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<SEC-DOCUMENT>0001061894-04-000012.txt : 20040303
<SEC-HEADER>0001061894-04-000012.hdr.sgml : 20040303
<ACCEPTANCE-DATETIME>20040303152839
ACCESSION NUMBER:		0001061894-04-000012
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20040303
FILED AS OF DATE:		20040303

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GILDAN ACTIVEWEAR INC
		CENTRAL INDEX KEY:			0001061894
		STANDARD INDUSTRIAL CLASSIFICATION:	APPAREL & OTHER FINISHED PRODS OF FABRICS & SIMILAR MATERIAL [2300]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1003

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-14830
		FILM NUMBER:		04645971

	BUSINESS ADDRESS:	
		STREET 1:		725 MONTEE DE LIESSE
		STREET 2:		VILLE SAINT LAURENT
		CITY:			QUEBEC CANADA
		STATE:			A8
		ZIP:			00000
		BUSINESS PHONE:		5147352023

	MAIL ADDRESS:	
		STREET 1:		725 MONTEE DE LIESSE
		STREET 2:		ST LAURENT QUE
		CITY:			CANADA
		STATE:			A8
		ZIP:			00000
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>form6-k.htm
<DESCRIPTION>Q1 2004 QUARTERLY REPORT TO SHAREHOLDERS
<TEXT>
<title>Q1 Quarterly Report</title><p align="left">&nbsp;</p>
<p>&nbsp;</p>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B><font size="4">SECURITIES AND EXCHANGE COMMISSION<br>
  WASHINGTON, DC 20549</font></B></FONT></FONT></P>
<p><font size="4">
  <!-- MARKER FORMAT-SHEET="Center Head Bold" -->
</font></p>
<p>&nbsp; </p>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B><font size="4">FORM 6-K</font></B></FONT></FONT></P>
<p><font size="4">
  <!-- MARKER FORMAT-SHEET="Center Head Bold" -->
</font></p>
<p>&nbsp; </p>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="4"><B>REPORT OF FOREIGN PRIVATE ISSUER<br>
  </B></FONT></FONT>Pursuant to Rule 13a-16 or 15d-16 under <br>
  the Securities Exchange Act of 1934</P>
<P ALIGN="CENTER"><br>
</P>
<DIV align=center>
  <TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
    <TR>
      <TD width="50%"><FONT face="Times New Roman, Times, serif" size=3>For the month of: <STRONG>March, 2004</STRONG></FONT></TD>
      <TD align=right width="50%"><FONT face="Times New Roman, Times, serif"
      size=3>Commission File Number:<STRONG> 1-14830</STRONG></FONT></TD>
    </TR>
    <TR>
      <TD width="50%"><FONT face="Times New Roman, Times, serif"
      size=3>&nbsp;</FONT></TD>
      <TD width="50%"><FONT face="Times New Roman, Times, serif"
      size=3>&nbsp;</FONT></TD>
    </TR>
    <TR vAlign=bottom align=middle>
      <TD colSpan=2><div align="center"><STRONG>GILDAN ACTIVEWEAR INC.</STRONG></div></TD>
    </TR>
    <TR vAlign=bottom align=middle>
      <TD colSpan=2><div align="center"><FONT face="Times New Roman, Times, serif"
      size=2><EM>(Translation of Registrant's name into English)</EM></FONT></div></TD>
    </TR>
    <TR vAlign=bottom align=middle>
      <TD width="50%"><FONT face="Times New Roman, Times, serif"
      size=3>&nbsp;</FONT></TD>
      <TD width="50%"><p>&nbsp;</p>
          <p>&nbsp;</p></TD>
    </TR>
    <TR vAlign=bottom align=middle>
      <TD colSpan=2><div align="center">
          <P ALIGN="CENTER"><strong><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">725 Mont&eacute;e de Liesse<br>
            Ville
            Saint-Laurent, Quebec <br>
          </FONT></FONT><font size="2">Canada H4T 1P5</font></strong></P>
      </div></TD>
    </TR>
    <TR vAlign=bottom align=middle>
      <TD colSpan=2><div align="center"><FONT face="Times New Roman, Times, serif"
      size=2><EM>(Address of principal executive offices)</EM></FONT></div></TD>
    </TR>
    <TR vAlign=bottom align=middle>
      <TD>&nbsp;</TD>
      <TD>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<p>&nbsp;</p>
<p><FONT face="Times New Roman, Times, serif" size=3>Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F. </FONT></p>
<p>&nbsp; </p>
<DIV align=center>
  <TABLE cellSpacing=0 cellPadding=0 border=0>
    <TR align=middle>
      <TD vAlign=top width=200>Form 20-F <U>&nbsp;&nbsp; &nbsp;&nbsp;</U>
      <TD vAlign=top width=200>Form 40-F <U>&nbsp;&nbsp;&nbsp;<strong>X</strong>&nbsp;&nbsp;</U></TD>
    </TR>
  </TABLE>
  <p align="left">&nbsp;</p>
</DIV>
<P>
<P>
<P><FONT face="Times New Roman, Times, serif" size=3>Indicate by check mark whether the Registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. </FONT>
<P>
<P>
<DIV align=center>
  <TABLE cellSpacing=0 cellPadding=0 border=0>
    <TR align=middle>
      <TD vAlign=top width=150>Yes <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
      <TD vAlign=top width=150>No <U>&nbsp;&nbsp;<strong>X</strong>&nbsp;&nbsp;</U></TD>
    </TR>
  </TABLE>
</DIV>
<P>
<P>
<P><FONT face="Times New Roman, Times, serif" size=3>If</FONT><FONT color=#0000ff><FONT
color=#0000ff><FONT face=serif
size=2>&nbsp;</FONT></FONT></FONT><FONT face="Times New Roman, Times, serif" size=3> &#8220;Yes&#8221; is marked, indicate below the file number assigned to the Registrant in connection with Rule 12g3-2(b): 82-_<strong>N/A</strong>_.</FONT>
<P>
<P>
<HR color=gray noShade SIZE=3>
<p align="left">
  <!-- MARKER FORMAT-SHEET="Left Head Bold" -->
</p>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="mda_logo.jpg" width="131" height="70"></td>
      <td width="54%" bgcolor="#000000"><blockquote>
          <p><font color="#FFFFFF" size="3" face="Times New Roman, Times, serif"><strong> Quarterly Report to Shareholders<br>
            First quarter ended January 4, 2004 </strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify"><FONT size="2" FACE="Times New Roman, Times, serif"><B>MESSAGE TO SHAREHOLDERS</B></FONT> <font size="2" face="Times New Roman, Times, serif">
  <!-- MARKER FORMAT-SHEET="Left Head Bold" -->
</font></P>
<table width="95%"  border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="40%"><FONT size="2" FACE="Times New Roman, Times, serif"><B><u>Succession Planning</u></B></FONT></td>
    <td width="10%">&nbsp;</td>
    <td width="40%"><font size="2" face="Times New Roman, Times, serif"><u></u></font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><div align="justify">
        <p><FONT size="2" FACE="Times New Roman, Times, serif">We are pleased to announce that H. Greg Chamandy will assume the newly-created role of Chairman of the Executive Committee of Gildan Activewear in addition to his continuing responsibilities as Chairman of the Board of Directors, while Glenn J. Chamandy will assume the responsibilities of President and Co-Chief Executive Officer of the Company. In order to ensure a seamless transition in the overall role and responsibilities of the Chief Executive Officer position, H. Greg Chamandy will also serve as Co-Chief Executive Officer for a transition period, currently contemplated as one year, at which point Glenn J. Chamandy will become Chief Executive Officer. Previously, H. Greg Chamandy was Chairman of the Board and Chief Executive Officer, and Glenn J. Chamandy was President and Chief Operating Officer.</FONT> </p>
        <p><FONT size="2" FACE="Times New Roman, Times, serif"><B><u>Corporate Governance</u></B></FONT></p>
    </div></td>
    <td>&nbsp;</td>
    <td valign="top"><P ALIGN="justify"><font size="2" face="Times New Roman, Times, serif">With effect from the beginning of the 2004 fiscal year, the Company has adopted the U.S. dollar as its functional and financial reporting currency, and accordingly the first quarter financial statements are presented in U.S. dollars. </font></P>
    <P ALIGN="justify"><font size="2" face="Times New Roman, Times, serif">The Company reported net earnings of U.S. $2.9 million, or U.S. $0.10 per diluted share, down respectively 21.6% and 23.1% compared with U.S. $3.7 million or U.S. $0.13 per diluted share in the first quarter of fiscal 2003. </font><font size="2" face="Times New Roman, Times, serif">The Company's results for the quarter reflect increases in cost of sales and depreciation expense as a result of the upward revaluation of opening inventories and fixed assets required in order to give effect to the change to U.S. functional currency. Net earnings for the first quarter of fiscal 2004 were U.S. $5.5 million or U.S. $0.18 per diluted share before reflecting the accounting treatment of these adjustments resulting from the change to U.S. functional currency, up respectively 48.6% and 38.5% from the first quarter of last year. </font></P>      </td>
  </tr>
  <tr>
    <td><P ALIGN="justify"><br>
      <FONT size="2" FACE="Times New Roman, Times, serif">The Company also announced that the Board of Directors has approved the conversion of all the Class B Multiple Voting shares of the Company, which are held by H. Greg Chamandy, Glenn J. Chamandy and Edwin B. Tisch through their respective holding corporations. The shares will be converted into Class A Subordinate Voting shares of the Company on a one-for-one basis and without any conversion premium. The conversion will be effective March 1, 2004. </FONT></P>
        <div align="justify"><font size="2" face="Times New Roman, Times, serif">
        <!-- MARKER FORMAT-SHEET="Left Head Bold" -->
        </font></div></td>
    <td>&nbsp;</td>
    <td><div align="justify">
      <p><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><br>
        <br>
        Compared to last year, the higher first quarter results reflected further manufacturing efficiencies and increased unit sales, including the timing impact of distributors building inventory in anticipation of a January price increase, as well as more favourable product-mix. These factors were partially offset by lower selling prices, combined with higher cotton costs, increased selling, general and administration expenses and higher depreciation as a result of the Company&#146;s recent major capital investment projects.</FONT></FONT> </p>
      <font size="2" face="Times New Roman, Times, serif">
          <!-- MARKER FORMAT-SHEET="Para Flush" -->
      </font> </div>
        </td>
  </tr>
  <tr>
    <td><font size="2" face="Times New Roman, Times, serif"><u></u></font></td>
    <td>&nbsp;</td>
    <td><div align="justify"></div></td>
  </tr>
  <tr>
    <td valign="top"><p><font size="2" face="Times New Roman, Times, serif"><u><B>First Quarter Results</B></u></font></p>
    <p><FONT size="2" FACE="Times New Roman, Times, serif">On behalf of the Board of Directors, we are also pleased to provide results for the three months ended January 4, 2004.</FONT> </p></td>
    <td>&nbsp;</td>
    <td><div align="justify">
      <p><FONT size="2" FACE="Times New Roman, Times, serif">On behalf of the Board of Directors, we wish to take this opportunity to thank our shareholders for their continued confidence and support.</FONT> </p>
    </div>
      <P ALIGN="justify">&nbsp;</P>
    <P ALIGN="justify"></P></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><em>(s) H. Greg Chamandy</em></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>H. Greg Chamandy </td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>Chairman of the Board,</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>Chairman of the Executive Committee and </td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>Co-Chief Executive Officer</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><em>(s) Glenn J. Chamandy</em></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>Glenn J. Chamandy </td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, serif" size=3>President, </FONT></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>Co-Chief Executive Officer and </td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>Chief Operating Officer </td>
  </tr>
</table>
<P ALIGN="LEFT">&nbsp;</P>
<P ALIGN="center"><font size="2" face="Times New Roman, Times, serif">1</font></P>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="mda_logo.jpg" width="131" height="70"></td>
      <td width="54%" bgcolor="#000000"><blockquote>
          <p><font color="#FFFFFF" size="3" face="Times New Roman, Times, serif"><strong> Quarterly Report to Shareholders<br>
            First quarter ended January 4, 2004 </strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<P ALIGN="justify">&nbsp;</P>
<p align="center"><font size="2" face="Times New Roman, Times, serif"> <strong>Gildan Activewear Inc. </strong><br>
    <strong>Consolidated Balance Sheets </strong><br>
  (In thousands of U.S. dollars) </font></p>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="90%">
  <TR VALIGN="BOTTOM">
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
    <TH></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">January 4, 2004</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">October 5, 2003</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">December 29, 2002</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><hr size="1" noshade></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><hr size="1" noshade></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(unaudited)</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(audited)</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(unaudited)</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD WIDTH="41%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Current assets:</font></TD>
    <TD WIDTH="6%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="14%" ALIGN="RIGHT"></TD>
    <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="13%" ALIGN="RIGHT"></TD>
    <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="16%" ALIGN="RIGHT"></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;37,490</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;69,340</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;39,865</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">45,760</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">64,260</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">35,300</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Inventories</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">139,248</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">103,503</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">96,432</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and deposits</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">4,967</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,849</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">2,734</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Future income taxes</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">6,049</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">4,682</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,424</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="5" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">233,514</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">245,634</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">177,755</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Fixed assets</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">190,295</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">180,349</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">140,724</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Other assets</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,520</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,681</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">4,072</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="5" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Total assets</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;427,329</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;429,664</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;322,551</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="5" ALIGN="RIGHT"><hr size="2" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Current liabilities:</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;56,643</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;67,278</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;52,872</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">4,016</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,909</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">1,908</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Current portion of long-term debt</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">19,409</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">19,481</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,970</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="5" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">80,068</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">90,668</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">58,750</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Long-term debt</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">57,198</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">54,077</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">72,088</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Future income taxes</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">22,725</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">20,716</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">13,304</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Shareholders' equity:</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Share capital (note 4) </font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">75,753</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">75,490</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">71,800</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Contributed surplus</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">220</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">220</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">220</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Retained earnings</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">165,117</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">162,245</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">112,780</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Cumulative translation adjustment</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">26,248</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">26,248</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(6,391)</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="5" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">267,338</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">264,203</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">178,409</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="5" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Total liabilities and shareholders' equity</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;427,329</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;429,664</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;322,551</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="5" ALIGN="RIGHT"><hr size="2" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
</TABLE>
<br>
<font size="2" face="Times New Roman, Times, serif">See accompanying notes to interim consolidated financial statements. </font>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="center"><font size="2" face="Times New Roman, Times, serif">2</font></P>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="mda_logo.jpg" width="131" height="70"></td>
      <td width="54%" bgcolor="#000000"><blockquote>
          <p><font color="#FFFFFF" size="3" face="Times New Roman, Times, serif"><strong> Quarterly Report to Shareholders<br>
            First quarter ended January 4, 2004 </strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<P ALIGN="justify">&nbsp;</P>
<div align="justify">
  <p align="center"><font size="2" face="Times New Roman, Times, serif"><strong>Gildan Activewear Inc. </strong><br>
      <strong>Consolidated Statements of Earnings</strong> <br>
    (In thousands of U.S. dollars, except per share data) </font></p>
  <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="90%">
    <TR VALIGN="BOTTOM">
      <TH COLSPAN="2"></TH>
      <TH COLSPAN="2"></TH>
      <TH></TH>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="3" ALIGN="RIGHT" bgcolor="#66CCFF"><div align="center"><font size="2" face="Times New Roman, Times, serif"><strong>Three months ended </strong></font></div></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">January 4, 2004<br>
      </font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">December 29, 2002</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="2" ALIGN="LEFT"><hr size="1" noshade></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><hr size="1" noshade></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(unaudited)</font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(unaudited)</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="4" ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD WIDTH="57%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Sales</font></TD>
      <TD WIDTH="5%" ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
      <TD WIDTH="15%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">77,959</font></TD>
      <TD WIDTH="6%" ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
      <TD WIDTH="17%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">65,000</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Cost of sales</font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">56,859</font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">45,915</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="4" ALIGN="LEFT"><hr size="1" noshade></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Gross profit</font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">21,100</font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">19,085</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Selling, general and administrative expenses</font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">11,397</font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">10,084</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="4" ALIGN="LEFT"><hr size="1" noshade></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Earnings before interest, income taxes,</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;depreciation and amortization </font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">9,703</font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">9,001</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Depreciation and amortization</font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">4,932</font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,496</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Interest expense</font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">1,589</font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">1,445</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="4" ALIGN="LEFT"><hr size="1" noshade></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Earnings before income taxes</font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,182</font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">4,060</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Income taxes</font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">310</font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">369</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="4" ALIGN="LEFT"><hr size="1" noshade></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Net earnings</font></TD>
      <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;2,872</font></TD>
      <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;3,691</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="4" ALIGN="LEFT"><hr size="2" noshade></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Basic EPS (note 5) </font></TD>
      <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;0.10</font></TD>
      <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;0.13</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Diluted EPS (note 5)</font></TD>
      <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;0.10</font></TD>
      <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;0.13</font></TD>
    </TR>
  </TABLE>
  <p align="center"><font size="2" face="Times New Roman, Times, serif"><strong>  <br>
    Consolidated Statements of Retained Earnings </strong><br>
  (In thousands of U.S. dollars, except per share data) <br>
  </font></p>
  <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="90%">
    <TR VALIGN="BOTTOM">
      <TH COLSPAN="2"></TH>
      <TH COLSPAN="2"></TH>
      <TH width="13%"></TH>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="4" ALIGN="LEFT" bgcolor="#66CCFF"><div align="center"><font size="2" face="Times New Roman, Times, serif"><strong>Three months ended <br>
      </strong></font></div></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">January 4, 2004</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">December 29, 2002</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="2" ALIGN="LEFT"><hr size="1" noshade></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT"><hr size="1" noshade></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD WIDTH="67%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Retained earnings, beginning of the period</font></TD>
      <TD WIDTH="3%" ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
      <TD WIDTH="12%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">162,245</font></TD>
      <TD WIDTH="5%" ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">109,089</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Net earnings</font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">2,872</font></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,691</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="4" ALIGN="LEFT"><hr size="1" noshade></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Retained earnings, end of the period</font></TD>
      <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">165,117</font></TD>
      <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">112,780</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="4" ALIGN="LEFT"><hr size="2" noshade></TD>
    </TR>
  </TABLE>
  <p><font size="2" face="Times New Roman, Times, serif">    See accompanying notes to interim consolidated financial statements. </font></p>
  <p>&nbsp;</p>
  <p>&nbsp;</p>
  <P ALIGN="center"><font size="2" face="Times New Roman, Times, serif">3</font></P>
  <hr size="3" noshade>
  <div align="justify">
    <table width="99%"  border="0" cellspacing="0" cellpadding="0">
      <tr>
        <td width="46%"><img src="mda_logo.jpg" width="131" height="70"></td>
        <td width="54%" bgcolor="#000000"><blockquote>
            <p><font color="#FFFFFF" size="3" face="Times New Roman, Times, serif"><strong> Quarterly Report to Shareholders<br>
              First quarter ended January 4, 2004 </strong></font><font size="2" face="Times New Roman, Times, serif"><br>
            </font></p>
        </blockquote></td>
      </tr>
    </table>
    <br>
  </div>
  <P ALIGN="center"><font size="2" face="Times New Roman, Times, serif"><strong>Gildan Activewear Inc.</strong> <br>
    <strong>Consolidated Statements of Cash Flows </strong><br>
  (In thousands of U.S. dollars) <br>
  </font></P>
  <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="90%">
    <TR VALIGN="BOTTOM">
      <TH COLSPAN="2"></TH>
      <TH COLSPAN="2"></TH>
      <TH COLSPAN="2"></TH>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="3" ALIGN="RIGHT" bgcolor="#66CCFF"><div align="center"><font size="2" face="Times New Roman, Times, serif"><strong>Three months ended</strong></font></div></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">January 4, 2004</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">December 29, 2002</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><hr size="1" noshade></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><hr size="1" noshade></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif"> (unaudited)</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif"> (unaudited)</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD WIDTH="61%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Cash flows from operating activities:</font></TD>
      <TD WIDTH="3%" ALIGN="LEFT">&nbsp;</TD>
      <TD WIDTH="14%" ALIGN="RIGHT"></TD>
      <TD WIDTH="4%" ALIGN="LEFT">&nbsp;</TD>
      <TD WIDTH="16%" ALIGN="RIGHT"></TD>
      <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Net earnings</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;2,872</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;3,691</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Adjustments for:</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">4,932</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,496</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future income taxes</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">122</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">144</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">7</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(175</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="3" ALIGN="RIGHT"><hr size="1" noshade></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">7,933</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">7,156</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Net changes in non-cash working capital balances:</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">19,201</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">19,992</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(35,745</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(23,322</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and deposits</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(1,118</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(382</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(9,978</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">2,562</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">21</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(196</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="3" ALIGN="RIGHT"><hr size="1" noshade></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(19,686</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">5,810</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Cash flows from financing activities:</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Repayment of capital leases and other long-term debt</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(1,171</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(1,006</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Increase in secured debt</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">4,125</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">96</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the issuance of shares</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">263</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">797</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Increase in deferred financing charges</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&#8212;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(26</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="3" ALIGN="RIGHT"><hr size="1" noshade></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,217</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(139</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Cash flows from investing activities:</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Purchase of fixed assets, net of disposals</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(16,123</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(11,440</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;Decrease in other assets</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">19</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">52</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="3" ALIGN="RIGHT"><hr size="1" noshade></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(16,104</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(11,388</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Effect of exchange rate changes on cash</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;and cash equivalents</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">723</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">572</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="3" ALIGN="RIGHT"><hr size="1" noshade></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Net decrease in cash and cash equivalents</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(31,850</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(5,145</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;during the period</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Cash and cash equivalents, beginning of period</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;69,340</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;45,010</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="3" ALIGN="RIGHT"><hr size="1" noshade></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Cash and cash equivalents, end of period</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;37,490</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;39,865</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="3" ALIGN="RIGHT"><hr size="2" noshade></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
    </TR>
  </TABLE>
  <p><font size="2" face="Times New Roman, Times, serif">See accompanying notes to interim consolidated financial statements. </font></p>
    <p>&nbsp;</p>
  <P ALIGN="center"><font size="2" face="Times New Roman, Times, serif">4</font></P>
  <hr size="3" noshade>
  <div align="justify">
    <table width="99%"  border="0" cellspacing="0" cellpadding="0">
      <tr>
        <td width="46%"><img src="mda_logo.jpg" width="131" height="70"></td>
        <td width="54%" bgcolor="#000000"><blockquote>
            <p><font color="#FFFFFF" size="3" face="Times New Roman, Times, serif"><strong> Quarterly Report to Shareholders<br>
              First quarter ended January 4, 2004 </strong></font><font size="2" face="Times New Roman, Times, serif"><br>
            </font></p>
        </blockquote></td>
      </tr>
    </table>
  </div>
  <P ALIGN="justify"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B><u>NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br>
    </u>(For the period ended January 4, 2004)<br>
    </B></FONT></FONT><font size="2" face="Times New Roman, Times, serif"><strong>(Tabular amounts in thousands of U.S. dollars, except per share data)
    <!-- MARKER FORMAT-SHEET="Left Head Bold" -->
    </strong><br>
    <B>(unaudited)</B></font></P>
</div>
<font size="2" face="Times New Roman, Times, serif">
<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
</font>
<div align="justify"><FONT SIZE="2" face="Times New Roman, Times, serif"><B>1. Basis of presentation: </B></FONT></div>
<font size="2" face="Times New Roman, Times, serif">
<!-- MARKER FORMAT-SHEET="Para Flush" -->
</font>
<P ALIGN="justify"><FONT size="2" FACE="Times New Roman, Times, serif">The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the Canadian generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by Canadian generally accepted accounting principles for complete financial statements, and should be read in conjunction with the Company&#146;s annual consolidated financial statements.</FONT> </P>
<font size="2" face="Times New Roman, Times, serif">
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</font>
<P ALIGN="justify"><FONT size="2" FACE="Times New Roman, Times, serif">The Company&#146;s revenues and income are subject to seasonal variations. Consequently, the results of operations for the first quarter ended January 4, 2004 are not traditionally indicative of the results to be expected for the full year.</FONT> </P>
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<P ALIGN="justify"><FONT size="2" FACE="Times New Roman, Times, serif">All amounts in the attached notes are unaudited unless specifically identified.</FONT> </P>
<div align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>2. Change in functional and reporting currency: </strong>
      <!-- MARKER FORMAT-SHEET="Para Flush" -->
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<P ALIGN="justify"><FONT size="2" FACE="Times New Roman, Times, serif">As a result of a significant portion of its revenues, expenses, assets and liabilities being denominated in U.S. dollars and the increasing international scope of its sales and manufacturing operations, the Company adopted the U.S dollar as its functional and reporting currency effective October 6, 2003, the commencement of fiscal 2004. All opening assets and liabilities were translated into U.S. dollars using the exchange rate in effect on October 6, 2003. For comparative purposes, historical financial statements and notes thereto up to an including October 5, 2003 have been restated into U.S dollars in accordance with generally accepted accounting principles using the following method and exchange rates:</FONT> </P>
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<div align="justify">
  <TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
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      <TD ALIGN="RIGHT" WIDTH="3%">&#8226;</TD>
      <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
      <TD WIDTH="94%"><P ALIGN="LEFT"><FONT size="2" FACE="Times New Roman, Times, serif"> Revenues, expenses and cash flows &#151; translated into U.S. dollars using the weighted-average exchange rate for the applicable quarters.</FONT> </P></TD>
    </TR>
  </TABLE>
  <font size="2" face="Times New Roman, Times, serif"><BR>
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      <TD ALIGN="RIGHT" WIDTH="3%">&#8226;</TD>
      <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
      <TD WIDTH="94%"><P ALIGN="LEFT"><FONT size="2" FACE="Times New Roman, Times, serif"> Assets and liabilities &#151; translated into U.S. dollars using the exchange rate in effect at the end of the applicable quarter or year.</FONT> </P></TD>
    </TR>
  </TABLE>
  <font size="2" face="Times New Roman, Times, serif"><BR>
  <!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
  </font>
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      <TD ALIGN="RIGHT" WIDTH="3%">&#8226;</TD>
      <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
      <TD WIDTH="94%"><P ALIGN="LEFT"><FONT size="2" FACE="Times New Roman, Times, serif"> Share capital &#151; translated into U.S. dollars using the exchange rate in effect when the shares were issued.</FONT> </P></TD>
    </TR>
  </TABLE>
  <font size="2" face="Times New Roman, Times, serif"><BR>
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  </font>
  <TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
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      <TD ALIGN="RIGHT" WIDTH="3%">&#8226;</TD>
      <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
      <TD WIDTH="94%"><P ALIGN="LEFT"><FONT size="2" FACE="Times New Roman, Times, serif"> Retained earnings &#150; represents the U.S. dollar earnings from July 1, 1998 to October 5, 2003 translated from Canadian dollars as described above, together with the Canadian dollar balance of retained earnings as at June 30, 1998 translated into U.S. dollars using the exchange rate in effect on that date.</FONT> </P></TD>
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<P ALIGN="justify"><FONT size="2" FACE="Times New Roman, Times, serif"><br>
  The change in the functional currency for the prior periods resulted in a positive currency translation adjustment of $26.2 million as at October 5, 2003, which is reflected as a separate component of shareholders&#146; equity.</FONT> </P>
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<div align="justify"><FONT SIZE="2" face="Times New Roman, Times, serif"><B>3. Significant accounting policies:</B></FONT></div>
<font size="2" face="Times New Roman, Times, serif">
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<P ALIGN="justify"><FONT size="2" FACE="Times New Roman, Times, serif">The Company applied the same accounting policies in the preparation of the interim consolidated financial statements, as disclosed in Note 1 of its audited consolidated financial statements in the Company&#146;s annual report for the year ended October 5, 2003.</FONT> </P>
<font size="2" face="Times New Roman, Times, serif">
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<P ALIGN="justify"><FONT size="2" FACE="Times New Roman, Times, serif">The following policies have been applied for the first time in this quarter:</FONT> </P>
<div align="justify"><font size="2" face="Times New Roman, Times, serif">(a) Stock-Based Compensation and Other Stock-Based Payments: <br>
  </font><FONT size="2" FACE="Times New Roman, Times, serif">In November 2003, the Canadian Institute of Chartered Accountants (&#147;CICA&#148;) revised Handbook Section 3870, with respect to the accounting for stock-based compensation and other stock-based payments. The revised recommendations require that beginning January 1, 2004, the fair value-based method be used to account for all transactions whereby goods and services are received in exchange for stock-based compensation and other stock-based payments. The revised standard no longer permits the use of the settlement method for stock-based employee compensation awards. Under the settlement method, any consideration paid by employees on the exercise of stock options is credited to share capital and no compensation expense is recognized. Under the fair value method, compensation cost is measured at fair value at the date of grant and is expensed over the award&#146;s vesting periods.</FONT> </div>
<font size="2" face="Times New Roman, Times, serif">
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<P ALIGN="justify"><FONT size="2" FACE="Times New Roman, Times, serif">In accordance with the transitional options permitted under Section 3870, the Company has elected to early adopt the new recommendations effective the commencement of our 2004 fiscal year and prospectively apply the standard for employee stock awards granted after October 6, 2003. There were no options granted during the three months ended January 4, 2004. Previously, the Company applied the settlement method of accounting to employee stock options. As required under the standard, the following disclosure is required to report the pro forma net earnings and earnings per share as if the fair value-based method had been used to account for employee stock options granted during our 2003 fiscal year.</FONT> </P>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="center"><font size="2" face="Times New Roman, Times, serif">5</font></P>
<hr size="3" noshade>
<div align="justify">
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    <tr>
      <td width="46%"><img src="mda_logo.jpg" width="131" height="70"></td>
      <td width="54%" bgcolor="#000000"><blockquote>
          <p><font color="#FFFFFF" size="3" face="Times New Roman, Times, serif"><strong> Quarterly Report to Shareholders<br>
            First quarter ended January 4, 2004 </strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<P ALIGN="justify">&nbsp;</P>
<p><font size="2" face="Times New Roman, Times, serif"><strong>3. Significant accounting policies (continued):</strong></font></p>
<p><font size="2" face="Times New Roman, Times, serif"> (a) Stock-Based Compensation and Other Stock-Based Payments (continued): </font> </p>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="90%">
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    <TH COLSPAN="2"></TH>
    <TH width="17%"></TH>
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    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="3" ALIGN="RIGHT" bgcolor="#66CCFF"><div align="center"><font size="2" face="Times New Roman, Times, serif"> <strong>Three months ended </strong></font></div></TD>
  </TR>
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    <TD colspan="5" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">January 4, 2004</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">December 29, 2002</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><hr size="1" noshade></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><hr size="1" noshade></TD>
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    <TD colspan="5" ALIGN="LEFT"><hr size="2" noshade></TD>
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    <TD WIDTH="64%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Net earnings, as reported</font></TD>
    <TD WIDTH="1%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="16%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,872</font></TD>
    <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,691</font></TD>
  </TR>
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    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Deduct:</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Total stock-based employee compensation expense</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">determined under fair value based method for all awards</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">granted prior to October 6, 2003</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">83</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">21</font></TD>
  </TR>
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    <TD colspan="5" ALIGN="LEFT"><hr size="1" noshade></TD>
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    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Pro forma net earnings</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,789</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,670</font></TD>
  </TR>
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    <TD colspan="5" ALIGN="LEFT"><hr size="2" noshade></TD>
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  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Earnings per share:</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
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    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Basic:</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">As reported</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.10</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0</font><font size="2" face="Times New Roman, Times, serif">.13</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Pro forma</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.09</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0</font><font size="2" face="Times New Roman, Times, serif">.13</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Diluted:</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">As reported</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.10</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0</font><font size="2" face="Times New Roman, Times, serif">.13</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Pro forma</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.09</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0</font><font size="2" face="Times New Roman, Times, serif">.12</font></TD>
  </TR>
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    <TD colspan="5" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
</TABLE>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The weighted average fair value of the 121,206 options granted during fiscal 2003 (101,206 options granted as at December 29, 2002) is CAD $10.65 per stock option (CAD $10.55 per stock option as at December 29, 2002), which would be recognized over the vesting period. The weighted average fair value of the stock options granted during fiscal 2003 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: expected dividend yield of nil; expected volatility of 36.09%; risk-free interest rate of 3.72%; and expected lives of 3 years. </font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">(b) Investment in joint venture:<br>
</font><font size="2" face="Times New Roman, Times, serif">During the first quarter of fiscal 2004, the Company invested in a 50%/50% owned joint venture with Frontier Spinning Mills, Inc. The new joint venture company acquired the equipment and real estate of an existing yarn-spinning facility in Cedartown, Georgia. The total cost of the acquisition, including Frontier's 50% share in the investment, amounted to $12.5 million. The joint venture is accounted for using the proportionate consolidated method whereby the Company's proportionate share of revenues, expenses, assets and liabilities is included in these financial statements. The Company's 50% proportionate interest in its joint venture did not have a material impact on the consolidated balance sheet, statements of earnings and cash flows. </font></p>
<p align="justify">&nbsp;</p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>4. Share capital: </strong></font> </p>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="90%">
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    <TH COLSPAN="2"></TH>
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    <TH COLSPAN="2"></TH>
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    <TH></TH>
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    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="7" ALIGN="RIGHT" bgcolor="#66CCFF"><div align="center"><font size="2" face="Times New Roman, Times, serif"><strong>Three months ended </strong></font></div></TD>
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    <TD colspan="9" ALIGN="LEFT"><hr size="1" noshade></TD>
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    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="3" ALIGN="RIGHT"><div align="center"><font size="2" face="Times New Roman, Times, serif">January 4, 2004</font></div></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="3" ALIGN="RIGHT"><div align="center"><font size="2" face="Times New Roman, Times, serif">December 29, 2002</font></div></TD>
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    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="3" ALIGN="RIGHT"><hr size="1" noshade></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="3" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
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    <TD colspan="9" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD WIDTH="54%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="10%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">Shares</font></TD>
    <TD WIDTH="1%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="12%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">Book Value</font></TD>
    <TD WIDTH="1%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="9%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">Shares</font></TD>
    <TD WIDTH="1%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="10%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">Book Value</font></TD>
  </TR>
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    <TD colspan="9" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
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    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Authorized without limit as to number and without par value:</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font size="2" face="Times New Roman, Times, serif">First preferred shares, issuable in series, non-voting</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Second preferred shares, issuable in series, non-voting</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Class A subordinate voting shares, participating, one vote per share</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
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    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Class B multiple voting shares, participating, eight votes per share</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Issued and outstanding:</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Class A subordinate voting shares:</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Total outstanding, beginning of period</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">23,426</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$72,023</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">22,827</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$67,536</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Shares issued under employee share purchase plan</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">2</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">47</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">1</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">15</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Shares issued pursuant to exercise of stock options</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">15</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">216</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">134</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">782</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="9" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Total outstanding, end of period</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">23,443</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">72,286</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">22,962</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">68,333</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Class B multiple voting shares</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">6,094</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,467</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">6,094</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,467</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="9" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,537</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$75,753</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,056</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$71,800</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="9" ALIGN="LEFT"><hr size="2" noshade></TD>
  </TR>
</TABLE>
<p align="justify"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">On December 3, 2003, the Board of Directors approved the renewal of the stock repurchase program authorizing the Company to purchase up to a maximum of 200,000 of the Company&#146;s Class A subordinate voting shares in the open market commencing December 22, 2003 and ending December 21, 2004. As at January 4, 2004 no shares have been repurchased under this plan.</FONT></FONT> </p>
<div align="justify"><font size="2" face="Times New Roman, Times, serif">
  <!-- MARKER FORMAT-SHEET="Left Head Bold" -->
</font><u><FONT SIZE="2" face="Times New Roman, Times, serif"><B></B></FONT></u></div>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="center"><font size="2" face="Times New Roman, Times, serif">6</font></P>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="mda_logo.jpg" width="131" height="70"></td>
      <td width="54%" bgcolor="#000000"><blockquote>
          <p><font color="#FFFFFF" size="3" face="Times New Roman, Times, serif"><strong> Quarterly Report to Shareholders<br>
            First quarter ended January 4, 2004 </strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<div align="justify">
  <p><font size="2" face="Times New Roman, Times, serif"> <strong>5. Earnings per share:</strong></font></p>
  <p><font size="2" face="Times New Roman, Times, serif">The following table sets forth the computation of basic and diluted earnings per share: </font> </p>
  <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="90%">
    <TR VALIGN="BOTTOM">
      <TH COLSPAN="2"></TH>
      <TH COLSPAN="2"></TH>
      <TH></TH>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="3" ALIGN="RIGHT" bgcolor="#66CCFF"><div align="center"><font size="2" face="Times New Roman, Times, serif"><strong>Three months ended </strong></font></div></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD colspan="5" ALIGN="LEFT"><hr size="1" noshade></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">January 4, 2004</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">December 29, 2002</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><hr size="1" noshade></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><hr size="1" noshade></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD colspan="5" ALIGN="LEFT"><hr size="1" noshade></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD width="66%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Basic weighted average number of common shares outstanding</font></TD>
      <TD width="1%" ALIGN="LEFT">&nbsp;</TD>
      <TD width="14%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,524</font></TD>
      <TD width="3%" ALIGN="LEFT">&nbsp;</TD>
      <TD width="16%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">28,945</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD colspan="5" ALIGN="LEFT"><hr size="2" noshade></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Basic earnings per share</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;0.10</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;0.13</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD colspan="5" ALIGN="LEFT"><hr size="2" noshade></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Diluted earnings per share:</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Basic weighted average number of common shares outstanding</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,524</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">28,945</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Plus impact of stock options</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">268</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">655</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD colspan="5" ALIGN="LEFT"><hr size="2" noshade></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Diluted common shares</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,792</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,600</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD colspan="5" ALIGN="LEFT"><hr size="2" noshade></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Diluted earnings per share</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;0.10</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;0.13</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD colspan="5" ALIGN="LEFT"><hr size="2" noshade></TD>
    </TR>
  </TABLE>
  <p><font size="2" face="Times New Roman, Times, serif"><strong>6. Guarantees:</strong></font></p>
  <p><font size="2" face="Times New Roman, Times, serif"> In accordance with CICA Accounting Guideline 14, Disclosure of Guarantees, significant guarantees that have been provided to third parties are the following: </font></p>
  <blockquote>
    <p><font size="2" face="Times New Roman, Times, serif">The Company, including certain of its subsidiaries, have granted irrevocable standby letters of credit and surety bonds, issued by highly rated financial institutions, to third parties to indemnify them in the event the Company does not perform its contractual obligations. As at January 4, 2004, the maximum potential liability under these guarantees was $12.3 million of which $10.8 million was surety bonds and $1.5 million was for standby letters of credit. The standby letters of credit mature at various dates during 2004 and the surety bonds are automatically renewed on an annual basis. </font></p>
  </blockquote>
  <p><font size="2" face="Times New Roman, Times, serif">As at January 4, 2004, the Company has not recorded a liability with respect to these guarantees, as the Company does not expect to make any payments in excess of what is recorded on the Company's financial statements for the aforementioned items. </font></p>
  <p><font size="2" face="Times New Roman, Times, serif"><strong>7. Financial instruments: </strong></font></p>
  <p><font size="2" face="Times New Roman, Times, serif">The following table summarizes the Company's commitments to buy and sell foreign currencies as at January 4, 2004 and December 29, 2002:</font> </p>
  <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="95%">
    <TR VALIGN="BOTTOM">
      <TH></TH>
      <TH></TH>
      <TH></TH>
      <TH></TH>
      <TH></TH>
      <TH></TH>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD colspan="2" ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">Notional amount</font></div></TD>
      <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">Exchange rate</font></div></TD>
      <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">Maturity</font></div></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">Notional U.S. equivalent</font></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD colspan="6" ALIGN="LEFT"><hr size="1" noshade></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">2004:</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD WIDTH="34%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Sell contracts:</font></TD>
      <TD WIDTH="10%" ALIGN="LEFT">&nbsp;</TD>
      <TD WIDTH="9%" ALIGN="RIGHT">&nbsp;</TD>
      <TD WIDTH="17%" ALIGN="LEFT">&nbsp;</TD>
      <TD WIDTH="20%" ALIGN="LEFT">&nbsp;</TD>
      <TD WIDTH="10%" ALIGN="RIGHT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange contracts</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Euro/US$</font></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">10,200&nbsp;</font></TD>
      <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">1.1740 to 1.2202</font></div></TD>
      <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">January to October 2004</font></div></TD>
      <TD ALIGN="RIGHT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$12,148&nbsp;</font></div></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Sell contracts:</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><div align="right"></div></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange contracts</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">GBP/US$</font></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">5,390&nbsp;</font></TD>
      <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">1.6660 to 1.6850</font></div></TD>
      <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">January to October 2004</font></div></TD>
      <TD ALIGN="RIGHT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;9,010&nbsp;</font></div></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">2003:</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><div align="right"></div></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><div align="right"></div></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Buy contracts:</font></TD>
      <TD ALIGN="LEFT">&nbsp;</TD>
      <TD ALIGN="RIGHT">&nbsp;</TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="LEFT"><div align="right"></div></TD>
      <TD ALIGN="RIGHT"><div align="right"></div></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange contracts</font></TD>
      <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Euro/CAD</font></TD>
      <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">330&nbsp;</font></TD>
      <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">1.0261</font></div></TD>
      <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">January 2003</font></div></TD>
      <TD ALIGN="RIGHT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;339&nbsp;</font></div></TD>
    </TR>
    <TR VALIGN="BOTTOM">
      <TD colspan="6" ALIGN="LEFT"><hr size="2" noshade></TD>
    </TR>
  </TABLE>
</div>
<P ALIGN="justify">&nbsp;</P>
<div align="justify"><font size="2" face="Times New Roman, Times, serif">
  <!-- MARKER FORMAT-SHEET="Left Head Bold" -->
</font><u><FONT SIZE="2" face="Times New Roman, Times, serif"><B></B></FONT></u></div>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="center"><font size="2" face="Times New Roman, Times, serif">7</font></P>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="mda_logo.jpg" width="131" height="70"></td>
      <td width="54%" bgcolor="#000000"><blockquote>
          <p><font color="#FFFFFF" size="3" face="Times New Roman, Times, serif"><strong> Quarterly Report to Shareholders<br>
            First quarter ended January 4, 2004 </strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<P ALIGN="justify">&nbsp;</P>
<p><font size="2" face="Times New Roman, Times, serif"><strong>8. Segmented information: </strong></font></p>
<p><font size="2" face="Times New Roman, Times, serif">The Company manufactures and sells activewear apparel. The Company operates in one business segment.</font></p>
<p><font size="2" face="Times New Roman, Times, serif"> Individual customers accounting for greater than 10% of total sales are as follows: </font> </p>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="95%">
  <TR VALIGN="BOTTOM">
    <TH width="36%"></TH>
    <TH COLSPAN="2"></TH>
    <TH width="5%"></TH>
    <TH></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="2" ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="3" ALIGN="LEFT" bgcolor="#66CCFF"><div align="center"><font size="2" face="Times New Roman, Times, serif"><strong>Three months ended </strong></font></div></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="2" ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">January 4, 2004</font></div></TD>
    <TD WIDTH="5%" ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">December 29, 2002</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="2" ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT"><hr size="1" noshade></TD>
    <TD WIDTH="5%" ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="5" ALIGN="LEFT"><hr size="3" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="2" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Company A</font></TD>
    <TD WIDTH="16%" ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">22.5%</font></div></TD>
    <TD WIDTH="5%" ALIGN="RIGHT">&nbsp;</TD>
    <TD WIDTH="16%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">12.2%</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="2" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Company B</font></TD>
    <TD ALIGN="LEFT"><div align="right">&#8212;</div></TD>
    <TD width="5%" ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">14.5%</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="5" ALIGN="LEFT"><hr size="3" noshade></TD>
  </TR>
</TABLE>
<p><font size="2" face="Times New Roman, Times, serif">During September 2003, Company A acquired Company B. </font></p>
<p><font size="2" face="Times New Roman, Times, serif">Sales were derived from customers located in the following geographic areas: </font></p>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="95%">
  <TR VALIGN="BOTTOM">
    <TH width="64%"></TH>
    <TH COLSPAN="2"></TH>
    <TH width="14%"></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="3" ALIGN="RIGHT" bgcolor="#66CCFF"><div align="center"><font size="2" face="Times New Roman, Times, serif"><strong>Three months ended </strong></font></div></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">January 4, 2004</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">December 29, 2002</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><hr size="1" noshade></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="4" ALIGN="LEFT"><hr size="3" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">International</font></TD>
    <TD WIDTH="16%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$71,500</font></TD>
    <TD WIDTH="6%" ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$58,797</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Canada</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">6,459</font></TD>
    <TD width="6%" ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">6,203</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="4" ALIGN="LEFT"><hr size="3" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$77,959</font></TD>
    <TD width="6%" ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$65,000</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="4" ALIGN="LEFT"><hr size="3" noshade></TD>
  </TR>
</TABLE>
<p><font size="2" face="Times New Roman, Times, serif">Fixed assets by geographic areas are as follows:</font></p>
<p><font size="2" face="Times New Roman, Times, serif"> </font></p>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="95%">
  <TR VALIGN="BOTTOM">
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
    <TH></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">January 4, 2004</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">October 5, 2003</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">December 29, 2002</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><hr size="1" noshade></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><hr size="1" noshade></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><div align="center"><font size="2" face="Times New Roman, Times, serif">(audited)</font></div></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="7" ALIGN="LEFT"><hr size="3" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD WIDTH="55%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Canada</font></TD>
    <TD WIDTH="1%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="14%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;91,695</font></TD>
    <TD WIDTH="1%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="13%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;93,247</font></TD>
    <TD WIDTH="1%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="15%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;84,381</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Caribbean basin, Central America and Mexico</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">74,322</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">68,570</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">40,296</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">United States</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">24,278</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">18,532</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">16,047</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="7" ALIGN="LEFT"><hr size="3" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$190,295</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$180,349</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$140,724</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="7" ALIGN="LEFT"><hr size="3" noshade></TD>
  </TR>
</TABLE>
<p><strong><font size="2" face="Times New Roman, Times, serif">9. Other information:</font></strong></p>
<p><font size="2" face="Times New Roman, Times, serif">(a) The following items were included in the determination of the Company's net earnings: </font></p>
<p><font size="2" face="Times New Roman, Times, serif"> </font></p>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="95%">
  <TR VALIGN="BOTTOM">
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
    <TH></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="3" ALIGN="RIGHT" bgcolor="#66CCFF"><div align="center"><font size="2" face="Times New Roman, Times, serif"><strong>Three months ended</strong></font></div></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">January 4, 2004</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">December 29, 2002 </font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><hr size="1" noshade></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="5" ALIGN="LEFT"><hr size="3" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD WIDTH="67%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Depreciation of fixed assets</font></TD>
    <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="14%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;4,755</font></TD>
    <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="15%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;3,255</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Interest expense on long-term debt</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">1,589</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">1,445</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Foreign exchange loss (gain)</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">761</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(593)</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Amortization of deferred charges</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">177</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">241</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="5" ALIGN="LEFT"><hr size="2" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">(b) Supplemental cash flow disclosure:</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="5" ALIGN="LEFT"><hr size="2" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Cash paid during the period for:</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Interest</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">1,579</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;1,544</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Income taxes</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">86</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">99</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Non-cash transactions:</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Additions of fixed assets included in accounts payable</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">968</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">1,907</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="5" ALIGN="LEFT"><hr size="2" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Cash and cash equivalents consist of:</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Cash balances with banks</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$24,649</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;8,843</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Short-term investments</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">12,841</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">31,022</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="5" ALIGN="LEFT"><hr size="2" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$37,490</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;39,865</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="5" ALIGN="LEFT"><hr size="3" noshade></TD>
  </TR>
</TABLE>
<div align="justify"><font size="2" face="Times New Roman, Times, serif">
  <!-- MARKER FORMAT-SHEET="Left Head Bold" -->
</font><u><FONT SIZE="2" face="Times New Roman, Times, serif"><B></B></FONT></u></div>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="center"><font size="2" face="Times New Roman, Times, serif">8</font></P>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="mda_logo.jpg" width="131" height="70"></td>
      <td width="54%" bgcolor="#000000"><blockquote>
          <p><font color="#FFFFFF" size="3" face="Times New Roman, Times, serif"><strong> Quarterly Report to Shareholders<br>
            First quarter ended January 4, 2004 </strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<P ALIGN="justify">&nbsp;</P>
<div align="justify"><font size="2" face="Times New Roman, Times, serif">
  <!-- MARKER FORMAT-SHEET="Left Head Bold" -->
  </font>
    <table width="95%"  border="0" cellspacing="0" cellpadding="0">
      <tr>
        <td width="40%"><strong><font size="2" face="Times New Roman, Times, serif">MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS</font></strong></td>
        <td width="10%">&nbsp;</td>
        <td width="40%"><u><FONT SIZE="2" face="Times New Roman, Times, serif"><B>Results of Operations</B></FONT></u></td>
      </tr>
      <tr>
        <td>&nbsp;</td>
        <td>&nbsp;</td>
        <td><FONT SIZE="2" face="Times New Roman, Times, serif"><B>Sales</B></FONT></td>
      </tr>
      <tr>
        <td valign="top"><div align="justify">
          <p><FONT size="2" FACE="Times New Roman, Times, serif">The following discussion and analysis should be read in conjunction with the unaudited consolidated financial statements for the three months ended January 4, 2004, with Management&#146;s Discussion and Analysis of Financial Position and Results of Operations (&#147;MD&amp;A&#148;) in the fiscal 2003 Annual Report, including the section on risks and uncertainties, and with the notes to the unaudited consolidated financial statements for the first quarter of fiscal 2004. The Company&#146;s accounting policies are in accordance with Canadian generally accepted accounting principles (&#147;GAAP&#148;). These differ in some respects from GAAP in the United States (&#147;U.S. GAAP&#148;). The Company&#146;s financial results are reconciled to U.S. GAAP at the end of its fiscal year in its Annual Report.</FONT></p>
          <p>&nbsp;</p>
        </div></td>
        <td>&nbsp;</td>
        <td valign="bottom"><div align="justify">
            <p><FONT size="2" FACE="Times New Roman, Times, serif">Sales for the three months ended January 4, 2004 were $78.0 million, up 20.0% from $65.0 million for the three months ended December 29, 2002. The increase in sales was due to a 21.9% increase in unit volume, partially offset by lower average selling prices. The higher unit sales growth reflected the market growth in the overall T-shirt category, increased market share in sport shirts and fleece, and a build up of inventory by distributors due to an announced January 2004 price increase.</FONT> </p>
          </div>
            <div align="justify">
              <p><font size="2" face="Times New Roman, Times, serif">U.S.<SUP>1</SUP> industry shipments of T-shirts from distributors to screen-printers increased by 12.3%, sport shirt shipments declined by 7.6%, while fleece shipments increased by 1.9% in the quarter ended December 2003 compared with the corresponding period in the previous year. During the </font></p>
          </div></td>
      </tr>
      <tr>
        <td valign="top"><div align="justify"><FONT size="2" FACE="Times New Roman, Times, serif">All financial information contained herein is expressed in U.S. dollars unless otherwise stated. Historically, the financial information of the Company has been measured and reported in Canadian dollars. However, effective October 6, 2003 the Company adopted the U.S. dollar as its functional currency since a significant portion of revenues, expenses, assets and liabilities are denominated in U.S. dollars and the Company&#146;s sales and manufacturing operations are increasingly international in scope. Effective the same date, the U.S. dollar was adopted as the Company&#146;s reporting currency. The Company will continue to report its results in accordance with Canadian GAAP. Historical financial information in U.S. dollars has been provided in the Investor Relations section of the Company&#146;s Web Site, which can be accessed at <U>www.gildan.com</U>.</FONT></div></td>
        <td>&nbsp;</td>
        <td valign="top"><div align="justify"><font size="2" face="Times New Roman, Times, serif">   same period, sales of Gildan T-shirts by distributors in the U.S. grew by 8.5% while sales of</font> <font size="2" face="Times New Roman, Times, serif">Gildan sport shirts and fleece products grew by 27.5% and 37.4% respectively. Gildan maintained its strong market leadership position in the overall T-shirt category in the United States with a market share of 30.5% in the first quarter of fiscal 2004, compared with 31.4% in the corresponding quarter of last year. During the first quarter of fiscal 2004, the Company focused on higher-valued product-lines within the T-shirt category and decided not to fully participate in highly discounted white T-shirts promotions.</font><font size="2" face="Times New Roman, Times, serif"> </font></div></td>
      </tr>
      <tr>
        <td><div align="justify">
          <p>&nbsp;</p>
          <p><FONT size="2" FACE="Times New Roman, Times, serif">When there is such a change in reporting currency, Canadian and U.S. accounting standards require that prior year comparative financial statements be presented in U.S. dollars, using a translation method that retains the Canadian dollar as the currency of measurement, as described in Note 2 to the interim consolidated financial statements. The application of this method at the beginning of fiscal 2004 involved translating all assets and liabilities using the exchange rate in effect at the end of fiscal 2003. This resulted in a translated value for opening inventories and fixed assets that was approximately $23 million higher than the amount that would have resulted from the application of exchange rates prevailing at the dates these assets were manufactured or acquired. This upward revaluation of inventories and fixed assets has been reflected directly in opening shareholders&#146; equity as part of the $26.2 million positive balance of cumulat
ive translation adjustments. These increases will have a corresponding offsetting negative impact on earnings as these inventories are consumed and fixed assets are depreciated. We have quantified the impact of these higher expenses for the first quarter of 2004 as part of our discussion and analysis of gross margins, depreciation expense and earnings per share below.</FONT> </p>
        </div></td>
        <td>&nbsp;</td>
        <td valign="top"><div align="justify">
            <p><FONT size="2" FACE="Times New Roman, Times, serif">European business has declined slightly from the prior year due to the sluggish economy in Europe, and the timing of shipments. We continue to expect to achieve our forecasted growth and market share increases in Europe in fiscal 2004.</FONT></p>
            <p><font size="2" face="Times New Roman, Times, serif"><B>Gross Margin</B></font></p>
            <p><FONT size="2" FACE="Times New Roman, Times, serif">Gross margin decreased from 29.4% in the first quarter of fiscal 2003 to 27.1% for the first quarter of fiscal 2004. Most of this decrease was due to the change in functional currency, as most of the upward revaluation of opening inventories was reflected in cost of sales during the period as opening inventories were consumed. Gross margins, excluding the impact of the adjustments due to the change in functional currency, were 29.8% in the first quarter of fiscal 2004 compared to 29.4% for the same period last year. The improvement in gross margin was the result of improved manufacturing efficiencies combined with a higher-valued product mix, partially offset by lower overall selling prices, increases in raw material costs and the impact of the stronger Canadian dollar. The Company has realized significant reductions in manufacturing, duty and transportation costs from its continuing investment in the Rio Nance facility in Honduras.</FONT></p
>
        </div></td>
      </tr>
      <tr>
        <td><div align="justify"></div></td>
        <td>&nbsp;</td>
        <td><div align="justify"><FONT size="2" FACE="Times New Roman, Times, serif"><br>
                  <br>
                  <br>
                  <br>
        </FONT> <FONT size="2" FACE="Times New Roman, Times, serif"> </FONT></div></td>
      </tr>
      <tr>
        <td>&nbsp;</td>
        <td>&nbsp;</td>
        <td><div align="justify">
            <hr align="left" width="60%" size="1" noshade>
        </div></td>
      </tr>
      <tr>
        <td>&nbsp;</td>
        <td>&nbsp;</td>
        <td><font size="1" face="Times New Roman, Times, serif"><SUP>1</SUP> Source: S.T.A.R.S. Report, AC Nielsen Market Decisions </font></td>
      </tr>
    </table>
    <u><FONT SIZE="2" face="Times New Roman, Times, serif"><B> </B></FONT></u></div>
<div align="justify">
  <p>&nbsp;</p>
</div>
<div align="justify">
  <p>&nbsp;</p>
  <P ALIGN="center"><font size="2" face="Times New Roman, Times, serif">9</font></P>
  <hr size="3" noshade>
  <div align="justify">
    <table width="99%"  border="0" cellspacing="0" cellpadding="0">
      <tr>
        <td width="46%"><img src="mda_logo.jpg" width="131" height="70"></td>
        <td width="54%" bgcolor="#000000"><blockquote>
            <p><font color="#FFFFFF" size="3" face="Times New Roman, Times, serif"><strong> Quarterly Report to Shareholders<br>
              First quarter ended January 4, 2004 </strong></font><font size="2" face="Times New Roman, Times, serif"><br>
            </font></p>
        </blockquote></td>
      </tr>
    </table>
    <p>&nbsp;</p>
  </div>
  <table width="95%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="40%"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font></td>
      <td width="10%">&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td><font size="2" face="Times New Roman, Times, serif"><B>Selling, General and Administrative Expenses</B></font></td>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td valign="top"><div align="justify">
          <p>&nbsp;</p>
          <p><FONT size="2" FACE="Times New Roman, Times, serif">Selling, general and administrative expenses were $11.4 million or 14.6% of sales for the first quarter of fiscal 2004, compared to $10.1 million or 15.5% of sales in the first quarter of fiscal 2003. The increase in the dollar amount of selling, general and administration expenses is the result of higher volume-related selling and distribution costs combined with an increase in directors and officers insurance premiums. As a percentage of sales, these expenses are higher in the first quarter of the fiscal year due to the seasonality of the business. The Company expects that for fiscal 2004, selling, general and administrative expenses will be at a similar level as a percentage of sales as fiscal 2003.</FONT> </p>
          <p><font size="2" face="Times New Roman, Times, serif"><B>Depreciation and Interest Expense</B></font></p>
      </div></td>
      <td>&nbsp;</td>
      <td><div align="justify">
          <p><FONT size="2" FACE="Times New Roman, Times, serif">In the first quarter of fiscal 2004, the Company invested $16.1 million in fixed assets mainly for the purchase of new equipment for the Rio Nance textile facility and the investment in a 50%/50% joint venture with Frontier Spinning Mills, Inc, a major yarn manufacturer. The joint venture purchased all the equipment and real estate of an existing yarn spinning facility in Cedartown, Georgia. The total cost of the acquisition, including Frontier&#146;s 50% share, amounted to $12.5 million. This facility will provide yarn to our offshore textile operations. In the first quarter of fiscal 2003, the Company invested $11.4 million in fixed assets.</FONT></p>
          <p><font size="2" face="Times New Roman, Times, serif">            For the quarter ended January 4, 2004, cash used in operating activities, including changes in non-cash working capital balances, amounted to $19.7 million compared with a source of cash of $5.8 million during the same period last year. The reduction in cash flow was mainly due to a larger seasonal build up of inventory in the first quarter of fiscal 2004 to meet our anticipated sales forecast. At the end of the first quarter of fiscal 2003, our inventories were below optimum levels, due to capacity constraints.</font> </p>
      </div></td>
    </tr>
    <tr>
      <td><div align="justify"><font size="2" face="Times New Roman, Times, serif"><br>
      Depreciation expense increased from $3.5 million in the first quarter of fiscal 2003 to $4.9 million in the first quarter of fiscal 2004. The increase in depreciation expense is the result of the Company&#146;s continued investment in capital expenditures to provide for long-term sales growth. Approximately $0.5 million of the increase was caused by the change in functional currency, as a portion of the upward revaluation of opening fixed assets was depreciated during the period.</font> </div></td>
      <td>&nbsp;</td>
      <td><div align="justify">
          <p><FONT size="2" FACE="Times New Roman, Times, serif">At January 4, 2004, none of the Company&#146;s revolving bank facility was utilized. Total indebtedness at January 4, 2004, amounted to $76.6 million compared to $73.6 million at October 5, 2003 and $76.1 million at December 29, 2002. Management expects that cash flow from its operating earnings, together with its unutilized bank facilities, will provide significant latitude to meet its foreseeable needs for seasonal working capital and capital expenditures for the balance of fiscal 2004.</FONT> </p>
          </div></td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td><div align="justify"><FONT size="2" FACE="Times New Roman, Times, serif">Interest expense has increased to $1.6 million in the first quarter of fiscal 2004 from $1.4 million in the first quarter of fiscal 2003. The increase is the result of our share of interest on long-term debt undertaken by our joint venture combined with lower interest income.</FONT> </div></td>
      <td>&nbsp;</td>
      <td><div align="justify"><FONT size="2" FACE="Times New Roman, Times, serif">Total assets were $427.3 million at January 4, 2004 compared to $429.7 million at October 5, 2003 and $322.6 million at December 29, 2002. Working capital was $153.4 million at the end of the first quarter of fiscal 2004 compared to $155.0 million at October 5, 2003, and $119.0 million at December 29, 2002.</FONT> </div></td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td><FONT SIZE="2" face="Times New Roman, Times, serif"><B>Earnings</B></FONT></td>
      <td>&nbsp;</td>
      <td><u><font size="2" face="Times New Roman, Times, serif"><B>Earnings Outlook</B></font></u></td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td><div align="justify"><FONT size="2" FACE="Times New Roman, Times, serif">Net earnings were $2.9 million or $0.10 per share on a diluted basis in the first quarter of fiscal 2004 compared to $3.7 million or $0.13 per share on a diluted basis in the first quarter of fiscal 2003. Excluding the impact of the change to the U.S. dollar functional currency outlined above, net earnings were $5.5 million or $0.18 per share on a diluted basis for the first quarter of fiscal 2004. The increase is mainly the result of the 21.9% increase in unit sales.</FONT></div></td>
      <td>&nbsp;</td>
      <td valign="top"><div align="justify">
          <P ALIGN="justify"><FONT size="2" FACE="Times New Roman, Times, serif">The Company is continuing to project a diluted EPS range of U.S. $2.25 &#151; $2.30 for fiscal 2004, up 25.7% &#151; 28.5% from fiscal 2003, before taking account of the estimated U.S. $0.16 per diluted share impact as a result of revaluing opening inventories and fixed assets. After reflecting the adjustments resulting from the transition to U.S. functional currency, the Company&#146;s EPS forecast for fiscal 2004 is U.S. $2.10 &#151; $2.15, up 17.3% &#151; 20.1% from fiscal 2003.</FONT> </P>
        </div>
          </td>
    </tr>
    <tr>
      <td valign="middle"><u><FONT SIZE="2" face="Times New Roman, Times, serif"><B>Balance Sheet, Financing and Capital Resources</B></FONT></u></td>
      <td>&nbsp;</td>
      <td><div align="justify"><FONT size="2" FACE="Times New Roman, Times, serif">These full year projections assume a 15% increase in unit sales volumes combined with a slight increase in selling prices in fiscal 2004 over fiscal 2003, to reflect partial pass-through of significantly higher cotton costs. Although there was some promotional activity in February following the implementation of the January 2004 selling price increase, the Company expects that upward pressure on selling prices will continue as manufacturers consume inventories which include higher-cost cotton.</FONT> </div></td>
    </tr>
    <tr>
      <td><div align="justify"><FONT size="2" FACE="Times New Roman, Times, serif">Accounts receivable decreased to $45.8 million in the first quarter of fiscal 2004 from $64.3 million at October 5, 2003 and increased by $10.5 million compared to the first quarter of the prior year. The reduction in receivables compared with October 5, 2003 was due to lower seasonal sales combined with a reduction in days sales outstanding on trade accounts receivable. The increase in accounts receivable from the first quarter of fiscal 2003 is due to the increase in sales over the prior year combined with an increase in non-trade receivables. Inventories have increased by $35.7 million from October 5, 2003 and by $42.8 million from the first quarter of fiscal 2003 to $139.2 million in the first quarter of fiscal 2004. The Company traditionally builds </FONT><FONT size="2" FACE="Times New Roman, Times, serif">up inventory levels in the first quarter to meet peak sales demand in the summer. The build up in the current year is
 in line with the Company&#146;s sales forecast.</FONT> </div></td>
      <td>&nbsp;</td>
      <td valign="top"><div align="justify"><FONT size="2" FACE="Times New Roman, Times, serif">   </FONT></div></td>
    </tr>
  </table>
  <P ALIGN="justify">&nbsp;</P>
</div>
<div align="justify">
  <P ALIGN="center"><font size="2" face="Times New Roman, Times, serif">10</font></P>
  <hr size="3" noshade>
  <p>&nbsp;</p>
  <div align="justify">
    <table width="99%"  border="0" cellspacing="0" cellpadding="0">
      <tr>
        <td width="46%"><img src="mda_logo.jpg" width="131" height="70"></td>
        <td width="54%" bgcolor="#000000"><blockquote>
            <p><font color="#FFFFFF" size="3" face="Times New Roman, Times, serif"><strong> Quarterly Report to Shareholders<br>
              First quarter ended January 4, 2004 </strong></font><font size="2" face="Times New Roman, Times, serif"><br>
            </font></p>
        </blockquote></td>
      </tr>
    </table>
    <p>&nbsp;</p>
  </div>
  <table width="95%"  border="0" cellpadding="0" cellspacing="0">
    <tr>
      <td width="40%"><div align="justify"><br>
              <u><FONT SIZE="2" face="Times New Roman, Times, serif"><B>Business Risks</B></FONT></u></div></td>
      <td width="10%">&nbsp;</td>
      <td width="40%">&nbsp;</td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td><div align="justify"><FONT size="2" FACE="Times New Roman, Times, serif">In order to be successful, the Company must continuously be aware of global changes and risks affecting its markets and competitive environment. Risk areas include changes in international trade legislation and taxation, and changes in cotton prices. For a more detailed discussion on potential business risks, readers should review the risk factors section of the Annual Information Form filed by the Company with the Canadian securities commissions and the Annual Report on Form 40-F filed with the U.S. Securities and Exchange Commission which are hereby incorporated by reference.</FONT> </div></td>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
  </table>
  <P ALIGN="justify">&nbsp;</P>
</div>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="center"><font size="2" face="Times New Roman, Times, serif">
  <!-- MARKER FORMAT-SHEET="Left Head Bold" -->
</font><u><FONT SIZE="2" face="Times New Roman, Times, serif"><B></B></FONT></u></P>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify">&nbsp;</P>
<div align="justify">
  <P ALIGN="justify">&nbsp;</P>
</div>
<div align="justify">
  <P ALIGN="center"><font size="2" face="Times New Roman, Times, serif">11</font></P>
</div>
<hr size="3" noshade>
<P ALIGN="justify">&nbsp;</P>
<p align="left">&nbsp;</p>
<p>&nbsp;</p>
<P>
<P align=center><FONT face="Times New Roman, Times, serif"
size=3><STRONG>SIGNATURE</STRONG></FONT>
<P align=left>
<P align="left"><FONT face="Times New Roman, Times, serif"
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securitiecs Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.</FONT>
<P>
<P>
<P>
<DIV align=right>
  <TABLE cellSpacing=0 cellPadding=0 width="50%" border=0>
    <TR>
      <TD><STRONG><FONT face="Times New Roman, Times, serif" size=3>GILDAN ACTIVEWEAR INC. </FONT></STRONG></TD>
    </TR>
    <TR>
      <TD>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp;</TD>
    </TR>
    <TR>
      <TD>(Signed) St&eacute;phane Lemay
          <HR noShade SIZE=1>
    </TR>
    <TR>
      <TD><FONT face="Times New Roman, Times, serif" size=3>St&eacute;phane Lemay </FONT></TD>
    </TR>
    <TR>
      <TD><FONT face="Times New Roman, Times, serif" size=3>Vice-President, Public and Legal Affairs </FONT></TD>
    </TR>
    <TR>
      <TD>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P align="left">
<div align="left">
  <TABLE width="50%" border=0 cellPadding=0 cellSpacing=0>
    <TR>
      <TD><strong>Date</strong> March 3, 2004</TD>
    </TR>
    <TR>
      <TD>&nbsp;</TD>
    </TR>
  </TABLE>
</div>
<P>
<p align="left">&nbsp;</p>
<p align="left"><FONT color=#0000ff></FONT></p>
<p></p>
<p>&nbsp;</p>

</TEXT>
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`
end

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
