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<SEC-DOCUMENT>0001061894-05-000009.txt : 20050216
<SEC-HEADER>0001061894-05-000009.hdr.sgml : 20050216
<ACCEPTANCE-DATETIME>20050216160842
ACCESSION NUMBER:		0001061894-05-000009
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20050216
FILED AS OF DATE:		20050216
DATE AS OF CHANGE:		20050216

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:		05621118

	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
<TEXT>
<title>Q1 Quarterly Report</title><p align="left">&nbsp;</p>
<p>&nbsp;</p>
<P ALIGN="CENTER"><FONT size="2" FACE="Times New Roman, Times, serif"><B>SECURITIES AND EXCHANGE COMMISSION<br>
  WASHINGTON, DC 20549</B></FONT></P>
<p><font size="2" face="Times New Roman, Times, serif">
  <!-- MARKER FORMAT-SHEET="Center Head Bold" -->
</font></p>
<p>&nbsp; </p>
<P ALIGN="CENTER"><FONT size="2" FACE="Times New Roman, Times, serif"><B>FORM 6-K</B></FONT></P>
<p><font size="2" face="Times New Roman, Times, serif">
  <!-- MARKER FORMAT-SHEET="Center Head Bold" -->
</font></p>
<p>&nbsp; </p>
<P ALIGN="CENTER"><FONT size="2" FACE="Times New Roman, Times, serif"><B>REPORT OF FOREIGN PRIVATE ISSUER<br>
  </B>Pursuant to Rule 13a-16 or 15d-16 under <br>
  the Securities Exchange Act of 1934</FONT></P>
<P ALIGN="CENTER"><font size="2" face="Times New Roman, Times, serif"><br>
</font></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=2>For the month of: <STRONG>February, 2005</STRONG></FONT></TD>
      <TD align=right width="50%"><FONT face="Times New Roman, Times, serif"
      size=2>Commission File Number:<STRONG> 1-14830</STRONG></FONT></TD>
    </TR>
    <TR>
      <TD width="50%">&nbsp;</TD>
      <TD width="50%">&nbsp;</TD>
    </TR>
    <TR vAlign=bottom align=middle>
      <TD colSpan=2><div align="center"><font size="2" face="Times New Roman, Times, serif"><STRONG>GILDAN ACTIVEWEAR INC.</STRONG></font></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%">&nbsp;</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"><font size="2" face="Times New Roman, Times, serif"><strong>725 Mont&eacute;e de Liesse<br>
            Ville
            Saint-Laurent, Quebec <br>
          Canada H4T 1P5</strong></font></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=2>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><font size="2" face="Times New Roman, Times, serif">Form 20-F <U>&nbsp;&nbsp; &nbsp;&nbsp;</U>
      </font>
      <TD vAlign=top width=200><font size="2" face="Times New Roman, Times, serif">Form 40-F <U>&nbsp;&nbsp;&nbsp;<strong>X</strong>&nbsp;&nbsp;</U></font></TD>
    </TR>
  </TABLE>
  <p align="left">&nbsp;</p>
</DIV>
<P>
<P>
<P><FONT face="Times New Roman, Times, serif" size=2>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><font size="2" face="Times New Roman, Times, serif">Yes <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
      </font>
      <TD vAlign=top width=150><font size="2" face="Times New Roman, Times, serif">No <U>&nbsp;&nbsp;<strong>X</strong>&nbsp;&nbsp;</U></font></TD>
    </TR>
  </TABLE>
</DIV>
<P>
<P>
<P><FONT face="Times New Roman, Times, serif" size=2>If</FONT><FONT color=#0000ff size="2" face="Times New Roman, Times, serif">&nbsp;</FONT><FONT face="Times New Roman, Times, serif" size=2> &#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>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<p>&nbsp;</p>
<p align="left"><font size="2" face="Times New Roman, Times, serif"><strong><u>MESSAGE TO SHAREHOLDERS</u></strong></font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">On behalf of the Board of Directors, I am pleased to provide results for the three months ended January 2, 2005.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">We are pleased to have again delivered sales and earnings growth in excess of expectations. Industry conditions continue to be
  strong, and the Gildan brand continues to have excellent momentum in all of our served markets.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The Company reported record net earnings for the first quarter of a fiscal year of U.S. $8.4 million or U.S. $0.28 per share, on a
  diluted basis, compared with U.S. $2.9 million or U.S. $0.10 per share in the first quarter of fiscal 2004. After adjusting prior
  year results for the impact on cost of sales of revaluing opening inventories, due to the adoption of the U.S. dollar as the
  Company&rsquo;s functional currency with effect from October 6, 2003, net earnings in the first quarter of fiscal 2004 were U.S. $5.0
  million or U.S. $0.17 per share. After adjusting prior year comparatives, the year-over-year increase in net earnings and diluted
  E.P.S was 68.0% and 64.7% respectively.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Compared to last year, the increase in first quarter net earnings was driven by continuing growth in unit sales volumes, higher
  selling prices and more favourable product-mix, together with the continuing ramp-up of the Rio Nance textile facility. These
  positive factors were partially offset by higher SG&amp;A expenses, increased costs for cotton, energy and transportation and the impact
  of lower capacity utilization on the efficiency of Gildan&rsquo;s Canadian yarn-spinning operations.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Sales in the first quarter were U.S. $109.0 million, representing an increase of 39.8% over the first quarter of fiscal 2004. The
  significant growth in sales revenues was due to improved selling prices, a 27.5% increase in unit sales volumes, and a higher-valued
  product-mix within the T-shirt category.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Gross margins in the first quarter were 29.7%, compared with 27.1% in the first quarter of fiscal 2004. Before the impact of the
  functional currency adjustment on cost of sales in the first quarter of last year, comparative gross margins were 29.8%. The positive
  gross margin impact of higher selling prices and more favourable product-mix was offset by higher cotton, energy and transportation
  costs and higher costs for our Canadian yarn-spinning operations.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">On February 1, 2005 the Company announced that it is closing its two Canadian yarn-spinning operations, located in Long Sault,
  Ontario and in Montr&eacute;al, Qu&eacute;bec. The majority of the equipment will be transferred to a new yarn-spinning facility in Clarkton, North
  Carolina, which will be leased and operated by the Company&rsquo;s yarn-spinning joint-venture with Frontier Spinning Mills.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Gildan&rsquo;s Canadian yarn-spinning facilities provide yarn for its Canadian textile manufacturing operations. In order to be globally
  cost-competitive, Gildan is expanding its textile operations in Central America and the Caribbean basin, and utilizing its textile
  operations in Canada to produce shorter-run, higher-value product-lines. This has resulted in lower requirements for commodity yarns
  from the Canadian yarn-spinning facilities, with the result that they are no longer able to operate at an efficient level of capacity
  utilization.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Furthermore, under the Caribbean Basin Trade Partnership Act (CBTPA) enacted by the U.S. in 2000, it is not economic for Gildan to
  utilize yarn from its Canadian yarn-spinning facilities to supply its offshore textile operations, which must use yarn spun in the
  U.S. in order to be eligible for duty-free access to U.S. markets. Approximately 85% of Gildan&rsquo;s overall sales are currently made to
  the U.S. The new Central American Free Trade Agreement (CAFTA), which is expected to be implemented by the U.S. in 2005, will also
  allow duty-free access from Gildan&rsquo;s offshore manufacturing hubs for products using regionally-spun yarn, but this new legislation
  will still not provide for the use of Canadian yarn.</font></p>
<HR color=gray noShade SIZE=3>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<p>&nbsp;</p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">In addition to the impact of lower capacity utilization on Gildan&rsquo;s Canadian yarn-spinning facilities, their cost structure has also
  been negatively impacted by the recent appreciation of the Canadian dollar and by the deregulation of electricity costs in the
  province of Ontario. Electricity is a major input in the cost structure of yarn-spinning operations. The relocation of yarn-spinning
  to the U.S. will also result in lower transportation costs for both cotton and yarn to be consumed by Gildan&rsquo;s offshore textile
  facilities. At current exchange rates, Gildan anticipates that the annual cost saving from the relocation and consolidation of its
  yarn-spinning operations will be in the order of U.S. $4.0 million after-tax, or U.S. $0.13 per diluted share.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The Company is maintaining its full year diluted E.P.S. guidance for fiscal 2005 of approximately U.S. $2.60 per share, before a
  special charge for the closure of its Canadian yarn-spinning facilities. The resulting special charge, estimated at approximately
  U.S. $7.8 million after-tax or $0.26 per diluted share, consists mainly of the loss on disposal of fixed assets that are not being
  transferred to the new U.S joint venture facility and severance costs. This charge will be reflected in the second quarter of fiscal
  2005. After taking account of this charge, full year diluted E.P.S. is estimated at approximately U.S. $2.34. The Company&rsquo;s full
  year earnings guidance reflects unit sales growth of approximately 20% over fiscal 2004, which will fully utilize the Company&rsquo;s
  available production capacity, and also assumes sequentially lower unit selling prices in the second half of the fiscal year,
  reflecting the possible flow-through of lower cotton prices. On this basis, full year sales are projected at approximately U.S. $640
  million, up approximately 20% from U.S. $533 million in fiscal 2004.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">On behalf of the Board of Directors, I wish to take this opportunity to thank our shareholders for their confidence and support.</font></p>
<p align="justify">&nbsp;</p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><em>Glenn J. Chamandy</em><br>
  Preisident and Chief Executive Officer</font></p>
<p align="justify">
  <font size="2" face="Times New Roman, Times, serif">
  <!-- MARKER FORMAT-SHEET="Left Head Bold" -->
</font></p>
<div align="justify"></div>
<hr size="3" noshade>
<P ALIGN="justify">&nbsp;</P>
<p align="center"><font size="2" face="Times New Roman, Times, serif"> <font size="3"><strong>Gildan Activewear Inc. </strong></font><strong><br>
  Consolidated Balance Sheets <br>
</strong>(in thousands of U.S. dollars) </font></p>
<p align="center"><font size="2" face="Times New Roman, Times, serif"> </font> </p>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="95%">
  <TR VALIGN="BOTTOM">
    <TH></TH>
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
    <TH></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><u><font size="2" face="Times New Roman, Times, serif">January 2, 2005</font></u></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><u><font size="2" face="Times New Roman, Times, serif">October 3, 2004 </font></u></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><u><font size="2" face="Times New Roman, Times, serif">January 4, 2004 </font></u></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <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="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="47%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Current assets:</font></TD>
    <TD WIDTH="17%" ALIGN="RIGHT"></TD>
    <TD WIDTH="4%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="14%" ALIGN="RIGHT"></TD>
    <TD WIDTH="3%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="15%" ALIGN="RIGHT"></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents</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;&nbsp;52,381</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;60,671</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;37,490</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">49,099</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">85,317</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">45,760</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">142,376</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">116,615</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">139,248</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and deposits</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">5,872</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,243</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">4,923</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future income taxes</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">8,818</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">8,149</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">6,049</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 colspan="3" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">258,546</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">273,995</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">233,470</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <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">&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="RIGHT"><font size="2" face="Times New Roman, Times, serif">234,992</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">211,693</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">190,295</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Other assets</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,739</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,127</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,520</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 colspan="3" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <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">Total assets</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;497,277</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;488,815</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;427,285</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><hr size="2" noshade></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="3" ALIGN="RIGHT"><hr size="2" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Current liabilities:</font></TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;65,363</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;74,607</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;56,599</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">2,364</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">1,966</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">4,016</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current portion of long-term debt</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">19,711</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">18,610</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">19,409</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 colspan="3" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">87,438</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">95,183</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">80,024</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Long-term debt</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">41,153</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">37,979</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">57,198</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="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,235</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">28,058</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">22,725</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Non-controlling interest</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">2,860</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&#8212;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&#8212;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <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">&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="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;&nbsp;Share capital (note 3) </font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">78,579</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">78,170</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">75,753</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contributed surplus</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">881</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">681</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;&nbsp;Retained earnings</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">230,883</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">222,496</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">165,117</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cumulative translation adjustment</font></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">26,248</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 colspan="3" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">336,591</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">327,595</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">267,338</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 colspan="3" 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="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;497,277</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;488,815</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;427,285</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><hr size="2" noshade></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="3" ALIGN="RIGHT"><hr size="2" noshade></TD>
  </TR>
</TABLE>
<p><font size="1" face="Times New Roman, Times, serif">See accompanying notes to interim consolidated financial statements. </font></p>
<p align="left"><font size="2" face="Times New Roman, Times, serif"><!-- MARKER FORMAT-SHEET="Left Head Bold" -->
</font></p>
<div align="justify"></div>
<hr size="3" noshade>
<P ALIGN="justify">&nbsp;</P>
<p align="center"><font size="2" face="Times New Roman, Times, serif"> <strong><font size="3">Gildan Activewear Inc. </font><br>
  Consolidated Statements of Earnings </strong><br>
  (In thousands of U.S. dollars, except per share data) <br>
</font><font size="2" face="Times New Roman, Times, serif"> </font></p>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="95%">
  <TR VALIGN="BOTTOM">
    <TH></TH>
    <TH></TH>
    <TH></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="2" 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"><u>January 2, 2005</u></font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif"><u>January 4, 2004</u></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(unaudited)</font></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="RIGHT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD WIDTH="68%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Sales</font></TD>
    <TD WIDTH="17%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$108,957</font></TD>
    <TD WIDTH="15%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$77,959</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="RIGHT"><font size="2" face="Times New Roman, Times, serif">76,577</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">56,859</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="2" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Gross profit</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">32,380</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">21,100</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&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="RIGHT"><font size="2" face="Times New Roman, Times, serif">16,327</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">11,397</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="2" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</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="RIGHT">&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="RIGHT"><font size="2" face="Times New Roman, Times, serif">16,053</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">9,703</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&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="RIGHT"><font size="2" face="Times New Roman, Times, serif">5,880</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">4,932</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Interest expense</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">1,201</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">1,589</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="2" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</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="RIGHT"><font size="2" face="Times New Roman, Times, serif">8,972</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,182</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&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="RIGHT"><font size="2" face="Times New Roman, Times, serif">585</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">310</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="2" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Net earnings</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;8,387</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;2,872</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="2" ALIGN="RIGHT"><hr size="2" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Basic EPS (note 4) </font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.28</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;0.10</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Diluted EPS (note 4)</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.28</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;0.10</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</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) </font></p>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="96%">
  <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"><u>January 2, 2005</u></font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif"><u>January 4, 2004</u></font></TD>
  </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">(unaudited)</font></div></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">(unaudited)</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="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="14%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">222,496</font></TD>
    <TD WIDTH="3%" ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">162,245</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Net earnings</font></TD>
    <TD ALIGN="LEFT"><div align="right"></div></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">8,387</font></TD>
    <TD ALIGN="LEFT"><div align="right"></div></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">2,872</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="4" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Retained earnings, end of the period</font></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">230,883</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>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="4" ALIGN="LEFT"><hr size="2" noshade></TD>
  </TR>
</TABLE>
<p><font size="1" face="Times New Roman, Times, serif"> See accompanying notes to interim consolidated financial statements. </font></p>
<P ALIGN="justify"> <font size="2" face="Times New Roman, Times, serif">
<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
</font></P>
<div align="justify"></div>
<hr size="3" noshade>
<P ALIGN="justify">&nbsp;</P>
<p align="center"><font size="2" face="Times New Roman, Times, serif"> <font size="3"><strong>Gildan Activewear Inc.</strong></font><strong><br>
  Consolidated Statements of Cash Flows </strong></font><font size="2" face="Times New Roman, Times, serif"><br>
  (In thousands of U.S. dollars) </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></TH>
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="4" ALIGN="RIGHT"><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"><u><font size="2" face="Times New Roman, Times, serif">January 2, 2005</font></u></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><u><font size="2" face="Times New Roman, Times, serif">January 4, 2004</font></u></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <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="69%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Cash flows from operating activities:</font></TD>
    <TD WIDTH="15%" ALIGN="RIGHT"></TD>
    <TD WIDTH="1%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="14%" ALIGN="RIGHT"></TD>
    <TD WIDTH="1%" 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;Net earnings</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;8,387</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>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments for:</font></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;&nbsp;&nbsp;Depreciation and amortization</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">5,880</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>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock based compensation</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">200</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&#8212;</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;&nbsp;&nbsp;Future income taxes</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(183</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">122</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;&nbsp;&nbsp;Loss on disposal of fixed assets</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">325</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">40</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;&nbsp;&nbsp;Unrealized foreign exchange gain</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(159</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">(33</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 colspan="4" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">14,450</font></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>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Net changes in non-cash working capital balances:</font></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;Accounts receivable</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">37,701</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>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(25,305</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">(35,745</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;Prepaid expenses and deposits</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(2,560</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">(1,242</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;Accounts payable and accrued liabilities</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(12,286</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">(9,854</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;Income taxes payable</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">236</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>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="4" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">12,236</font></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>
  </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="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;Repayment of capital leases and other long-term debt</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(375</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">(1,171</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;Increase in long-term debt</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">1,281</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>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the issuance of shares</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">409</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>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="4" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">1,315</font></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>
  </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="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;Purchase of fixed assets, net of disposals</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(22,089</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">(16,123</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;(Increase) decrease in other assets</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(54</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">19</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="4" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(22,143</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">(16,104</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="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;and cash equivalents</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">302</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>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="4" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <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">Net decrease in cash and cash equivalents</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(8,290</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">(31,850</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;during the period</font></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">&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="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;60,671</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;69,340</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="4" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Cash and cash equivalents, end of period</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;52,381</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>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="4" ALIGN="RIGHT"><hr size="2" noshade></TD>
  </TR>
</TABLE>
<p><font size="1" face="Times New Roman, Times, serif">See accompanying notes to interim consolidated financial statements. </font></p>
<P ALIGN="justify"> <font size="2" face="Times New Roman, Times, serif">
<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
</font></P>
<div align="justify"></div>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong><u>NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS</u></strong><br>
    <strong>(For the period ended January 2, 2005)<br>
  (Tabular amounts in thousands of U.S. dollars, except per share data)<br>
(unaudited)</strong></font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>1. Basis of presentation: </strong></font></p>
<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&rsquo;s annual consolidated financial statements. The January 2, 2005 unaudited interim consolidated
  financial statements include the full consolidation of Cedartown Manufacturing LLC (&ldquo;Cedartown&rdquo;), the Company&rsquo;s 50% owned joint
  venture with Frontier Spinning Mills, Inc. Historically, the Company has accounted for its investment in Cedartown using the
  proportionate consolidation method (see Note 2, Significant account policies below).</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The Company's revenues and income are subject to seasonal variations. Consequently, the results of operations for the first quarter
  ended January 2, 2005 are traditionally not indicative of the results to be expected for the full year.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Certain comparative figures have been reclassified in order to conform with the current&rsquo;s year&rsquo;s presentation.</font></p>
<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>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>2. Significant accounting policies:</strong></font></p>
<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 2 of its audited consolidated financial statements in the Company&rsquo;s annual report for the year ended October 3, 2004, except as
  noted below.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The following policy has been applied for the first time in this quarter following a new Accounting Guideline issued by the Canadian
  Institute of Chartered Accountants (&ldquo;CICA&rdquo;);</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>Variable interest entities (AcG-15)</strong></font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The CICA issued a guideline on accounting for variable interest entities (&ldquo;VIEs&rdquo;) titled Accounting Guideline 15 &ndash; Consolidation of
  Variable Interest Entities (&ldquo;AcG-15&rdquo;), which proposes guidelines to harmonize with corresponding guidance in the United States. A
  VIE is any type of legal structure not controlled by voting equity but rather by/or through contractual or other financial
  arrangements. This guideline requires the Company to identify VIEs in which it has an interest, determine whether it is the primary
  beneficiary of such entities and, if so, to consolidate the VIE. A primary beneficiary is an enterprise that will absorb a majority
  of the VIE&rsquo;s expected losses, receive a majority of its expected residual return, or both. We have determined that the Company&rsquo;s
  joint venture with Frontier Spinning Mills, Inc. (Cedartown Manufacturing LLC) meets the criteria for being a VIE and that the<br>
  Company is the primary beneficiary of the entity.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The Company elected to early adopt this standard on October 4, 2004, the beginning of its 2005 fiscal year, in order to minimize any
  potential difference between Canadian and U.S. GAAP. The consolidation of Cedartown at October 4, 2004, the beginning of the
  Company&rsquo;s 2004 fiscal year, increased total assets by $7.9 million and total liabilities by $5.0 million, while creating a
  non-controlling interest of $2.9 million. The Company&rsquo;s net earnings will not be affected by this change.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The consolidation of the Company&rsquo;s interest in Cedartown did not result in any material change in the underlying tax, legal or credit
  risks facing the Company.<br>
</font></p>
<p align="justify">&nbsp;</p>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<p>&nbsp;</p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>3. Share capital: </strong></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 COLSPAN="2"></TH>
    <TH></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <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>
  </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 colspan="3" ALIGN="RIGHT"><div align="center"><font size="2" face="Times New Roman, Times, serif">January 2, 2005</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">January 4, 2004 </font></div></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>
    <TD colspan="3" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <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>
  <TR VALIGN="BOTTOM">
    <TD colspan="9" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <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>
  <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, 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">29,699</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$78,170</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>
  </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">1</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">33</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>
  </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">19</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">376</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>
  </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">29,719</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">78,579</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>
  </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">0</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">&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">29,719</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$78,579</font></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>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="9" ALIGN="LEFT"><hr size="2" noshade></TD>
  </TR>
</TABLE>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The Company has obtained approval from the Toronto Stock Exchange to renew the stock repurchase program authorizing the Company to
  purchase up to a maximum of 500,000 of the Company&rsquo;s Class A subordinate voting shares in the open market commencing December 22,
  2004 and ending December 21, 2005. As at January 2, 2005 no shares have been repurchased under this plan.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">At the annual and special meeting of the shareholders on February 2, 2005, our shareholders approved a special resolution to amend
  our Articles of Incorporation in order to change each of the issued and outstanding Class A subordinate voting shares into one
  newly-created common share and to remove the Class B multiple voting shares and the Class A subordinate voting shares, effectively
  eliminating our dual class voting structure.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">On December 1, 2004, our Board of Directors adopted a shareholder rights plan, which became effective that same day. At the annual
  and special meeting of the shareholders on February 2, 2005, our shareholders approved a resolution confirming the ratification of
  the shareholder rights plan. The objectives of the shareholder rights plan are to provide the Board of Directors and the shareholders
  with adequate time to assess any unsolicited take-over bid for the Company and where appropriate, give the Board of Directors
  sufficient time to pursue other alternatives for maximizing shareholder value. The shareholder rights plan was not adopted in
  response to any specific proposal to acquire control of the Company nor is the Board of Directors currently aware of any pending or
  threatened take-over bid for the Company.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">On March 1, 2004, the holders of the Class B multiple voting shares converted all their issued and outstanding shares into Class A
  subordinate voting shares on a one-for-one basis for no consideration.</font></p>
<p align="justify">&nbsp;</p>
<div align="justify"></div>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<p><strong><font size="2" face="Times New Roman, Times, serif">4. Earnings per share:</font></strong></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The following table sets forth the computation of basic and diluted earnings per share:<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="16%"></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD width="66%" ALIGN="LEFT">&nbsp;</TD>
    <TD width="1%" 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 width="14%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">January 2, 2005</font></TD>
    <TD width="3%" ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">January 4, 2004</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 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">&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">29,704</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,524</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="5" ALIGN="LEFT"><hr size="2" 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><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;0.28</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>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="5" ALIGN="LEFT"><hr size="2" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="5" ALIGN="LEFT">&nbsp;</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">29,704</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,524</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">181</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">268</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="5" ALIGN="LEFT"><hr size="2" 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 size="2" face="Times New Roman, Times, serif">Diluted 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">29,885</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,792</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="5" ALIGN="LEFT"><hr size="2" 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 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;0.28</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>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="5" ALIGN="LEFT"><hr size="2" noshade></TD>
  </TR>
</TABLE>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Stock-Based Compensation and Other Stock-Based Payments:<br>
  Effective the commencement of our 2004 fiscal year, the Company follows the fair value-based method to account for all transactions
  whereby goods and services are received in exchange for stock-based compensation and other stock-based payments. Under the fair
  value method, compensation cost is measured at fair value at the date of grant and is expensed over the award&rsquo;s vesting periods. 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 fiscal 2003.<br>
</font></p>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="90%">
  <TR VALIGN="BOTTOM">
    <TH COLSPAN="4"></TH>
    <TH COLSPAN="2"></TH>
    <TH width="16%"></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="3" ALIGN="LEFT">&nbsp;</TD>
    <TD width="1%" 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="7" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="3" ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD width="14%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">January 2, 2005</font></TD>
    <TD width="3%" ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">January 4, 2004</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="3" 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="7" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="3" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Net earnings, as reported </font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">8,387</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">2,872</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="3" ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><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 width="8%" ALIGN="LEFT">&nbsp;</TD>
    <TD width="36%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Total stock-based employee compensation expense determined under fair value based method for all wards granted in fiscal 2003</font></TD>
    <TD width="22%" ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">26</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">83</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="7" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="3" 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;8,361</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;2,789</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="7" ALIGN="LEFT"><hr size="2" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="7" ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="3" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Earnings per share:</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="3" ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="Times New Roman, Times, serif">Basic:</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">As reported </font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;0.28</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>
  </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></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Pro forma </font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;0.28</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;0.09</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="3" ALIGN="LEFT"><font color="#666666" size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">As reported </font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;0.28</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>
  </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></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Pro forma </font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;0.28</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;0.09</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="7" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <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>
</TABLE>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The weighted average fair value of the remaining 34,329 options granted in fiscal 2003 is CAD $10.86 per, which is recognized over
  the vesting period for purposes of calculating pro forma net earnings. As at January 4, 2004, there were 121,206 of the options
  granted in fiscal 2003 outstanding having a weighted average fair value of CAD $10.65 per share. The Company only accounts for
  forfeitures as they occur. 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 34.94%; risk-free interest rate of 3.63%; and expected lives of 3 years.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>5. Guarantees:</strong></font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Significant guarantees that have been provided to third parties are the following:</font></p>
<p align="justify"><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 2, 2005, the maximum potential liability under these guarantees was $24.9 million of which $8.7 million
  was surety bonds and $16.2 million was for standby letters of credit and corporate guarantees. The standby letters of credit mature
  at various dates during 2005 and the surety bonds are automatically renewed on an annual basis.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">As at January 2, 2005, the Company has not recorded a liability with respect to these guarantees, as the Company does not expect to
make any payments for the aforementioned items.</font></p>
<p align="justify">&nbsp;</p>
<div align="justify"></div>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<p><font size="2" face="Times New Roman, Times, serif"><strong>6. Financial instruments:</strong></font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The following table summarizes the Company&rsquo;s commitments to buy and sell foreign currencies as at January 2, 2005 and January 4, 2004:
</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">2005:</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">Buy 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">CAD$</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">42,840</font></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">0.7251 to 0.7896</font></div></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">January to September 2005</font></div></TD>
    <TD ALIGN="RIGHT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$32,573&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">&pound;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">5,435&nbsp;</font></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">1.8815 to 1.9197</font></div></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">January 2005 to March 2006</font></div></TD>
    <TD ALIGN="RIGHT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$10,317&nbsp;</font></div></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&#8364;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">19,259</font></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">1.3308 to 1.3721</font></div></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">January 2005 to March 2006</font></div></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$26,085&nbsp;</font></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 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">&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;&nbsp;&nbsp;Foreign exchange contracts</font></TD>
    <TD ALIGN="LEFT">&pound;</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">$12,148&nbsp;</font></div></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&#8364;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">5,390&nbsp;</font></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">1.6660 to 1.6850</font></div></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">January to October 2004</font></div></TD>
    <TD ALIGN="RIGHT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$&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 colspan="6" ALIGN="LEFT">&nbsp;</TD>
  </TR>
</TABLE>
<p align="justify"><strong><font size="2" face="Times New Roman, Times, serif">7. Segmented information:</font></strong></p>
<p align="justify"><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 align="justify"><font size="2" face="Times New Roman, Times, serif">For the three-month period ended January 2, 2005 and January 4, 2004 the Company had one individual customer who accounted for 36.4%
  and 22.5% of total sales, respectively.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Sales were derived from customers located in the following geographic areas:</font><font size="2" face="Times New Roman, Times, serif"> </font> </p>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="95%">
  <TR VALIGN="BOTTOM">
    <TH></TH>
    <TH COLSPAN="2"></TH>
    <TH></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="3" ALIGN="RIGHT" bgcolor="#66CCFF"><div align="center"><font size="2"><strong><font face="Times New Roman, Times, serif">Three months ended</font></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"><u>January 2, 2005 </u></font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif"><u>January 4, 2004</u></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="4" ALIGN="LEFT"><hr size="2" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD WIDTH="68%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">United States</font></TD>
    <TD WIDTH="14%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;95,571</font></TD>
    <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="13%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$66,775</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">6,820</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">6,459</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Europe and other</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">6,566</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">4,725</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="4" ALIGN="LEFT"><hr size="2" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$108,957</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$77,959</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="4" ALIGN="LEFT"><hr size="2" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
</TABLE>
<p><font size="2" face="Times New Roman, Times, serif"> Fixed assets by geographic areas are as follows: </font></p>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="95%">
  <TR VALIGN="BOTTOM">
    <TH></TH>
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
    <TH></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><u><font size="2" face="Times New Roman, Times, serif">January 2, 2005 </font></u></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><u><font size="2" face="Times New Roman, Times, serif">October 3, 2004</font></u></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><u><font size="2" face="Times New Roman, Times, serif">January 4, 2004</font></u></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(audited)</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="6" ALIGN="LEFT"><hr size="2" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD WIDTH="51%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Canada</font></TD>
    <TD WIDTH="14%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;79,711</font></TD>
    <TD WIDTH="4%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="14%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;82,034</font></TD>
    <TD WIDTH="4%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="13%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;91,695</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="RIGHT"><font size="2" face="Times New Roman, Times, serif">114,170</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">101,653</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">74,322</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">United States</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">41,111</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">28,006</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">24,278</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="6" ALIGN="LEFT"><hr size="2" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$234,992</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$211,693</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$190,295</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="6" ALIGN="LEFT"><hr size="2" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <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>
<p align="justify">&nbsp;</p>
<div align="justify"></div>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<p><strong><font size="2" face="Times New Roman, Times, serif">8. Other information:</font></strong></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">(a) The following items were included in the determination of the Company&rsquo;s net earnings:<br>
  <br>
</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 2, 2005</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">January 4, 2004</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 expense 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;5,684</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;4,755</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">1,319</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">1,589</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Foreign exchange (gain) loss </font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(604</font></TD>
    <TD ALIGN="LEFT">)</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">761</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Amortization expense of deferred start-up costs </font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">87</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">79</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Amortization of deferred financing costs and other </font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">110</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">97</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Investment income </font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(119</font></TD>
    <TD ALIGN="LEFT">)</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(134)</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">1,237</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">1,579</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">82</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">86</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">3,997</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">968</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">$29,581</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$24,649</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">22,800</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">12,841</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">$52,381</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$37,490</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="5" ALIGN="LEFT"><hr size="3" noshade></TD>
  </TR>
</TABLE>
<p align="justify"><strong><font size="2" face="Times New Roman, Times, serif">9. Subsequent event:</font></strong></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The Company announced on February 1, 2005 that it will close its two Canadian yarn-spinning operations at the end of March 2005. A
  majority of the equipment will be transferred to a new yarn-spinning facility in Clarkton, North Carolina, which will be operated by
  the Company&rsquo;s yarn-spinning joint-venture with Frontier Spinning Mills Inc. The Company anticipates that the closure costs will be
  approximately $7.8 million after tax or $0.26 per diluted share. The closure costs will consist mainly of severance and the loss on
  disposal of fixed assets that are not being transferred. This charge will be expensed in the second quarter of fiscal 2005.</font></p>
<P ALIGN="justify">&nbsp;</P>
<div align="justify"></div>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><br>
    <strong><font size="2" face="Times New Roman, Times, serif">MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS</font></strong></font></p>
<p align="justify"><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 and notes
  thereto for the three months ended January 2, 2005, and with Management's Discussion and Analysis of Financial Condition and Results
  of Operations (&quot;2004 MD&amp;A&quot;) in the fiscal 2004 Annual Report, including the sections on critical accounting estimates and risks.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">All financial information contained in this Interim MD&amp;A and the Interim Company&rsquo;s Consolidated Financial Statements has been
  prepared in accordance with Canadian generally accepted accounting principles (&ldquo;GAAP&rdquo;), except for certain information discussed in
  the paragraph entitled Non-GAAP Financial Measures on page 19 of this Interim MD&amp;A. The Company&rsquo;s financial results are reconciled to
  U.S. GAAP at the end of its fiscal year. The effect of significant differences between Canadian and U.S. GAAP is discussed in Note
  16 to the Company&rsquo;s 2004 Consolidated Financial Statements. All amounts in this report are in U.S. dollars, unless otherwise
  stated. Gildan Activewear&rsquo;s Audit and Finance Committee and its Board of Directors have reviewed this MD&amp;A to ensure consistency
  with the approved strategy of the Company.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">For additional information relating to the Company, readers may review the documentation filed by the Company with the Canadian
  securities regulatory authorities (including the Company&rsquo;s Annual Information Form) available at www.sedar.com and with the U.S.
  Securities and Exchange Commission (including the Annual Report on 40-F) available at www.sec.gov.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">  <strong>CORPORATE OVERVIEW</strong></font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">We are a rapidly growing, vertically-integrated manufacturer and marketer of premium quality basic activewear for sale principally
  into the wholesale imprinted activewear market in the Canadian, United States, European and other international apparel markets. Our
  sales continue to be predominately in our historical markets in the United States and Canada. During the past four years we
  established a strong base for future growth in Europe, where, as of January 2005, we had set up a network of 36 distributors in 20
  countries. We entered the Australian market in fiscal 2004. We manufacture and sell premium quality T-shirts, placket collar sport
  shirts and fleece products in a variety of weights, sizes, colors and styles. We sell our products as &ldquo;blanks&rdquo;, which are ultimately
  decorated with designs and logos for sale to customers.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">To support its sales in the various markets, the Company has modern textile facilities located in Canada and Honduras. The Company
  is currently constructing textile facilities in both the Dominican Republic and Nicaragua, which are scheduled for start-up in fiscal
  2005. All of the Company&rsquo;s sewing facilities are located in Central America, Mexico and the Caribbean basin. Due to the growing
  demand for its products, the Company also utilizes third party contractors to complement its vertically-integrated production.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The Company distributes its products in Canada and the U.S. out of distribution centres, and uses third party warehouses in Europe
  and Australia to service its international customers. The corporate head office is located in Montreal, Canada and over 8,000
  full-time employees work in the Company&rsquo;s facilities worldwide.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong><u>Results of Operations</u></strong></font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>Sales</strong><br>
  Sales for the three months ended January 2, 2005 were $109.0 million, up 39.8% from $78.0 million for the three months ended January
  4, 2004. The significant growth in sales revenues was due to improved selling prices, a 27.5% increase in unit sales volumes, and a
  higher-valued product-mix within the T-shirt category.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The S.T.A.R.S. market and market share data for the U.S. wholesale distributor market for the fourth quarter of calendar 2004
  excludes sales by three large distributors who have discontinued their participation in the report and the value of the report is
  therefore reduced compared to prior years. With this caveat, the table below summarizes the S.T.A.R.S. data for the quarter ended
  December 31, 2004. In calculating year-over-year growth rates, S.T.A.R.S. has adjusted prior period comparatives to exclude sales
  through distributors no longer participating in the S.T.A.R.S. report. Although prior year market share data have not been restated
  on a comparable basis by S.T.A.R.S., this information has been extrapolated from the information provided in the S.T.A.R.S. report.<br>
  <br>
  </font></p>
<div align="justify"></div>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<br>
<TABLE WIDTH="85%" BORDER="0" align="center" CELLPADDING="0" CELLSPACING="0">
  <TR VALIGN="BOTTOM">
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
    <TH></TH>
    <TH COLSPAN="2"></TH>
    <TH></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><div align="center"><strong><font size="2" face="Times New Roman, Times, serif">Gildan<br>
                <u>Market Share<br>
        Q1 2004 </u><br>
    </font></strong></div></TD>
    <TD ALIGN="LEFT"><div align="center"></div></TD>
    <TD ALIGN="LEFT"><div align="center"><strong><font size="2" face="Times New Roman, Times, serif">Gildan<br>
                <u>Market Share <br>
        Q1 2005 </u></font></strong></div></TD>
    <TD ALIGN="LEFT"><div align="center"></div></TD>
    <TD ALIGN="LEFT"><div align="center"></div></TD>
    <TD ALIGN="LEFT"><div align="center"><strong><font size="2" face="Times New Roman, Times, serif">Gildan<br>
                <u>Unit growth <br>
        Q1 2005 vs Q1 2004</u> </font></strong></div></TD>
    <TD ALIGN="LEFT"><div align="center"></div></TD>
    <TD ALIGN="LEFT"><div align="center"><strong><font size="2" face="Times New Roman, Times, serif">Industry<br>
                <u>Unit growth <br>
        Q1 2005 vs Q1 2004 </u></font></strong></div></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD WIDTH="15%" ALIGN="LEFT"><div align="center"><font size="2" face="Times New Roman, Times, serif">26.9 %</font></div></TD>
    <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="15%" ALIGN="LEFT"><div align="center"><font size="2" face="Times New Roman, Times, serif">30.2 %</font></div></TD>
    <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="18%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">T-shirts</font></TD>
    <TD WIDTH="21%" ALIGN="LEFT"><div align="center"><font size="2" face="Times New Roman, Times, serif">13.5 %</font></div></TD>
    <TD WIDTH="4%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="20%" ALIGN="LEFT"><div align="center"><font size="2" face="Times New Roman, Times, serif">1.1 %</font></div></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><div align="center"><font size="2" face="Times New Roman, Times, serif">20.9 %</font></div></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT"><div align="center"><font size="2" face="Times New Roman, Times, serif">24.6 %</font></div></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Sport shirts</font></TD>
    <TD ALIGN="LEFT"><div align="center"><font size="2" face="Times New Roman, Times, serif">18.6 %</font></div></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT"><div align="center"><font size="2" face="Times New Roman, Times, serif">0.8 %</font></div></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><div align="center"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;13.5 %</font></div></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT"><div align="center"><font size="2" face="Times New Roman, Times, serif">18.6 %</font></div></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Fleece</font></TD>
    <TD ALIGN="LEFT"><div align="center"><font size="2" face="Times New Roman, Times, serif">56.2 %</font></div></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT"><div align="center"><font size="2" face="Times New Roman, Times, serif">12.9 %</font></div></TD>
  </TR>
</TABLE>
<p><font size="2" face="Times New Roman, Times, serif">During the first quarter of fiscal 2005, Gildan also experienced strong growth with non-S.T.A.R.S. distributors.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">During the first quarter of fiscal 2005 the Company continued to expand its European business, with an increase of 15.3% in unit
  sales. We continue to expect to achieve our forecasted growth in Europe and Australia in fiscal 2005. The Company has maintained its
  leading market share position in Canada.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>Gross Margin</strong> <br>
  Gross margin increased from 27.1% in the first quarter of fiscal 2004 to 29.7% for the first quarter of fiscal 2005. Before the
  impact of the functional currency adjustment on cost of sales in the first quarter of last year, comparative gross margins were
  29.8%. The positive gross margin impact of higher selling prices and more favourable product-mix was offset by higher cotton, energy
and transportation costs and higher costs for the Canadian yarn-spinning operations.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>  Selling, General and Administrative Expenses</strong><br>
  Selling, general and administrative expenses were $16.3 million or 15.0% of sales for the first quarter of fiscal 2005, compared to
  $11.4 million or 14.6% of sales in the first quarter of fiscal 2004. In addition to reflecting the continuing development of the
  organization to manage the Company&rsquo;s growth and expansion plans, SG&amp;A increased due to the strengthening of the Canadian dollar, the
  timing of professional and consulting fees and increased volume-related selling and distribution costs. 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 2005, SG&amp;A expenses will be at a similar level as a percentage of sales as fiscal 2004.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>Depreciation and Interest Expense</strong><br>
  Depreciation expense increased from $4.9 million in the first quarter of fiscal 2004 to $5.9 million in the first quarter of fiscal
  2005. The increase in depreciation expense is the result of the Company's continued investment in capital expenditures to provide
for long-term sales growth.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Interest expense has decreased to $1.2 million in the first quarter of fiscal 2005 from $1.6 million in the first quarter of fiscal
  2004. The decrease is the result of the reduction in overall debt following the first scheduled principal repayment made in June
  2004 on the Company&rsquo;s U.S. Senior Notes.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>Income taxes</strong><br>
  The income tax rate for the first quarter of fiscal 2005 was 6.5% compared to 9.7% for the first quarter of the prior fiscal year.
  The Company continues to anticipate that the effective tax rate will range between 5%-6% for fiscal 2005 as sales continue to grow in
its international operations and are increasingly sourced from its offshore textile facilities.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>Earnings</strong><br>
  Net earnings were $8.4 million or $0.28 per share on a diluted basis in the first quarter of fiscal 2005 compared to $2.9 million or
  $0.10 per share on a diluted basis in the first quarter of fiscal 2004. Excluding the impact of the change to the U.S. dollar
functional currency, net earnings were $5.0 million or $0.17 per share on a diluted basis for the first quarter of fiscal 2005.</font></p>
<p align="justify">&nbsp;</p>
<div align="justify"></div>
<div align="justify"></div>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<p></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Compared to last year, the increase in first quarter net earnings was driven by higher selling prices and continuing growth in unit
  sales volumes, together with more favourable product-mix. These positive factors were partially offset by higher SG&amp;A expenses,
increased raw material costs and the impact of lower capacity utilization on the efficiency of the Canadian yarn-spinning operations.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong><u>Balance Sheet</u></strong></font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Accounts receivable decreased to $49.1 million in the first quarter of fiscal 2005 from $85.3 million at October 3, 2004 and
  increased by $3.3 million compared to the first quarter of the prior year. The reduction in receivables compared with October 3,
  2004 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 2004 is due to the 39.8% increase in sales over the prior year offset by a
  reduction in days sales outstanding. Inventories have increased by $25.8 million from October 3, 2004 and by $3.1 million from the
  first quarter of fiscal 2004 to $142.4 million in the first quarter of fiscal 2005. The Company traditionally builds 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&rsquo;s
  sales forecast.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">In the first quarter of fiscal 2005, the Company invested $22.1 million in fixed assets mainly for the textile facilities in the
  Dominican Republic and Honduras along with the expansion of our U.S. distribution centre to prepare for entry into the retail
channel. In the first quarter of fiscal 2004, the Company invested $16.1 million in fixed assets.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>Liquidity and Capital Resources</strong><br>
  The Company has in recent years funded its capital requirements with cash generated from operations. A revolving credit facility has
  been periodically utilized to finance seasonal peak working capital requirements. The Company&rsquo;s primary uses of financing on an
  ongoing basis are related to capital expenditures for new manufacturing facilities, inventory financing, accounts receivable funding,
  servicing the interest payments on our U.S. Senior Notes as well as scheduled annual repayments of principal over the next three
years.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">As a result of the seasonal nature of the apparel business, working capital requirements are variable throughout the year. For the
  quarter ended January 2, 2005, cash inflows from operating activities, including changes in non-cash working capital balances,
  amounted to $12.2 million compared with a use of cash of $19.7 million during the same period last year. The increase in cash inflow
  was mainly due a reduction in days sales outstanding and a smaller build up of seasonal inventory in the first quarter of fiscal
  2005. The Company&rsquo;s need for working capital typically grows throughout the first two quarters as inventories are built up for the
  peak selling period in the third quarter.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">At January 2, 2005, none of the Company&rsquo;s revolving bank facility was utilized. Total indebtedness1 at January 2, 2005, amounted to
  $60.9 million compared to $56.6 million at October 3, 2004 and $76.6 million at January 4, 2004.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Continued sales growth in fiscal 2005 will result in increased working capital requirements mainly to finance trade accounts
  receivable and inventory. For fiscal 2005, the Company estimates to spend between $85 million to $90 million on capital
  expenditures. The Company expects to continue to have sufficient liquidity and capital resources throughout 2005 to fund its working
  capital requirements, capital expenditures and the June 2005 repayment on its U.S. Senior Notes.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Total assets were $497.3 million at January 2, 2005 compared to $488.8 million at October 3, 2004 and $427.3 million at January 4,
  2004. Working capital was $171.1 million at the end of the first quarter of fiscal 2005 compared to $178.8 million at October 3,
  2004, and $153.4 million at January 4, 2004.</font></p>
<hr align="left" width="20%" size="1" noshade>
<font size="2" face="Times New Roman, Times, serif">1 Total long-term debt. See Non-GAAP Financial Measure on page 19. </font>
<p align="justify">&nbsp;</p>
<div align="justify"></div>
<div align="justify"></div>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<p></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">
<PAGE>
<strong>  Off-Balance Sheet Arrangements</strong></font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><u>Operating Leases</u><br>
  We have no commitments that are not reflected in our balance sheets except for operating leases and other purchase obligations, which
  are included in the table of contractual obligations below. As disclosed in Note 5 to our Interim Consolidated Financial Statements,
  we have issued standby letters of credit and corporate guarantees primarily from various servicing agreements amounting to $16.2
million at January 2, 2005.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><u>Derivative Financial Instruments </u><br>
  From time to time, the Company uses forward foreign exchange contracts, primarily in Canadian dollars and Euros, to hedge cash flows
  related to sales and disbursements in foreign currencies (non-U.S. dollar). A forward foreign exchange contract represents an
  obligation to exchange a foreign currency with a counterparty at a predetermined rate. Credit risk exists in the event of failure by
  a counterparty to meet its obligations. The Company reduces this risk by dealing only with highly rated counterparties, normally
  major North American financial institutions. The Company&rsquo;s exposure to foreign currency fluctuations is described in more detail in
the &ldquo;Risks&rdquo; section of the 2004 MD&amp;A.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The Company does not use derivative financial instruments for speculative purposes. Forward foreign exchange contracts are entered
  into with maturities not exceeding twenty-four months.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The following table summarizes the Company&rsquo;s commitments to buy and sell foreign currencies as at January 2, 2005 and January 4, 2004:</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">2005:</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">Buy 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">CAD$</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">42,840</font></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">0.7251 to 0.7896</font></div></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">January to September 2005</font></div></TD>
    <TD ALIGN="RIGHT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$32,573&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">&pound;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">5,435&nbsp;</font></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">1.8815 to 1.9197</font></div></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">January 2005 to March 2006</font></div></TD>
    <TD ALIGN="RIGHT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$10,317&nbsp;</font></div></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&#8364;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">19,259</font></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">1.3308 to 1.3721</font></div></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">January 2005 to March 2006</font></div></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$26,085&nbsp;</font></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 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">&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;&nbsp;&nbsp;Foreign exchange contracts</font></TD>
    <TD ALIGN="LEFT">&pound;</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">$12,148&nbsp;</font></div></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&#8364;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">5,390&nbsp;</font></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">1.6660 to 1.6850</font></div></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">January to October 2004</font></div></TD>
    <TD ALIGN="RIGHT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$&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 colspan="6" ALIGN="LEFT">&nbsp;</TD>
  </TR>
</TABLE>
<p align="justify">&nbsp;</p>
<div align="justify"></div>
<div align="justify"></div>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<p></p>
<p align="justify"><strong><font size="2" face="Times New Roman, Times, serif">Contractual Obligations</font></strong><font size="2" face="Times New Roman, Times, serif"><br>
  In the normal course of business, the Company enters into contractual obligations that will require it to disburse cash over future
  periods. The following table sets forth the Company&rsquo;s contractual obligations for the following items as at January 2, 2005:</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 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="10" ALIGN="RIGHT"><div align="center"><font size="2" face="Times New Roman, Times, serif"><strong>Payments Due by Period</strong></font></div></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="12" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif"><strong>(in millions)</strong></font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="2" ALIGN="RIGHT"><div align="center"><font size="2" face="Times New Roman, Times, serif"><strong>Total</strong></font></div></TD>
    <TD colspan="2" ALIGN="RIGHT"><div align="center"><font size="2" face="Times New Roman, Times, serif"><strong>Less than<br>
        1 year</strong> </font></div></TD>
    <TD colspan="2" ALIGN="RIGHT"><div align="center"><strong><font size="2" face="Times New Roman, Times, serif">1 &#8211; 3<br>
        years </font></strong></div></TD>
    <TD colspan="2" ALIGN="RIGHT"><div align="center"><font size="2" face="Times New Roman, Times, serif"><strong>4 &#8211; 5<br>
        years</strong> </font></div></TD>
    <TD colspan="2" ALIGN="RIGHT"><div align="center"><font size="2" face="Times New Roman, Times, serif"><strong>After <br>
        5 years </strong></font></div></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="12" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD WIDTH="33%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Long Term Debt</font></TD>
    <TD WIDTH="5%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="10%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;60</font></TD>
    <TD WIDTH="5%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.7</font></TD>
    <TD WIDTH="10%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19</font></TD>
    <TD WIDTH="5%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.2</font></TD>
    <TD WIDTH="8%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;39</font></TD>
    <TD WIDTH="5%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.2</font></TD>
    <TD WIDTH="6%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;2</font></TD>
    <TD WIDTH="5%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.3</font></TD>
    <TD WIDTH="6%" ALIGN="RIGHT">&#8212;</TD>
    <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="12" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Capital Lease</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>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="12" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Obligations</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">.3</font></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">.1</font></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">.2</font></TD>
    <TD ALIGN="RIGHT">&#8212;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&#8212;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="12" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Operating Leases</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">8</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.3</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">2</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.0</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.3</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">1</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.8</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">1</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.2</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="12" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Purchase Obligations</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"><font size="2" face="Times New Roman, Times, serif">.3</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">109</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.9</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">12</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.4</font></TD>
    <TD ALIGN="RIGHT">&#8212;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&#8212;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="12" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Other Long Term</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>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="12" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Obligations</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">68</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.9</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">64</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.1</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">4</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.8</font></TD>
    <TD ALIGN="RIGHT">&#8212;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&#8212;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="12" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Total Contractual</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>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="12" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Obligations</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;260</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.5</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;195</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.3</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;59</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.9</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;4</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.1</font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;1</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">.2</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="12" 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>
    <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>
  </TR>
</TABLE>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Management expects that cash flow from its operating earnings, together with its year-end cash balances and unutilized bank
facilities, will be sufficient to meet foreseeable cash needs for fiscal 2005.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><br>
</font></p>
<div align="justify"></div>
<div align="justify"></div>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<p></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"></font><font size="2" face="Times New Roman, Times, serif">  <strong>Summary of Quarterly Results</strong></font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The following table sets forth certain summarized unaudited quarterly financial and other data for the periods presented. The
  financial data have been derived from the Company&rsquo;s unaudited financial statements that, in the opinion of management, reflect all
  adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of such quarterly data. The operating
  results for any quarter are not necessarily indicative of the results to be expected for any future period.</font></p>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="58%">
  <TR VALIGN="BOTTOM">
    <TH COLSPAN="2"></TH>
    <TH></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><div align="center"><font size="2"><strong><font face="Times New Roman, Times, serif">2005</font></strong></font></div></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">(in millions, except per share data)</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><div align="center"><font size="2" face="Times New Roman, Times, serif">Q1</font></div></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="3" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Unit sales (Dozen)</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">5.1</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD WIDTH="46%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Sales</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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;109.0</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">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">&nbsp;8.4</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Basic EPS</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.28</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Diluted EPS</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.28</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD 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">497.3</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Total long-term financial 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;73.2</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="3" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Weighted average # of shares outstanding (in thousands)</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="3" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Basic</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,704</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Diluted</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,885</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="3" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
</TABLE>
<br>
<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 COLSPAN="2"></TH>
    <TH></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="7" ALIGN="RIGHT"><div align="center"><font size="2"><strong><font face="Times New Roman, Times, serif">2004</font></strong></font></div></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">(in millions, except per share data)</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><div align="center"><font size="2" face="Times New Roman, Times, serif">Q1</font></div></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><div align="center"><font size="2" face="Times New Roman, Times, serif">Q2</font></div></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><div align="center"><font size="2" face="Times New Roman, Times, serif">Q3</font></div></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><div align="center"><font size="2" face="Times New Roman, Times, serif">Q4</font></div></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="9" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Unit sales (Dozen)</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">4.0</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">7.6</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">8.4</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">6.9</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>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD WIDTH="46%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Sales</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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;78.0</font></TD>
    <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="10%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;141.4</font></TD>
    <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="11%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;168.4</font></TD>
    <TD WIDTH="3%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="11%" ALIGN="RIGHT"><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; 145.6</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">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">&nbsp;2.9</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">14.3</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">26.2</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">16.8</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Basic EPS</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.10</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.48</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.89</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.57</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Diluted EPS</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.10</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.48</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.88</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.56</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="7" 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">427.3</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">447.6</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">457.3</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">488.8</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Total long-term financial 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;79.9</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;81.2</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><p><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;60.9</font></p>    </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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;66.0</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="9" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Weighted average # of shares outstanding (in thousands)</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 colspan="9" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Basic</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">29,576</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,628</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,635</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Diluted</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">29,866</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,859</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,825</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="9" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
</TABLE>
<p align="justify">&nbsp;</p>
<p align="justify">&nbsp;</p>
<div align="justify"></div>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<p></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 COLSPAN="2"></TH>
    <TH></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="7" ALIGN="RIGHT"><div align="center"><font size="2"><strong><font face="Times New Roman, Times, serif">2003</font></strong></font></div></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">(in millions, except per share data)</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><div align="center"><font size="2" face="Times New Roman, Times, serif">Q1</font></div></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><div align="center"><font size="2" face="Times New Roman, Times, serif">Q2</font></div></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><div align="center"><font size="2" face="Times New Roman, Times, serif">Q3</font></div></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><div align="center"><font size="2" face="Times New Roman, Times, serif">Q4</font></div></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="9" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Unit sales (Dozen)</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3.3</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">6.1</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">7.4</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">5.8</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>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD WIDTH="46%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Sales</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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;65.0</font></TD>
    <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="10%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;113.6</font></TD>
    <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="11%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;143.4</font></TD>
    <TD WIDTH="3%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="11%" ALIGN="RIGHT"><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; 109.2</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">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">&nbsp;3.7</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">13.4</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">21.8</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">14.2</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Basic EPS</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.13</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.46</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.74</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.48</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Diluted EPS</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.13</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.45</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.73</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.48</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="7" 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">322.6</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">356.9</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">409.4</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">429.7</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Total long-term financial liabilities</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">85.4</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">87.5</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">73.8</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">74.8</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="9" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Weighted average # of shares outstanding (in thousands)</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 colspan="9" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Basic</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">28,945</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,160</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,373</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,478</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Diluted</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,600</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,715</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,768</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">29,808</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="9" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
</TABLE>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The activewear business is seasonal and the Company has historically experienced significant quarterly fluctuations in operating
  results. Typically, demand for our products is highest in the third quarter of each fiscal year and lowest in the first quarter of
  each fiscal year. Weather conditions also affect the demand for our products particularly for fleece products. The seasonality of
  specific product lines is consistent with the results of other companies in the activewear industry and management anticipates that
this will continue in the future.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong><u>Subsequent Event</u></strong></font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The Company announced on February 1, 2005 that it will close its two Canadian yarn-spinning operations at the end of March 2005. A
  majority of the equipment will be transferred to a new yarn-spinning facility in Clarkton, North Carolina, which will be operated by
  the Company&rsquo;s yarn-spinning joint venture with Frontier Spinning Mills, Inc. The Company anticipates that the closure costs will be
  approximately $7.8 million after tax or $0.26 per diluted share. The closure costs will consists mainly of severance costs and the
  loss on disposal of fixed assets that are not being transferred. This charge will be expensed in the second quarter of fiscal 2005.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong><u>Earnings Outlook</u></strong></font></p>
<p align="justify"><u><font size="2" face="Times New Roman, Times, serif"></font></u><font size="2" face="Times New Roman, Times, serif">The Company is continuing to project for fiscal 2005 diluted EPS of approximately $2.60, before the special charge for the closure of
  its Canadian yarn-spinning facilities. This represents EPS growth of 28% over fiscal 2004 reported EPS, and 16% growth over fiscal
  2004 adjusted earnings of $2.24 per diluted share. In the fourth quarter of fiscal 2004, the Company incurred a special charge of
  $4.6 million ($3.2 million net of taxes - $0.11 per diluted share) to satisfy its contractual commitments to H. Greg Chamandy when he
  stepped down from his role as co-Chief Executive Officer, Chairman of the Board and Chairman of the Executive Committee in order to
  pursue other business interests. Adjusted earnings for fiscal 2004 are earnings prior to the special charge for H. Greg Chamandy and
  the impact of the change in functional currency included in cost of sales. After taking account of the closure costs, estimated at
  approximately $7.8 million after-tax, or $0.26 per diluted share, full year diluted EPS for fiscal 2005 are estimated at $2.34 per
  share. As previously indicated, the Company&rsquo;s full year earnings guidance reflects unit sales growth of approximately 20% over fiscal
  2004, which will fully utilize the Company&rsquo;s available production capacity, and also assumes sequentially lower unit selling prices
  in the second half of the fiscal year, reflecting the possible flow-through of lower cotton prices. On this basis, full year sales
are projected at approximately $640 million, up approximately 20% from $533 million in fiscal 2004, or 32 million dozens.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The Company expects to achieve diluted EPS of $0.60 - $0.65 in the second quarter of fiscal 2005 before the special charge, relating
  to the closure of the Company&rsquo;s Canadian yarn-spinning facilities, up 15% - 25% from the second quarter of fiscal 2004, after
  increasing the prior year comparative results as reported to reflect the functional currency adjustment impacting cost of sales in
  the second quarter of last year. Diluted EPS in the second quarter of fiscal 2005 are projected at $0.34 - $0.39, after the special
  charge for the closure of the yarn-spinning facilities.</font></p>
<p align="justify">&nbsp;</p>
<div align="justify"></div>
<div align="justify"></div>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<p></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"></font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The Company&rsquo;s projection for fiscal 2005 assumes the continued market share penetration in all the categories the Company competes
  in. The unit sales growth will be supported primarily by our current Canadian and Honduran operations. Further upside in unit sales
  growth in fiscal 2005 will be limited by capacity constraints. However, the ramp-up of the new textile facilities in the Dominican
  Republic and Nicaragua is expected to significantly increase our production capacity in fiscal 2006.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The Company continues to estimate that capital expenditures for fiscal 2005 will be in the range of $85 to $90 million. The major
  projects are the completion of our textile facilities in the Dominican Republic and Nicaragua. In addition, the Company is expanding
  its U.S. distribution centre to prepare for entry into the retail channel. The Company expects that cash flows from operations for
  fiscal 2005 will be in the same range as capital expenditures. The Company intends to use a portion of its surplus cash reserves in
  June 2005 to meet the second scheduled principal repayment on its Senior Notes.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>Critical Accounting Estimates</strong></font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The Company&rsquo;s significant accounting policies are described in Note 2 to the Company&rsquo;s 2004 Consolidated Financial Statements. The
  preparation of financial statements in conformity with Canadian GAAP requires estimates and assumptions that affect our results of
  operations and financial position. By their nature, these judgments are subject to an inherent degree of uncertainty and are based
  upon historical experience, trends in the industry and information available from outside sources. On an ongoing basis, management
  reviews its estimates and actual results could differ from those estimates. </font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Management believes that the accounting estimates relating to the following items are most significant to assist in understanding and
  evaluating the Company&rsquo;s financial results:<br>
  &#8226; Sales promotional programs;<br>
 &#8226; Trade accounts receivable;<br>
 &#8226; Fixed assets;<br>
 &#8226; Cotton procurements; and<br>
 &#8226; Future income taxes.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">For a more detailed discussion of these estimates, readers should review the &ldquo;Critical Accounting Estimates&rdquo; section of the 2004
  MD&amp;A, which is hereby incorporated by reference.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>Changes in Accounting Policies/Recent Accounting Pronouncements</strong></font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The CICA issued a guideline on accounting for variable interest entities (&ldquo;VIEs&rdquo;) titled Accounting Guideline 15 &ndash; Consolidation of
  Variable Interest Entities (&ldquo;AcG-15&rdquo;), which harmonizes with corresponding guidance in the United States. A VIE is any type of legal
  structure not controlled by voting equity but rather by/or through contractual or other financial arrangements. This guideline
  requires the Company to identify VIEs in which it has an interest, determine whether it is the primary beneficiary of such entities
  and, if so, to consolidate the VIE. A primary beneficiary is an enterprise that will absorb a majority of the VIE&rsquo;s expected losses,
  receive a majority of its expected residual return, or both. We have determined that the Company&rsquo;s joint venture with Frontier
  Spinning Mills, Inc. (Cedartown Manufacturing, LLC) meets the criteria for being a VIE and that the Company is the primary<br>
  beneficiary of the entity.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">AcG-15 is effective for all fiscal periods beginning on or after November 1, 2004 and early adoption is encouraged. The Company
  early adopted this standard on October 4, 2004, the beginning of its 2005 fiscal year, in order to minimize any potential difference
  between Canadian and U.S. GAAP. In accordance with AcG-15, we consolidated Cedartown at October 4, 2004, which increased total
  assets by $7.9 million and total liabilities by $5.0 million, while creating non-controlling interest by $2.9 million. The
  Company&rsquo;s net earnings will not be affected by this change.</font></p>
<p align="justify">&nbsp;</p>
<div align="justify"></div>
<div align="justify"></div>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<p></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"></font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The consolidation of the Company&rsquo;s interest in Cedartown did not result in any material change in the underlying tax, legal or credit
  risks facing the Company.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>Risks</strong></font></p>
<p 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. The most significant risks the Company faces are as follows:<br>
 &#8226; Our industry is competitive;<br>
 &#8226; Our industry is subject to pricing pressures;<br>
 &#8226; We rely on a relatively small number of significant customers;<br>
 &#8226; We are subject to international trade legislation that is becoming increasingly liberalized;<br>
 &#8226; We currently pay income tax at a comparatively low effective rate, which could change in the future;<br>
 &#8226; The price of the raw materials we buy is prone to significant fluctuations and volatility;<br>
 &#8226; Our operations are subject to political, social and economic risks;<br>
 &#8226; Our industry is subject to fluctuation in sales demand;<br>
 &#8226; Our operations are subject to environmental regulation;<br>
 &#8226; We are exposed to concentration of credit risk; and<br>
 &#8226; We are subject to foreign exchange fluctuation risk.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">For a more detailed discussion on potential business risks, readers should review the &ldquo;Risks&rdquo; section of the 2004 MD&amp;A and 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></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>Disclosure of Outstanding Share Data</strong></font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Our shares are listed on the New York Stock Exchange (GIL) and the Toronto Stock Exchange (GIL).</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">As of January 31, 2005 there were 29,722,207 Class A Subordinate voting shares issued and outstanding along with 549,896 options
  outstanding.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"><strong>Reconciliation of Non-GAAP Financial Measures</strong></font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The Company uses and presents such Non-GAAP Financial Measures because it believes such measures provide meaningful information on
  the Company&rsquo;s performance and operating results. However, investors should know that such Non-GAAP Financial Measures have no
  standardized meaning as prescribed by GAAP and may not be comparable to similar measures presented by other companies. Accordingly
  they should not be considered in isolation.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">The following two measures included in this interim MD&amp;A do not have standardized meaning under Canadian GAAP and, therefore, are
  unlikely to be comparable to similar measures presented by other companies;</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">1. Total indebtedness;<br>
  2. All reference made to adjusted gross margins, adjusted net earnings and adjusted diluted earnings per share<br>
</font></p>
<p align="justify">&nbsp;</p>
<div align="justify"></div>
<div align="justify"></div>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<p></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif"></font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">
  The following table reconciles all Non-GAAP Financial Measures mentioned in this interim MD&amp;A to the most directly comparable GAAP
  measures:</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">(in thousands, except earnings per share)</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 COLSPAN="2"></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif"><strong>Total Indebtedness</strong></font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif"><strong>Q1 2005</strong></font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif"><strong>Q4 2004</strong></font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif"><strong>Q1 2004</strong></font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD WIDTH="52%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Current portion of long-term debt</font></TD>
    <TD WIDTH="4%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="10%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(19,711</font></TD>
    <TD WIDTH="6%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
    <TD WIDTH="10%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(18,610</font></TD>
    <TD WIDTH="6%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
    <TD WIDTH="10%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(19,409</font></TD>
    <TD WIDTH="2%" 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">Long-term debt</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(41,153</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">(37,979</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">(57,198</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD colspan="8" ALIGN="LEFT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Total Indebtedness</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(60,864</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">(56,589</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">(76,607</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">)</font></TD>
  </TR>
</TABLE>
<font size="2"><br>
</font><font size="2" face="Times New Roman, Times, serif"><strong>Adjusted Consolidated Statement of Earnings<br>
and Earnings per Share</strong></font><font size="2"><br>
</font>
<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 COLSPAN="2"></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"><strong>Q1 2004</strong></font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif"><strong>Q1 2004<br>
      Adjusted</strong></font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="6" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD WIDTH="59%" ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Sales</font></TD>
    <TD WIDTH="4%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="9%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$77,959</font></TD>
    <TD WIDTH="4%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="9%" ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$77,959</font></TD>
    <TD WIDTH="4%" ALIGN="LEFT">&nbsp;</TD>
    <TD WIDTH="9%" 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">Cost of sales</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">56,859</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">(2,140)</font></TD>
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif"><SUP>2</SUP></font></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">54,719</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="6" ALIGN="RIGHT"><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">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">21,100</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">2,140</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">23,240</font></TD>
    <TD ALIGN="LEFT">&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">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">11,397</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">11,397</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="6" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">EBITDA<SUP>3</SUP></font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">9,703</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">2,140</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">11,843</font></TD>
    <TD ALIGN="LEFT">&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">&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">4,932</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Interest expense</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">1,589</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="6" ALIGN="RIGHT"><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">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">3,182</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">2,140</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">5,322</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Income taxes expense</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">310</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">310</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Net earnings</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="6" ALIGN="RIGHT"><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">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;2,872</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">$&nbsp;&nbsp;2,140</font></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;5,012</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD colspan="6" ALIGN="RIGHT"><hr size="1" noshade></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Basic EPS</font></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.10</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">&nbsp;0.17</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2" face="Times New Roman, Times, serif">Diluted EPS</font></TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">0.10</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="RIGHT">&nbsp;</TD>
    <TD ALIGN="LEFT"><div align="right"><font size="2" face="Times New Roman, Times, serif">$</font></div></TD>
    <TD ALIGN="RIGHT"><font size="2" face="Times New Roman, Times, serif">&nbsp;0.17</font></TD>
    <TD ALIGN="LEFT">&nbsp;</TD>
  </TR>
</TABLE>
<br>
<hr align="left" width="20%" size="1" noshade>
<p><font size="2" face="Times New Roman, Times, serif"><SUP>2</SUP> Adjustment due to change in functional currency<br>
      <SUP>3</SUP> Earnings before interest, income taxes, depreciation and amortization</font> <br>
</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<div align="justify"></div>
<div align="justify"></div>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<p></p>
<p align="justify"><strong><font size="2" face="Times New Roman, Times, serif">Forward Looking Statements</font></strong></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Certain statements included in this management discussion and analysis may constitute &ldquo;forward looking statements&rdquo; within the meaning
  of the U.S. Private Securities Litigation Reform Act of 1995. Forward looking statements generally can be identified by the use of
  forward looking terminology such as &ldquo;may&rdquo;, &ldquo;will&rdquo;, &ldquo;expect&rdquo;, &ldquo;intend&rdquo;, &ldquo;estimate&rdquo;, &ldquo;anticipate&rdquo;, &ldquo;plan&rdquo;, &ldquo;foresee&rdquo;, &ldquo;believe&rdquo; or
&ldquo;continue&rdquo; or the negatives of these terms or variations of them or similar terminology. We refer you to the Company&rsquo;s filings with
  the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission for a discussion of the various
factors that may affect the Company&rsquo;s future results.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">Readers are cautioned however not to place undue reliance on forward looking statements as there can be no assurance that the plans,
  intentions or expectations upon which they are based will occur. By their nature, forward looking statements involve numerous
  assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the
  predictions, forecasts, projections and other forward looking statements will not occur. This may cause the Company&rsquo;s actual
  performance and financial results in future periods to differ materially from any estimates or projections of future performance or
  results expressed or implied by such forward looking statements.</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">We believe that the expectations represented by such forward looking statements are reasonable, yet there can be no assurance that
  such expectations will prove to be correct. Furthermore, the forward looking statements contained in this report are made as of the
  date of this report, and we do not undertake any obligation to update publicly or to revise any of the included forward looking
  statements, whether as a result of new information, future events or otherwise. The forward looking statements contained in this
  report are expressly qualified by this cautionary statement.<br>
</font></p>
<p align="justify"><font size="2" face="Times New Roman, Times, serif">February 1, 2005</font></p>
<P ALIGN="justify">&nbsp;</P>
<div align="justify"></div>
<div align="justify"></div>
<hr size="3" noshade>
<div align="justify">
  <table width="99%"  border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="46%"><img src="headerlogo.jpg" width="151" 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 2, 2005</strong></font><font size="2" face="Times New Roman, Times, serif"><br>
          </font></p>
      </blockquote></td>
    </tr>
  </table>
</div>
<p>&nbsp;</p>
<P>
<P align=center><FONT face="Times New Roman, Times, serif"
size=2><STRONG>SIGNATURE</STRONG></FONT>
<P align=left>
<P align="left"><FONT face="Times New Roman, Times, serif"
size=2>&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><font size="2" face="Times New Roman, Times, serif"><STRONG>GILDAN ACTIVEWEAR INC. </STRONG></font></TD>
    </TR>
    <TR>
      <TD>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp;</TD>
    </TR>
    <TR>
      <TD><font size="2" face="Times New Roman, Times, serif">(Signed) Lindsay Matthews
        </font>        <HR noShade SIZE=1>
    </TR>
    <TR>
      <TD><FONT face="Times New Roman, Times, serif" size=2>Lindsay Matthews</FONT></TD>
    </TR>
    <TR>
      <TD><FONT face="Times New Roman, Times, serif" size=2>Corporate Secretary </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><font size="2" face="Times New Roman, Times, serif"><strong>Date</strong> February 16, 2005</font></TD>
    </TR>
    <TR>
      <TD>&nbsp;</TD>
    </TR>
  </TABLE>
</div>
<P>
<p align="left">&nbsp;</p>
<p align="left">&nbsp;</p>
<p></p>
<p>&nbsp;</p>
</TEXT>
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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
