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<SEC-DOCUMENT>0001204459-06-000751.txt : 20060823
<SEC-HEADER>0001204459-06-000751.hdr.sgml : 20060823
<ACCEPTANCE-DATETIME>20060823091841
ACCESSION NUMBER:		0001204459-06-000751
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20060702
FILED AS OF DATE:		20060823
DATE AS OF CHANGE:		20060823

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:		061049904

	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>gildan6k.htm
<DESCRIPTION>FORM 6-K
<TEXT>
<html>

<head>

<title>Gildan Activewear Inc.: Form 6-K - Prepared by TNT Filings Inc.</title>
</head>

<body>

<div style="font-family: 'Times New Roman',Times,serif">
&nbsp;<hr color="#000000" size="5">
  <div style="font-size: 14pt; margin-top: 12pt" align="center">
    <b><font size="5">SECURITIES AND EXCHANGE COMMISSION</font></b><font size="5">
    </font>
  </div>
  <div style="font-size: 12pt" align="center">
    <b><font size="2">Washington, DC 20549</font></b><font size="2"> </font>
  </div>
  <div style="font-size: 18pt; margin-top: 12pt" align="center">
    <b>Form&nbsp;6-K</b>
  </div>
  <div style="font-size: 12pt; margin-top: 12pt" align="center">
    <b><font size="2">Report of Foreign Private Issuer<br>
    Pursuant to Rule&nbsp;13a-16 or 15d-16 of<br>
    the Securities Exchange Act of 1934</font></b><font size="2"> </font>
  </div>
  <div style="font-size: 10pt; margin-top: 18pt" align="center">
    For the month of: August&nbsp;2006&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commission File Number: 1-14830
  </div>
  <div style="font-size: 24pt; margin-top: 12pt" align="center">
    <b><font size="5">GILDAN ACTIVEWEAR INC.</font></b><font size="5"> </font>
  </div>
  <div style="font-size: 10pt" align="center">
    (<i>Translation of Registrant's name into English</i>)</div>
  <div style="font-size: 10pt; margin-top: 18pt" align="center">
    <b>725 Mont&#233;e de Liesse<br>
    Ville Saint-Laurent, Qu&#233;bec<br>
    Canada H4T 1P5</b><br>
    (<i>Address of Principal Executive Offices</i>)
  </div>
  <div style="font-size: 10pt; text-indent: 0%; margin-left: 0%; margin-right: 0%; margin-top: 6pt" align="left">
    Indicate by check mark whether the registrant files or will file annual
    reports under cover of Form 20-F or Form 40-F:</div>
  <div style="font-size: 10pt; margin-top: 18pt" align="center">
    Form&nbsp;20-F <font style="font-family: Wingdings">o</font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Form&nbsp;40-F
    <font style="font-family: Wingdings">&#254;</font>
  </div>
  <div style="font-size: 10pt; text-indent: 0%; margin-left: 0%; margin-right: 0%; margin-top: 6pt" align="left">
    Indicate by check mark if the registrant is submitting the Form 6-K in paper
    as permitted by Regulation&nbsp;S-T Rule&nbsp;101(b)(1):
    <font style="font-family: Wingdings">o</font></div>
  <div style="font-size: 10pt; text-indent: 0%; margin-left: 0%; margin-right: 0%; margin-top: 6pt" align="left">
    Indicate by check mark if the registrant is submitting the form 6-K in paper
    as permitted by Regulation&nbsp;S-T Rule&nbsp;101(b)(7):
    <font style="font-family: Wingdings">o</font></div>
  <div style="font-size: 10pt; text-indent: 0%; margin-left: 0%; margin-right: 0%; margin-top: 6pt" align="left">
    Indicate by check mark whether by furnishing the information contained in
    this Form, the registrant is also thereby furnishing the information to the
    Commission pursuant to Rule&nbsp;12g3-2(b) under the Securities Exchange Act of
    1934:</div>
  <div style="font-size: 10pt; margin-top: 18pt" align="center">
    Yes <font style="font-family: Wingdings">o</font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
    <font style="font-family: Wingdings">&#254;</font>
  </div>
  <div style="font-size: 10pt; text-indent: 0%; margin-left: 0%; margin-right: 0%; margin-top: 6pt" align="left">
    If &quot;Yes&quot; is marked, indicate below the file number assigned to the
    registrant in connection with Rule&nbsp;12g3-2(b): N/A<hr color="#000000" size="5"><p Style='page-break-before:always'>
  </div>
</div>
<div style="font-family: 'Times New Roman',Times,serif">
  <!-- link1 "SIGNATURES" -->
  <div style="font-size: 10pt; margin-top: 18pt" align="center">
    <b>SIGNATURES</b>
  </div>
  <div style="font-size: 10pt; margin-top: 6pt" align="left">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934,
    the registrant has duly caused this report to be signed on its behalf by the
    undersigned, thereunto duly authorized.
  </div>
  <table style="font-size: 10pt; border-collapse: collapse" cellSpacing="0" cellPadding="0" width="100%" border="0" bordercolor="#111111">
    <tr>
      <td width="48%">&nbsp;</td>
      <td width="1%">&nbsp;</td>
      <td width="1%">&nbsp;</td>
      <td width="35%">&nbsp;</td>
      <td width="15%">&nbsp;</td>
    </tr>
    <tr>
      <td vAlign="top" align="left">&nbsp;</td>
      <td align="left" colSpan="3"><b>GILDAN ACTIVEWEAR INC.</b><br>
      &nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td align="left">Date: August 15, 2006&nbsp;</td>
      <td vAlign="top">By:&nbsp;&nbsp;</td>
      <td style="border-bottom: 1px solid #000000" align="left" colSpan="2">/s/
      Lindsay Matthews &nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td align="left">&nbsp;</td>
      <td>&nbsp;</td>
      <td vAlign="top">Name:&nbsp;&nbsp;</td>
      <td align="left">Lindsay Matthews&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td align="left">&nbsp;</td>
      <td>&nbsp;</td>
      <td vAlign="top">Title:&nbsp;&nbsp;</td>
      <td align="left">Director, Legal Services and<br>
      Corporate Secretary&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td colSpan="5">&nbsp;</td>
    </tr>
  </table>
  <p style="font-size: 10pt" align="center">&nbsp; </p>
  <hr color="#000000" size="5"><p Style='page-break-before:always'>
</div>
<div style="font-family: 'Times New Roman',Times,serif">
  <!-- link1 "EXHIBIT INDEX" -->
  <div style="font-size: 10pt; margin-top: 18pt" align="center">
    <b>EXHIBIT INDEX</b>
  </div>
  <div align="center">
    <table style="font-size: 10pt; border-collapse:collapse" cellSpacing="0" cellPadding="0" width="100%" border="0" bordercolor="#111111">
      <!-- Begin Table Head -->
      <tr vAlign="bottom">
        <td width="5%">&nbsp;</td>
        <td width="2%">&nbsp;</td>
        <td width="93%">&nbsp;</td>
      </tr>
      <tr style="font-size: 8pt" vAlign="bottom">
        <td style="border-bottom: 1px solid #000000" noWrap align="left"><b>
        <font size="2">Exhibit</font></b></td>
        <td><font size="2">&nbsp;</font></td>
        <td style="border-bottom: 1px solid #000000" noWrap align="middle"><b>
        <font size="2">Description of Exhibit</font></b></td>
      </tr>
      <!-- End Table Head -->
      <!-- Begin Table Body -->
      <tr vAlign="bottom">
        <td vAlign="middle">
        <div style="text-indent: 0px; margin-left: 0px">
          <a href="gildan3q.htm" style="text-decoration: none">99.1 </a>
        </div>
        </td>
        <td>&nbsp;</td>
        <td vAlign="middle">
        <p class="MsoBodyText" style="line-height: normal; margin-bottom: .0001pt">
        <a href="gildan3q.htm" style="text-decoration: none">Third Quarter Report to Shareholders</a></td>
      </tr>
      <!-- End Table Body -->
    </table>
  </div>
</div>
<hr color="#000000" size="5">

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>gildan3q.htm
<DESCRIPTION>THIRD QUARTER REPORT
<TEXT>
<html>

<head>
<title>Gildan Activewear Inc. - Quarterly Report - Prepared By TNT Filings Inc.</title>
</head>

<body>

<p>&nbsp;</p>
<hr color="#000000" size="5">
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td width="100%" colspan="2" bgcolor="#000000">
    <font FACE="Times New Roman PS" size="5" color="#FFFFFF"><b>
    <p align="center">MESSAGE FROM THE PRESIDENT AND CEO </b></font></td>
  </tr>
</table>
<font SIZE="2">
<p ALIGN="JUSTIFY">I am pleased to communicate and review our results for the
three months ended July 2, 2006. Gildan reported another excellent quarter with
record sales and earnings that exceeded our expectations. In addition, we
increased our EPS guidance for the fiscal 2006 year. </p>
<p ALIGN="JUSTIFY">Gildan reported record third quarter net earnings of U.S.
$42.8 million and diluted EPS of U.S. $0.71, up respectively 25.5% and 24.6%
from U.S. $34.1 million and U.S. $0.57 per share in the third quarter of fiscal
2005. The increase in net earnings and EPS compared to a year ago was due to
continuing strong growth in unit sales volumes and higher gross margins,
partially offset by increased selling, general and administrative and
depreciation expenses. </p>
<p ALIGN="JUSTIFY">Sales in the third quarter amounted to a record U.S. $233.9
million, up 17.6% from U.S. $198.9 million in the third quarter of last year.
The increase in sales revenues reflected a 15.6% increase in unit sales volumes
and the impact of a higher-valued product-mix, partially offset by an
approximate 2.5% reduction in unit selling prices compared to last year. The
growth in unit sales was due to continuing market share penetration, combined
with 3.7% growth in overall industry unit shipments in the quarter. The
Company's ability to fully capitalize on demand for its products in the third
quarter continued to be constrained by limitations on production capacity. </p>
<p ALIGN="JUSTIFY">Based on the S.T.A.R.S. data for market growth and market
shares in the U.S. distributor channel for the calendar quarter ended June 30,
2006, Gildan grew unit volumes in the T-shirt category by 19.2% in the quarter
and increased its leading share in this category to 44.5%. We maintained our
position as the leading brand in sport shirts with a 32.7% market share, and
achieved a 32.3% share in the sweatshirt category, where our volume grew by
15.5%, compared with an overall decline of 4.5% in the industry. </p>
<p ALIGN="JUSTIFY">Gross margins in the third quarter were 32.4%, versus 31.6%
in the third quarter of 2005. The increase in gross margins was due to more
favourable product-mix, increased manufacturing efficiencies and lower cotton
costs, partially offset by the impact of the reduction in selling prices as well
as higher energy and transportation costs. </p>
<p ALIGN="JUSTIFY">Selling, general and administrative expenses in the third
quarter were U.S. $22.0 million, or 9.4% of sales, compared to U.S. $19.1
million, or 9.6% of sales, in the third quarter of last year. The increase in
selling, general and administrative expenses was due to higher distribution
expenses, professional fees for compliance with SOX-404, the impact of the
stronger Canadian dollar and a write-down of surplus equipment, combined with
the cost of ongoing organizational development to support the Company's growth
strategy. The increase of U.S. $2.1 million in depreciation expenses was due to
the Company's continuing investments in capacity expansion, in particular the
new Dominican Republic textile facility. </p>
<p ALIGN="JUSTIFY">Gildan has increased its diluted EPS guidance for the full
2006 fiscal year to approximately U.S. $2.07. The revised full year guidance is
up from the Company's most recent guidance of approximately U.S. $2.00 per
share, and reflects a projected increase of 33.5% compared with adjusted EPS of
U.S. $1.55 in fiscal 2005, before taking account of the prior year special
charge. </p>
<p ALIGN="JUSTIFY">The further increase in EPS guidance for fiscal 2006 is due
to the more favourable than previously anticipated results for the third
quarter, and the assumed continuation in the fourth quarter of more favourable
manufacturing efficiencies and product-mix, partially offset by the projected
continuation of more unfavourable industry pricing. The Company is now
projecting diluted EPS of U.S. $0.58 in the fourth quarter, compared with its
most recent guidance of U.S. $0.56 per share and up 23.4% from adjusted EPS of
U.S. $0.47 in the fourth quarter of fiscal 2005. The updated guidance assumes
that the Company's recent acquisition of Kentucky Derby Hosiery Co., Inc., which
was completed on July 6, 2006, will be neither accretive nor dilutive to EPS in
the fourth quarter of the current fiscal year.</p>
<p ALIGN="JUSTIFY">During the third quarter, the Company generated free cash
flow (defined as cash flow from operating activities less cash flow from
investing activities) of U.S. $33.6 million, including U.S. $5.0 million
proceeds from the disposal of the balance of the Canadian yarn-spinning assets
held for sale. Inventories decreased by U.S. $25.3 million in the </p>
<p align="center">1</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2">
<p ALIGN="JUSTIFY">third quarter, compared to U.S. $9.3 million in the third
quarter a year ago. Capital expenditures in the third quarter, primarily for
major capacity expansion projects, amounted to U.S. $17.8 million. During the
quarter, Gildan utilized U.S. $17.5 million of its cash and cash equivalents to
finance the third scheduled principal repayment of its Senior Notes, and ended
the quarter with cash and cash equivalents of U.S. $63.9 million. </p>
<p ALIGN="JUSTIFY">Finally, I would like to thank our shareholders for
continuing to show their confidence in our plans for our Company and also
acknowledge the contributions of our employees who have enabled us to continue
to successfully implement these plans and achieve superior results. </p>
</font>
<p><img border="0" src="sig1.gif" width="204" height="37"></p>
<font FACE="Times New Roman PS" SIZE="2"><i>
<p>Glenn J. Chamandy </p>
</i></font><font FACE="Times New Roman PSMT" SIZE="2">
<p>President and Chief Executive Officer </p>
</font><font SIZE="2">
<p align="center">2</p>
</font><hr color="#000000" size="5"><p Style='page-break-before:always'><b>
<p align="center">Gildan Activewear Inc.<br>
<font SIZE="2">Consolidated Balance Sheets</font></b><font SIZE="2"><br>
(in thousands of U.S. dollars)</p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="39%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: none; border-bottom-width: medium">
    <font SIZE="2"><u>July 2, 2006</u></font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: none; border-bottom-width: medium">
    <font SIZE="2"><u>October 2, 2005</u></font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: none; border-bottom-width: medium">
    <font SIZE="2"><u>July 3, 2005</u></font></td>
  </tr>
  <tr>
    <td WIDTH="39%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: none; border-top-width: medium">
    <font SIZE="2">(unaudited)</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: none; border-top-width: medium">
    <font SIZE="2">(audited)</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: none; border-top-width: medium">
    <font SIZE="2">(unaudited)</font></td>
  </tr>
  <tr>
    <td WIDTH="39%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="39%" bgcolor="#E6E6E6"><font SIZE="2">Current assets:</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="39%"><font SIZE="2">&nbsp;&nbsp;&nbsp; Cash and cash equivalents</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">63,883</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">69,802</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="11%" align="right"><font SIZE="2">30,784</font></td>
  </tr>
  <tr>
    <td WIDTH="39%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp; Accounts receivable</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font SIZE="2">133,666</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font SIZE="2">108,646</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2">112,354</font></td>
  </tr>
  <tr>
    <td WIDTH="39%"><font SIZE="2">&nbsp;&nbsp;&nbsp; Inventories</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">161,261</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">134,861</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">131,803</font></td>
  </tr>
  <tr>
    <td WIDTH="39%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp; Prepaid expenses and
    deposits</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font SIZE="2">6,302</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font SIZE="2">4,394</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2">6,426</font></td>
  </tr>
  <tr>
    <td WIDTH="39%"><font SIZE="2">&nbsp;&nbsp;&nbsp; Future income taxes</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">8,575</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">10,135</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">9,943</font></td>
  </tr>
  <tr>
    <td WIDTH="39%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">373,687</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">327,838</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">291,310</font></td>
  </tr>
  <tr>
    <td WIDTH="39%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="39%" bgcolor="#E6E6E6"><font SIZE="2">Fixed assets</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font SIZE="2">292,985</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font SIZE="2">260,615</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2">249,984</font></td>
  </tr>
  <tr>
    <td WIDTH="39%"><font SIZE="2">Assets held for sale</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">5,027</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">5,426</font></td>
  </tr>
  <tr>
    <td WIDTH="39%" bgcolor="#E6E6E6"><font SIZE="2">Other assets</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">6,475</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">4,036</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">4,928</font></td>
  </tr>
  <tr>
    <td WIDTH="39%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="39%"><font SIZE="2">Total assets</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000">
    <font SIZE="2">673,147</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000">
    <font SIZE="2">597,516</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="11%" align="right" style="border-bottom: 2px solid #000000">
    <font SIZE="2">551,648</font></td>
  </tr>
  <tr>
    <td WIDTH="39%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="39%" bgcolor="#E6E6E6"><font SIZE="2">Current liabilities:</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="39%"><font SIZE="2">&nbsp;&nbsp;&nbsp; Bank indebtedness</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">3,980</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">3,980</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="11%" align="right"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="39%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp; Accounts payable and
    accrued liabilities</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font SIZE="2">86,579</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font SIZE="2">86,843</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2">81,425</font></td>
  </tr>
  <tr>
    <td WIDTH="39%"><font SIZE="2">&nbsp;&nbsp;&nbsp; Income taxes payable</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">3,516</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">2,206</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">2,400</font></td>
  </tr>
  <tr>
    <td WIDTH="39%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp; Current portion of
    long-term debt</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">19,582</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">19,859</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">19,724</font></td>
  </tr>
  <tr>
    <td WIDTH="39%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">113,657</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">112,888</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">103,549</font></td>
  </tr>
  <tr>
    <td WIDTH="39%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="39%"><font SIZE="2">Long-term debt</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">8,977</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">27,288</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">24,159</font></td>
  </tr>
  <tr>
    <td WIDTH="39%" bgcolor="#E6E6E6"><font SIZE="2">Future income taxes</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font SIZE="2">31,821</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font SIZE="2">31,386</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2">28,373</font></td>
  </tr>
  <tr>
    <td WIDTH="39%"><font SIZE="2">Non-controlling interest</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">5,634</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">5,394</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">5,548</font></td>
  </tr>
  <tr>
    <td WIDTH="39%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="39%"><font SIZE="2">Shareholders' equity:</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="39%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp; Share capital (note 3)</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font SIZE="2">85,791</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font SIZE="2">84,177</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2">83,167</font></td>
  </tr>
  <tr>
    <td WIDTH="39%"><font SIZE="2">&nbsp;&nbsp;&nbsp; Contributed surplus</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">2,439</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">1,596</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">1,262</font></td>
  </tr>
  <tr>
    <td WIDTH="39%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp; Retained earnings</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font SIZE="2">398,580</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font SIZE="2">308,539</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2">279,342</font></td>
  </tr>
  <tr>
    <td WIDTH="39%"><font SIZE="2">&nbsp;&nbsp;&nbsp; Cumulative translation
    adjustment</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">26,248</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">26,248</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">26,248</font></td>
  </tr>
  <tr>
    <td WIDTH="39%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">513,058</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">420,560</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">390,019</font></td>
  </tr>
  <tr>
    <td WIDTH="39%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="39%"><font SIZE="2">Total liabilities and shareholders' equity</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">673,147</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">597,516</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">551,648</font></td>
  </tr>
</table>
<font FACE="Arial MT" SIZE="2">
<p>See accompanying notes to interim consolidated financial statements.</p>
</font><font SIZE="2">
<p align="center">3</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b>
<p align="center">Gildan Activewear Inc.<br>
<font SIZE="2">Consolidated Statements of Earnings</font></b><font SIZE="2"><br>
(In thousands of U.S. dollars, except per share data)</p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="40%">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="20%" align="left" colspan="4" bgcolor="#9ACCFF">
    <p align="center">
    <font FACE="Times New Roman" SIZE="2"><i><b>Three months ended</b></i></font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="20%" align="left" colspan="4" bgcolor="#9ACCFF">
    <p align="center">
    <font FACE="Times New Roman" SIZE="2"><i><b>Nine months ended</b></i></font></td>
  </tr>
  <tr>
    <td WIDTH="40%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: none; border-bottom-width: medium">
    <u><font FACE="Times New Roman" size="2">July
    2, 2006</font></u></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: none; border-bottom-width: medium">
    <u><font FACE="Times New Roman" size="2">July
    3, 2005</font></u></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: none; border-bottom-width: medium">
    <u><font FACE="Times New Roman" size="2">July
    2, 2006</font></u></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: none; border-bottom-width: medium">
    <u><font FACE="Times New Roman" size="2">July
    3, 2005</font></u></td>
  </tr>
  <tr>
    <td WIDTH="40%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: none; border-top-width: medium"><font FACE="Times New Roman" size="2">(unaudited)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: none; border-top-width: medium"><font FACE="Times New Roman" size="2">(unaudited)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: none; border-top-width: medium"><font FACE="Times New Roman" size="2">(unaudited)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: none; border-top-width: medium"><font FACE="Times New Roman" size="2">(unaudited)</font></td>
  </tr>
  <tr>
    <td WIDTH="40%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="40%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">Sales</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">233,945</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">198,901</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">538,038</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">473,179</font></td>
  </tr>
  <tr>
    <td WIDTH="40%"><font FACE="Times New Roman" SIZE="2">Cost of sales</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">158,221</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">136,091</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">358,011</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">328,309</font></td>
  </tr>
  <tr>
    <td WIDTH="40%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="40%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">Gross profit</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">75,724</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">62,810</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">180,027</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">144,870</font></td>
  </tr>
  <tr>
    <td WIDTH="40%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="40%"><font FACE="Times New Roman" SIZE="2">Selling, general and
    administrative expenses</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">21,978</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">19,134</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">60,747</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">53,746</font></td>
  </tr>
  <tr>
    <td WIDTH="40%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    Special charge (note 4)</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">-</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">-</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">-</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">11,886</font></td>
  </tr>
  <tr>
    <td WIDTH="40%">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="40%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">53,746</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">43,676</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">119,280</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">79,238</font></td>
  </tr>
  <tr>
    <td WIDTH="40%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="40%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    Depreciation and amortization</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">8,169</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">6,043</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">23,311</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">18,413</font></td>
  </tr>
  <tr>
    <td WIDTH="40%"><font FACE="Times New Roman" SIZE="2">Interest expense, net</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">759</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">1,191</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">2,028</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">3,691</font></td>
  </tr>
  <tr>
    <td WIDTH="40%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    Non-controlling interest in income of</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="40%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    &nbsp;consolidated joint venture</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">192</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">72</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">240</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">187</font></td>
  </tr>
  <tr>
    <td WIDTH="40%">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="40%"><font FACE="Times New Roman" SIZE="2">Earnings before
    income taxes</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">44,626</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">36,370</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">93,701</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">56,947</font></td>
  </tr>
  <tr>
    <td WIDTH="40%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="40%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    Income tax expense (note 5)</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 3" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">1,795</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 3" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">2,223</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 3" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">3,660</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 3" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">101</font></td>
  </tr>
  <tr>
    <td WIDTH="40%">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="40%"><font FACE="Times New Roman" SIZE="2">Net earnings</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">42,831</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">34,147</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">90,041</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">56,846</font></td>
  </tr>
  <tr>
    <td WIDTH="40%">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="40%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="40%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">Basic EPS
    (note 6)</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">0.71</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">0.57</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">1.50</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">0.95</font></td>
  </tr>
  <tr>
    <td WIDTH="40%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="40%"><font FACE="Times New Roman" SIZE="2">Diluted EPS (note 6)</font></td>
    <td WIDTH="3%" align="right"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">0.71</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">0.57</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">1.49</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="7%" align="right"><font FACE="Times New Roman" SIZE="2">0.95</font></td>
  </tr>
</table>
<b>
<p align="center"><font size="2">Consolidated Statements of Retained Earnings</font></b><font size="2"><br>
(In thousands of U.S. dollars)</font></p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="44%">&nbsp;</td>
    <td WIDTH="6%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="24%" COLSPAN="3" align="right" bgcolor="#9ACCFF"><font size="2">
    <i><b>
    <p align="center">Three months ended</b></i></font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="22%" COLSPAN="3" align="right" bgcolor="#9ACCFF"><font size="2">
    <i><b>
    <p align="center">Nine months ended</b></i></font></td>
  </tr>
  <tr>
    <td WIDTH="44%">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: none; border-bottom-width: medium">
    <font size="2"><u>July 2, 2006</u></font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: none; border-bottom-width: medium">
    <font size="2"><u>July 3, 2005</u></font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: none; border-bottom-width: medium">
    <font size="2"><u>July 2, 2006</u></font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: none; border-bottom-width: medium">
    <font size="2"><u>July 3, 2005</u></font></td>
  </tr>
  <tr>
    <td WIDTH="44%">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: none; border-top-width: medium">
    <font size="2">(unaudited)</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: none; border-top-width: medium">
    <font size="2">(unaudited)</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: none; border-top-width: medium">
    <font size="2">(unaudited)</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: none; border-top-width: medium">
    <font size="2">(unaudited)</font></td>
  </tr>
  <tr>
    <td WIDTH="44%">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="44%" bgcolor="#E6E6E6"><font size="2">Retained earnings, beginning of the period</font></td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6"><font size="2">$</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font size="2">355,749</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font size="2">$</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font size="2">245,195</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font size="2">$</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font size="2">308,539</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font size="2">$</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font size="2">222,496</font></td>
  </tr>
  <tr>
    <td WIDTH="44%"><font size="2">Net earnings</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">42,831</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">34,147</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">90,041</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">56,846</font></td>
  </tr>
  <tr>
    <td WIDTH="44%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="44%" bgcolor="#E6E6E6"><font size="2">Retained earnings, end of the period</font></td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6"><font size="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#E6E6E6">
    <font size="2">398,580</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font size="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#E6E6E6">
    <font size="2">279,342</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font size="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#E6E6E6">
    <font size="2">398,580</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font size="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#E6E6E6">
    <font size="2">279,342</font></td>
  </tr>
</table>
<font SIZE="2">
<p>See accompanying notes to interim consolidated financial statements.</p>
<p align="center">4</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b>
<p align="center">Gildan Activewear Inc.<br>
<font SIZE="2">Consolidated Statements of Cash Flows</font></b><font SIZE="2"><br>
(In thousands of U.S. dollars)</font></p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="41%">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="25%" COLSPAN="3" align="right" bgcolor="#9ACCFF"><font SIZE="2">
    <i><b>
    <p align="center">Three months ended</b></i></font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="23%" COLSPAN="3" align="right" bgcolor="#9ACCFF"><font SIZE="2">
    <i><b>
    <p align="center">Nine months ended</b></i></font></td>
  </tr>
  <tr>
    <td WIDTH="41%">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2"><u>July 2, 2006</u></font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2"><u>July 3, 2005</u></font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2"><u>July 2, 2006</u></font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2"><u>July 3, 2005</u></font></td>
  </tr>
  <tr>
    <td WIDTH="41%">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">(unaudited)</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">(unaudited)</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">(unaudited)</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">(unaudited)</font></td>
  </tr>
  <tr>
    <td WIDTH="41%">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2">Cash flows from (used in) operating
    activities:</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">&nbsp;&nbsp;&nbsp; Net earnings</font></td>
    <td WIDTH="7%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="7%" align="right"><font SIZE="2">42,831</font></td>
    <td WIDTH="7%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="7%" align="right"><font SIZE="2">34,147</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="7%" align="right"><font SIZE="2">90,041</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">56,846</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp; Adjustments for:</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Depreciation and amortization</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">8,169</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">6,043</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">23,311</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">18,413</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Future income taxes</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">427</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">1,431</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">845</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(1,943)</font></td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Loss on disposal and writedown of fixed assets</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">833</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">287</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">1,175</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">8,646</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Stock-based compensation expense</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">318</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">164</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">843</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">581</font></td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Other</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(574)</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">465</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(407)</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">619</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">52,004</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">42,537</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">115,808</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">83,162</font></td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">Net changes in non-cash working capital
    balances:</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp; Accounts receivable</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(29,333)</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(23,863)</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(24,077)</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(26,552)</font></td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">&nbsp;&nbsp;&nbsp; Inventories</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">25,330</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">9,304</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">(26,400)</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">(14,732)</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp; Prepaid expenses and
    deposits</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(2,413)</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">325</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(1,908)</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(3,114)</font></td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">&nbsp;&nbsp;&nbsp; Accounts payable and
    accrued liabilities</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">293</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">7,548</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">(3,499)</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">5,437</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp; Income taxes payable</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">1,240</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">324</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">1,225</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">400</font></td>
  </tr>
  <tr>
    <td WIDTH="41%">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">47,121</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">36,175</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">61,149</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">44,601</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">Cash flows from (used in) financing
    activities:</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp; Increase in long-term debt</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">-</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">1,139</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">691</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">2,420</font></td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">&nbsp;&nbsp;&nbsp; Repayment of long-term
    debt</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">(18,007)</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">(17,569)</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">(19,279)</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">(18,495)</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp; Contribution by
    non-controlling interest</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">-</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">-</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">-</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">2,500</font></td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">&nbsp;&nbsp;&nbsp; Proceeds from the issuance
    of shares</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">167</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">1,310</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">1,614</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">4,997</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(17,840)</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(15,120)</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(16,974)</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(8,578)</font></td>
  </tr>
  <tr>
    <td WIDTH="41%">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2">Cash flows from (used in) investing
    activities:</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">&nbsp;&nbsp;&nbsp; Purchase of fixed assets</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">(17,772)</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">(23,563)</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">(53,995)</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">(66,693)</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp; Proceeds from the disposal
    of assets held for sale</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">5,027</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">2,599</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">5,027</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">2,599</font></td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">&nbsp;&nbsp;&nbsp; (Increase) decrease in
    other assets</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(756)</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">676</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(1,007)</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(1,933)</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(13,501)</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(20,288)</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(49,975)</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(66,027)</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#FFFFFF"><font SIZE="2">Effect of exchange rate changes on cash and</font></td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#FFFFFF">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">&nbsp;&nbsp; cash equivalents</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(26)</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(26)</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(119)</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">117</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2">Net increase (decrease) in cash and cash
    equivalents</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp; during the period</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">15,754</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">741</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(5,919)</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(29,887)</font></td>
  </tr>
  <tr>
    <td WIDTH="41%">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">Cash and cash equivalents, beginning of
    period</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">48,129</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">30,043</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">69,802</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">60,671</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2">Cash and cash equivalents, end of period</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font SIZE="2">63,883</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font SIZE="2">30,784</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font SIZE="2">63,883</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font SIZE="2">30,784</font></td>
  </tr>
</table>
<font SIZE="2">
<p>See accompanying notes to interim consolidated financial statements.</p>
<p align="center">5</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<font SIZE="2"><b>
<p>NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (For the period ended July
2, 2006) (Tabular amounts in thousands of U.S. dollars, except per share data) (unaudited)
</p>
<p>1.</b> <b>Basis of presentation:</p>
</b>
<p ALIGN="JUSTIFY">The accompanying unaudited interim consolidated financial
statements have been prepared in accordance with Canadian generally accepted
accounting principles for interim financial information and include all normal
and recurring entries that are necessary for a fair presentation of the
statements. 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's annual consolidated financial statements. </p>
<p>The Company's revenues and income are subject to seasonal variations.
Typically, demand for our product is highest in the third quarter of each fiscal
year, when distributors purchase inventory for the peak summer selling season.
</p>
<p>Certain comparative figures have been reclassified in order to conform with
the current year's presentation. </p>
<p>All amounts in the attached notes are unaudited unless specifically
identified. </p>
</font><font SIZE="2"><b>
<p>2.</b> <b>Significant accounting policies: </p>
</b>
<p>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's annual report for the year
ended October 2, 2005. </p>
</font><font SIZE="2"><b>
<p>3.</b> <b>Share capital: </b></p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="42%">&nbsp;</td>
    <td WIDTH="20%" COLSPAN="3" align="center"><font SIZE="2"><u>July 2, 2006</u></font></td>
    <td WIDTH="24%" COLSPAN="3" align="center"><font SIZE="2"><u>October 2, 2005</u></font></td>
    <td WIDTH="21%" COLSPAN="3" align="center"><font SIZE="2"><u>July 3, 2005</u></font></td>
  </tr>
  <tr>
    <td WIDTH="42%">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="24%" COLSPAN="3" align="right"><font SIZE="2">
    <p align="center">(audited)</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Shares</font></td>
    <td WIDTH="13%" COLSPAN="2" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Book value</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Shares</font></td>
    <td WIDTH="15%" COLSPAN="2" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Book Value</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Shares</font></td>
    <td WIDTH="12%" COLSPAN="2" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Book Value</font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Authorized without limit as to number and without par value:</font></td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="5%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="5%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="5%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="42%"><font SIZE="2">&nbsp;&nbsp;&nbsp; First preferred shares,
    issuable in series, non-voting</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="42%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp; Second preferred shares,
    issuable in series, non-voting</font></td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">&nbsp;&nbsp;&nbsp; Common shares</font></td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Issued and outstanding:</font></td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="5%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="5%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="5%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="42%"><font SIZE="2">&nbsp;&nbsp;&nbsp; Common shares:</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="42%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp; Total outstanding,
    beginning of period</font></td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6"><font SIZE="2">59,954</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6"><font SIZE="2">84,177</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">59,397</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">78,170</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">59,397</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">78,170</font></td>
  </tr>
  <tr>
    <td WIDTH="42%"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Shares issued under employee share purchase plan</font></td>
    <td WIDTH="6%" align="right"><font SIZE="2">6</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font SIZE="2">225</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">10</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">200</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">8</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">140</font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shares issued
    pursuant to exercise of stock options</font></td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">122</font></td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">1,389</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">547</font></td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">5,807</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">472</font></td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">4,857</font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">&nbsp;&nbsp;&nbsp; Total outstanding, end of period</font></td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">60,082</font></td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">85,791</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">59,954</font></td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">84,177</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">59,877</font></td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">83,167</font></td>
  </tr>
</table>
<font size="2">
<p ALIGN="JUSTIFY">On May 4, 2005, the Board of Directors of the Company
declared a two-for-one stock split, effected in the form of a stock dividend,
applicable to all of its issued and outstanding common shares and payable to
shareholders of record on May 20, 2005. All share and per share data reflect the
effect of the stock split on a retroactive basis. </p>
<p ALIGN="JUSTIFY">The Company obtained approval from the Toronto Stock Exchange
to renew its normal course issuer bid, authorizing the Company to purchase up to
a maximum of 1,000,000 of its common shares in the open market commencing
December 22, 2005 and ending December 21, 2006. As at July 2, 2006, no shares
have been repurchased under this plan. </p>
<p align="center">6</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<font SIZE="2"><b>
<p>4.</b> <b>Special charge: </p>
</b>
<p>During the second quarter of fiscal 2005, the Company closed its two Canadian
yarn-spinning operations and recognized a charge of $11.9 million before tax, or
$7.8 million after tax ($0.13 per share). The components of the special charge
were as follows; </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="50%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="48%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Writedown of fixed assets</font></td>
    <td WIDTH="23%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$</font></td>
    <td WIDTH="29%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">7,872</font></td>
  </tr>
  <tr>
    <td WIDTH="48%"><font SIZE="2">Employee severance</font></td>
    <td WIDTH="23%" align="right">&nbsp;</td>
    <td WIDTH="29%" align="right"><font SIZE="2">3,688</font></td>
  </tr>
  <tr>
    <td WIDTH="48%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Other</font></td>
    <td WIDTH="23%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="29%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">326</font></td>
  </tr>
  <tr>
    <td WIDTH="48%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="23%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="29%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">11,886</font></td>
  </tr>
</table>
<font size="2">
<p ALIGN="JUSTIFY">A major portion of the Canadian yarn-spinning equipment was
transferred to a new facility in Clarkton, North Carolina, which is operated by
the Company's joint venture with Frontier Spinning Mills, Inc. The Company
reduced the carrying values of the remaining fixed assets considered to be held
for sale to their fair values. </p>
<p ALIGN="JUSTIFY">In the fourth quarter of fiscal 2005, the Company realized an
after-tax gain of $0.8 million, or $0.01 per share, from the sale of equipment,
thereby reducing the cumulative amount of the charge to $10.7 million before
tax, or $7.0 million after-tax ($0.12 per share), for the full fiscal year. </p>
<p>During the third quarter of fiscal 2006, the balance of the assets held for
sale were sold for proceeds of $5.0 million, which approximated their carrying
value. </p>
</font><font SIZE="2"><b>
<p>5.</b> <b>Income taxes: </p>
</b>
<p ALIGN="JUSTIFY">The income tax expense of $0.1 million for the nine months
ended July 3, 2005 included the income tax recovery arising from the special
charge of the closure of the Canadian yarn-spinning operations in the second
quarter of fiscal 2005. Excluding the impact of the tax recovery due to the
closure costs, the tax provision for nine-month period ended July 3, 2005 was
$4.2 million, resulting in an effective tax rate of 6.1%. </p>
</font><font SIZE="2"><b>
<p>6.</b> <b>Earnings per share: </p>
</b>
<p>The following table sets forth the computation of basic and diluted earnings
per share: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="47%">&nbsp;</td>
    <td WIDTH="6%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="19%" align="center" colspan="3" bgcolor="#9ACCFF"><b>
    <font size="2">Three months ended</font></b></td>
    <td WIDTH="7%" align="center">&nbsp;</td>
    <td WIDTH="7%" align="center" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="21%" align="center" colspan="3" bgcolor="#9ACCFF"><b>
    <font size="2">Nine months ended</font></b></td>
  </tr>
  <tr>
    <td WIDTH="47%">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font size="2"><u>July 2,</u></font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font size="2"><u>July 3,</u></font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font size="2"><u>July 2,</u></font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font size="2"><u>July 3,</u></font></td>
  </tr>
  <tr>
    <td WIDTH="47%">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font size="2"><u>2006</u></font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font size="2"><u>2005</u></font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font size="2"><u>2006</u></font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font size="2"><u>2005</u></font></td>
  </tr>
  <tr>
    <td WIDTH="47%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="47%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">Basic weighted average number of common shares outstanding</font></td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">60,077</font></td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">59,816</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">60,034</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">59,613</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">Basic earnings per share</font></td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">$</font></td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">0.71</font></td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">0.57</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">1.50</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">0.95</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" bgcolor="#E6E6E6"><font size="2">Diluted earnings per share:</font></td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="47%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Basic weighted
    average number of common shares outstanding</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font size="2">60,077</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font size="2">59,816</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font size="2">60,034</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font size="2">59,613</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
    Dilutive impact of stock options and RSUs</font></td>
    <td WIDTH="6%" align="right" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6">
    <font size="2">550</font></td>
    <td WIDTH="6%" align="right" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6">
    <font size="2">454</font></td>
    <td WIDTH="7%" align="right" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6">
    <font size="2">577</font></td>
    <td WIDTH="7%" align="right" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6">
    <font size="2">429</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" style="border-bottom: 1px solid #000000"><font size="2">
    Diluted weighted average number of common shares outstanding</font></td>
    <td WIDTH="6%" align="right" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom: 1px solid #000000">
    <font size="2">60,627</font></td>
    <td WIDTH="6%" align="right" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom: 1px solid #000000">
    <font size="2">60,270</font></td>
    <td WIDTH="7%" align="right" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom: 1px solid #000000">
    <font size="2">60,611</font></td>
    <td WIDTH="7%" align="right" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom: 1px solid #000000">
    <font size="2">60,042</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6"><font size="2">
    Diluted earnings per share</font></td>
    <td WIDTH="6%" align="right" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="6%" align="right" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6">
    <font size="2">0.71</font></td>
    <td WIDTH="6%" align="right" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6">
    <font size="2">0.57</font></td>
    <td WIDTH="7%" align="right" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6">
    <font size="2">1.49</font></td>
    <td WIDTH="7%" align="right" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-bottom: 1px solid #000000" bgcolor="#E6E6E6">
    <font size="2">0.95</font></td>
  </tr>
</table>
<font SIZE="2"><b>
<p>7.</b> <b>Guarantees: </p>
</b>
<p>Significant guarantees that have been provided to third parties are the
following: </p>
<p ALIGN="JUSTIFY">The Company, and some 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 July 2 2006, the
maximum potential liability under these guarantees was $36.9 million of which
$3.7 million was surety bonds and $33.2 million was for standby letters of
credit and corporate guarantees. The standby letters of credit mature at various
dates during 2006, the surety bonds are automatically renewed on an annual basis
and the corporate guarantees mature upon 30 days notice. </p>
<p ALIGN="JUSTIFY">As at July 2, 2006, 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. Management believes that the fair value
of the non-contingent obligations to stand ready to perform in the event that
specified triggering events or conditions occur approximates the cost of
obtaining the standby letters of credit and surety bonds. </p>
<p align="center">7</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<font SIZE="2"><b>
<p>8.</b> <b>Financial instruments: </p>
</b>
<p>The following table summarizes the Company's commitments to buy and sell
foreign currencies as at July 2, 2006 and July 3, 2005:</p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="16%" align="right">&nbsp;</td>
    <td WIDTH="22%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">Notional U.S.</font></td>
  </tr>
  <tr>
    <td WIDTH="25%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="30%" COLSPAN="2" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Notional amount</font></td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Exchange rate</font></td>
    <td WIDTH="22%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Maturity</font></td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">equivalent</font></td>
  </tr>
  <tr>
    <td WIDTH="25%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>2006:</b></font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="22%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2">Buy contracts:</font></td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="16%" align="right">&nbsp;</td>
    <td WIDTH="22%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp; Foreign exchange contracts</font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2">CA$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">37,334</font></td>
    <td WIDTH="16%" align="right" bgcolor="#E6E6E6"><font SIZE="2">0.7997 to 0.8997</font></td>
    <td WIDTH="22%" align="right" bgcolor="#E6E6E6"><font SIZE="2">July 2006 to September 2006</font></td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$ 31,720</font></td>
  </tr>
  <tr>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">&#128;</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">11,147</font></td>
    <td WIDTH="16%" align="right"><font SIZE="2">1.1991 to 1.2208</font></td>
    <td WIDTH="22%" align="right"><font SIZE="2">July 2006 to June 2007</font></td>
    <td WIDTH="14%" align="right"><font SIZE="2">$ 13,480</font></td>
  </tr>
  <tr>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">Sell contracts:</font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="16%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="22%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2">&nbsp;&nbsp;&nbsp; Foreign exchange contracts</font></td>
    <td WIDTH="11%" align="right"><font SIZE="2">&#128;</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">2,265</font></td>
    <td WIDTH="16%" align="right"><font SIZE="2">1.3495 to 1.3525</font></td>
    <td WIDTH="22%" align="right"><font SIZE="2">July 2006 to September 2006</font></td>
    <td WIDTH="14%" align="right"><font SIZE="2">$ 3,059</font></td>
  </tr>
  <tr>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font size="2">&#163;</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">1,745</font></td>
    <td WIDTH="16%" align="right" bgcolor="#E6E6E6"><font SIZE="2">1.8396 to 1.8736</font></td>
    <td WIDTH="22%" align="right" bgcolor="#E6E6E6"><font SIZE="2">July 2006 to September 2006</font></td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$ 3,256</font></td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2"><b>2005:</b></font></td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="16%" align="right">&nbsp;</td>
    <td WIDTH="22%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">Buy contracts:</font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="16%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="22%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2">&nbsp;&nbsp;&nbsp; Foreign exchange contracts</font></td>
    <td WIDTH="11%" align="right"><font SIZE="2">CA$</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">47,800</font></td>
    <td WIDTH="16%" align="right"><font SIZE="2">0.7896 to 0.8216</font></td>
    <td WIDTH="22%" align="right"><font SIZE="2">July 2005 to August 2006</font></td>
    <td WIDTH="14%" align="right"><font SIZE="2">$ 38,298</font></td>
  </tr>
  <tr>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">Sell contracts:</font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="16%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="22%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2">&nbsp;&nbsp;&nbsp; Foreign exchange contracts</font></td>
    <td WIDTH="11%" align="right"><font SIZE="2">&#128;</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">15,884</font></td>
    <td WIDTH="16%" align="right"><font SIZE="2">1.3345 to 1.3721</font></td>
    <td WIDTH="22%" align="right"><font SIZE="2">July 2005 to September 2006</font></td>
    <td WIDTH="14%" align="right"><font SIZE="2">$ 21,543</font></td>
  </tr>
  <tr>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font size="2">&#163;</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">6,187</font></td>
    <td WIDTH="16%" align="right" bgcolor="#E6E6E6"><font SIZE="2">1.8707 to 1.9008</font></td>
    <td WIDTH="22%" align="right" bgcolor="#E6E6E6"><font SIZE="2">July 2005 to September 2006</font></td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$ 11,662</font></td>
  </tr>
</table>
<font SIZE="2"><b>
<p>9.</b> <b>Segmented information: </p>
</b>
<p>The Company manufactures and sells activewear apparel, and operates in one
business segment. </p>
<p ALIGN="JUSTIFY">The Company has one customer accounting for greater than 10%
of total sales. For the three-month period ended July 2, 2006 and July 3, 2005,
this customer accounted for 31.5% and 24.9% of total sales, respectively. For
the nine-month period ended July 2, 2006 and July 3, 2005, the customer
accounted for 30.3% and 28.7% of total sales, respectively. </p>
<p>Sales were derived from customers located in the following geographic areas:
</p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="32%">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="24%" align="right" colspan="3" bgcolor="#9ACCFF">
    <p align="center"><b><font size="2">Three months ended </font></b></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="27%" align="right" colspan="3" bgcolor="#9ACCFF">
    <p align="center"><b><font size="2">Nine months ended</font></b></td>
  </tr>
  <tr>
    <td WIDTH="32%">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2"><u>July 2,</u></font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2"><u>July 3,</u></font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right"><font SIZE="2"><u>July 2,</u></font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right"><font SIZE="2"><u>July 3,</u></font></td>
  </tr>
  <tr>
    <td WIDTH="32%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><u>2006</u></font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><u>2005</u></font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><u>2006</u></font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><u>2005</u></font></td>
  </tr>
  <tr>
    <td WIDTH="32%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">United States</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">203,047</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">173,062</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">470,197</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">408,926</font></td>
  </tr>
  <tr>
    <td WIDTH="32%"><font SIZE="2">Canada</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">16,429</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">13,259</font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right"><font SIZE="2">38,055</font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right"><font SIZE="2">34,514</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Europe and other</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">14,469</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">12,580</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">29,786</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">29,739</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">233,945</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">198,901</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">538,038</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">473,179</font></td>
  </tr>
</table>
<font FACE="Arial MT" SIZE="2">
<p>Fixed assets by geographic areas are as follows: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="37%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2"><u>July 2, 2006</u></font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2"><u>October 2, 2005</u></font></td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2"><u>July 3, 2005</u></font></td>
  </tr>
  <tr>
    <td WIDTH="37%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(audited)</font></td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="37%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Caribbean basin and Central America</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">180,595</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">141,029</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">132,574</font></td>
  </tr>
  <tr>
    <td WIDTH="37%"><font SIZE="2">United States</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">64,146</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">67,260</font></td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">64,300</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2">Canada</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font SIZE="2">44,229</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2">47,711</font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2">48,427</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Mexico</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">4,015</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">4,615</font></td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">4,683</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">292,985</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">260,615</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">249,984</font></td>
  </tr>
</table>
<font SIZE="2">
<p align="center">8</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<b><font SIZE="2">
<p>10. Other information: </p>
</font></b>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="41%">&nbsp;</td>
    <td WIDTH="6%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="30%" align="right" colspan="3" bgcolor="#9ACCFF">
    <p align="center"><b><font size="2">Three months ended </font></b></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="36%" align="right" colspan="3" bgcolor="#9ACCFF">
    <p align="center"><b><font size="2">Nine months ended</font></b></td>
  </tr>
  <tr>
    <td WIDTH="41%">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font SIZE="2"><u>July 2,</u></font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font SIZE="2"><u>July 3,</u></font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2"><u>July 2,</u></font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2"><u>July 3,</u></font></td>
  </tr>
  <tr>
    <td WIDTH="41%">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font SIZE="2"><u>2006</u></font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font SIZE="2"><u>2005</u></font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2"><u>2006</u></font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2"><u>2005</u></font></td>
  </tr>
  <tr>
    <td WIDTH="96%" COLSPAN="4" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(a) The following items were included in the determination of
    the Company's net earnings:</font></td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Depreciation of fixed assets</font></td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$</font></td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">7,913</font></td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$</font></td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">5,777</font></td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">22,526</font></td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$</font></td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">17,749</font></td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">Interest expense on long-term debt</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font SIZE="2">869</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font SIZE="2">1,198</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">2,989</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">3,839</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2">Interest on short-term indebtedness</font></td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6"><font SIZE="2">73</font></td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6"><font SIZE="2">-</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">205</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">Foreign exchange (gain) loss</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font SIZE="2">(1,171)</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font SIZE="2">1,245</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">(1,200)</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">667</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2">Amortization expense of deferred start-up
    costs</font></td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6"><font SIZE="2">195</font></td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6"><font SIZE="2">105</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">606</font></td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" bgcolor="#E6E6E6"><font SIZE="2">284</font></td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">Amortization of deferred financing costs and
    other</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font SIZE="2">61</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font SIZE="2">161</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">179</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">380</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Investment income</font></td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(304)</font></td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(79)</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(1,223)</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(266)</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(b) Supplemental cash flow disclosure:</font></td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Cash paid during the period for:</font></td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">&nbsp;&nbsp;&nbsp; Interest</font></td>
    <td WIDTH="6%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="6%" align="right"><font SIZE="2">955</font></td>
    <td WIDTH="6%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="6%" align="right"><font SIZE="2">1,075</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="7%" align="right"><font SIZE="2">3,115</font></td>
    <td WIDTH="7%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="7%" align="right"><font SIZE="2">3,611</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">&nbsp;&nbsp;&nbsp; Income taxes</font></td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">111</font></td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">113</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">1,382</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">675</font></td>
  </tr>
</table>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="44%">&nbsp;</td>
    <td WIDTH="20%" COLSPAN="2" align="right">&nbsp;</td>
    <td WIDTH="18%" COLSPAN="2" align="right">&nbsp;</td>
    <td WIDTH="19%" COLSPAN="2" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="44%">&nbsp;</td>
    <td WIDTH="20%" COLSPAN="2" align="right"><font SIZE="2">July 2, 2006</font></td>
    <td WIDTH="18%" COLSPAN="2" align="right"><font SIZE="2">October 2, 2005</font></td>
    <td WIDTH="19%" COLSPAN="2" align="right"><font SIZE="2">July 3, 2005</font></td>
  </tr>
  <tr>
    <td WIDTH="44%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(audited)</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="44%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Non-cash transactions:</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="44%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; Additions to fixed assets included
    in accounts payable</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">2,816</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">740</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">2,797</font></td>
  </tr>
  <tr>
    <td WIDTH="44%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Cash and cash equivalents consist of:</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="44%"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; Cash balances with
    banks</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">39,096</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">38,802</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">27,984</font></td>
  </tr>
  <tr>
    <td WIDTH="44%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; Short-term investments</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">24,787</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">31,000</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">2,800</font></td>
  </tr>
  <tr>
    <td WIDTH="44%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">63,883</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">69,802</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">30,784</font></td>
  </tr>
</table>
<font SIZE="2"><b>
<p>11. Insurance Receivable </p>
</b>
<p ALIGN="JUSTIFY">On June 20, 2006, a sewing facility located at San Marcos,
Nicaragua was destroyed by a fire. The Company's insurance policies provide
coverage for damage to property destroyed, loss of revenues and expenditures to
minimize and/or avoid loss of revenues. As at July 2, 2006, the Company recorded
an insurance claim receivable of $3.2 million in accounts receivable, equal to
the net book value of the fixed assets and inventory destroyed. Any additional
recoveries will be recorded as costs are incurred and become determinable. </p>
<b>
<p>12. Contingent Liability </p>
</b>
<p ALIGN="JUSTIFY">In November 2002, one of the Company's Mexican subsidiaries
(&quot;Gildan Mexico&quot;) received a tax assessment from a regional taxation office
relating to duties for the 2000 fiscal year for approximately $6.0 million,
essentially asserting that Canadian-made textiles shipped to Gildan Mexico for
sewing processing were not subsequently exported from Mexico. Gildan Mexico
appealed the assessment and was successful in obtaining a judgment in its favour.
Notwithstanding the judgment, the regional Mexican taxation office issued a new
assessment in March 2005, and increased the assessed amount from $6.0 million to
approximately $7.1 million. Shortly after receiving the second assessment,
Gildan Mexico again filed an appeal. In July 2006, Gildan Mexico received
notification that its appeal of the second assessment for fiscal 2000 was
unsuccessful. The Company strongly maintains that the tax assessment is entirely
without substance as it has provided proper documentation to establish that the
textiles imported into Mexico for sewing were subsequently exported to the
United States and Canada. The Company is pursuing appropriate administrative and
judicial avenues to resolve this matter in its favour. The Company expects to be
successful in its efforts to clarify and resolve this matter, and accordingly no
provision has been made in the accounts for this exposure. </p>
<p align="center">9</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<font SIZE="2"><b>
<p>13. Subsequent Event </p>
</b>
<p ALIGN="JUSTIFY">On July 6, 2006, the Company acquired 100% of the equity of
Kentucky Derby Hosiery Co., Inc. (&quot;Kentucky Derby&quot;), a hosiery manufacturer
based in Hopkinsville, Kentucky. The total purchase price of approximately $19.5
million for the shareholders' equity was paid in cash, except for an approximate
$0.5 million that was paid in common shares of the Company. The acquisition is
intended to enhance and accelerate the Company's strategy to enter the North
American retail channel as a supplier of athletic socks, underwear and activewear. </p>
<p>The Company will account for this acquisition using the purchase method and
the results of Kentucky Derby will be consolidated with those of the Company
from the date of acquisition. The Company is in the process of finalizing its
valuations of the net assets acquired. </p>
<p align="center">10</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>

<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<font size="2"><i>
<p ALIGN="JUSTIFY">In this MD&amp;A, &quot;Gildan&quot;, the &quot;Company&quot;, or the words &quot;we&quot;,
&quot;us&quot;, &quot;our&quot; refer, depending on the context, either to Gildan Activewear Inc. or
to Gildan Activewear Inc. together with its subsidiaries and joint ventures. </p>
</i></font><b><font size="2">
<p>MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS</p>
</font></b>
<p ALIGN="JUSTIFY"><font size="2">The following is management's discussion and
analysis (MD&amp;A) of Gildan's consolidated financial condition and results of
operations for the three month and nine month periods ended July 2, 2006
compared to the corresponding periods in the previous year. This MD&amp;A has been
prepared as of August 2, 2006. For a complete understanding of our business
environment, trends, risks and uncertainties and the effect of accounting
estimates on our results of operations and financial condition, this MD&amp;A should
be read together with the unaudited interim consolidated financial statements
for the three and nine month periods ended July 2, 2006 and notes thereto, and
with our MD&amp;A for the year ended October 2, 2005 (2005 MD&amp;A), which is part of
the fiscal 2005 Annual Report. </font></p>
<p ALIGN="JUSTIFY"><font size="2">All financial information contained in this
interim MD&amp;A and Gildan's interim consolidated financial statements has been
prepared in accordance with Canadian generally accepted accounting principles (GAAP),
except for certain information discussed in the paragraph entitled &quot;<i>Non-GAAP
Financial Measures&quot;</i> on page 13 of this interim MD&amp;A. The Company'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 18
to the Company's 2005 Consolidated Financial Statements. All amounts in this
report are in U.S. dollars, unless otherwise noted. The interim consolidated
financial statements and this MD&amp;A were reviewed by Gildan's Audit and Finance
Committee and were approved by its Board of Directors. </font></p>
<p><font size="2">This document contains forward-looking statements, which are
qualified by reference to, and should be read together with the &quot;<i>Forward-looking
Statements&quot; cautionary notice </i>on page 23. </font></p>
<p ALIGN="JUSTIFY"><font size="2">Additional information about Gildan, including
our 2005 Annual Information Form, is available on our website at <u>
<font color="#0000FF">www.gildan.com</font></u>, on the SEDAR website at <u>
<font color="#0000FF">www.sedar.com</font></u> and on the EDGAR section of the
U.S. Securities and Exchange Commission website (which includes the Annual
Report on Form 40-F) at <u><font color="#0000FF">www.sec.gov</font></u>.</font></p>
<b><font size="2">
<p>RPORATE OVERVIEW</p>
<p>CORPORATE OVERVIEW</p>
</font></b>
<p ALIGN="JUSTIFY"><font size="2">Gildan is a vertically-integrated marketer and
manufacturer of quality branded basic apparel. The Company is the leading
supplier of activewear for the wholesale imprinted sportswear market in the U.S.
and Canada, and also a leading supplier for this market in Europe. We sell
T-shirts, sport shirts and sweatshirts in large quantities to wholesale
distributors as undecorated &quot;blanks&quot;, which are subsequently decorated by
screenprinters with designs and logos. Consumers ultimately purchase the
Company's products, with the Gildan label, in venues such as sports,
entertainment and corporate events, and travel and tourism destinations. Other
end-uses include work uniforms and similar applications to convey individual,
group and team identity. </font></p>
<p ALIGN="JUSTIFY"><font size="2">In addition to continuing its growth within
the wholesale channel, Gildan is implementing a major new growth initiative to
sell its products into the mass-market retail channel in North America.
Effective July 6, 2006, Gildan completed the acquisition of Kentucky Derby
Hosiery, Co., Inc. (Kentucky Derby), a U.S. hosiery manufacturer based in
Hopkinsville, Kentucky. This acquisition is intended to enhance and accelerate
Gildan's strategy to enter the North American retail channel. Gildan intends to
utilize Kentucky Derby's experience and distribution with mass-market retailers
to enhance its platform to build the Gildan retail brand in athletic socks,
underwear and activewear, while continuing to provide quality products to
support and develop Kentucky Derby's private label programs and brand licenses.
</font></p>
<font size="2">
<p align="center">11</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<font SIZE="2">
<p ALIGN="JUSTIFY">To support our sales in the various markets, we have textile
facilities located in Honduras, the Dominican Republic and Canada. The Dominican
Republic facility began production in fiscal 2005 and management expects to ramp
up this state-of-the-art facility to close to full capacity by the end of fiscal
2006. In conjunction with the continuation of our growth strategy, we are
currently constructing two world-scale facilities at our Rio Nance manufacturing
complex in Honduras, one for the production of sweatshirts and one for athletic
socks. </p>
<p ALIGN="JUSTIFY">During the third quarter this fiscal year, consistent with
our ongoing strategy to enhance our overall cost structure by maximizing
large-scale production of basic T-shirts at our textile manufacturing operations
in Honduras and the Dominican Republic, we announced a further reduction of
Canadian and U.S. textile manufacturing operations. Operations at the
Valleyfield, Quebec and at Bombay, N.Y. facilities will be reduced to a 5-day
workweek, starting in August of this year. The Canadian and U.S. textile
facilities will continue to manufacture fabric for sweatshirts and sport shirts,
as well as for a T-shirt sewing facility in Mexico. Gildan will continue on an
ongoing basis to evaluate the role and global competitiveness of its Canadian
and U.S. textile manufacturing facilities within its overall capacity planning
to support its growth strategy.</p>
<p>All of our sewing facilities are located in Central America, Mexico and the
Caribbean Basin. We also utilize third party contractors to complement our
vertically-integrated production. </p>
<p ALIGN="JUSTIFY">We have a joint-venture company with Frontier Spinning Mills,
Inc. (Frontier), called CanAm Yarns, LLC (CanAm) (formerly Cedartown
Manufacturing, LLC) that operates yarn-spinning facilities in Georgia and North
Carolina. CanAm's yarn-spinning operations, together with supply agreements
currently in place with Frontier and other third-party yarn providers, serve to
meet our commodity yarn requirements. </p>
<p ALIGN="JUSTIFY">We distribute our products in Canada and the U.S. primarily
out of company-owned distribution centres, and we use third-party warehouses in
Mexico, Europe and Australia to service our international customers. </p>
<p>Our corporate head office is located in Montreal, Canada and we employ over
13,000 full-time employees in our facilities worldwide. </p>
<b>
<p>INDUSTRY OVERVIEW </p>
</b>
<p ALIGN="JUSTIFY">The majority of our current sales consist of T-shirts, sport
shirts, and sweatshirts, in &quot;blank&quot; form, to the wholesale imprinted activewear
market. &quot;Imprinted&quot; activewear is decorated with a screenprint or embroidered
with a logo, design or character before it reaches the customer. Imprinted
activewear is either branded or private label. Branded products, which
constitute approximately 95% of Gildan's current sales, reach consumers carrying
the manufacturer's label, whereas products sold on a private label basis reach
consumers carrying the brand name of the customer. </p>
<p ALIGN="justify">We believe that growth in the imprinted activewear market has
been driven by several trends, such as the following: </font></p>
<ul>
  <li>
  <p ALIGN="justify"><font SIZE="2">continued use of activewear for event
  merchandising (such as concerts, festivals, etc.); </font></li>
  <li>
  <p ALIGN="justify"><font SIZE="2">continued evolution of the
  entertainment/sports licensing and merchandising businesses; </font></li>
  <li>
  <p ALIGN="justify"><font SIZE="2">the growing use of activewear for uniform
  applications; </font></li>
  <li>
  <p ALIGN="justify"><font SIZE="2">the growing use of activewear for corporate
  promotions; </font></li>
  <li>
  <p ALIGN="justify"><font SIZE="2">continued increase in use of activewear
  products for travel and tourism; </font></li>
  <li>
  <p ALIGN="justify"><font SIZE="2">an increased emphasis on physical fitness;
  and </font></li>
  <li>
  <p ALIGN="justify"><font SIZE="2">a greater use and acceptance of casual dress
  in the workplace. </li>
</ul>
<p align="center">12</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<font SIZE="2">
<p ALIGN="JUSTIFY">Furthermore, the continuation of significant reductions in
manufacturing costs, combined with quality enhancements in activewear apparel,
such as pre-shrunk fabrics, improved fabric weight, blends and construction,
have provided consumers with superior products at lower prices. </p>
<p ALIGN="JUSTIFY">The screenprint activewear market is characterized by low
fashion risk compared to many other apparel markets, since products are basic
and produced in a limited range of sizes, colours and styles, and since logos
and designs are not imprinted by manufacturers. </p>
</font><b><font size="2">
<p>RESULTS OF OPERATIONS </p>
<p>Non-GAAP Financial Measures </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY">The operating results of Gildan include unusual items, which
affect the comparability of its results. To measure our performance from one
period to the next, without the variations caused by the adjustments of special
charges as discussed on page 15, management uses certain measures that are not
defined by GAAP, such as: adjusted net earnings and adjusted earnings per share,
being net earnings and earnings per share excluding the special charge. Other
such measures are free cash flow, total indebtedness and net debt. We use and
present such non-GAAP financial measures because we believe such measures
provide meaningful information on the Company's financial condition 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 used and presented by other companies.
Accordingly, they should not be considered in isolation. </p>
<p>See the tables on pages 21 and 22 for a complete reconciliation of all non-GAAP
financial measures used and presented by Gildan to the most directly comparable
GAAP financial measures.</p>
<b>
<p>Quarterly Results Summary </p>
</b>
<p ALIGN="JUSTIFY">The table below sets forth selected consolidated financial
and other data for the eight most recently completed quarters. This quarterly
information is unaudited but has been prepared on the same basis as the annual
consolidated financial statements. The operating results for any quarter are not
necessarily indicative of the results to be expected for any future period. </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="32%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="24%" align="center" colspan="3" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">2006</font></td>
    <td WIDTH="35%" align="center" colspan="4" style="border-style: solid; border-width: 1">
    <font SIZE="2">2005</font></td>
    <td WIDTH="9%" align="right" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">2004</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><i>(in $ millions, except per share amounts)</i></font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>Q3</b></font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Q2</font></td>
    <td WIDTH="8%" align="right" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Q1</font></td>
    <td WIDTH="8%" align="right" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Q4</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Q3</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Q2</font></td>
    <td WIDTH="9%" align="right" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Q1</font></td>
    <td WIDTH="9%" align="right" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Q4</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Sales</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>233.9</b></font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">183.8</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">120.3</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">180.7</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">198.9</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">165.3</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">109.0</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">145.6</font></td>
  </tr>
  <tr>
    <td WIDTH="32%"><font SIZE="2">Net earnings</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2"><b>42.8</b></font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">31.0</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">16.2</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">29.2</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">34.1</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">14.3</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">8.4</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">16.8</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" bgcolor="#E6E6E6"><font SIZE="2">Net earnings per share</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="32%"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; Basic EPS</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2"><b>0.71</b></font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">0.52</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">0.27</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">0.49</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">0.57</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">0.24</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">0.14</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">0.28</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; Diluted EPS</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>0.71</b></font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">0.51</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">0.27</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">0.48</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font SIZE="2">0.57</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font SIZE="2">0.24</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font SIZE="2">0.14</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font SIZE="2">0.28</font></td>
  </tr>
  <tr>
    <td WIDTH="32%"><font SIZE="2">Total assets</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2"><b>673.1</b></font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">643.8</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">609.6</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">597.5</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">551.6</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">525.4</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">497.5</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">488.8</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" bgcolor="#E6E6E6"><font SIZE="2">Total long-term financial liabilities<sup>1</sup></font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>46.4</b></font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">64.8</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">65.4</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">64.1</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font SIZE="2">58.1</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font SIZE="2">72.8</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font SIZE="2">73.2</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font SIZE="2">66.0</font></td>
  </tr>
  <tr>
    <td WIDTH="32%"><font SIZE="2">Average number of shares outstanding <i>(in</i></font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="32%"><font SIZE="2"><i>thousands)</i></font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="32%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; Basic</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>60,077</b></font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">60,054</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">59,970</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">59,924</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font SIZE="2">59,816</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font SIZE="2">59,617</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font SIZE="2">59,407</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font SIZE="2">59,270</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; Diluted</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>60,627</b></font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">60,647</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">60,559</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">60,414</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">60,270</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">60,086</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">59,770</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">59,651</font></td>
  </tr>
</table>
<font SIZE="2"><sup>
<p>1</sup>Represents sum of long-term debt, future income taxes and
non-controlling interest</p>
<p ALIGN="JUSTIFY">The activewear business is seasonal and Gildan has
historically experienced quarterly fluctuations in operating results. Typically,
demand for our products is highest in the third quarter of each fiscal year,
when distributors purchase inventory for the peak summer selling season, and
lowest in the first quarter of each fiscal year. The seasonality of specific
product lines is consistent with that experienced by other companies in the
activewear industry and management anticipates and assumes that this trend will
continue in the future, although it is expected to be somewhat mitigated by the
Company's product diversification. </p>
<p align="center">13</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<font SIZE="2">
<p ALIGN="JUSTIFY">We produce and store finished goods inventory in the first
half of the fiscal year in order to meet the expected demand for delivery in the
second half of the fiscal year. However, if after producing and storing
inventory in anticipation of third and fourth quarter deliveries, demand is
significantly less than expected, a risk inherent in our business is that we may
be required to hold inventory for an extended period of time at our expense, or
sell the excess inventory at reduced prices, thereby reducing profits. This risk
is mitigated by the low risk of obsolescence inherent in undecorated apparel.
</p>
<b>
<p>Sales</p>
</b>
<p ALIGN="JUSTIFY">Sales of $233.9 million for the three months ended July 2,
2006 grew 17.6% from $198.9 million in the same period last year. This sales
growth was driven by a 15.6% increase in unit sales volumes and the impact of a
higher-valued product-mix, partially offset by an approximate 2.5% decline in
unit selling prices compared to the same period last year. Sales for the nine
months ended July 2, 2006 were $538.0 million, up 13.7% from sales of $473.2 in
the nine months ended July 3, 2005. The growth in sales reflected an increase of
14.8% in unit sales volumes, partially offset by lower selling prices. </p>
<p ALIGN="JUSTIFY">Gildan uses U.S. market growth and share data for the U.S.
wholesale distributor channel based on the S.T.A.R.S. report produced by
ACNielsen Market Decisions. The S.T.A.R.S. data for the calendar quarter ended
June 30, 2006 includes information provided by the largest wholesale
distributor, which has renewed its participation in the report. In order to
calculate year-over-year growth rates S.T.A.R.S. has adjusted comparative data
for the June quarter of 2005. However, market share data for last year has not
yet been restated by S.T.A.R.S. on a comparable basis. </p>
<p>The table below summarizes the S.T.A.R.S. data for the calendar quarter ended
June 30, 2006. </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="33%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="35%" align="center" colspan="2" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>Q3 2006 vs Q3 2005</b></font></td>
    <td WIDTH="32%" align="center" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2"><b>Q3 2006</b></font></td>
  </tr>
  <tr>
    <td WIDTH="33%">&nbsp;</td>
    <td WIDTH="35%" align="center" colspan="2" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>Unit Growth</b></font></td>
    <td WIDTH="32%" align="center"><font SIZE="2"><b>Gildan Market</b></font></td>
  </tr>
  <tr>
    <td WIDTH="33%">&nbsp;</td>
    <td WIDTH="13%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>Industry</b></font></td>
    <td WIDTH="22%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>Gildan</b></font></td>
    <td WIDTH="32%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>Share</b></font></td>
  </tr>
  <tr>
    <td WIDTH="33%" bgcolor="#E6E6E6"><font SIZE="2">All Products</font></td>
    <td WIDTH="13%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">3.7%</font></td>
    <td WIDTH="22%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>18.6%</b></font></td>
    <td WIDTH="32%" align="center" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>43.6%</b></font></td>
  </tr>
  <tr>
    <td WIDTH="33%"><font SIZE="2">T-shirts</font></td>
    <td WIDTH="13%" align="right"><font SIZE="2">4.2%</font></td>
    <td WIDTH="22%" align="right"><font SIZE="2"><b>19.2%</b></font></td>
    <td WIDTH="32%" align="center"><font SIZE="2"><b>44.5%</b></font></td>
  </tr>
  <tr>
    <td WIDTH="33%" bgcolor="#E6E6E6"><font SIZE="2">Sport shirts</font></td>
    <td WIDTH="13%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(0.2%)</font></td>
    <td WIDTH="22%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>4.2%</b></font></td>
    <td WIDTH="32%" align="center" bgcolor="#E6E6E6"><font SIZE="2"><b>32.7%</b></font></td>
  </tr>
  <tr>
    <td WIDTH="33%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Sweatshirts</font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(4.5%)</font></td>
    <td WIDTH="22%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>15.5%</b></font></td>
    <td WIDTH="32%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>32.3%</b></font></td>
  </tr>
</table>
<font SIZE="2">
<p ALIGN="JUSTIFY">The increase in unit sales was due to continuing market share
penetration and 3.7% growth in overall industry unit shipments in the quarter,
based on the S.T.A.R.S. report. In the T-shirt category, Gildan grew unit
volumes by 19.2% in the quarter and increased its leading share in this category
to 44.5%. We maintained our position as the leading brand in sport shirts with a
32.7% market share, and achieved a 32.3% share in the sweatshirt category, where
our volume grew by 15.5%, compared with an overall decline of 4.5% for the
overall industry in this category. </p>
<b>
<p>Gross Margins </p>
</b>
<p ALIGN="JUSTIFY">Gross margins increased to 32.4% in the third quarter of
fiscal 2006 from 31.6% for the same period of fiscal 2005. The gross margin
improvement in the third quarter of fiscal 2006 was due to a favourable
product-mix combined with gains in manufacturing efficiencies and lower cotton
costs. These positive factors were offset in part by the impact of the reduction
in selling prices and higher energy and transportation costs compared to last
year. </p>
<p ALIGN="JUSTIFY">For the first nine months of fiscal 2006 we increased our
gross margins to 33.5% compared to 30.6% achieved in the same period last year
due to lower cotton costs and gains in manufacturing efficiencies. In addition,
the year-to-date margin improvement reflected the impact of the reversal of a
prior year reserve of $1.1 million for litigation related to cotton purchase
contracts in fiscal 2001, which was resolved in Gildan's favour in the second
quarter of this fiscal year. The increase in gross margins for the period </p>
<p align="center">14</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<font SIZE="2">
<p>included the impact of lower net selling prices, increased energy and
transportation costs, and the impact of start-up costs for new manufacturing
facilities. </p>
<b>
<p>Selling, General and Administrative Expenses</p>
</b>
<p ALIGN="JUSTIFY">Selling, general and administrative (SG&amp;A) expenses for the
third quarter of fiscal 2006 were $22.0 million, or 9.4% of sales, compared to
$19.1 million, or 9.6% of sales, for the third quarter of fiscal 2005. For the
nine-month period ended July 2, 2006, SG&amp;A expenses were $60.7 million, or 11.3%
of sales, compared to $53.7 million, or 11.4% of sales, for the same period of
the prior year. The increase in SG&amp;A expenses compared to last year stemmed
primarily from higher volume-driven distribution costs, professional fees for
the compliance with the requirements of section 404 of the U.S. Sarbanes Oxley
Act of 2002, the impact of the stronger Canadian dollar and a write-down of
surplus equipment, combined with the cost of ongoing organizational development
to support our growth strategy. In addition, SG&amp;A expenses for the nine-month
period ended July 2, 2006 included a severance charge in the first quarter of
the year. The year-to-date increase in SG&amp;A expenses was partially offset by an
adjustment to the reserve for doubtful accounts in the second quarter of this
fiscal year. </p>
<b>
<p>Special Charge </p>
</b>
<p ALIGN="JUSTIFY">During the second quarter of fiscal 2005, we closed our two
Canadian yarn-spinning operations and recognized a charge of $11.9 million
before tax, or $7.8 million after tax ($0.13 per share). The components of the
special charge were as follows: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="50%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><i>(in $ millions)</i></font></td>
    <td WIDTH="50%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="50%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Writedown of fixed assets</font></td>
    <td WIDTH="50%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">7.9</font></td>
  </tr>
  <tr>
    <td WIDTH="50%"><font SIZE="2">Employee severance</font></td>
    <td WIDTH="50%" align="right"><font SIZE="2">3.7</font></td>
  </tr>
  <tr>
    <td WIDTH="50%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Other</font></td>
    <td WIDTH="50%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">0.3</font></td>
  </tr>
  <tr>
    <td WIDTH="50%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="50%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">11.9</font></td>
  </tr>
</table>
<font SIZE="2">
<p ALIGN="JUSTIFY">A major portion of the Canadian yarn-spinning equipment was
transferred to a new facility in Clarkton, North Carolina, which is operated by
our joint venture with Frontier. We reduced the carrying values of the remaining
fixed assets considered to be held for sale to their fair values.</p>
<p ALIGN="JUSTIFY">In the fourth quarter of fiscal 2005, we realized an
after-tax gain of $0.8 million or $0.01 per share from the sale of equipment,
thereby reducing the cumulative amount of the charge for the full fiscal year to
$10.7 million before tax, or $7.0 million after-tax ($0.12 per share). </p>
<p>During the third quarter of fiscal 2006, the balance of the assets held for
sale were sold for proceeds of $5.0 million, which approximated their carrying
value. </p>
<b>
<p>Depreciation and Interest Expense </p>
</b>
<p ALIGN="JUSTIFY">Depreciation expense increased from $6.0 million in the third
quarter of fiscal 2005 to $8.2 million in the third quarter of fiscal 2006. For
the nine-month period, depreciation expense was $23.3 million in fiscal 2006
compared to $18.4 million in fiscal 2005. These increases in depreciation
expense resulted from a higher capital asset base driven by continued capital
spending to support capacity expansion, in particular the new Dominican Republic
textile facility. </p>
<p ALIGN="JUSTIFY">Net interest expense of $0.8 million in the third quarter and
$2.0 million in the first nine months of fiscal 2006, reflected declines of $0.4
million and $1.7 million, respectively, compared to the same periods in fiscal
2005. The lower net interest expense resulted from increases in investment
income driven by higher average cash balances combined with higher interest rate
returns compared to the same periods last year, and the reduction in overall
debt following the second scheduled principal repayment made in June of last
year on the Company's Senior Notes. The third scheduled principal repayment on
the Company's Senior Notes was made on June 12, 2006. </p>
<p align="center">15</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<font SIZE="2"><b>
<p>Income Taxes</p>
</b>
<p ALIGN="JUSTIFY">The effective income tax rate for the three months ended July
2, 2006 was 4.0% compared to an effective income tax rate of 6.1% for the same
period last year. For the nine months ended this fiscal year, the effective
income tax rate was 3.9%, down from 6.1% in the nine months ended July 3, 2005,
excluding the impact of the closure of our Canadian yarn-spinning operations in
March 2005, which yielded a tax recovery of $4.1 million. The decline in the
effective income tax rate was due to a higher proportion of our total sales
being derived from our international operations and sourced from our offshore
textile facilities. Given the proportion of total sales derived from our
international operations, we continue to anticipate that the effective tax rate
for fiscal 2006 will be approximately 4%. </p>
<b>
<p>Net earnings </p>
</b></font>
<p ALIGN="JUSTIFY"><font size="2">Net earnings were $42.8 million, or $0.71 per
share on a diluted basis, in the third quarter of fiscal 2006, up 25.5% and
24.6%, respectively, compared to net earnings of $34.1 million, or $0.57 per
diluted share, in the third quarter of fiscal 2005. </font></p>
<p ALIGN="JUSTIFY"><font size="2">Net earnings for the first nine months of
fiscal 2006 were $90.0 million or $1.49 per diluted share compared to net
earnings of $56.8 million, or $0.95 per diluted share, in fiscal 2005,
reflecting year-over-year increases of 58.4% and 56.8%, respectively. Excluding
the impact of a special charge incurred in the second quarter of fiscal 2005 of
$7.8 million after tax, or $0.13 per share, relating to the closure and
relocation of the Canadian yarn-spinning operations, net earnings and earnings
per share on a diluted basis (EPS) for the nine months ended July 2, 2006 grew
39.3% and 38.0% respectively, compared to adjusted net earnings<sup>1</sup> of
$64.6 million, or $1.08 per share for the same period last year. </font></p>
<p><font size="2">The increase in net earnings and EPS was driven by continued
strong growth in unit sales volumes and higher gross margins, which more than
offset increases in SG&amp;A and depreciation expenses. </font></p>
<font SIZE="2"><b>
<p>Balance Sheet </p>
</b></font>
<p ALIGN="JUSTIFY"><font size="2">Accounts receivable increased to $133.7
million in the third quarter of fiscal 2006 from $108.6 million at October 2,
2005 and grew by $21.3 million compared to the third quarter of the prior year
in line with the sales growth during these periods. In addition, accounts
receivable as at July 2, 2006, included an amount of $3.2 million recorded as an
insurance claim receivable relating to a fire that destroyed one of our sewing
facilities located at San Marcos, Nicaragua on June 20, 2006. Gildan has
implemented plans to replace the production from this facility by increased
production from external contractors and other Company-owned sewing plants.
Plans are also being implemented to restart operations in the San Marcos area,
and we expect to be operating at full production at this location in the first
quarter of 2007. Our insurance policies provide coverage for damage to property
destroyed, loss of revenues and expenditures to minimize and/or avoid loss of
revenues. Consequently, the economic impact to the Company is expected to be
negligible. The insurance claim receivable of $3.2 million was equal to the net
book value of the fixed assets and the inventory destroyed by the fire. Any
additional recoveries will be recorded as costs are incurred and become
determinable. </font></p>
<p ALIGN="JUSTIFY"><font size="2">Inventories of $161.3 million were up $26.4
million, or 19.6%, from October 2, 2005 and by $29.5 million, or 22.4%, from the
third quarter of fiscal 2005. The increase in inventory from the third quarter
of fiscal 2005 was primarily attributable to the 17.6% increase in sales over
the prior year. Additionally, year-over-year inventory requirements have
increased due to the broadening of our product-line to support greater
penetration in sweatshirts, more T-shirt styles and the introduction of
underwear, combined with increased geographical coverage requiring more
inventory to be allocated to regional warehouses, and the impact of a
higher-valued product-mix. </font></p>
<p><font size="2">We invested $17.8 million and $54.0 million in fixed assets in
the third quarter and the first nine months of fiscal 2006 respectively,
primarily for the textile facilities in the Dominican Republic and Honduras.
This </font></p>
<sup>
<p><font size="2">__________________<br>
1</font></sup><font size="2"> See Non-GAAP financial measures on page 13 </font>
</p>
<font size="2">
<p align="center">16</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<font SIZE="2">
<p ALIGN="JUSTIFY">compared to capital investments of $23.6 million and $66.7
million in the corresponding periods of fiscal 2005. Prior year capital
expenditures were primarily related to the textile facilities in the Dominican
Republic and Honduras, the expansion of our yarn-spinning joint venture with
Frontier and the expansion of our U.S. distribution centre to prepare for entry
into the retail channel. </p>
<b>
<p>Liquidity and Capital Resources </p>
</b>
<p ALIGN="JUSTIFY">In recent years, we have funded our capital expenditure
requirements with cash generated from operations. Our primary use of funds on an
ongoing basis is related to capital expenditures for new manufacturing
facilities, inventory and accounts receivable financing and scheduled payments
of principal and interest on the Company's Senior Notes. </p>
<p ALIGN="JUSTIFY">As a result of the seasonal nature of the apparel business,
working capital requirements are variable throughout the year. Our need for
working capital typically grows during the first two quarters of the fiscal year
as inventories are built up for the peak selling period in the third quarter.
</p>
<p>For the quarter ended July 2, 2006, cash flow from operating activities
amounted to $47.1 million compared with cash flow from operating activities of
$36.2 million during the same period last year. Inventories for the quarter
decreased by $25.3 million compared to a decline of $9.3 million in the third
quarter of fiscal 2005. Including the impact of the $3.2 million insurance
receivable, accounts receivable for the quarter increased by $29.3 million,
compared to an increase of $23.9 million a year ago, in line with sales growth.
For the nine months ended July 2, 2006, cash flow from operating activities of
$61.1 million was up $16.5 million compared to the same period last year, mainly
due to higher earnings partly offset by higher inventory requirements in the
first half of the fiscal year. </p>
<p ALIGN="JUSTIFY">Cash flows used in financing activities for the third quarter
ended this fiscal year amounted to $17.8 million, consisting primarily of the
$17.5 million third scheduled principal repayment on Gildan's Senior Notes and a
reduction of long term debt of our joint venture. This compared to cash flows
used in financing activities of $15.1 million in the third quarter of fiscal
2005 which consisted of Gildan's second scheduled repayment on its Senior Notes,
partly offset by an increase in the long-term debt of our joint venture. During
the nine months ended July 2, 2006, cash used in financing activities totaled
$17.0 million up from $8.6 million in the same period last year. The debt
repayment last year was partially offset by an increase in the long-term debt of
our joint venture in 2005, a cash contribution of $2.5 million received in
fiscal 2005 from our joint venture partner, as well as higher proceeds from the
issuance of shares in fiscal 2005 pursuant to stock option exercises. </p>
<p ALIGN="JUSTIFY">Cash flows used in investing activities were $13.5 million
for the quarter and $50.0 million for the nine months ended July 2, 2006,
compared to cash outflows of $20.3 million and $66.0 million for the same
respective periods last year. The lower cash used in investing activities for
the quarter and on a year-to-date basis compared to the same periods last year
was due to lower capital expenditures and higher proceeds from the disposition
of assets held for sale in 2006. During the third quarter this year we disposed
of the remaining assets held for sale relating to the closure of the Canadian
yarn-spinning operations for proceeds of $5.0 million, resulting in higher
proceeds received in 2006 compared to the same period last year. While capital
expenditures in fiscal 2006 for the textile facilities in the Dominican Republic
and Honduras were up from fiscal 2005, total capital expenditures were higher in
fiscal 2005 due to investments for the expansion of our U.S. distribution centre
to prepare for entry into the retail channel and for the expansion of our
yarn-spinning joint venture with Frontier. </p>
<p ALIGN="JUSTIFY">We ended the third quarter of fiscal 2006 with cash and cash
equivalents of $63.9 million compared to $30.8 million at the end of the third
quarter of fiscal 2005 and $69.8 million at October 2, 2005. At the end of the
third fiscal quarter of 2006, as was the case for the end of the same period in
2005, no amounts were drawn under our revolving bank facility. Bank indebtedness
included in the interim consolidated financial statements is attributable to our
joint venture. Total indebtedness<sup>1</sup> at July 2, 2006, which comprises
both long-term and short-term debt, amounted to $32.6 million compared to $51.1
million at </p>
<sup>
<p>__________________<br>
1</sup> See Non-GAAP financial measures on page 13. </p>
</font><font SIZE="2">
<p align="center">17</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<font SIZE="2">
<p ALIGN="JUSTIFY">October 2, 2005 and $43.9 million at July 3, 2005. The
decline in total indebtedness from July 3, 2005 primarily reflects the third
scheduled principal repayment of $17.5 million on our Senior Notes, which was
made on June 12, 2006, offset in part by an increase in the long-term debt of
our joint venture. </p>
<p ALIGN="JUSTIFY">We currently anticipate that capital expenditures for the
full fiscal year will amount to approximately $90 million. We believe our cash
flow from operating activities together with our unused credit facilities will
provide us with sufficient liquidity and capital resources in the foreseeable
future to fund our anticipated requirements for working capital and capital
expenditures, in addition to the recent acquisition of Kentucky Derby, which was
completed on July 6, 2006. The total purchase price of approximately $19.5
million for 100% of the equity of Kentucky Derby was paid in cash, except for an
approximate $0.5 million that was paid in common shares of the Company. </p>
<p ALIGN="JUSTIFY">Total assets were $673.1 million at July 2, 2006, compared to
$597.5 million at October 2, 2005 and $551.6 million at July 3, 2005. Working
capital was $260.0 million at the end of the third quarter of fiscal 2006
compared to $214.9 million at October 2, 2005, and $187.8 million at July 3,
2005. </p>
<p>In order to maximize flexibility to finance our ongoing growth and expansion,
we do not currently pay a dividend. Periodically, the merits of introducing a
dividend are re-evaluated by our Board of Directors. </p>
<p ALIGN="JUSTIFY">We obtained approval from the Toronto Stock Exchange to renew
our normal course issuer bid in order to repurchase up to a maximum of 1,000,000
of our common shares in the open market commencing December 22, 2005 and ending
December 21, 2006. This represents less than 2.0% of the total common shares
issued and outstanding. As at August 2, 2006, no shares have been repurchased
under this plan.</p>
<b>
<p>Off-Balance Sheet Arrangements</p>
</b>
<p><u>Operating Leases</u></p>
<p ALIGN="JUSTIFY">Gildan has 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 on page 19 of this interim
MD&amp;A. As disclosed in Note 7 to our Interim Consolidated Financial Statements,
the Company has issued standby letters of credit and corporate guarantees
primarily from various servicing agreements amounting to $33.2 million at July
2, 2006. </p>
<p><u>Derivative Financial Instruments </u></p>
<p ALIGN="JUSTIFY">From time to time, we use forward foreign exchange contracts,
primarily in Canadian dollars, British pounds and Euros, mainly to hedge cash
flows related to sales and operating expenses denominated 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 European and North American financial
institutions. Gildan's exposure to foreign currency fluctuations is described in
more detail in the &quot;Risks&quot; section of the 2005 MD&amp;A, which is hereby
incorporated by reference. </p>
<p ALIGN="JUSTIFY">We do not use derivative financial instruments for
speculative purposes. Forward foreign exchange contracts are entered into with
maturities not exceeding twenty-four months. The following table summarizes
Gildan's commitments to buy and sell foreign currencies as at July 2, 2006 and
July 3, 2005: </p>
<p align="center">18</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="26%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="22%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="26%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Notional</font></td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="22%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Notional U.S.</font></td>
  </tr>
  <tr>
    <td WIDTH="26%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><i>(in thousands)</i></font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">amount</font></td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Exchange rate</font></td>
    <td WIDTH="22%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Maturity</font></td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">equivalent</font></td>
  </tr>
  <tr>
    <td WIDTH="26%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>2006</b></font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="22%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="26%"><font SIZE="2"><b>Buy contracts:</b></font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="16%" align="right">&nbsp;</td>
    <td WIDTH="22%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="26%" bgcolor="#E6E6E6"><font SIZE="2"><b>&nbsp;&nbsp;&nbsp; Foreign exchange
    contracts</b></font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>CA$</b></font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>37,334</b></font></td>
    <td WIDTH="16%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>0.7997 to 0.8997</b></font></td>
    <td WIDTH="22%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>July 2006 to September 2006</b></font></td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>$31,720</b></font></td>
  </tr>
  <tr>
    <td WIDTH="26%">&nbsp;</td>
    <td WIDTH="9%" align="right"><font SIZE="2"><b>&#128;</b></font></td>
    <td WIDTH="12%" align="right"><font SIZE="2"><b>11,147</b></font></td>
    <td WIDTH="16%" align="right"><font SIZE="2"><b>1.1991 to 1.2208</b></font></td>
    <td WIDTH="22%" align="right"><font SIZE="2"><b>July 2006 to June 2007</b></font></td>
    <td WIDTH="15%" align="right"><font SIZE="2"><b>$13,480</b></font></td>
  </tr>
  <tr>
    <td WIDTH="26%" bgcolor="#E6E6E6"><font SIZE="2"><b>Sell contracts:</b></font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="16%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="22%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="26%"><font SIZE="2"><b>&nbsp;&nbsp;&nbsp; Foreign exchange
    contracts</b></font></td>
    <td WIDTH="9%" align="right"><font SIZE="2"><b>&#128;</b></font></td>
    <td WIDTH="12%" align="right"><font SIZE="2"><b>2,265</b></font></td>
    <td WIDTH="16%" align="right"><font SIZE="2"><b>1.3495 to 1.3525</b></font></td>
    <td WIDTH="22%" align="right"><font SIZE="2"><b>July 2006 to September 2006</b></font></td>
    <td WIDTH="15%" align="right"><font SIZE="2"><b>$3,059</b></font></td>
  </tr>
  <tr>
    <td WIDTH="26%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6">
    <b><font size="2">&#163;</font></b></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>1,745</b></font></td>
    <td WIDTH="16%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>1.8396 to 1.8736</b></font></td>
    <td WIDTH="22%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>July 2006 to September 2006</b></font></td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>$3,256</b></font></td>
  </tr>
  <tr>
    <td WIDTH="26%">&nbsp;</td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="16%" align="right">&nbsp;</td>
    <td WIDTH="22%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="26%" bgcolor="#E6E6E6"><font SIZE="2">2005</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="16%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="22%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="26%"><font SIZE="2">Buy contracts:</font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="16%" align="right">&nbsp;</td>
    <td WIDTH="22%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="26%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp; Foreign exchange contracts</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font SIZE="2">CA$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">47,800</font></td>
    <td WIDTH="16%" align="right" bgcolor="#E6E6E6"><font SIZE="2">0.7896 to 0.8216</font></td>
    <td WIDTH="22%" align="right" bgcolor="#E6E6E6"><font SIZE="2">July 2005 to August 2006</font></td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$38,298</font></td>
  </tr>
  <tr>
    <td WIDTH="26%"><font SIZE="2">Sell contracts:</font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="16%" align="right">&nbsp;</td>
    <td WIDTH="22%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="26%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp; Foreign exchange contracts</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font SIZE="2">&#128;</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">15,884</font></td>
    <td WIDTH="16%" align="right" bgcolor="#E6E6E6"><font SIZE="2">1.3345 to 1.3721</font></td>
    <td WIDTH="22%" align="right" bgcolor="#E6E6E6"><font SIZE="2">July 2005 to September 2006</font></td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$21,543</font></td>
  </tr>
  <tr>
    <td WIDTH="26%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">&#163;</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">6,187</font></td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">1.8707 to 1.9008</font></td>
    <td WIDTH="22%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">July 2005 to September 2006</font></td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$11,662</font></td>
  </tr>
</table>
<font SIZE="2"><b>
<p>Contractual Obligations </p>
</b>
<p ALIGN="JUSTIFY">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's contractual obligations
for the following items as at July 2, 2006: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="31%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="76%" align="center" colspan="5" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>Payments Due by Period</b></font></td>
  </tr>
  <tr>
    <td WIDTH="31%"><font SIZE="2"><i>(in $ millions)</i></font></td>
    <td WIDTH="13%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2"><b>Less than</b></font></td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2"><b>1 to 3</b></font></td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2"><b>4 to 5</b></font></td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2"><b>After</b></font></td>
  </tr>
  <tr>
    <td WIDTH="31%">&nbsp;</td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>Total</b></font></td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>1 year</b></font></td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>years</b></font></td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>years</b></font></td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>5 years</b></font></td>
  </tr>
  <tr>
    <td WIDTH="31%" bgcolor="#E6E6E6"><font SIZE="2">Long-term debt</font></td>
    <td WIDTH="13%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">28.5</font></td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">0.5</font></td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">21.6</font></td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">3.3</font></td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">3.1</font></td>
  </tr>
  <tr>
    <td WIDTH="31%"><font SIZE="2">Capital lease obligations</font></td>
    <td WIDTH="13%" align="right"><font SIZE="2">1.8</font></td>
    <td WIDTH="14%" align="right"><font SIZE="2">0.5</font></td>
    <td WIDTH="14%" align="right"><font SIZE="2">1.3</font></td>
    <td WIDTH="14%" align="right"><font SIZE="2">-</font></td>
    <td WIDTH="14%" align="right"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="31%" bgcolor="#E6E6E6"><font SIZE="2">Operating leases</font></td>
    <td WIDTH="13%" align="right" bgcolor="#E6E6E6"><font SIZE="2">27.9</font></td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">4.8</font></td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">7.4</font></td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">5.0</font></td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">10.7</font></td>
  </tr>
  <tr>
    <td WIDTH="31%"><font SIZE="2">Purchase obligations</font></td>
    <td WIDTH="13%" align="right"><font SIZE="2">123.1</font></td>
    <td WIDTH="14%" align="right"><font SIZE="2">95.4</font></td>
    <td WIDTH="14%" align="right"><font SIZE="2">27.7</font></td>
    <td WIDTH="14%" align="right"><font SIZE="2">-</font></td>
    <td WIDTH="14%" align="right"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="31%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Other long-term obligations</font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">51.5</font></td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">41.9</font></td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">9.6</font></td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">-</font></td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="31%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>Total Contractual Obligations</b></font></td>
    <td WIDTH="13%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">232.8</font></td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">143.1</font></td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">67.6</font></td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">8.3</font></td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">13.8</font></td>
  </tr>
</table>
<font SIZE="2">
<p ALIGN="JUSTIFY">Management expects that cash flow from the Company's
operating earnings, together with its year-end cash balances and unutilized bank
facilities, will be sufficient to meet foreseeable cash needs for fiscal 2006.</p>
<b>
<p>Contingent Liability </p>
</b>
<p ALIGN="JUSTIFY">In November 2002, one of the Company's Mexican subsidiaries (Gildan
Mexico) received a tax assessment from a regional taxation office relating to
duties for the 2000 fiscal year for approximately $6.0 million, essentially
asserting that Canadian-made textiles shipped to Gildan Mexico for sewing
processing were not subsequently exported from Mexico. Gildan Mexico appealed
the assessment and was successful in obtaining a judgment in its favour.
Notwithstanding the judgment, the regional Mexican taxation office issued a new
assessment in March 2005, and increased the assessed amount from $6.0 million to
approximately $7.1 million. Shortly after receiving the second assessment,
Gildan Mexico again filed an appeal. In July 2006, Gildan Mexico received
notification that its appeal of the second assessment for fiscal 2000 was
unsuccessful. The Company strongly maintains that the tax assessment is entirely
without substance as it has provided proper documentation to establish that the
textiles imported into Mexico for sewing were subsequently exported to the
United States and Canada. The Company is pursuing appropriate administrative and
judicial avenues to resolve this matter in its favour. The Company expects to be
successful in its efforts to clarify and resolve this matter, and accordingly no
provision has been made in the accounts for this exposure. </p>
<b>
<p>Outlook</p>
</b>
<p>We have increased our diluted EPS guidance for the full 2006 fiscal year to
approximately $2.07. The revised full year guidance is up from our most recent
guidance of approximately $2.00 per share and </p>
<p align="center">19</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<font SIZE="2">
<p>reflects a projected increase of 33.5% compared with adjusted EPS of $1.55 in
fiscal 2005, before taking account of the prior year special charge. </p>
<p ALIGN="JUSTIFY">The further increase in EPS guidance for fiscal 2006 is due
to the more favourable than previously anticipated results for the third
quarter, and the assumed continuation in the fourth quarter of more favourable
manufacturing efficiencies and product-mix, partially offset by the projected
continuation of more unfavourable industry pricing. We are now projecting
diluted EPS of $0.58 in the fourth quarter, compared with our most recent
guidance of $0.56 per share and up 23.4% from adjusted EPS of $0.47 per share in
the fourth quarter of fiscal 2005. The updated guidance assumes that our recent
acquisition of Kentucky Derby, which was completed on July 6, 2006, will be
neither accretive nor dilutive to EPS in the fourth quarter of the current
fiscal year.</p>
<p>We are projecting capital expenditures for fiscal 2006 of approximately $90
million, which we expect to fully finance out of our internally-generated cash
flow from operating activities. </p>
<p>We hereby refer to the Forward-Looking Statements cautionary notice on page
23. </p>
<b>
<p>CRITICAL ACCOUNTING ESTIMATES </p>
</b>
<p ALIGN="JUSTIFY">The Company's significant accounting policies are described
in Note 2 to the Company's 2005 Consolidated Financial Statements. The
preparation of financial statements in conformity with Canadian GAAP requires
estimates and assumptions that affect the Company's 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. </p>
<p>Management believes that the accounting estimates relating to the following
items are most significant to assist in understanding and evaluating the
Company's financial results: </p>
</font>
<ul>
  <li><font size="2">Sales promotional programs; </li>
  </font>
  <li><font size="2">Trade accounts receivable; </li>
  </font>
  <li><font size="2">Fixed assets; </li>
  </font>
  <li><font size="2">Cotton and yarn procurements; and </li>
  </font>
  <li><font size="2">Future income taxes. </li>
</ul>
<p>For a more detailed discussion of these estimates, readers should review the
&quot;Critical Accounting Estimates&quot; section of the 2005 MD&amp;A, which is hereby
incorporated by reference.</p>
<b>
<p>RISKS</p>
</b>
<p>In order to be successful, we must continuously be aware of global changes
and risks affecting our markets and competitive environment. The most
significant risks we face are as follows: </p>
</font>
<ul>
  <li><font size="2">Our industry is competitive; </li>
  </font>
  <li><font size="2">Our industry is subject to pricing pressures; </li>
  </font>
  <li><font size="2">Our operations are subject to environmental regulation;
  </li>
  </font>
  <li><font size="2">We are exposed to concentration of credit risk; </li>
  </font>
  <li><font size="2">We rely on a relatively small number of significant
  customers; </li>
  </font>
  <li><font size="2">We are subject to international trade legislation that is
  becoming increasingly liberalized; </li>
  </font>
  <li><font size="2">We currently pay income tax at a comparatively low
  effective rate, which could change in the future;</li>
  </font>
  <li><font size="2">The price of the raw materials we buy may be subject to
  significant fluctuations and volatility; </li>
  </font>
  <li><font size="2">Our operations are subject to political, social and
  economic risks; </li>
  </font>
  <li><font size="2">Our industry is subject to fluctuation in sales demand; and
  </li>
  </font>
  <li><font size="2">We are subject to foreign exchange fluctuation risk. </li>
</ul>
</font><font SIZE="2">
<p align="center">20</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<font SIZE="2">
<p ALIGN="JUSTIFY">For a more detailed discussion of these potential business
risks, readers should review the &quot;Risks&quot; section of the 2005 MD&amp;A and the Annual
Information Form filed by Gildan with the Canadian securities regulatory
authorities and the Annual Report on Form 40-F filed with the U.S. Securities
and Exchange Commission, which are hereby incorporated by reference. </p>
<p ALIGN="JUSTIFY">As part of our growth strategy, we are implementing a major
new initiative to sell our products into the mass-market retail channel in North
America, in addition to the screenprint market. While we believe we can leverage
our business model into the mass-market retail channel, there can be no
assurance that we will successfully execute these plans, or that we will achieve
the anticipated benefits from the integration of acquisitions. </p>
<b>
<p>DISCLOSURE OF OUTSTANDING SHARE DATA </p>
</b>
<p>Gildan's common shares are listed on the New York Stock Exchange and the
Toronto Stock Exchange (GIL).</p>
<p ALIGN="JUSTIFY">As of July 31, 2006 there were 60,093,130 common shares
issued and outstanding along with 446,847 stock options and 418,500 restricted
share units outstanding. Each stock option entitles the holder to purchase one
common share at the end of the vesting period at a pre-determined option price.
Each restricted share unit entitles the holder to receive one common share at
the end of the vesting period. However, the vesting of 50% of the restricted
share grant is dependent upon the financial performance of the Company, relative
to a benchmark group of Canadian publicly-listed companies. </p>
<b>
<p>RECONCILIATION OF NON-GAAP FINANCIAL MEASURES </p>
</b>
<p ALIGN="JUSTIFY">We use and present Non-GAAP financial measures because we
believe such measures provide meaningful information on our performance and
operating results. However, investors should be advised 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. </p>
<p>The following measures included in this interim MD&amp;A do not have standardized
meanings under Canadian GAAP: </p>
<ol>
  <li>Total indebtedness; </li>
  <li>Cash in excess of debt (net debt); </li>
  <li>Free cash flow; and </li>
  <li>All references made to adjusted gross margin, adjusted net earnings and
  adjusted diluted earnings per share. </li>
</ol>
<p>The following tables reconcile the Non-GAAP financial measures mentioned in
this Interim MD&amp;A to the most directly comparable GAAP measures: </p>
<b>
<p>Total Indebtedness / Cash in excess of debt (net debt) </p>
</b></font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="40%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><i>(in $ millions)</i></font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="20%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="20%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="40%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="19%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>Q3 2006</b></font></td>
    <td WIDTH="20%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Q4 2005</font></td>
    <td WIDTH="20%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Q3 2005</font></td>
  </tr>
  <tr>
    <td WIDTH="40%" bgcolor="#E6E6E6"><font SIZE="2">Bank indebtedness</font></td>
    <td WIDTH="19%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>(4.0)</b></font></td>
    <td WIDTH="20%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(4.0)</font></td>
    <td WIDTH="20%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="40%"><font SIZE="2">Current portion of long-term debt</font></td>
    <td WIDTH="19%" align="right"><font SIZE="2"><b>(19.6)</b></font></td>
    <td WIDTH="20%" align="right"><font SIZE="2">(19.9)</font></td>
    <td WIDTH="20%" align="right"><font SIZE="2">(19.7)</font></td>
  </tr>
  <tr>
    <td WIDTH="40%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Long-term debt</font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>(9.0)</b></font></td>
    <td WIDTH="20%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(27.2)</font></td>
    <td WIDTH="20%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(24.2)</font></td>
  </tr>
  <tr>
    <td WIDTH="40%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2"><b>Total indebtedness</b></font></td>
    <td WIDTH="19%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2"><b>(32.6)</b></font></td>
    <td WIDTH="20%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(51.1)</font></td>
    <td WIDTH="20%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(43.9)</font></td>
  </tr>
  <tr>
    <td WIDTH="40%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="19%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="20%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="20%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="40%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Cash and cash equivalents</font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>63.9</b></font></td>
    <td WIDTH="20%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">69.8</font></td>
    <td WIDTH="20%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">30.8</font></td>
  </tr>
  <tr>
    <td WIDTH="40%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>Cash in excess of debt (net debt)</b></font></td>
    <td WIDTH="19%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>31.3</b></font></td>
    <td WIDTH="20%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">18.7</font></td>
    <td WIDTH="20%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(13.1)</font></td>
  </tr>
</table>
<font SIZE="2">
<p align="center">21</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<font SIZE="2"><b>
<p>Free cash flow </p>
</b></font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="36%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><i>(in $ millions)</i></font></td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="36%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>Q3 2006</b></font></td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>Q3 2005</b></font></td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>YTD 2006</b></font></td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>YTD 2005</b></font></td>
  </tr>
  <tr>
    <td WIDTH="36%" bgcolor="#E6E6E6"><font SIZE="2"><b>Cash flows from operating activities</b></font></td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>47.1</b></font></td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">36.2</font></td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>61.1</b></font></td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">44.6</font></td>
  </tr>
  <tr>
    <td WIDTH="36%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Cash flows from investing activities</font></td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>(13.5)</b></font></td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(20.3)</font></td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>(50.0)</b></font></td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(66.0)</font></td>
  </tr>
  <tr>
    <td WIDTH="36%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font SIZE="2"><b>Free cash flow</b></font></td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font SIZE="2"><b>33.6</b></font></td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font SIZE="2">15.9</font></td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font SIZE="2"><b>11.1</b></font></td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font SIZE="2">(21.4)</font></td>
  </tr>
</table>
<font SIZE="2"><b>
<p>Adjusted Consolidated Statement of Earnings and Earnings per Share* </p>
</b><i>
<p>(in $ millions, except per share amounts)</p>
</i></font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="28%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2"><b>Q3 2006</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2"><b>YTD 2006</b></font></td>
  </tr>
  <tr>
    <td WIDTH="28%">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>Q3 2006</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>Adjustments</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>Adjusted</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>YTD 2006</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>Adjustments</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>Adjusted</b></font></td>
  </tr>
  <tr>
    <td WIDTH="28%" bgcolor="#E6E6E6"><font SIZE="2">Sales</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>233.9</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>233.9</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>538.0</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>538.0</b></font></td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Cost of sales</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>158.2</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>158.2</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>358.0</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>358.0</b></font></td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Gross profit</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>75.7</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">-</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>75.7</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>180.0</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>-</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>180.0</b></font></td>
  </tr>
  <tr>
    <td WIDTH="28%"><font SIZE="2">Selling, general and</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">administrative expenses</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>22.0</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>22.0</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>60.8</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>60.8</b></font></td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>53.7</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">-</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>53.7</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>119.2</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>-</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>119.2</b></font></td>
  </tr>
  <tr>
    <td WIDTH="28%"><font SIZE="2">Depreciation and amortization</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2"><b>8.2</b></font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2"><b>8.2</b></font></td>
    <td WIDTH="12%" align="right"><font SIZE="2"><b>23.3</b></font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2"><b>23.3</b></font></td>
  </tr>
  <tr>
    <td WIDTH="28%" bgcolor="#E6E6E6"><font SIZE="2">Interest expense, net</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>0.7</b></font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>0.7</b></font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>2.0</b></font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>2.0</b></font></td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Non-controlling interest</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>0.2</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>0.2</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>0.2</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>0.2</b></font></td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Earnings before income taxes</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>44.6</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">-</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>44.6</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>93.7</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>-</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>93.7</b></font></td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Income taxes</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>1.8</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>1.8</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>3.7</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>3.7</b></font></td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font SIZE="2">Net earnings</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font SIZE="2"><b>42.8</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font SIZE="2">-</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font SIZE="2"><b>42.8</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font SIZE="2"><b>90.0</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font SIZE="2"><b>-</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font SIZE="2"><b>90.0</b></font></td>
  </tr>
  <tr>
    <td WIDTH="28%">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="28%" bgcolor="#E6E6E6"><font SIZE="2">Basic E.P.S.</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>0.71</b></font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">-</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>0.71</b></font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>1.50</b></font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>-</b></font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>1.50</b></font></td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">Diluted E.P.S.</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>0.71</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">-</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>0.71</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>1.49</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>-</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>1.49</b></font></td>
  </tr>
  <tr>
    <td WIDTH="28%">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><i>(in $ millions, except per share amounts)</i></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="28%">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Q3 2005</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">YTD 2005</font></td>
  </tr>
  <tr>
    <td WIDTH="28%">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Q3 2005</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Adjustments</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Adjusted</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">YTD 2005</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Adjustments</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Adjusted</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" bgcolor="#E6E6E6"><font SIZE="2">Sales</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">198.9</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">198.9</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">473.2</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">473.2</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Cost of sales</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">136.1</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">136.1</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">328.3</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">328.3</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Gross profit</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">62.8</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">-</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">62.8</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">144.9</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">-</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">144.9</font></td>
  </tr>
  <tr>
    <td WIDTH="28%"><font SIZE="2">Selling, general and</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="28%"><font SIZE="2">administrative expenses</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">19.2</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">19.2</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">53.8</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">53.8</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Special charge <sup>(1)</sup></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">0.0</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">-</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">0.0</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">11.9</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(11.9)</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">43.6</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">-</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">43.6</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">79.2</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">11.9</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">91.1</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" bgcolor="#E6E6E6"><font SIZE="2">Depreciation and amortization</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">6.0</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">6.0</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">18.4</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">18.4</font></td>
  </tr>
  <tr>
    <td WIDTH="28%"><font SIZE="2">Interest expense, net</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">1.2</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">1.2</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">3.7</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">3.7</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Non-controlling interest</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">0.1</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">0.1</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">0.2</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">0.2</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Earnings before income taxes</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">36.3</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">-</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">36.3</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">56.9</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">11.9</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">68.8</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Income taxes</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">2.2</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">-</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">2.2</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">0.1</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">4.1</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">4.2</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">Net earnings</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">34.1</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">-</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">34.1</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">56.8</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">7.8</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">64.6</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="28%"><font SIZE="2">Basic E.P.S.</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">0.57</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">-</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">0.57</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">0.95</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">0.13</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">1.08</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Diluted E.P.S.</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">0.57</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">-</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">0.57</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">0.95</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">0.13</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">1.08</font></td>
  </tr>
</table>
<font SIZE="2">
<p>* Certain minor rounding variances exist between the financial statements and
this summary</p>
<p>(1) Adjustment to remove the special charge relating to the closure of the
Canadian yarn-spinning facilities and the income tax effect thereon. See page
15. </p>
<p align="center">22</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">
    <img border="0" src="gildanlogo.jpg" width="223" height="61"></td>
    <td width="50%" bgcolor="#000000"><b><font SIZE="4" color="#FFFFFF">
    <p style="margin-left: 20"><font style="background-color: #000000">Quarterly
    Report to Shareholders <br>
    </font>Third quarter ended July 2, 2006</font></b></td>
  </tr>
</table>
<font size="2"><b>
<p>FORWARD-LOOKING STATEMENTS </p>
</b></font>
<p align="justify"><font size="2">Certain statements included in this interim
MD&amp;A may constitute &quot;forward-looking statements&quot; within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995 and Canadian securities
legislation and regulations, and are subject to important risks, uncertainties
and assumptions. This forward-looking information includes amongst others,
information with respect to our objectives and the strategies to achieve these
objectives, as well as information with respect to our beliefs, plans,
expectations, anticipations, estimates and intentions. Forward-looking
statements generally can be identified by the use of forward-looking terminology
such as &quot;may&quot;, &quot;will&quot;, &quot;expect&quot;, &quot;intend&quot;, &quot;estimate&quot;, &quot;anticipate&quot;, &quot;plan&quot;,
&quot;foresee&quot;, &quot;believe&quot; or &quot;continue&quot; or the negatives of these terms or variations
of them or similar terminology. We refer you to the Company's filings with the
Canadian securities regulatory authorities and the U.S. Securities and Exchange
Commission, as well as the &quot;Risks&quot; section of the 2005 MD&amp;A for a discussion of
the various factors that may affect the Company's future results. Material
factors and assumptions that were applied in drawing a conclusion or making a
forecast or projection are also set out throughout this document. The
forward-looking information on this interim MD&amp;A describes our expectations as
at August 2, 2006. </font></p>
<p align="justify"><font size="2">The results or events predicted in such
forward-looking information may differ materially from actual results or events.
Material factors, which could cause actual results or events to differ
materially from a conclusion, forecast or projection in such forward-looking
information, include, but are not limited to: </font></p>
<ul>
  <li>
  <p align="justify"><font size="2">general economic conditions such as currency
  exchange rates, commodity prices and other factors over which we have no
  control; </font></li>
  <li>
  <p align="justify"><font size="2">the impact of economic and business
  conditions, industry trends and other external and political factors in the
  countries in which we operate; </font></li>
  <li>
  <p align="justify"><font size="2">the intensity of competitive activity;
  </font></li>
  <li>
  <p align="justify"><font size="2">changes in environmental, tax, trade and
  other laws and regulations; </font></li>
  <li>
  <p align="justify"><font size="2">our ability to implement our strategies and
  plans; </font></li>
  <li>
  <p align="justify"><font size="2">our ability to complete and successfully
  integrate acquisitions; </font></li>
  <li>
  <p align="justify"><font size="2">changes in customer demand for our products
  and our ability to maintain customer relationships and grow our business;
  </font></li>
  <li>
  <p align="justify"><font size="2">the seasonality of our business; </font>
  </li>
  <li>
  <p align="justify"><font size="2">our ability to attract and retain key
  personnel; </font></li>
  <li>
  <p align="justify"><font size="2">changes in accounting policies; and </font>
  </li>
  <li>
  <p align="justify"><font size="2">disruption to manufacturing and distribution
  activities due to the impact of weather, natural disasters and other
  unforeseen adverse events. </font></li>
</ul>
<p align="justify"><font size="2">This may cause the Company'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. Forward-looking statements do not
take into account the effect that transactions or nonrecurring or other special
items announced or occurring after the statements are made have on the Company's
business. For example, they do not include the effect of dispositions,
acquisitions, other business transactions, asset writedowns or other charges
announced or occurring after forward-looking statements are made. </font></p>
<p align="justify"><font size="2">The financial impact of such transactions and
non-recurring and other special items can be complex and necessarily depends on
the facts particular to each of them. </font></p>
<p align="justify"><font size="2">We believe that the expectations represented
by our 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 unless required by applicable
legislation or regulation. The forward-looking statements contained in this
report are expressly qualified by this cautionary statement. </font></p>
<p align="justify"><font size="2">August 2, 2006 </font></p>
<font size="2">
<p align="center">23</p>
<hr color="#000000" size="5"></font>

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