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<SEC-DOCUMENT>0001204459-06-001117.txt : 20061207
<SEC-HEADER>0001204459-06-001117.hdr.sgml : 20061207
<ACCEPTANCE-DATETIME>20061207161202
ACCESSION NUMBER:		0001204459-06-001117
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20061207
FILED AS OF DATE:		20061207
DATE AS OF CHANGE:		20061207

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:		061262823

	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>

<head>

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



<html>

<body>

<div style="font-family: 'Times New Roman',Times,serif; width:1241; height:612">
&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: December&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: December 7, 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="gildan4q.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">
  <font FACE="Times New Roman PS">
        <a href="gildan4q.htm" style="text-decoration: none">Gildan Activewear Announces Strong Fourth Quarter EPS
        </a>
</font></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>gildan4q.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
<html>

<head>
<title>Gildan Activewear Inc. - Fourth Quarter 2006 - Prepared By TNT Filings
Inc.</title>
</head>

<body>

<p>&nbsp;</p>
<hr color="#000000" size="5">
<p align="center"><img border="0" src="gildanlogo.jpg" width="304" height="71"></p>
<font FACE="Times New Roman PS" size="2"><i><b>
<p align="right">For Immediate Release </p>
</b></i></font><b>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="11%"><font size="2">Contact:</font></td>
    <td WIDTH="89%"><font size="2">Laurence G. Sellyn, Executive Vice-President,</font></td>
  </tr>
  <font FACE="Times New Roman PS">
  <tr>
    <td WIDTH="11%">&nbsp;</td>
    <td WIDTH="89%"><font size="2">Chief Financial and Administrative Officer</font></td>
  </tr>
  <tr>
    <td WIDTH="11%">&nbsp;</td>
    <td WIDTH="89%"><font size="2">Tel: (514) 343-8805</font></td>
  </tr>
  <tr>
    <td WIDTH="11%">&nbsp;</td>
    <td WIDTH="89%"><font size="2">Email: <u>lsellyn@gildan.com</u></font></td>
  </tr>
</table>
<p align="center"><u>Gildan Activewear Announces Strong Fourth Quarter EPS </u>
</font></b><font FACE="Times New Roman PSMT" SIZE="2"><br>
&#150;</font><font size="2"> </font><font FACE="Times New Roman PS" SIZE="2"><b>
Company Updates EPS Guidance for 2007 Fiscal Year &#150; </p>
<p align="justify">Montr&#233;al, Thursday, December 7<sup>th</sup>, 2006</b></font><font FACE="Times New Roman PSMT" SIZE="2">
&#150; Gildan Activewear Inc. (GIL; TSX and NYSE) today announced its financial
results for its fourth quarter and fiscal year ended October 1, 2006, and
updated its earnings guidance for fiscal year 2007. </p>
<p><u>Fourth Quarter Sales and Earnings </u></p>
<p ALIGN="JUSTIFY">Gildan reported fourth quarter net earnings of U.S. $16.8
million and diluted EPS of U.S. $0.28, after recording restructuring and other
charges in the quarter totaling U.S. $20.0 million after-tax or U.S. $0.33 per
share. The restructuring and other charges comprised U.S. $0.31 per share for
the restructuring of the Company's Canadian manufacturing facilities, which was
announced on September 27, 2006, and U.S. $0.02 per share to reflect the
variable component of Gildan's contractual obligations towards its former
Chairman and Co-Chief Executive Officer. Before reflecting the restructuring and
other charges, net earnings and diluted EPS for the fourth quarter of fiscal
2006 amounted to U.S. $36.8 million or U.S. $0.61 per share, up respectively
25.6% and 27.1% from net earnings of U.S. $29.3 million and diluted EPS of U.S.
$0.48 in the fourth quarter of fiscal 2005. Excluding the impact of the Kentucky
Derby Hosiery acquisition in the quarter, which was U.S. $0.01 per share
dilutive to EPS, the increase in net earnings and EPS before the restructuring
and other charges was primarily due to continuing strong growth in unit sales
volumes, favourable manufacturing efficiencies, a higher-valued product-mix for
activewear, and lower selling, general and administrative expenses, partially
offset by lower selling prices and higher depreciation expense. </p>
<p ALIGN="JUSTIFY">Sales in the fourth quarter amounted to U.S. $235.2 million,
a record for any fiscal quarter, and up 30.2% from U.S. $180.7 million in the
fourth quarter of last year. The increase in sales revenues was due to U.S.
$30.0 million of sock sales resulting from the acquisition of Kentucky Derby
Hosiery, which was effective from July 6, 2006, a 13.7% increase in unit sales
volumes for activewear and the impact of a higher-valued activewear product-mix,
partially offset by a close to 3% reduction in unit selling prices for
activewear compared to last year. </p>
</font><hr color="#000000" size="5"><p Style='page-break-before:always'><font FACE="Times New Roman PSMT" SIZE="2">
<p ALIGN="JUSTIFY">The growth in activewear unit sales was primarily due to
continuing market share penetration in all product categories in the U.S.
distributor channel. The table below summarizes the S.T.A.R.S. data for market
shares and market growth in the U.S. distributor channel for the calendar
quarter and nine months ended September 30, 2006. </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="14%">&nbsp;</td>
    <td WIDTH="17%" align="center"><font SIZE="2"><b><u>Gildan</u></b></font></td>
    <td WIDTH="17%" align="center"><font SIZE="2"><b><u>Gildan</u></b></font></td>
    <td WIDTH="17%" align="center"><font SIZE="2"><b><u>Gildan</u></b></font></td>
    <td WIDTH="17%" align="center"><font SIZE="2"><b><u>Industry</u></b></font></td>
    <td WIDTH="17%" align="center"><font SIZE="2"><b><u>Industry</u></b></font></td>
  </tr>
  <tr>
    <td WIDTH="14%">&nbsp;</td>
    <td WIDTH="17%" align="center"><font SIZE="2"><b><u>Market Share</u></b></font></td>
    <td WIDTH="17%" align="center"><font SIZE="2"><b><u>Market Share</u></b></font></td>
    <td WIDTH="17%" align="center"><font SIZE="2"><b><u>Unit Growth</u></b></font></td>
    <td WIDTH="17%" align="center"><font SIZE="2"><b><u>Unit Growth</u></b></font></td>
    <td WIDTH="17%" align="center"><font SIZE="2"><b><u>Unit Growth</u></b></font></td>
  </tr>
  <tr>
    <td WIDTH="14%">&nbsp;</td>
    <td WIDTH="17%" align="center"><font SIZE="2"><b><u>Q4 2006</u></b></font></td>
    <td WIDTH="17%" align="center"><font SIZE="2"><b><u>YTD 2006</u></b></font></td>
    <td WIDTH="17%" align="center"><font SIZE="2"><b><u>Q4 2006 vs.</u></b></font></td>
    <td WIDTH="17%" align="center"><font SIZE="2"><b><u>Q4 2006 vs.</u></b></font></td>
    <td WIDTH="17%" align="center"><font SIZE="2"><b><u>YTD 2006 vs.</u></b></font></td>
  </tr>
  <tr>
    <td WIDTH="14%">&nbsp;</td>
    <td WIDTH="17%" align="center">&nbsp;</td>
    <td WIDTH="17%" align="center">&nbsp;</td>
    <td WIDTH="17%" align="center"><font SIZE="2"><b><u>Q4 2005</u></b></font></td>
    <td WIDTH="17%" align="center"><font SIZE="2"><b><u>Q4 2005</u></b></font></td>
    <td WIDTH="17%" align="center"><font SIZE="2"><b><u>YTD 2005</u></b></font></td>
  </tr>
  <tr>
    <td WIDTH="14%" bgcolor="#E6E6E6"><font SIZE="2">All products</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">42.7%</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">42.6%</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">11.8%</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">(1.3)%</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">2.1%</font></td>
  </tr>
  <tr>
    <td WIDTH="14%">&nbsp;</td>
    <td WIDTH="17%" align="center">&nbsp;</td>
    <td WIDTH="17%" align="center">&nbsp;</td>
    <td WIDTH="17%" align="center">&nbsp;</td>
    <td WIDTH="17%" align="center">&nbsp;</td>
    <td WIDTH="17%" align="center">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="14%" bgcolor="#E6E6E6"><font SIZE="2">T-shirts</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">44.0%</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">43.7%</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">11.8%</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">(1.3)%</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">2.4%</font></td>
  </tr>
  <tr>
    <td WIDTH="14%">&nbsp;</td>
    <td WIDTH="17%" align="center">&nbsp;</td>
    <td WIDTH="17%" align="center">&nbsp;</td>
    <td WIDTH="17%" align="center">&nbsp;</td>
    <td WIDTH="17%" align="center">&nbsp;</td>
    <td WIDTH="17%" align="center">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="14%" bgcolor="#E6E6E6"><font SIZE="2">Sport shirts</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">33.3%</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">32.2%</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">1.8%</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">(5.5)%</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">(3.2%)</font></td>
  </tr>
  <tr>
    <td WIDTH="14%">&nbsp;</td>
    <td WIDTH="17%" align="center">&nbsp;</td>
    <td WIDTH="17%" align="center">&nbsp;</td>
    <td WIDTH="17%" align="center">&nbsp;</td>
    <td WIDTH="17%" align="center">&nbsp;</td>
    <td WIDTH="17%" align="center">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="14%" bgcolor="#E6E6E6"><font SIZE="2">Fleece</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">31.0%</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">30.8%</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">21.2%</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">1.2%</font></td>
    <td WIDTH="17%" align="center" bgcolor="#E6E6E6"><font SIZE="2">1.4%</font></td>
  </tr>
</table>
<font SIZE="2">
<p ALIGN="JUSTIFY">Lower overall industry unit sales in the quarter was
primarily due to the unusual strength of the market in the fourth quarter of
last year, due to purchases in advance of an industry selling price increase
which had been announced for October 2005. In the month of October 2006,
industry unit shipments as reported by S.T.A.R.S. increased by 5.1% compared
with October 2005. Gildan's market share in T-shirts and fleece in October was
46.9% and 35.9%, respectively. </p>
<p ALIGN="JUSTIFY">Gross margins in the fourth quarter of fiscal 2006 were
30.6%, versus 32.3% in the fourth quarter of 2005. The decrease in gross margins
was entirely attributable to the impact of lower margins from the sale of socks,
which do not yet reflect the anticipated cost synergies from the planned
rationalization of the Company's sock manufacturing operations. Excluding the
impact of Kentucky Derby Hosiery, gross margins in the fourth quarter of fiscal
2006 were 32.5%. The slight increase in gross margins for activewear reflected
favourable manufacturing efficiencies and higher-valued product-mix compared to
last year, essentially offset by lower selling prices. </p>
<p ALIGN="JUSTIFY">Selling, general and administrative expenses in the fourth
quarter were U.S. $23.6 million, or 10.1% of sales, compared to U.S. $20.1
million, or 11.1% of sales, in the fourth quarter of last year. The increase in
selling, general and administrative expenses was due to the impact of the
acquisition of Kentucky Derby Hosiery, higher volume-related distribution costs
and professional fees for compliance with Section 404 of the U.S. Sarbanes Oxley
Act of 2002, partly offset by the nonrecurrence of severance costs incurred in
the fourth quarter of fiscal 2005 and lower performance-related compensation
costs in the fourth quarter of this fiscal year. The increase of U.S. $1.9
million in depreciation and amortization expenses was due to the Company's
continuing investments in capacity expansion, combined with the impact of the
Kentucky Derby Hosiery acquisition. </p>
<p align="right">2</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p><u>Full Year Sales and Earnings</u></p>
<p ALIGN="JUSTIFY">Sales for fiscal 2006 totaled U.S. $773.2 million, up 18.2%
from fiscal 2005, due primarily to an increase of 14.5% in activewear unit sales
volumes and U.S. $30.0 million of sock sales resulting from the Kentucky Derby
Hosiery acquisition, partially offset by lower selling prices. </p>
<p ALIGN="JUSTIFY">Net earnings for fiscal 2006 amounted to U.S. $106.8 million
and diluted EPS was U.S. $1.76, up respectively 24.2% and 23.1% from U.S. $86.0
million or U.S. $1.43 per share last year. Net earnings for fiscal 2006 included
restructuring and other charges of U.S. $20.0 million after-tax or U.S. $0.33
per share. Results for fiscal 2005 included restructuring and other charges of
U.S. $7.9 million after-tax or U.S. $0.13 per share primarily for the closure
and relocation of the Company's Canadian yarn-spinning operations. Before
restructuring and other charges in both years, net earnings and EPS increased
respectively by 35.0% and 34.0% to U.S. $126.8 million or U.S. $2.09 per share,
compared with net earnings of U.S. $93.9 million or U.S. $1.56 per share in
fiscal 2005. The increase in net earnings and EPS compared to fiscal 2005 was
primarily due to 14.5% growth in activewear unit sales volumes, lower cotton
costs and favourable manufacturing efficiencies, partially offset by an
approximate 2.5% reduction in selling prices, higher selling, general and
administrative expenses and higher depreciation expenses. </p>
<p><u>Cash Flow</u></p>
<p ALIGN="JUSTIFY">During the fourth quarter of fiscal 2006, the Company
generated cash flow of U.S $33.6 million from operating activities, after using
U.S. $17.0 million to finance seasonal accounts receivable and U.S. $9.0 million
to meet seasonal and replenishment inventory requirements for the sock business
and to support transitional outsourcing programs. The Company also used cash of
U.S. $26.2 million for capital expenditures for its major capacity expansion
projects in Honduras and the Dominican Republic and U.S. $19.9 million for the
acquisition of Kentucky Derby Hosiery. In addition, the Company repaid U.S.
$21.3 million of the total amount of U.S. $27.4 million of Kentucky Derby
Hosiery's debt assumed at the date of the acquisition. For the full fiscal year, Gildan incurred capital expenditures of U.S. $80.2 million. The Company ended
the fiscal year with cash and cash equivalents of U.S. $29.0 million, and
continues to have significant unused financing capacity to be able to pursue
further capacity expansion in excess of its current plans, as well as other
potential growth opportunities. </p>
<p><u>Fiscal 2007 EPS Guidance</u></p>
<p ALIGN="JUSTIFY">Gildan has increased its diluted EPS guidance for fiscal 2007
from U.S. $2.50 per share to approximately U.S. $2.55 per share, to take account
of the projected U.S. $0.05 per share impact of the acquisition of Kentucky
Derby Hosiery. The Company's fiscal 2007 guidance continues to include
approximately U.S. $0.06 per share of accelerated depreciation to reflect the
change in the estimated economic life of the Company's remaining Canadian
textile and related manufacturing assets. Prior to this additional depreciation
charge, adjusted diluted EPS for fiscal 2007 is projected to be approximately
U.S. $2.61. </p>
<p align="right">3</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p ALIGN="JUSTIFY">The Company's updated guidance for fiscal 2007 assumes that
the acquisition of Kentucky Derby Hosiery has a negligible impact on EPS until
the fourth quarter of the fiscal year. By the end of fiscal 2007, the annualized
impact of cost reductions from the integration of Kentucky Derby Hosiery into Gildan is expected to be in excess of U.S. $0.15 per share. The Company
continues to be confident that it will achieve annual cost reduction synergies
of U.S. $0.30 per share, once the integration process is completed during fiscal
2008 and the Company has achieved a globally competitive cost structure for its
sock manufacturing operations. </p>
<p ALIGN="JUSTIFY">The Company's guidance for fiscal 2007 assumes growth in
sales of approximately 26% compared to fiscal 2006, to approximately U.S. $970
million. Unit sales growth is projected at over 55%, including approximately 25
million dozens of socks. The Company has obtained its first major Gildan branded
sock program with a U.S. national mass-market retail account, for delivery
starting in the second quarter of fiscal 2007. </p>
<p ALIGN="JUSTIFY">Compared with its previous EPS guidance, which the Company
initiated on September 27, 2006, the Company is now projecting more favourable
cotton costs than originally forecast, particularly in the second half of fiscal
2007, with the benefit of such cost reductions being assumed to be fully passed
through into lower selling prices than originally projected. The Company is now
projecting a year-over-year reduction in activewear selling prices of
approximately 2.5% in fiscal 2007 as it continues to drive further market share
penetration and enter the mass-market retail channel. </p>
<p ALIGN="JUSTIFY">EPS for the first quarter of fiscal 2007, before the
additional depreciation charge, are projected to be the same as in the first
quarter of fiscal 2006, at U.S. $0.27 per share. Higher unit sales volume growth
in the first quarter is projected to be offset by lower gross margins and higher
selling, general and administrative expenses. In particular, the first quarter
is impacted by significant year-over-year increases in cotton costs, compared
with a low point in cotton prices in the first quarter of last year. Also, the
positive impact of unit volume growth is lower than in other quarters, as the
first quarter is seasonally the lowest sales volume quarter of the fiscal year.
</p>
<p ALIGN="JUSTIFY">After the first quarter, in addition to the more significant
impact of sales volume growth, gross margins for activewear are expected to
increase, both relative to the first quarter as well as to the corresponding
quarters in fiscal 2006. In the second half of fiscal 2007, cotton costs are
expected to be comparable to the second half of fiscal 2006. Also, throughout
fiscal 2007 the Company expects to realize significant manufacturing
efficiencies from the continuing ramp-up of the Dominican Republic textile
facility and the rationalization of its Canadian textile manufacturing announced
on September 27, 2006, which are expected to more than offset the projected 2.5%
reduction in selling prices. In addition, gross margins for the sock business
are expected to increase in successive quarters as the Company progresses with
the integration of Kentucky Derby Hosiery. </p>
<p>Gildan is projecting capital expenditures of approximately U.S. $110 million
in fiscal 2007. </p>
<p align="right">4</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p><u>Disclosure of Outstanding Share Data</u></p>
<p ALIGN="JUSTIFY">As of November 30, 2006, there were 60,138,612 common shares
issued and outstanding along with 501,343 stock options and 453,872 dilutive
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, without any monetary
consideration being paid to the Company. 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>
<p><u>Information for shareholders</u></p>
<p ALIGN="JUSTIFY">Gildan Activewear Inc. will hold a conference call to discuss
these results today at 10:00 AM Eastern Time. The conference call can be
accessed by dialing 800-261-3417 (Canada &amp; U.S.) or 617-614-3673 (international)
and entering passcode 37448625, or by live sound webcast on Gildan's Internet
site (&quot;Investor Relations&quot; section) at the following address: www.gildan.com. If
you are unable to participate in the conference call, a replay will be available
starting that same day at 12:00 PM EST by dialing 888-286-8010 (Canada &amp; U.S.)
or 617-801-6888 (international) and entering passcode 88091542, until Thursday,
December 14, 2006 at midnight, or by audio webcast on Gildan's Web site for 30
days. </p>
<p><u>Profile</u></p>
<p ALIGN="JUSTIFY">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 to this market in Europe. The Company sells
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. In addition to continuing its growth within the
wholesale channel, Gildan is implementing a major new growth initiative to sell
athletic socks, underwear and activewear to mass-market retailers in North
America. </p>
</font><i><font SIZE="2">
<p ALIGN="JUSTIFY">Certain statements included in this press release 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. Such forward-looking statements involve assumptions and known and
unknown risks, uncertainties and other factors, including, but not limited to:
general economic conditions such as currency exchange rates, commodity prices
and other factors over which we have no control; the impact of economic and
business conditions, industry trends and other external and political factors in
the countries in which we operate; the intensity of competitive activity;
changes in environmental, tax, trade and other laws and regulations; our ability
to implement our strategies and plans; our ability to complete and successfully
integrate acquisitions; changes in customer demand for our products and our
ability to maintain customer relationships and grow our business; the
seasonality of our business; our ability to attract and retain key personnel;
changes in accounting policies; </p>
</font></i><font SIZE="2">
<p align="right">5</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'><i>
<p ALIGN="JUSTIFY">and, disruption to manufacturing and distribution activities
due to the impact of weather, natural disasters and other unforeseen adverse
events, which could cause actual results to differ materially from future
results expressed or implied by such forward-looking statements. You should not
place undue reliance on these forward-looking statements, which are made only as
of the date of this press release. We refer you to the Company's filings with
the U.S. Securities and Exchange Commission and Canadian securities regulatory
authorities for a discussion of other factors that may affect the Company's
future results. </p>
<p ALIGN="JUSTIFY">This release includes reference to certain Non-GAAP Financial
measures such as adjusted net earnings and adjusted diluted earnings per share,
which are calculated as net earnings and earnings per share excluding
restructuring and other charges, as discussed in Note 2 to the condensed interim
consolidated financial statements. The Company uses and presents these non-GAAP
measures to assess its operating performance from one period to the next without
the variation caused by restructuring and other charges that could potentially
distort the analysis of trends in our business performance. Excluding these
items does not imply they are necessarily non-recurring. However, investors
should know that such Non-GAAP Financial Measures have no standardized meaning
as prescribed by GAAP and may not be comparable to similar measures presented by
other companies. Accordingly, they should not be considered in isolation. A
reconciliation of the non-GAAP measures to the most comparable GAAP measures is
provided in the table below: </p>
</i></font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="41%" style="border-bottom: 2px solid #000000"><font SIZE="2"><i>
    (in millions of U.S. dollars, except per share amounts)</i></font></td>
    <td WIDTH="14%" align="right" style="border-bottom: 2px solid #000000">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-bottom: 2px solid #000000">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-bottom: 2px solid #000000">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-bottom: 2px solid #000000">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>Q4 2006</b></font></td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Q4 2005</font></td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>2006</b></font></td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">2005</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Net earnings</font></td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>16.8</b></font></td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">29.2</font></td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>106.8</b></font></td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">86.0</font></td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">Restructuring and other charges <sup>(1)</sup></font></td>
    <td WIDTH="14%" align="right"><font SIZE="2"><b>20.4</b></font></td>
    <td WIDTH="15%" align="right"><font SIZE="2">(0.1)</font></td>
    <td WIDTH="15%" align="right"><font SIZE="2"><b>20.4</b></font></td>
    <td WIDTH="15%" align="right"><font SIZE="2">11.8</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Income tax effect thereon</font></td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>(0.4)</b></font></td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">0.2</font></td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>(0.4)</b></font></td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(3.9)</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">Adjusted net earnings</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"><b>36.8</b></font></td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">29.3</font></td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>126.8</b></font></td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">93.9</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">Diluted E.P.S.</font></td>
    <td WIDTH="14%" align="right"><font SIZE="2"><b>0.28</b></font></td>
    <td WIDTH="15%" align="right"><font SIZE="2">0.48</font></td>
    <td WIDTH="15%" align="right"><font SIZE="2"><b>1.76</b></font></td>
    <td WIDTH="15%" align="right"><font SIZE="2">1.43</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Restructuring and other charges, net of tax</font></td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>0.33</b></font></td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">-</font></td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>0.33</b></font></td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">0.13</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">Adjusted diluted E.P.S.</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"><b>0.61</b></font></td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">0.48</font></td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>2.09</b></font></td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">1.56</font></td>
  </tr>
</table>
<i><font size="2"><sup>
<p>(1)</sup> Adjustment to remove restructuring and other charges. See note 2 to
the condensed interim consolidated financial statements.</p>
</font></i><font SIZE="2">
<p align="center">- 30 - </p>
<font FACE="Arial MT">
<p align="right">6</p>
</font><i><hr color="#000000" size="5"><p Style='page-break-before:always'></i></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="41%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="42%" COLSPAN="3" align="center"><font SIZE="2"><i><b>Three months
    ended</b></i></font></td>
    <td WIDTH="4%" align="center">&nbsp;</td>
    <td WIDTH="29%" COLSPAN="3" align="center"><font SIZE="2"><i><b>Twelve
    months ended</b></i></font></td>
  </tr>
  <tr>
    <td WIDTH="41%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">October 1, 2006</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">October 2, 2005</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">October 1, 2006</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">October 2, 2005</font></td>
  </tr>
  <tr>
    <td WIDTH="41%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(unaudited)</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(unaudited)</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(audited)</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(audited)</font></td>
  </tr>
  <tr>
    <td WIDTH="41%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2"><b>Sales</b></font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>$</b></font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>235,152</b></font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>$</b></font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>180,672</b></font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>$</b></font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>773,190</b></font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>$</b></font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>653,851</b></font></td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">Cost of sales</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">163,084</font></td>
    <td WIDTH="4%" 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">122,261</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">521,095</font></td>
    <td WIDTH="4%" 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">450,570</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2"><b>Gross profit</b></font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2"><b>72,068</b></font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2"><b>58,411</b></font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2"><b>252,095</b></font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2"><b>203,281</b></font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">Selling, general and administrative expenses</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">23,641</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">20,100</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">84,388</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">73,846</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">Restructuring and other charges (note 2)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">20,386</font></td>
    <td WIDTH="4%" 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">(110)</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">20,386</font></td>
    <td WIDTH="4%" 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">11,776</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2"><b>Earnings before the undernoted items</b></font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2"><b>28,041</b></font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2"><b>38,421</b></font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2"><b>147,321</b></font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2"><b>117,659</b></font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">Depreciation and amortization</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">9,072</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">7,202</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">32,383</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">25,615</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2">Interest expense, net</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2">1,039</font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2">924</font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2">3,067</font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2">4,615</font></td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">Non-controlling interest in income of
    consolidated joint venture</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">20</font></td>
    <td WIDTH="4%" 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">(153)</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">260</font></td>
    <td WIDTH="4%" 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">34</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2"><b>Earnings before income taxes</b></font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2"><b>17,910</b></font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2"><b>30,448</b></font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2"><b>111,611</b></font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2"><b>87,395</b></font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">Income tax</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">1,122</font></td>
    <td WIDTH="4%" 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">1,251</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">4,782</font></td>
    <td WIDTH="4%" 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">1,352</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2"><b>Net earnings</b></font></td>
    <td WIDTH="3%" align="right"><font SIZE="2"><b>$</b></font></td>
    <td WIDTH="11%" align="right" style="border-bottom: 2px solid #000000">
    <font SIZE="2"><b>16,788</b></font></td>
    <td WIDTH="4%" align="right" style="border-bottom: 2px solid #000000">
    <font SIZE="2"><b>$</b></font></td>
    <td WIDTH="11%" align="right" style="border-bottom: 2px solid #000000">
    <font SIZE="2"><b>29,197</b></font></td>
    <td WIDTH="4%" align="right"><font SIZE="2"><b>$</b></font></td>
    <td WIDTH="11%" align="right" style="border-bottom: 2px solid #000000">
    <font SIZE="2"><b>106,829</b></font></td>
    <td WIDTH="4%" align="right" style="border-bottom: 2px solid #000000">
    <font SIZE="2"><b>$</b></font></td>
    <td WIDTH="11%" align="right" style="border-bottom: 2px solid #000000">
    <font SIZE="2"><b>86,043</b></font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2"><b>Basic EPS</b></font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>$</b></font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>0.28</b></font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>$</b></font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>0.49</b></font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>$</b></font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>1.78</b></font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>$</b></font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>1.44</b></font></td>
  </tr>
  <tr>
    <td WIDTH="41%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2"><b>Diluted EPS</b></font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>$</b></font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>0.28</b></font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>$</b></font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>0.48</b></font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>$</b></font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>1.76</b></font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>$</b></font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>1.43</b></font></td>
  </tr>
  <tr>
    <td WIDTH="41%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2"><b>Weighted average number of shares
    outstanding (in thousands)</b></font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; Basic</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2"><b>60,105</b></font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2"><b>59,924</b></font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2"><b>60,052</b></font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2"><b>59,691</b></font></td>
  </tr>
  <tr>
    <td WIDTH="41%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; Diluted</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>60,670</b></font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>60,414</b></font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>60,626</b></font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>60,135</b></font></td>
  </tr>
</table>
<font FACE="Arial MT" SIZE="2">
<p>See accompanying condensed notes to interim consolidated financial
statements.</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="37%">&nbsp;</td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="51%" COLSPAN="3" align="right"><font SIZE="2"><i><b>
    <p align="center">Three months ended</b></i></font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="30%" COLSPAN="3" align="right"><font SIZE="2"><i><b>
    <p align="center">Twelve months ended</b></i></font></td>
  </tr>
  <tr>
    <td WIDTH="37%">&nbsp;</td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">October 1, 2006</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">October 2, 2005</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">October 1, 2006</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">October 2, 2005</font></td>
  </tr>
  <tr>
    <td WIDTH="37%">&nbsp;</td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(unaudited)</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(unaudited)</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(audited)</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(audited)</font></td>
  </tr>
  <tr>
    <td WIDTH="37%">&nbsp;</td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="37%">&nbsp;</td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2"><b>Cash flows from (used in) operating
    activities:</b></font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="37%"><font SIZE="2">&nbsp;&nbsp; Net earnings</font></td>
    <td WIDTH="1%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="14%" align="right"><font SIZE="2">16,788</font></td>
    <td WIDTH="2%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="14%" align="right"><font SIZE="2">29,197</font></td>
    <td WIDTH="2%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="14%" align="right"><font SIZE="2">106,829</font></td>
    <td WIDTH="2%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="14%" align="right"><font SIZE="2">86,043</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp; Adjustments for:</font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="37%"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation
    and amortization</font></td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">9,072</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">7,202</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">32,383</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">25,615</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Impairment
    loss</font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">15,149</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">-</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">15,149</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="37%"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss (gain) on
    disposal and writedown of fixed assets</font></td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">22</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">(1,273)</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">1,197</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">7,373</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Future income
    taxes</font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">919</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">2,119</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">1,764</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">176</font></td>
  </tr>
  <tr>
    <td WIDTH="37%"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock-based
    compensation costs</font></td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">65</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">469</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">908</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">1,050</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other</font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">1,510</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">1,967</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">1,103</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">2,586</font></td>
  </tr>
  <tr>
    <td WIDTH="37%">&nbsp;</td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">43,525</font></td>
    <td WIDTH="2%" 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">39,681</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">159,333</font></td>
    <td WIDTH="2%" 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">122,843</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp; Net changes in non-cash working
    capital balances:</font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="37%"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts
    receivable</font></td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">(16,981)</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">3,858</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">(41,058)</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">(22,694)</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories</font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(9,035)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(3,058)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(35,435)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(17,790)</font></td>
  </tr>
  <tr>
    <td WIDTH="37%"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid
    expenses and deposits</font></td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">2,003</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">2,032</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">95</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">(1,082)</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts
    payable and accrued liabilities</font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">14,545</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">6,542</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">11,046</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">11,979</font></td>
  </tr>
  <tr>
    <td WIDTH="37%"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income taxes
    payable</font></td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(485)</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(406)</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">740</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(6)</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>33,572</b></font></td>
    <td WIDTH="2%" 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">
    <font SIZE="2"><b>48,649</b></font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>94,721</b></font></td>
    <td WIDTH="2%" 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">
    <font SIZE="2"><b>93,250</b></font></td>
  </tr>
  <tr>
    <td WIDTH="37%">&nbsp;</td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2"><b>Cash flows (used in) from financing
    activities:</b></font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="37%"><font SIZE="2">&nbsp;&nbsp; (Decrease) increase in bank
    indebtedness</font></td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">(17,830)</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">3,980</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">(17,830)</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">3,980</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp; Net (decrease) increase in
    long-term debt</font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(4,773)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">3,265</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(23,361)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(12,810)</font></td>
  </tr>
  <tr>
    <td WIDTH="37%"><font SIZE="2">&nbsp;&nbsp; Proceeds from the issuance of
    shares</font></td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">194</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">875</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">1,808</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">5,872</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp; Contribution by non-controlling
    interest</font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">-</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">-</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">-</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">2,500</font></td>
  </tr>
  <tr>
    <td WIDTH="37%">&nbsp;</td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2"><b>(22,409)</b></font></td>
    <td WIDTH="2%" 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>8,120</b></font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2"><b>(39,383)</b></font></td>
    <td WIDTH="2%" 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>(458)</b></font></td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="37%"><font SIZE="2"><b>Cash flows from (used in) investing
    activities:</b></font></td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp; Purchase of fixed assets</font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(26,188)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(19,431)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(80,183)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(86,124)</font></td>
  </tr>
  <tr>
    <td WIDTH="37%"><font SIZE="2">&nbsp;&nbsp; Acquisition of Kentucky Derby
    Hosiery (note 1)</font></td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">(19,911)</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">-</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">(19,911)</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp; Proceeds from the disposal of
    assets held for sale</font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">-</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">1,488</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">5,027</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2">4,087</font></td>
  </tr>
  <tr>
    <td WIDTH="37%"><font SIZE="2">&nbsp;&nbsp; Decrease (increase) in other
    assets</font></td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">21</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">122</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(986)</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(1,811)</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>(46,078)</b></font></td>
    <td WIDTH="2%" 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">
    <font SIZE="2"><b>(17,821)</b></font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>(96,053)</b></font></td>
    <td WIDTH="2%" 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">
    <font SIZE="2"><b>(83,848)</b></font></td>
  </tr>
  <tr>
    <td WIDTH="37%">&nbsp;</td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2"><b>Effect of exchange rate changes on cash</b></font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2"><b>&nbsp; and cash equivalents</b></font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>39</b></font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>70</b></font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>(80)</b></font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>187</b></font></td>
  </tr>
  <tr>
    <td WIDTH="37%">&nbsp;</td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="2%" 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">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="2%" 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">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2"><b>Net (decrease) increase in cash and cash
    equivalents</b></font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2"><b>&nbsp; during the period</b></font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>(34,876)</b></font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>39,018</b></font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>(40,795)</b></font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>9,131</b></font></td>
  </tr>
  <tr>
    <td WIDTH="37%">&nbsp;</td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2"><b>Cash and cash equivalents, beginning of
    period</b></font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>63,883</b></font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>30,784</b></font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>69,802</b></font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>60,671</b></font></td>
  </tr>
  <tr>
    <td WIDTH="37%">&nbsp;</td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="37%" bgcolor="#E6E6E6"><font SIZE="2"><b>Cash and cash equivalents, end of period</b></font></td>
    <td WIDTH="1%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>$</b></font></td>
    <td WIDTH="14%" 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>29,007</b></font></td>
    <td WIDTH="2%" 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>$</b></font></td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font SIZE="2"><b>69,802</b></font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>$</b></font></td>
    <td WIDTH="14%" 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>29,007</b></font></td>
    <td WIDTH="2%" 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="14%" 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>69,802</b></font></td>
  </tr>
</table>
<font FACE="Arial MT" SIZE="2">
<p>See accompanying condensed notes to interim consolidated financial
statements.</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)</font></p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="53%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">October 1, 2006</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">October 2, 2005</font></td>
  </tr>
  <tr>
    <td WIDTH="53%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(audited)</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(audited)</font></td>
  </tr>
  <tr>
    <td WIDTH="53%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="53%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="53%"><font SIZE="2"><b>Current assets:</b></font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="53%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp; Cash and cash equivalents</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">29,007</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="13%" align="right" bgcolor="#E6E6E6"><font SIZE="2">69,802</font></td>
  </tr>
  <tr>
    <td WIDTH="53%"><font SIZE="2">&nbsp;&nbsp; Accounts receivable</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">165,870</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right"><font SIZE="2">108,646</font></td>
  </tr>
  <tr>
    <td WIDTH="53%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp; Inventories</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">200,653</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="13%" align="right" bgcolor="#E6E6E6"><font SIZE="2">134,861</font></td>
  </tr>
  <tr>
    <td WIDTH="53%"><font SIZE="2">&nbsp;&nbsp; Prepaid expenses and deposits</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">5,757</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right"><font SIZE="2">4,394</font></td>
  </tr>
  <tr>
    <td WIDTH="53%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp; Future income taxes</font></td>
    <td WIDTH="10%" 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">5,298</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">10,135</font></td>
  </tr>
  <tr>
    <td WIDTH="53%">&nbsp;</td>
    <td WIDTH="10%" 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">406,585</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="13%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">327,838</font></td>
  </tr>
  <tr>
    <td WIDTH="53%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" 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="13%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="53%"><font SIZE="2"><b>Fixed assets</b></font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">302,677</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right"><font SIZE="2">260,615</font></td>
  </tr>
  <tr>
    <td WIDTH="53%" bgcolor="#E6E6E6"><font SIZE="2"><b>Intangible assets</b></font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">9,513</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="13%" align="right" bgcolor="#E6E6E6"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="53%"><font SIZE="2"><b>Other assets</b></font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">4,501</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right"><font SIZE="2">4,036</font></td>
  </tr>
  <tr>
    <td WIDTH="53%" bgcolor="#E6E6E6"><font SIZE="2"><b>Assets held for sale</b></font></td>
    <td WIDTH="10%" 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">-</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">5,027</font></td>
  </tr>
  <tr>
    <td WIDTH="53%">&nbsp;</td>
    <td WIDTH="10%" 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">&nbsp;</td>
    <td WIDTH="13%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="53%" bgcolor="#E6E6E6"><font SIZE="2"><b>Total assets</b></font></td>
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#E6E6E6">
    <font SIZE="2"><b>$</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#E6E6E6">
    <font SIZE="2"><b>723,276</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#E6E6E6">
    <font SIZE="2"><b>$</b></font></td>
    <td WIDTH="13%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#E6E6E6">
    <font SIZE="2"><b>597,516</b></font></td>
  </tr>
  <tr>
    <td WIDTH="53%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="53%" bgcolor="#E6E6E6"><font SIZE="2"><b>Current liabilities:</b></font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="13%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="53%"><font SIZE="2">&nbsp;&nbsp; Bank indebtedness</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">3,500</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="13%" align="right"><font SIZE="2">3,980</font></td>
  </tr>
  <tr>
    <td WIDTH="53%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp; Accounts payable and accrued
    liabilities</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">117,984</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="13%" align="right" bgcolor="#E6E6E6"><font SIZE="2">86,843</font></td>
  </tr>
  <tr>
    <td WIDTH="53%"><font SIZE="2">&nbsp;&nbsp; Income taxes payable</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">2,269</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right"><font SIZE="2">2,206</font></td>
  </tr>
  <tr>
    <td WIDTH="53%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp; Current portion of long-term
    debt</font></td>
    <td WIDTH="10%" 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">21,820</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">19,859</font></td>
  </tr>
  <tr>
    <td WIDTH="53%">&nbsp;</td>
    <td WIDTH="10%" 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">145,573</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="13%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">112,888</font></td>
  </tr>
  <tr>
    <td WIDTH="53%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" 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="13%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="53%"><font SIZE="2"><b>Long-term debt</b></font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">12,041</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right"><font SIZE="2">27,288</font></td>
  </tr>
  <tr>
    <td WIDTH="53%" bgcolor="#E6E6E6"><font SIZE="2"><b>Future income taxes</b></font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">29,443</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="13%" align="right" bgcolor="#E6E6E6"><font SIZE="2">31,386</font></td>
  </tr>
  <tr>
    <td WIDTH="53%"><font SIZE="2"><b>Non-controlling interest in consolidated
    joint venture</b></font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">5,654</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right"><font SIZE="2">5,394</font></td>
  </tr>
  <tr>
    <td WIDTH="53%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" 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="13%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="53%"><font SIZE="2"><b>Shareholders' equity:</b></font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="53%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp; Share capital</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">86,584</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="13%" align="right" bgcolor="#E6E6E6"><font SIZE="2">84,177</font></td>
  </tr>
  <tr>
    <td WIDTH="53%"><font SIZE="2">&nbsp;&nbsp; Contributed surplus</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">2,365</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right"><font SIZE="2">1,596</font></td>
  </tr>
  <tr>
    <td WIDTH="53%" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;&nbsp; Retained earnings</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">415,368</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="13%" align="right" bgcolor="#E6E6E6"><font SIZE="2">308,539</font></td>
  </tr>
  <tr>
    <td WIDTH="53%"><font SIZE="2">&nbsp;&nbsp; Cumulative translation
    adjustment</font></td>
    <td WIDTH="10%" 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">26,248</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">26,248</font></td>
  </tr>
  <tr>
    <td WIDTH="53%" 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">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">530,565</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="13%" 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>
  </tr>
  <tr>
    <td WIDTH="53%">&nbsp;</td>
    <td WIDTH="10%" 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">&nbsp;</td>
    <td WIDTH="13%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="53%" bgcolor="#E6E6E6"><font SIZE="2"><b>Total liabilities and shareholders' equity</b></font></td>
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#E6E6E6">
    <font SIZE="2"><b>$</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#E6E6E6">
    <font SIZE="2"><b>723,276</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#E6E6E6">
    <font SIZE="2"><b>$</b></font></td>
    <td WIDTH="13%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#E6E6E6">
    <font SIZE="2"><b>597,516</b></font></td>
  </tr>
</table>
<font FACE="Arial MT" SIZE="2">
<p>See accompanying condensed notes to interim consolidated financial
statements.</p>
</font><hr color="#000000" size="5"><p Style='page-break-before:always'><font size="2"><b>
<p>Gildan Activewear Inc. &#150; Notes to interim consolidated financial statements
<br>
</b>(tabular amounts in thousands of U.S. dollars, except per share data) </p>
<p>For complete notes to the annual consolidated financial statements, please
refer to filings with the various securities regulatory authorities. </p>
<p ALIGN="JUSTIFY" style="text-indent: -26; margin-left: 26">1.&nbsp;&nbsp;&nbsp;&nbsp;
Effective July 6, 2006, the Company acquired 100% of the common shares of
Kentucky Derby Hosiery Co., Inc. (&quot;Kentucky Derby&quot;), a U.S. hosiery manufacturer
with corporate headquarters in Hopkinsville, Kentucky. The total purchase price
of $20.4 million, including transactions costs, was paid in cash, except for
$0.5 million which was settled through the issuance of common shares of the
Company. The acquisition is intended to enhance and accelerate the Company's
strategy to enter the North American mass-market retail channel as a supplier of
athletic socks, underwear and activewear. </p>
<p style="margin-left: 26">The Company accounted for this acquisition using the
purchase method and the results of Kentucky Derby were consolidated with those
of the Company from the date of acquisition. </p>
<p style="margin-left: 26">The following table summarizes the estimated fair
value of the assets acquired and liabilities assumed at the date of acquisition:
</p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="58%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-left: 26">Assets acquired:</font></td>
    <td WIDTH="21%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="21%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="58%"><font SIZE="2">
    <p style="margin-left: 26">&nbsp;&nbsp; Accounts receivable</font></td>
    <td WIDTH="21%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="21%" align="right"><font SIZE="2">15,081</font></td>
  </tr>
  <tr>
    <td WIDTH="58%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 26">&nbsp;&nbsp; Income taxes receivable</font></td>
    <td WIDTH="21%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="21%" align="right" bgcolor="#E6E6E6"><font SIZE="2">775</font></td>
  </tr>
  <tr>
    <td WIDTH="58%"><font SIZE="2">
    <p style="margin-left: 26">&nbsp;&nbsp; Inventory</font></td>
    <td WIDTH="21%" align="right">&nbsp;</td>
    <td WIDTH="21%" align="right"><font SIZE="2">30,357</font></td>
  </tr>
  <tr>
    <td WIDTH="58%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 26">&nbsp;&nbsp; Prepaid expenses</font></td>
    <td WIDTH="21%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="21%" align="right" bgcolor="#E6E6E6"><font SIZE="2">1,458</font></td>
  </tr>
  <tr>
    <td WIDTH="58%"><font SIZE="2">
    <p style="margin-left: 26">&nbsp;&nbsp; Fixed assets</font></td>
    <td WIDTH="21%" align="right">&nbsp;</td>
    <td WIDTH="21%" align="right"><font SIZE="2">6,993</font></td>
  </tr>
  <tr>
    <td WIDTH="58%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-left: 26">&nbsp;&nbsp; Customer contracts and customer
    relationships</font></td>
    <td WIDTH="21%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="21%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">9,866</font></td>
  </tr>
  <tr>
    <td WIDTH="58%" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-left: 26">&nbsp;</td>
    <td WIDTH="21%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="21%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">64,530</font></td>
  </tr>
  <tr>
    <td WIDTH="58%" bgcolor="#E6E6E6">
    <p style="margin-left: 26">&nbsp;</td>
    <td WIDTH="21%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="21%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="58%"><font SIZE="2">
    <p style="margin-left: 26">Liabilities assumed:</font></td>
    <td WIDTH="21%" align="right">&nbsp;</td>
    <td WIDTH="21%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="58%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 26">&nbsp;&nbsp; Bank indebtedness</font></td>
    <td WIDTH="21%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="21%" align="right" bgcolor="#E6E6E6"><font SIZE="2">17,350</font></td>
  </tr>
  <tr>
    <td WIDTH="58%"><font SIZE="2">
    <p style="margin-left: 26">&nbsp;&nbsp; Accounts payable and accrued
    liabilities</font></td>
    <td WIDTH="21%" align="right">&nbsp;</td>
    <td WIDTH="21%" align="right"><font SIZE="2">16,734</font></td>
  </tr>
  <tr>
    <td WIDTH="58%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-left: 26">&nbsp;&nbsp; Long-term debt</font></td>
    <td WIDTH="21%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="21%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">10,075</font></td>
  </tr>
  <tr>
    <td WIDTH="58%" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-left: 26">&nbsp;</td>
    <td WIDTH="21%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="21%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">44,159</font></td>
  </tr>
  <tr>
    <td WIDTH="58%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-left: 26">&nbsp;</td>
    <td WIDTH="21%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="21%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="58%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-left: 26">Net assets acquired</font></td>
    <td WIDTH="21%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">$</font></td>
    <td WIDTH="21%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">20,371</font></td>
  </tr>
  <tr>
    <td WIDTH="58%" bgcolor="#E6E6E6">
    <p style="margin-left: 26">&nbsp;</td>
    <td WIDTH="21%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="21%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="58%">
    <p style="margin-left: 26">&nbsp;</td>
    <td WIDTH="21%" align="right">&nbsp;</td>
    <td WIDTH="21%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="58%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 26">Consideration:</font></td>
    <td WIDTH="21%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="21%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="58%"><font SIZE="2">
    <p style="margin-left: 26">&nbsp;&nbsp; Cash</font></td>
    <td WIDTH="21%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="21%" align="right"><font SIZE="2">19,000</font></td>
  </tr>
  <tr>
    <td WIDTH="58%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 26">&nbsp;&nbsp; 10,000 common shares</font></td>
    <td WIDTH="21%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="21%" align="right" bgcolor="#E6E6E6"><font SIZE="2">460</font></td>
  </tr>
  <tr>
    <td WIDTH="58%"><font SIZE="2">
    <p style="margin-left: 26">&nbsp;&nbsp; Transaction costs</font></td>
    <td WIDTH="21%" align="right">&nbsp;</td>
    <td WIDTH="21%" align="right"><font SIZE="2">911</font></td>
  </tr>
  <tr>
    <td WIDTH="58%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-left: 26">&nbsp;</td>
    <td WIDTH="21%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="21%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="58%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <p style="margin-left: 26">&nbsp;</td>
    <td WIDTH="21%" 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="21%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">20,371</font></td>
  </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2">
<p style="margin-left: 26">Immediately following the acquisition, the Company
repaid the entire amount of bank indebtedness and $4.0 million of Kentucky
Derby's long-term debt. </p>
</font><hr color="#000000" size="5"><p Style='page-break-before:always'><font FACE="Times New Roman PSMT" SIZE="2">
<p style="text-indent: -26; margin-left: 26">2.</font>
<font FACE="Times New Roman PSMT" SIZE="2">&nbsp;&nbsp;&nbsp; The following
table summarizes the components of the restructuring and other charges: </font>
</p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="29%">
    <p style="margin-left: 26">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">(unaudited)</font></td>
    <td WIDTH="22%" COLSPAN="2" align="right">
    <font FACE="Times New Roman PSMT" SIZE="2">(unaudited)</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">
    (audited)</font></td>
    <td WIDTH="28%" COLSPAN="2" align="right">
    <font FACE="Times New Roman PSMT" SIZE="2">(audited)</font></td>
  </tr>
  <tr>
    <td WIDTH="29%">
    <p style="margin-left: 26">&nbsp;</td>
    <td WIDTH="31%" COLSPAN="2" align="right">
    <font FACE="Times New Roman PSMT" SIZE="2">Three months</font></td>
    <td WIDTH="22%" COLSPAN="2" align="right">
    <font FACE="Times New Roman PSMT" SIZE="2">Three months</font></td>
    <td WIDTH="24%" COLSPAN="2" align="right">
    <font FACE="Times New Roman PSMT" SIZE="2">Twelve months</font></td>
    <td WIDTH="28%" COLSPAN="2" align="right">
    <font FACE="Times New Roman PSMT" SIZE="2">Twelve months</font></td>
  </tr>
  <tr>
    <td WIDTH="29%">
    <p style="margin-left: 26">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">
    ended</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">
    ended</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">
    ended</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">
    ended</font></td>
  </tr>
  <tr>
    <td WIDTH="29%">
    <p style="margin-left: 26">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman PSMT" SIZE="2">Oct. 1, 2006</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman PSMT" SIZE="2">Oct. 2, 2005</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman PSMT" SIZE="2">Oct. 1, 2006</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman PSMT" SIZE="2">Oct. 2, 2005</font></td>
  </tr>
  <tr>
    <td WIDTH="29%" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">
    <p style="margin-left: 26">Canadian textile manufacturing</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" 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="14%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" 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="29%" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">
    <p style="margin-left: 26">restructuring (a)</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">$</font></td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">
    18,930</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">$</font></td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">-</font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">$</font></td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">
    18,930</font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">$</font></td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="29%"><font FACE="Times New Roman PSMT" SIZE="2">
    <p style="margin-left: 26">Restructuring of yarn-spinning</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="29%"><font FACE="Times New Roman PSMT" SIZE="2">
    <p style="margin-left: 26">facilities (b)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">-</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">
    (1,160)</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="14%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">-</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">
    10,726</font></td>
  </tr>
  <tr>
    <td WIDTH="29%" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">
    <p style="margin-left: 26">Charge to comply with</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="29%" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">
    <p style="margin-left: 26">employment contract (c)</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman PSMT" SIZE="2">1,456</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman PSMT" SIZE="2">1,050</font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="14%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman PSMT" SIZE="2">1,456</font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman PSMT" SIZE="2">1,050</font></td>
  </tr>
  <tr>
    <td WIDTH="29%">
    <p style="margin-left: 26">&nbsp;</td>
    <td WIDTH="3%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">$</font></td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font FACE="Times New Roman PSMT" SIZE="2">20,386</font></td>
    <td WIDTH="3%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">$</font></td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font FACE="Times New Roman PSMT" SIZE="2">(110)</font></td>
    <td WIDTH="4%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">$</font></td>
    <td WIDTH="14%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font FACE="Times New Roman PSMT" SIZE="2">20,386</font></td>
    <td WIDTH="4%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">$</font></td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font FACE="Times New Roman PSMT" SIZE="2">11,776</font></td>
  </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: -26; margin-left: 52">(a)&nbsp;&nbsp; In
September 2006, the Company announced a restructuring of its Canadian
manufacturing operations to take effect in December 2006, involving the closure
of its textile manufacturing facility in Valleyfield, Quebec and the downsizing
of its Montreal knitting facility. During the fourth quarter of fiscal 2006, the
Company has recorded a charge of $18.9 million relating to this restructuring
and its concurrent re-assessment of the recoverability of the carrying values of
its remaining Canadian textile manufacturing and related assets. Under the
Company's tax structure, there are essentially no tax recoveries with respect to
this charge. The components of this charge include employee severance of $2.1
million with respect to the Valleyfield and Montreal knitting facilities, an
asset impairment loss of $15.1 million relating to all of the Canadian textile
and related manufacturing fixed assets, and other costs of $1.7 million. The
Company was required to reduce the carrying value of the fixed assets to fair
value and recognized asset impairment charges, because the carrying value of the
assets exceeded the projected future undiscounted cash flows. </p>
<p ALIGN="JUSTIFY" style="text-indent: -26; margin-left: 52">(b)&nbsp;&nbsp;
During the second quarter of fiscal 2005, the Company closed its two Canadian
yarn-spinning facilities, and relocated a major portion of its yarn-spinning
equipment to a North Carolina spinning facility operated by Company's joint
venture with Frontier Spinning Mills, Inc. For the twelve months ended October
2, 2005 the Company recorded a charge of $10.7 million for the costs associated
with this closure. The components of this charge included a writedown to fair
value of fixed assets not transferred of $6.8 million, employee severance of
$3.7 million and other costs of $0.2 million. The fixed assets not transferred
to the joint venture were classified as held for sale at their estimated fair
values. Proceeds from the assets held for sale of $4.1 million and $5.0 million
were received, respectively in fiscal 2005 and in fiscal 2006. In the fourth
quarter of fiscal 2005, the Company recognized a gain of $1.1 million, due to
proceeds exceeding estimates on assets held for sale.</p>
<p ALIGN="JUSTIFY" style="text-indent: -26; margin-left: 52">(c)&nbsp;&nbsp;
During fiscal 2004, the Company incurred a charge to comply with its contractual
commitments to its former Chairman and Co-chief Executive Officer of the
Company. For the three-month and twelve-month periods ended October 1, 2006 and
October 2, 2005, the Company incurred further charges of $1.5 million and $1.1
million respectively, in order to comply with the variable components of its
obligations under the terms of the employment contract. </p>
<p>3.</font> <font FACE="Times New Roman PSMT" SIZE="2">&nbsp;&nbsp;&nbsp;
Certain comparative figures have been reclassified in order to conform to the
current year's presentation. </p>
</font>

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