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<SEC-DOCUMENT>0001204459-07-000172.txt : 20070208
<SEC-HEADER>0001204459-07-000172.hdr.sgml : 20070208
<ACCEPTANCE-DATETIME>20070208161825
ACCESSION NUMBER:		0001204459-07-000172
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20061231
FILED AS OF DATE:		20070208
DATE AS OF CHANGE:		20070208

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:		07592811

	BUSINESS ADDRESS:	
		STREET 1:		725 MONT?E DE LIESSE
		STREET 2:		MONTREAL
		CITY:			CANADA
		STATE:			A8
		ZIP:			H4T 1P5
		BUSINESS PHONE:		5147352023

	MAIL ADDRESS:	
		STREET 1:		725 MONT?E DE LIESSE
		STREET 2:		MONTREAL
		CITY:			CANADA
		STATE:			A8
		ZIP:			H4T 1P5

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GILDAN ACTIVEWEAR INC
		DATE OF NAME CHANGE:	19980515
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>gildan6k.htm
<DESCRIPTION>FORM 6-K
<TEXT>
<html>

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

<body>

<div style="font-family: 'Times New Roman',Times,serif">
  <div style="border-top: 1px solid; padding-top: 1px">
    <hr color="#000000" SIZE="5">
  </div>
  <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: February&nbsp;2007&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>
    Montr&#233;al, 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">&nbsp;</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" borderColor="#111111" cellSpacing="0" cellPadding="0" width="100%" border="0">
    <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: February 7, 2007&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">&nbsp;</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" borderColor="#111111" cellSpacing="0" cellPadding="0" width="100%" border="0" height="46">
      <!-- Begin Table Head -->
      <tr vAlign="bottom">
        <td width="5%" height="15"></td>
        <td width="2%" height="15"></td>
        <td width="93%" height="15"></td>
      </tr>
      <tr style="font-size: 8pt" vAlign="bottom">
        <td style="border-bottom: 1px solid #000000" noWrap align="left" height="16"><b>
        <font size="2">Exhibit</font></b></td>
        <td height="16"><font size="2">&nbsp;</font></td>
        <td style="border-bottom: 1px solid #000000" noWrap align="middle" height="16"><b>
        <font size="2">Description of Exhibit</font></b></td>
      </tr>
      <!-- End Table Head -->
      <!-- Begin Table Body -->
      <tr vAlign="bottom">
        <td vAlign="center" height="15">
        <div style="text-indent: 0px; margin-left: 0px">
          <a href="exh991.htm" style="text-decoration: none">99.1 </a>
        </div>
        </td>
        <td height="15"></td>
        <td vAlign="center" height="15">
        <a href="exh991.htm" style="text-decoration: none">Q1 2007: Quarterly Report to Shareholders</a></td>
      </tr>
      <!-- End Table Body -->
    </table>
  </div>
</div>
<hr color="#000000" SIZE="5">

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>exh991.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
<html>

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

<body>

<div style="border-top-style: solid; border-top-width: 1; padding-top: 1">
  <hr color="#000000" size="5"></div>
<p align="center">
  <img border="0" src="gildan1.gif" width="570" height="390"></p>
<div align="right">
  <table CELLSPACING="0" BORDER="0" WIDTH="60%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
      <tr>
            <td WIDTH="79%">
                  <font FACE="Times New Roman" SIZE="2">CONTENTS</font></td>
            <td WIDTH="21%" align="right">
&nbsp;</td>
      </tr>
      <tr>
            <td WIDTH="79%">
&nbsp;</td>
            <td WIDTH="21%" align="right">
&nbsp;</td>
      </tr>
      <tr>
            <td WIDTH="79%">
                  <font FACE="Times New Roman" SIZE="2">Message from the President and CEO</font></td>
            <td WIDTH="21%" align="right">
                  <font FACE="Times New Roman" SIZE="2">2</font></td>
      </tr>
      <tr>
            <td WIDTH="79%">
                  <font FACE="Times New Roman" SIZE="2">MD&amp;A</font></td>
            <td WIDTH="21%" align="right">
&nbsp;</td>
      </tr>
      <tr>
            <td WIDTH="79%">
                  <font FACE="Times New Roman" SIZE="2">Our Business</font></td>
            <td WIDTH="21%" align="right">
                  <font FACE="Times New Roman" SIZE="2">4</font></td>
      </tr>
      <tr>
            <td WIDTH="79%">
                  <font FACE="Times New Roman" SIZE="2">Strategy and Financial Objectives</font></td>
            <td WIDTH="21%" align="right">
                  <font FACE="Times New Roman" SIZE="2">6</font></td>
      </tr>
      <tr>
            <td WIDTH="79%">
                  <font FACE="Times New Roman" SIZE="2">Operating Results</font></td>
            <td WIDTH="21%" align="right">
                  <font FACE="Times New Roman" SIZE="2">7</font></td>
      </tr>
      <tr>
            <td WIDTH="79%">
                  <font FACE="Times New Roman" SIZE="2">Financial Condition</font></td>
            <td WIDTH="21%" align="right">
                  <font FACE="Times New Roman" SIZE="2">10</font></td>
      </tr>
      <tr>
            <td WIDTH="79%">
                  <font FACE="Times New Roman" SIZE="2">Liquidity and Capital Resources</font></td>
            <td WIDTH="21%" align="right">
                  <font FACE="Times New Roman" SIZE="2">11</font></td>
      </tr>
      <tr>
            <td WIDTH="79%">
                  <font FACE="Times New Roman" SIZE="2">Critical Accounting estimates</font></td>
            <td WIDTH="21%" align="right">
                  <font FACE="Times New Roman" SIZE="2">13</font></td>
      </tr>
      <tr>
            <td WIDTH="79%">
                  <font FACE="Times New Roman" SIZE="2">Changes in Accounting Policies</font></td>
            <td WIDTH="21%" align="right">
                  <font FACE="Times New Roman" SIZE="2">14</font></td>
      </tr>
      <tr>
            <td WIDTH="79%">
                  <font FACE="Times New Roman" SIZE="2">Reconciliation and Definition of Non-GAAP Measures</font></td>
            <td WIDTH="21%" align="right">
                  <font FACE="Times New Roman" SIZE="2">15</font></td>
      </tr>
      <tr>
            <td WIDTH="79%">
                  <font FACE="Times New Roman" SIZE="2">Risks and Uncertainties</font></td>
            <td WIDTH="21%" align="right">
                  <font FACE="Times New Roman" SIZE="2">17</font></td>
      </tr>
      <tr>
            <td WIDTH="79%">
                  <font FACE="Times New Roman" SIZE="2">Forward-Looking Statements</font></td>
            <td WIDTH="21%" align="right">
                  <font FACE="Times New Roman" SIZE="2">17</font></td>
      </tr>
      <tr>
            <td WIDTH="79%">
                  <font FACE="Times New Roman" SIZE="2">Interim Consolidated Financial Statements</font></td>
            <td WIDTH="21%" align="right">
                  <font FACE="Times New Roman" SIZE="2">19</font></td>
      </tr>
      <tr>
            <td WIDTH="79%">
                  <font FACE="Times New Roman" SIZE="2">Notes to Interim Consolidated Financial Statements</font></td>
            <td WIDTH="21%" align="right">
                  <font FACE="Times New Roman" SIZE="2">22</font></td>
      </tr>
      <tr>
            <td WIDTH="79%">
&nbsp;</td>
            <td WIDTH="21%" align="right">
&nbsp;</td>
      </tr>
  </table>
</div>
<hr color="#000000" size="5"><p Style='page-break-before:always'><table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
    <tr>
          <td colspan="2" width="1242">
    <font FACE="Times New Roman" SIZE="2"><b>
    <img border="0" src="gildan1.jpg" width="84" height="19"></b></font></td>
    </tr>
    <tr>
          <td width="621">
&nbsp;</td>
          <td width="621">
                <p align="right">
                  <font FACE="Times New Roman PS" SIZE="2"><i>MESSAGE FROM THE PRESIDENT AND CEO</i></font></td>
    </tr>
</table>
<font SIZE="2" face="Times New Roman"><p>
&nbsp;</p>
<p>
  I am pleased to report our results for the three months ended December 31, 2006. </p>
<p ALIGN="JUSTIFY">
  We reported first quarter net earnings of U.S. $15.6 million and diluted EPS of U.S. $0.26, after recording charges in the quarter related to the previously announced restructuring of the Company's Canadian manufacturing facilities totalling U.S. $1.4 million after-tax or U.S. $0.02 per share. Before reflecting the restructuring charges, adjusted net earnings and adjusted diluted EPS for the first quarter of fiscal 2007 amounted to
  U.S. $17.0 million or U.S. $0.28 per share, up respectively 4.9% and 3.7% from net earnings of U.S. $16.2 million and diluted EPS of U.S. $0.27 in the first quarter of fiscal 2006, and U.S. $0.01 per share higher than the earnings guidance provided by the Company. Compared to last year, continuing strong growth in unit sales volumes, a higher-valued product-mix for activewear and favourable manufacturing efficiencies were essentially
  offset by lower unit selling prices for activewear, higher cotton costs and increased selling, general and administrative and depreciation expenses. The impact of the Kentucky Derby Hosiery acquisition on the Company's results in the first quarter was accretive by U.S. $0.01 per share. </p>
<p ALIGN="JUSTIFY">
  Sales in the first quarter amounted to U.S. $185.8 million, up 54.4% from U.S. $120.3 million in the first quarter of last year. The increase in sales revenues was due to U.S. $42.6 million of sock sales resulting from the acquisition of Kentucky Derby Hosiery, a 15.2% increase in unit sales volumes for activewear and the impact of a higher-valued activewear product-mix, partially offset by a reduction in unit selling prices for
  activewear of approximately 4% compared to last year. The first quarter is seasonally the lowest quarter of the fiscal year for sales of activewear. </p>
<p ALIGN="JUSTIFY">
  Our growth in activewear unit sales was primarily due to continuing market share penetration in all product categories in the U.S. distributor channel. We increased our leading share in the T-shirt category to 46.0% from 41.7% a year ago, and we increased our share in the fleece category to 36.0%, compared to 27.7% a year ago. </p>
<p ALIGN="JUSTIFY">
  Gross margins in the first quarter of fiscal 2007 were 29.0%, versus 35.7% in the first quarter of 2006. The decrease in gross margins was largely 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 sock sales, gross margins in the first quarter of fiscal 2007
  were 33.1%. The decrease in gross margins for activewear compared to last year was due to lower selling prices and higher cotton costs compared to the low point in cotton prices in the first quarter of last year, partially offset by higher-valued product-mix and favourable manufacturing efficiencies. </p>
<p ALIGN="JUSTIFY">
  Selling, general and administrative expenses in the first quarter were U.S. $26.1 million, or 14.1% of sales, compared to U.S. $18.1 million, or 15.0% of sales, in the first 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 distribution costs, and a U.S. $1.1 million charge for the replacement of the aircraft leased by the
  Company, partially offset by the non-recurrence of a U.S. $0.6 million severance charge incurred in the first quarter of fiscal 2006. The increase <font FACE="Times New Roman PSMT" SIZE="2">of U.S. $1.3 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. </font></p>
</font><i><font FACE="Times New Roman" SIZE="2"><p align="right">
  GILDAN QUARTERLY REPORT &#150; Q1 2007 p.2</font></i></p>
<hr color="#000000" size="5"><p Style='page-break-before:always'><table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
    <tr>
          <td colspan="2" width="1242">
    <font FACE="Times New Roman" SIZE="2"><b>
    <img border="0" src="gildan1.jpg" width="84" height="19"></b></font></td>
    </tr>
    <tr>
          <td width="621">
&nbsp;</td>
          <td width="621">
                <p align="right">
                  <font FACE="Times New Roman PS" SIZE="2"><i>MESSAGE FROM THE PRESIDENT AND CEO</i></font></td>
    </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2"><p ALIGN="JUSTIFY">
&nbsp;</p>
<p ALIGN="JUSTIFY">
  During the first quarter of fiscal 2007, the Company generated free cash flow of U.S $8.6 million. Cash flow from operating activities amounted to U.S. $39.5 million, including a U.S. $67.4 million reduction in accounts receivables due to the low seasonal level of sales in the first quarter and a reduction in days sales outstanding. The Company used U.S. $32.9 million in the first quarter for seasonal rebuilding of inventories, in
  line with its requirements to support its projected sales. U.S. $30.3 million was used for capital investments in the Company's major textile and sock manufacturing capacity expansion projects in Honduras and the Dominican Republic, as well as for its new U.S. retail distribution centre and the expansion of its sewing capacity. The Company ended the first quarter with cash and cash equivalents of U.S. $36.3 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 align="justify">
  I would like to thank you, our shareholders, for your continued confidence and support. </p>
<p align="justify">
<img border="0" src="sig2.gif" width="192" height="40"></p>
<p align="justify">
  Glenn J. Chamandy <br>
  President and Chief Executive Officer </p>
</font><p>
&nbsp;</p>
<p>
&nbsp;</p>
<i><font FACE="Times New Roman" SIZE="2"><p align="right">
  GILDAN QUARTERLY REPORT &#150; Q1 2007 p.3</font></i></p>
<hr color="#000000" size="5"><p Style='page-break-before:always'><table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
    <tr>
          <td colspan="2" width="1242">
    <font FACE="Times New Roman" SIZE="2"><b>
    <img border="0" src="gildan1.jpg" width="84" height="19"></b></font></td>
    </tr>
    <tr>
          <td width="621">
&nbsp;</td>
          <td width="621">
                <font FACE="Times New Roman PS" SIZE="2"><i><p align="right">
                  MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
    </tr>
</table>
<i><font FACE="Times New Roman" SIZE="2"><p align="justify">
&nbsp;</p>
<div style="border-style: solid; border-width: 1; padding-left: 4; padding-right: 4; padding-top: 1; padding-bottom: 1">
  <p align="justify" style="margin-left: 10; margin-right: 10">
    This Management's discussion and analysis (MD&amp;A) comments on Gildan's operations, performance and financial condition as at and for the three months ended December 31, 2006 compared to the corresponding periods in the previous year. For a complete understanding of our business environment, trends, risks and uncertainties and the effect of accounting estimates on our results of operations and financial condition, this MD&amp;A should be
    read together with the unaudited interim consolidated financial statements as at and for the three months ended December 31, 2006 and the related notes, and with our MD&amp;A for the year ended October 1, 2006 (2006 MD&amp;A), which is part of the fiscal 2006 Annual Report. This MD&amp;A is dated January 31, 2007. All amounts in this report are in U.S. dollars, unless otherwise noted. </p>
  <p align="justify" style="margin-left: 10; margin-right: 10">
    All financial information contained in this interim MD&amp;A and in the interim consolidated financial statements has been prepared in accordance with Canadian generally accepted accounting principles (GAAP), except for certain information discussed in the paragraph entitled &quot;Non-GAAP Financial Measures&quot; on page 7 of this MD&amp;A. The unaudited consolidated financial statements and this MD&amp;A were reviewed by Gildan's Audit and Finance
    Committee and were approved by our Board of Directors. </p>
  <p align="justify" style="margin-left: 10; margin-right: 10">
    Additional information about Gildan, including our 2006 Annual Information Form, is available on our website at <u><font color="#0000FF">www.gildan.com</font></u>, on the SEDAR website at <u><font color="#0000FF">www.sedar.com</font></u> and on the EDGAR section of the U.S. Securities and Exchange Commission website (including the Annual Report on Form 40-F) at <font color="#0000FF"><u>www.sec.gov</u></font>. </p>
  <p align="justify" style="margin-left: 10; margin-right: 10">
    This document contains forward-looking statements, which are qualified by reference to, and should be read together with the &quot;Forward-looking Statements&quot; cautionary notice on page 17. </p>
  <p align="justify" style="margin-left: 10; margin-right: 10">
    In this MD&amp;A, &quot;Gildan&quot;, the &quot;Company&quot;, or the words &quot;we&quot;, &quot;us&quot;, &quot;our&quot; refer, depending on the context, either to Gildan Activewear Inc. or to Gildan Activewear Inc. together with its subsidiaries and joint venture.<br>
&nbsp;</div>
</font></i><font FACE="Times New Roman"><div style="border-bottom-style: solid; border-bottom-width: 1; padding-bottom: 1">
  <p align="justify">
    <font color="#000080">Our Business </font></div>
</font><font FACE="Times New Roman" SIZE="2"><p align="justify">
  Gildan is a vertically-integrated marketer and manufacturer of activewear, underwear and socks. The Company operates in one business segment, being high-volume, basic, frequently replenished, non-fashion apparel. We are the leading supplier of activewear for the wholesale imprinted sportswear market in the U.S. and Canada, and also a leading supplier for this market in Europe. In 2005, as part of our growth strategy, we began to
  implement a major new initiative to sell our products into the mass-market retail channel in North America. In conjunction with these plans, in fiscal 2006, we expanded our product-line to include underwear and athletic socks. </p>
<p align="justify">
  Effective July 6, 2006, Gildan completed the acquisition of Kentucky Derby Hosiery Co., Inc. (Kentucky Derby), a U.S. hosiery manufacturer with corporate headquarters in Hopkinsville, Kentucky. Gildan is using Kentucky Derby's experience and distribution with mass-market retailers to enhance its platform to develop Gildan as a consumer brand in basic athletic socks, underwear and activewear, while continuing to focus on serving the
  needs of our customers in the wholesale distribution channel and continuing to support Kentucky Derby's private label programs and brand licenses. </p>
<b><p align="justify">
  Our Products </p>
</b><p align="justify">
  We specialize in large-scale marketing and manufacturing of basic, non-fashion apparel products for customers requiring an efficient supply chain and consistent product quality for high- volume, automatic replenishment programs. Our product offering focuses on core basic activewear styles sold in various fabrics, weights and colours. In fiscal 2006, we also introduced a variety of styles of men's and boys' underwear and athletic socks
  into our product-line. Typically, our product offering is characterized by low fashion risk, since products are basic and produced in a limited range of sizes, colours and styles. Our products for the wholesale channel for screenprinters are produced and sold without logos and designs. </p>
</font><i><font FACE="Times New Roman" SIZE="2"><p align="right">
  GILDAN QUARTERLY REPORT &#150; Q1 2007 p.4</font></i></p>
<hr color="#000000" size="5"><p Style='page-break-before:always'><table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
    <tr>
          <td colspan="2" width="1242">
    <font FACE="Times New Roman" SIZE="2"><b>
    <img border="0" src="gildan1.jpg" width="84" height="19"></b></font></td>
    </tr>
    <tr>
          <td width="621">
&nbsp;</td>
          <td width="621">
                <font FACE="Times New Roman PS" SIZE="2"><i><p align="right">
                  MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
    </tr>
</table>
<font FACE="Arial MT" SIZE="2"><p ALIGN="JUSTIFY">
&nbsp;</p>
</font><font SIZE="2" face="Times New Roman"><p align="justify">
  We sell activewear, namely T-shirts, sport shirts and fleece, 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. </p>
<p align="justify">
  In the retail channel, we sell a variety of styles of men's and boys' underwear and athletic socks complemented by our activewear product-line. </p>
<b><p align="justify">
  Our Manufacturing and Distribution Facilities </p>
</b><p align="justify">
  To support our sales in the various markets, we have built and are continuing to build modern manufacturing facilities located in Central America and the Caribbean Basin. We also operate manufacturing facilities in North America. Our largest manufacturing hub in Central America includes our first offshore integrated knitting, bleaching, dyeing, finishing and cutting facility in Rio Nance, Honduras, which became operational in 2002. In
  addition, during 2006, we completed the construction of an integrated world-scale sock manufacturing facility and began the construction of a world-scale manufacturing textile facility for the production of fleece. We commenced production at our sock facility in the first quarter of fiscal 2007 and expect to ramp up our sock facility to full capacity during fiscal 2008. We expect to begin production at our fleece facility in the
  second half of fiscal 2007. </p>
<p align="justify">
  We also have established a Caribbean Basin manufacturing hub with a facility in Bella Vista, Dominican Republic, which began production in fiscal 2005 and is currently running at a comparable scale of production to our mature textile facility in Honduras. We will continue to maximize production levels and cost efficiencies at the Dominican Republic facility during fiscal 2007. </p>
<p align="justify">
  Our sewing facilities are primarily located in Central America, Mexico and the Caribbean Basin. We also utilize third-party contractors to complement our vertically-integrated production. </p>
<p align="justify">
  CanAm Yarns, LLC (CanAm), our joint-venture company with Frontier Spinning Mills, Inc. (Frontier), operates yarn-spinning facilities in Georgia and North Carolina. CanAm's yarn-spinning operations, together with supply agreements currently in place with Frontier and other third-party yarn providers, serve to meet our yarn requirements. </p>
<p align="justify">
  We distribute our products in the U.S. primarily out of our company-owned distribution centre in Eden, North Carolina, and use third-party warehouses in Canada, Mexico, Europe and Australia to service our customers in these markets. </p>
<p align="justify">
  In addition, we are at an advanced stage of implementing plans for a new retail distribution centre in Martinsville, Virginia and relocating and consolidating Kentucky Derby's existing distribution centres, at multiple sites in Virginia and North Carolina, to this single location. This new distribution centre will be fully dedicated to supporting our retail distribution plans. The installation of equipment in this facility, together
  with the associated warehouse management system, is expected to be completed during the second quarter of fiscal 2007. Our existing distribution centre in Eden, North Carolina will remain fully dedicated to providing the capacity required for Gildan's anticipated further growth in the wholesale distribution channel. </p>
<p align="justify">
  Our corporate head office is located in Montreal, Canada and we employ over 15,000 full-time employees worldwide. </p>
<b><p align="justify">
  Market Overview </p>
</b><p align="justify">
  Our target market for activewear, underwear and socks is characterized by low fashion risk compared to many other apparel markets, since products are basic and produced in a limited range of sizes, colours and styles, and since logos and designs for the screenprint market are not imprinted or embroidered by manufacturers. </p>
</font><i><font FACE="Times New Roman" SIZE="2"><p align="right">
  GILDAN QUARTERLY REPORT &#150; Q1 2007 p.5</font></i></p>
<hr color="#000000" size="5"><p Style='page-break-before:always'><table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
    <tr>
          <td colspan="2" width="1242">
    <font FACE="Times New Roman" SIZE="2"><b>
    <img border="0" src="gildan1.jpg" width="84" height="19"></b></font></td>
    </tr>
    <tr>
          <td width="621">
&nbsp;</td>
          <td width="621">
                <font FACE="Times New Roman PS" SIZE="2"><i><p align="right">
                  MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
    </tr>
</table>
<font FACE="Arial MT" SIZE="2"><p align="justify">
  The apparel market for our products is highly competitive. Competition is generally based upon price, with reliable quality and service also being key requirements for success. Our primary competitors in North America are the major U.S.-based manufacturers of basic branded activewear for the wholesale and retail channels, such as Fruit of the Loom, Inc., Hanesbrands Inc., the Jerzees division of Russell Corporation, which was acquired
  by Berkshire Hathaway Inc., which owns Fruit of the Loom, Inc., Delta Apparel, Inc., and Anvil Knitwear, Inc. The competition in the European wholesale imprinted activewear market is similar to that in North America, as we compete primarily with the European divisions of the larger U.S.-based manufacturers. In Europe, we also have large competitors that do not have integrated manufacturing operations and source products from
  contractors in Asia. </p>
<p align="justify">
  Due to wholesaler and retailer consolidation, the customer base to which we sell and are targeting to sell our products is composed of a relatively small number of significant customers. </p>
<p align="justify">
  While the majority of our sales is currently derived from the sale of activewear through the wholesale distribution channel, in 2006 we continued to expand our entry into the retail channel, concentrating on regional retailers that we can service well with the production capacity that we have available. As we ramp up our major capacity expansion projects in the Caribbean Basin and Central America, we expect to increasingly be in a
  position to service major mass-market retailers. We believe that providing a superior value proposition predicated on reliable product quality and comfort, combined with efficient customer service and competitive pricing, the same factors that contribute to our success in the wholesale channel, will allow us to be successful in penetrating the retail channel. </p>
<p align="justify">
  We believe that growth for our activewear products has been driven by several market trends such as the following:</p>
<ul>
  <li><p align="justify">
    continued use of activewear for event merchandising (such as concerts, festivals, etc.);</li>
  <li><p align="justify">
    continued evolution of the entertainment/sports licensing and merchandising businesses;</li>
  <li><p align="justify">
    the growing use of activewear for uniform applications;</li>
  <li><p align="justify">
    the growing use of activewear for corporate promotions;</li>
  <li><p align="justify">
    continued increase in use of activewear products for travel and tourism;</li>
  <li><p align="justify">
    an increased emphasis on physical fitness; and</li>
  <li><p align="justify">
    a greater use and acceptance of casual dress in the workplace.</li>
</ul>
<p align="justify">
  In addition, reductions in manufacturing costs, combined with quality enhancements in activewear apparel, such as pre-shrunk fabrics, improved fabric weight, blends and construction have provided consumers with superior products at lower prices. </p>
</font><font FACE="Arial MT"><div style="border-bottom-style: solid; border-bottom-width: 1; padding-bottom: 1">
  <p align="justify">
    <font color="#000080">Strategy and Financial Objectives</font> </div>
</font><font FACE="Arial MT" SIZE="2"><p align="justify">
  We believe that our success in developing our vertically-integrated manufacturing hubs has allowed us to deliver superior value to our customers with low prices, consistent product quality and a reliable supply chain, and has been the main reason that we have been able to rapidly increase our market presence and establish our market leadership in the imprinted sportswear market. These are the same factors that management believes will
  allow Gildan to be successful in building a consumer brand in the retail channel. </p>
<p align="justify">
  We are able to price our products competitively because of our success in reducing operating costs. We accomplish this by:</p>
<ul>
  <li><p align="justify">
    investing in modern, automated equipment and facilities;</li>
  <li><p align="justify">
    increasing our capacity through the development of integrated regional hubs in Central America and the Caribbean Basin, where we benefit from strategic locations and favourable international trade agreements; and</li>
</ul>
<i><font FACE="Times New Roman" SIZE="2"><p align="right">
  GILDAN QUARTERLY REPORT &#150; Q1 2007 p.</font></i></font><font SIZE="2" face="Times New Roman"><i>6</i></p>
</font><font FACE="Arial MT" SIZE="2"><hr color="#000000" size="5"><p Style='page-break-before:always'><table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
    <tr>
          <td colspan="2" width="1242">
    <font FACE="Times New Roman" SIZE="2"><b>
    <img border="0" src="gildan1.jpg" width="84" height="19"></b></font></td>
    </tr>
    <tr>
          <td width="621">
&nbsp;</td>
          <td width="621">
                <font FACE="Times New Roman PS" SIZE="2"><i><p align="right">
                  MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
    </tr>
</table>
</font><font SIZE="2" face="Times New Roman">
<ul>
  <li><p align="justify">
    focusing on producing a narrow range of basic, high-volume product-lines, which allows us to maximize production efficiencies.</li>
</ul>
<p ALIGN="JUSTIFY">
  We are implementing a five-year plan with the objectives of approximately tripling our unit sales volumes and continuing to achieve significant manufacturing efficiencies. Our growth strategy comprises the following four initiatives: </p>
<p align="justify" style="text-indent: -26; margin-left: 52">
  1.&nbsp;&nbsp;&nbsp;&nbsp; Continue to increase market share in the U.S. wholesale imprinted sportswear market in all product categories; </p>
<p align="justify" style="text-indent: -26; margin-left: 52">
  2.&nbsp;&nbsp;&nbsp;&nbsp; Leverage our successful business model to enter the mass-market retail channel and develop Gildan as a consumer brand; </p>
<p align="justify" style="text-indent: -26; margin-left: 52">
  3.&nbsp;&nbsp;&nbsp;&nbsp; Increase penetration in Europe and other international markets; and </p>
<p align="justify" style="text-indent: -26; margin-left: 52">
  4.&nbsp;&nbsp;&nbsp;&nbsp; Support unit sales growth and maintain pricing competitiveness through continued significant investments in low-cost production capacity </p>
<p ALIGN="JUSTIFY">
  We are subject to a variety of business risks that may affect our ability to maintain our current market share and profitability, as well as our ability to achieve our long-term strategic objectives. These risks are described in the &quot;Risks and Uncertainties&quot; section of our 2006 MD&amp;A. As well, the nature of the Company's growth strategy involves risks related to certain assumptions underlying unit sales growth, production capacity
  growth and cost reductions, among others. Notably, our planned growth in market share depends to a significant extent on the successful start-up and ramp-up of new offshore facilities. There can be no assurances that we will achieve our planned market share growth, retail market penetration or capacity increases. </p>
</font><font FACE="Times New Roman"><div style="border-bottom-style: solid; border-bottom-width: 1; padding-bottom: 1">
  <p align="justify">
    <font color="#000080">Operating Results</font> </div>
</font><font FACE="Arial MT" SIZE="2"><font FACE="Times New Roman" SIZE="2"><b><p align="justify">
  Non-GAAP Financial Measures </p>
</b><p ALIGN="JUSTIFY">
  We use non-GAAP measures to assess our operating performance. Securities regulations require that companies caution readers that earnings and other measures adjusted to a basis other than GAAP do not have standardized meanings and are unlikely to be comparable to similar measures used by other companies. Accordingly, they should not be considered in isolation. We use non-GAAP measures such as adjusted net earnings, adjusted diluted
  EPS, EBITDA, free cash flow, total indebtedness and net indebtedness to measure our performance from one period to the next without the variation caused by certain adjustments that could potentially distort the analysis of trends in our operating performance, and because we believe such measures provide meaningful information on the Company's financial condition and operating results. </p>
<p ALIGN="JUSTIFY">
  We refer the reader to page 15 for the definition and complete reconciliation of all non-GAAP financial measures used and presented by the Company to the most directly comparable GAAP financial measures. </p>
<b><p align="justify">
  Summary of Quarterly Results </p>
</b><p ALIGN="JUSTIFY">
  The following table sets forth certain summarized unaudited quarterly financial data for the eight most recently completed quarters. This quarterly information is unaudited but has been prepared on the same basis as the annual audited Consolidated Financial Statements. The operating results for any quarter are not necessarily indicative of the results to be expected for any period. </p>
</font><i><font FACE="Times New Roman" SIZE="2"><p align="right">
  GILDAN QUARTERLY REPORT &#150; Q1 2007 p.</font></i></font><font SIZE="2" face="Times New Roman"><i>7</i></p>
</font><font FACE="Arial MT" SIZE="2"><hr color="#000000" size="5"><p Style='page-break-before:always'><table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
    <tr>
          <td colspan="2" width="1242">
    <font FACE="Times New Roman" SIZE="2"><b>
    <img border="0" src="gildan1.jpg" width="84" height="19"></b></font></td>
    </tr>
    <tr>
          <td width="621">
&nbsp;</td>
          <td width="621">
                <font FACE="Times New Roman PS" SIZE="2"><i><p align="right">
                  MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
    </tr>
    <tr>
          <td width="621">
&nbsp;</td>
          <td width="621">
&nbsp;</td>
    </tr>
</table>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
    <tr>
          <td WIDTH="522">
&nbsp;</td>
          <td WIDTH="90" align="right" style="border-right-style: solid; border-right-width: 2">
                <font size="2"><b><p style="margin-right: 10">
                  2007</b></font></td>
          <td WIDTH="90" align="right">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right" style="border-right-style: solid; border-right-width: 2">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  2006</font></td>
          <td WIDTH="90" align="right">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right" style="border-right-style: solid; border-right-width: 2">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  2005</font></td>
    </tr>
    <tr>
          <td WIDTH="522" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
                <font size="2"><i>(in $ millions, except per share amounts)</i></font></td>
          <td WIDTH="90" align="right" style="border-right-style: solid; border-right-width: 2; border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
                <font size="2"><b><p style="margin-right: 10">
                  Q1</b></font></td>
          <td WIDTH="90" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  Q4</font></td>
          <td WIDTH="90" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  Q3</font></td>
          <td WIDTH="90" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  Q2</font></td>
          <td WIDTH="90" align="right" style="border-right-style: solid; border-right-width: 2; border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  Q1</font></td>
          <td WIDTH="90" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  Q4</font></td>
          <td WIDTH="90" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  Q3</font></td>
          <td WIDTH="90" align="right" style="border-right-style: solid; border-right-width: 2; border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  Q2</font></td>
    </tr>
    <tr>
          <td WIDTH="522" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2">Sales</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font size="2"><b><p style="margin-right: 10">
                  185.8</b></font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  235.2</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  233.9</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  183.8</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  120.3</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  180.7</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  198.9</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  165.3</font></td>
    </tr>
    <tr>
          <td WIDTH="522">
                <font FACE="Arial MT" size="2">Net earnings</font></td>
          <td WIDTH="90" align="right">
                <font size="2"><b><p style="margin-right: 10">
                  15.6</b></font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  16.8</font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  42.8</font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  31.0</font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  16.2</font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  29.2</font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  34.1</font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  14.3</font></td>
    </tr>
    <tr>
          <td WIDTH="522" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2">Net earnings per share</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <p style="margin-right: 10">
&nbsp;</td>
    </tr>
    <tr>
          <td WIDTH="522">
                <font FACE="Arial MT" size="2"><p style="margin-left: 26">
                  Basic EPS</font></td>
          <td WIDTH="90" align="right">
                <font size="2"><b><p style="margin-right: 10">
                  0.26</b></font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  0.28</font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  0.71</font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  0.52</font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  0.27</font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  0.49</font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  0.57</font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  0.24</font></td>
    </tr>
    <tr>
          <td WIDTH="522" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-left: 26">
                  Diluted EPS</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font size="2"><b><p style="margin-right: 10">
                  0.26</b></font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  0.28</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  0.71</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  0.51</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  0.27</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  0.48</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  0.57</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  0.24</font></td>
    </tr>
    <tr>
          <td WIDTH="522">
                <font FACE="Arial MT" size="2">Total assets</font></td>
          <td WIDTH="90" align="right">
                <font size="2"><b><p style="margin-right: 10">
                  715.8</b></font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  723.3</font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  673.1</font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  643.8</font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  609.6</font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  597.5</font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  551.6</font></td>
          <td WIDTH="90" align="right">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  525.4</font></td>
    </tr>
    <tr>
          <td WIDTH="522" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2">Total long-term financial liabilities<sup>1</sup></font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font size="2"><b><p style="margin-right: 10">
                  44.2</b></font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  47.1</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  46.4</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  64.8</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  65.4</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  64.1</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  58.1</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  72.8</font></td>
    </tr>
    <tr>
          <td WIDTH="522">
                <font FACE="Arial MT" size="2">Average number of shares outstanding </font><font size="2"><i>(in thousands)</i></font></td>
          <td WIDTH="90" align="right">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right">
                <p style="margin-right: 10">
&nbsp;</td>
          <td WIDTH="90" align="right">
                <p style="margin-right: 10">
&nbsp;</td>
    </tr>
    <tr>
          <td WIDTH="522" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-left: 26">
                  Basic</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font size="2"><b><p style="margin-right: 10">
                  60,139</b></font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  60,105</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  60,077</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  60,054</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  59,970</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  59,924</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  59,816</font></td>
          <td WIDTH="90" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  59,617</font></td>
    </tr>
    <tr>
          <td WIDTH="522" style="border-bottom-style: solid; border-bottom-width: 2">
                <font FACE="Arial MT" size="2"><p style="margin-left: 26">
                  Diluted</font></td>
          <td WIDTH="90" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
                <font size="2"><b><p style="margin-right: 10">
                  60,724</b></font></td>
          <td WIDTH="90" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  60,670</font></td>
          <td WIDTH="90" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  60,627</font></td>
          <td WIDTH="90" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  60,647</font></td>
          <td WIDTH="90" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  60,559</font></td>
          <td WIDTH="90" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  60,414</font></td>
          <td WIDTH="90" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  60,270</font></td>
          <td WIDTH="90" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
                <font FACE="Arial MT" size="2"><p style="margin-right: 10">
                  60,086</font></td>
    </tr>
    <tr>
          <td WIDTH="1242" COLSPAN="9">
                <font size="2"><i><sup>1 </sup>Represents sum of long-term debt, future income taxes and non-controlling interest</i></font></td>
    </tr>
</table>
</font><font SIZE="2" face="Times New Roman"><p align="justify">
  The activewear business is seasonal and we have historically experienced quarterly fluctuations in operating results. Typically, demand for our T-shirts is highest in the third quarter of each fiscal year, when distributors purchase inventory for the peak summer selling season, and lowest in the first quarter of each fiscal year. The seasonality of specific product-lines is consistent with that experienced by other companies in the
  activewear industry. For our sock products, demand is typically highest in the first and fourth quarters of each fiscal year, stimulated largely by the need to support requirements for the back-to-school period and peak retail selling during the Christmas holiday season. Management anticipates that the seasonality we have historically experienced will continue in the future, although it is expected to be somewhat mitigated by our
  product diversification. As a result of the historical seasonal sales trends, we produce and store finished goods inventory in the first half of the fiscal year in order to meet the expected demand for delivery in the second half of the fiscal year. Net earnings in the fourth quarter of fiscal 2006 and the second quarter of fiscal 2005 were impacted by material restructuring and other charges. </p>
</font><font FACE="Arial MT" SIZE="2"><font FACE="Times New Roman" SIZE="2"><b><p align="justify">
  Sales </p>
</b><p align="justify">
  Sales for the three months ended December 31, 2006 amounted to $185.8 million, up 54.4% from $120.3 million in the first quarter of fiscal 2006. The increase in sales was due to $42.6 million of sock sales resulting from the acquisition of Kentucky Derby, which was effective July 6, 2006, a 15.2% increase in unit sales volumes for activewear and the impact of a higher-valued activewear product-mix, partially offset by an approximate
  4% reduction in activewear unit selling prices compared to the same period last year. Excluding the sock product-line, sales were up 19.1%. </p>
<p align="justify">
  Market growth and share data presented for the U.S. wholesale distributor channel is based on the S.T.A.R.S. Report produced by ACNielsen Market Decisions. The table below summarizes the S.T.A.R.S. data for the quarter ended December 31, 2006: </p>
</font><table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
    <tr>
          <td WIDTH="34%">
&nbsp;</td>
          <td WIDTH="47%" COLSPAN="2" align="center">
                <font size="2"><b><p style="margin-left: 40%">
                  Three months ended</b></font></td>
          <td WIDTH="22%" align="right">
                <font size="2"><b>Three months ended</b></font></td>
    </tr>
    <tr>
          <td WIDTH="34%">
&nbsp;</td>
          <td WIDTH="47%" COLSPAN="2" align="center">
                <font size="2"><b><p style="margin-left: 40%">
                  December 31, 2006 vs 2005</b></font></td>
          <td WIDTH="22%" align="right">
                <font size="2"><b>December 31, 2006</b></font></td>
    </tr>
    <tr>
          <td WIDTH="34%" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
&nbsp;</td>
          <td WIDTH="44%" align="center" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2" colspan="2">
                <p style="margin-left: 40%">
                <font size="2"><b>Unit Growth</b></font></td>
          <td WIDTH="22%" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
                <font size="2"><b>Market Share</b></font></td>
    </tr>
    <tr>
          <td WIDTH="34%" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
&nbsp;</td>
          <td WIDTH="22%" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
                <font size="2"><b>Industry</b></font></td>
          <td WIDTH="22%" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
                <font size="2"><b>Gildan</b></font></td>
          <td WIDTH="22%" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
                <font size="2"><b>Gildan</b></font></td>
    </tr>
    <tr>
          <td WIDTH="34%" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2">All Products</font></td>
          <td WIDTH="22%" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2">2.9%</font></td>
          <td WIDTH="22%" align="right" bgcolor="#E6E6E6">
                <font size="2"><b>19.6%</b></font></td>
          <td WIDTH="22%" align="right" bgcolor="#E6E6E6">
                <font size="2"><b>44.2%</b></font></td>
    </tr>
    <tr>
          <td WIDTH="34%">
                <font FACE="Arial MT" size="2">T-shirts</font></td>
          <td WIDTH="22%" align="right">
                <font FACE="Arial MT" size="2">2.7%</font></td>
          <td WIDTH="22%" align="right">
                <font size="2"><b>16.6%</b></font></td>
          <td WIDTH="22%" align="right">
                <font size="2"><b>46.0%</b></font></td>
    </tr>
    <tr>
          <td WIDTH="34%" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2">Sport shirts</font></td>
          <td WIDTH="22%" align="right" bgcolor="#E6E6E6">
                <font FACE="Arial MT" size="2">(9.9%)</font></td>
          <td WIDTH="22%" align="right" bgcolor="#E6E6E6">
                <font size="2"><b>4.2%</b></font></td>
          <td WIDTH="22%" align="right" bgcolor="#E6E6E6">
                <font size="2"><b>34.6%</b></font></td>
    </tr>
    <tr>
          <td WIDTH="34%" style="border-bottom-style: solid; border-bottom-width: 2">
                <font FACE="Arial MT" size="2">Fleece</font></td>
          <td WIDTH="22%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
                <font FACE="Arial MT" size="2">8.7%</font></td>
          <td WIDTH="22%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
                <font size="2"><b>58.1%</b></font></td>
          <td WIDTH="22%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
                <font size="2"><b>36.0%</b></font></td>
    </tr>
</table>
<p align="justify">
  The growth in activewear unit sales was due to continuing market share penetration in all product categories in the U.S. distributor channel, combined with 2.9% growth in overall industry unit shipments. </p>
<i><font FACE="Times New Roman" SIZE="2"><p align="right">
  GILDAN QUARTERLY REPORT &#150; Q1 2007 p.8</font></i></p>
<hr color="#000000" size="5"><p Style='page-break-before:always'><table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
    <tr>
          <td colspan="2" width="1242">
    <font FACE="Times New Roman" SIZE="2"><b>
    <img border="0" src="gildan1.jpg" width="84" height="19"></b></font></td>
    </tr>
    <tr>
          <td width="621">
&nbsp;</td>
          <td width="621">
                <font FACE="Times New Roman PS" SIZE="2"><i><p align="right">
                  MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
    </tr>
</table>
</font><font SIZE="2" face="Times New Roman"><p align="justify">
  In the T-shirt category, we grew unit volumes by 16.6% for the three months ended December 31, 2006, and increased our leading share in this category to 46.0%. We increased our leading brand position in sport shirts with a 34.6% market share, where our volume grew by 4.2%, compared with an overall decline of 9.9% for the industry. In the fleece category, our volume growth of 58.1% significantly exceeded that of the industry,
  increasing our share to 36.0%. </p>
</font><font FACE="Arial MT" SIZE="2"><font FACE="Times New Roman" SIZE="2"><b><p align="justify">
  Gross Profit </p>
</b><p align="justify">
  Gross profit for the first quarter of fiscal 2007 was $53.9 million, or 29.0% of sales, compared to $42.9 million, or 35.7% of sales during the first quarter of fiscal 2006. The gross margin decline in the first quarter of fiscal 2007 was largely 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. We expect to achieve improvement in gross margins for our sock product-line as we implement the ramp-up of our new state-of-the-art sock manufacturing facility in Honduras. Excluding the impact of the sock sales, gross margin in the first quarter of fiscal 2007 was 33.1%. The decrease in gross margin for activewear compared to last year was due to lower selling prices and higher cotton costs compared to the
  low point in cotton prices in the first quarter of last year, partially offset by the higher-valued product-mix and favourable manufacturing efficiencies. </p>
<b><p align="justify">
  Selling, General and Administrative Expenses </p>
</b><p align="justify">
  Selling, general and administrative (SG&amp;A) expenses in the first quarter were $26.1 million, or 14.1% of sales, compared to $18.1 million, or 15.0% of sales, in the first quarter of last year. The increase in SG&amp;A expenses was due to the impact of the acquisition of Kentucky Derby, higher distribution costs, and a $1.1 million charge for the replacement of the aircraft leased by the Company, partially offset by the nonrecurrence of a
  $0.6 million severance charge incurred in the first quarter of fiscal 2006. </p>
<b><p align="justify">
  Restructuring and Other Charges </p>
</b><p align="justify">
  Restructuring and other charges of $1.4 million in the first quarter of fiscal 2007 were composed of $1.1 million of accelerated depreciation related to the change in the estimated economic lives of our Canadian manufacturing assets and $0.3 million of additional severance costs and carrying costs relating to closed facilities following the restructuring of the operations announced in September 2006. </p>
<b><p align="justify">
  Depreciation and Interest Expense </p>
</b><p align="justify">
  Depreciation and amortization expense increased to $8.8 million in the first quarter of fiscal 2007, compared to $7.4 million in the first quarter of fiscal 2006. The increase in depreciation and amortization expense was due to a higher capital asset base resulting from the Company's continuing investments in capacity expansion, combined with the impact of the Kentucky Derby acquisition. </p>
<p align="justify">
  Net interest expense amounted to $1.0 million in the first quarter of fiscal 2007, up from $0.6 million in the same period last year. The increase in net interest expense reflected lower investment income resulting from lower average cash balances during the quarter, mainly due to the acquisition of Kentucky Derby, which more than offset the decrease in interest expense due to the reduction in overall debt, following the scheduled
  principal repayment made on the Company's Senior Notes. </p>
<b><p align="justify">
  Income Taxes </p>
</b><p align="justify">
  Income tax expense for the first quarter of fiscal 2007 was $1.1 million compared to an income tax expense of $0.7 million in the first quarter of fiscal 2006. The effective income tax rate in the first quarter of fiscal 2007 was 6.5% compared to an effective income tax rate of 4.4% for the same period last year. Excluding the impact of restructuring and other charges, which did not result in a tax recovery for the Company, the
  effective income tax rate for the quarter was 6.0%. The increase in the effective income tax rate was mainly due to our operations in the U.S, following our acquisition of Kentucky Derby in the fourth quarter of fiscal 2006, and higher income from our Canadian operations, both of which are taxed at higher effective income tax rates. </p>
</font><i><font FACE="Times New Roman" SIZE="2"><p align="right">
  GILDAN QUARTERLY REPORT &#150; Q1 2007 p.</font></i></font><font SIZE="2" face="Times New Roman"><i>9</i></p>
</font><font FACE="Arial MT" SIZE="2"><hr color="#000000" size="5"><p Style='page-break-before:always'><table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
    <tr>
          <td colspan="2" width="1242">
    <font FACE="Times New Roman" SIZE="2"><b>
    <img border="0" src="gildan1.jpg" width="84" height="19"></b></font></td>
    </tr>
    <tr>
          <td width="621">
&nbsp;</td>
          <td width="621">
                <font FACE="Times New Roman PS" SIZE="2"><i><p align="right">
                  MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
    </tr>
</table>
<font FACE="Times New Roman" SIZE="2"><b><p>
  Net Earnings </p>
</b></font></font><font SIZE="2" face="Times New Roman"><p ALIGN="JUSTIFY">
  Net earnings for the quarter were $15.6 million, or $0.26 per share on a diluted basis (EPS), slightly down from the same period last year. Included in net earnings for the quarter were restructuring and other charges of $1.4 million after-tax, or $0.02 per share, mainly as a result of the accelerated depreciation related to the change in the estimated economic lives of our remaining Canadian textile and related manufacturing assets.
  Adjusted net earnings for the quarter, which represents net earnings before restructuring and other charges amounted to $17.0 million, or $0.28 per share on a diluted basis, up respectively, 4.9% and 3.7%, compared to net earnings of $16.2 million, or $0.27 per share on a diluted basis for the first quarter of fiscal 2006. The increase in adjusted net earnings and adjusted diluted EPS resulted mainly from the continued strong growth
  in unit sales volumes, a higher-valued product-mix for activewear and favourable manufacturing efficiencies, which more than offset lower unit selling prices for activewear, higher cotton costs and increased SG&amp;A and depreciation expenses. The impact of the Kentucky Derby acquisition on our results in the first quarter was accretive by approximately $0.01 per share. </p>
</font><font FACE="Times New Roman"><div style="border-bottom-style: solid; border-bottom-width: 1; padding-bottom: 1">
  <font color="#000080">Financial Condition</font> </div>
</font><font FACE="Arial MT" SIZE="2"><font SIZE="2" face="Times New Roman"><p ALIGN="JUSTIFY">
  Accounts receivable decreased to $98.3 million in the first quarter of fiscal 2007 from $165.9 million at October 1, 2006 and grew by $46.6 million compared to the first quarter of the prior year. The decrease in accounts receivable from the end of fiscal 2006 reflected the low seasonal level of sales and a decline in days sales outstanding. The increase in accounts receivable compared to the first quarter of fiscal 2006 was mainly
  due to the 19.1% increase in activewear sales in the first quarter over the prior year and the inclusion of $22.3 million accounts receivable for Kentucky Derby. </p>
<p ALIGN="JUSTIFY">
  Inventories of $233.5 million were up $32.8 million, or 16.3% from October 1, 2006 and by $54.7 million, or 30.6% compared to the first quarter of fiscal 2006. The increase in inventories from October 1, 2006 reflected the seasonal rebuilding of inventories, in line with our requirements to support our projected sales. The year-over-year inventory increase reflected the inclusion of sock inventory following our acquisition of Kentucky
  Derby, and the 19.1% increase in activewear sales over the prior year. </p>
<p ALIGN="JUSTIFY">
  Property, plant and equipment, which are net of accumulated depreciation and asset impairment losses, amounted to $318.0 million at the end of the first quarter of fiscal 2007, up $15.3 million from October 1, 2006. This increase was primarily due to net capital expenditures of $30.3 million, mainly for the capacity expansion projects in Honduras and the Dominican Republic as well as for our new U.S. retail distribution centre,
  partially offset by depreciation and a reclassification of property, plant and equipment to assets held for sale. During the fourth quarter of fiscal 2006, we announced the closure of sock manufacturing facilities in Mount Airy, North Carolina and Hillsville, Virginia, a textile manufacturing facility in Valleyfield, Quebec and distribution centres in Montreal, Quebec and Mount Airy, North Carolina. As at December 31, 2006 assets held
  for sale of $4.7 million represent land, building and equipment at these locations. During the first quarter of fiscal 2007, we ceased recording depreciation on these assets, which are recorded at the lower of their net book value or fair value less costs to sell. We expect these assets to be sold during the balance of fiscal 2007. As at January 1, 2006 assets held for sale of $5.0 million were related to the closure of two Canadian
  yarn-spinning operations during fiscal 2005. These assets were sold during the third quarter of fiscal 2006. </p>
<p ALIGN="JUSTIFY">
  Total assets were $715.8 million at December 31, 2006, compared to $723.3 million at the end of the previous year and $609.6 million at January 1, 2006. Working capital was $254.7 million at the end of the first quarter of fiscal 2007 compared to $261.0 million at October 1, 2006, and $228.9 million at January 1, 2006. </p>
</font><i><font FACE="Times New Roman" SIZE="2"><p align="right">
  GILDAN QUARTERLY REPORT &#150; Q1 2007 p.10</font></i></p>
</font>

<hr color="#000000" size="5"><p Style='page-break-before:always'><font FACE="Times New Roman" SIZE="2"><b>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%"><font size="2">
    <img border="0" src="gildan1.jpg" width="84" height="19"></font></td>
    <td width="50%"><font SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
  </tr>
</table>
<p>&nbsp;</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font color="#000080">Liquidity and Capital Resources </font></td>
  </tr>
</table>
<p>Cash Flows </p>
</b>
<p ALIGN="JUSTIFY">Cash flows from operating activities in the first quarter of
fiscal 2007 were $39.5 million, compared to $32.1 million for the previous year.
The increase in cash inflow was mainly due to a larger seasonal decrease in
accounts receivable and a lower seasonal increase in inventories compared to the
first quarter of fiscal 2006. </p>
<p ALIGN="JUSTIFY">Cash flows used in investing activities were $30.9 million in
the first quarter of fiscal 2007, compared to $12.5 million in the same period
last year, mainly as a result of higher net capital expenditures in the period.
Net capital expenditures in the first quarter amounted to $30.3 million, up
$17.9 million from the first quarter of fiscal 2006. The increase was mainly due
to higher spending for the new sock manufacturing facility and the textile
facility for the production of fleece in Honduras, combined with investments in
our new U.S. retail distribution centre in Martinsville, Virginia, and in our
sewing facilities, partially offset by year-over-year lower capital spending for
the Dominican Republic textile facility. </p>
<p ALIGN="JUSTIFY">Free cash flow amounted to $8.6 million in the first quarter
of fiscal 2007, down from free cash flow of $19.6 million in the first quarter
of 2006, mainly as a result of higher capital spending compared to last year.</p>
<p ALIGN="JUSTIFY">Cash flows used in financing activities in the first quarter
of fiscal 2007 were $1.3 million and consisted primarily of reductions in the
long-term debt of Kentucky Derby and our joint venture, compared to cash inflows
of $1.0 million in the same period last year, which resulted primarily from
proceeds from the issuance of shares. </p>
<p ALIGN="JUSTIFY">We ended the first quarter of fiscal 2007 with cash and cash
equivalents of $36.3 million compared to $90.3 million at the end of the first
quarter last year and $29.0 million at October 1, 2006. At the end of the first
quarter of fiscal 2007 and fiscal 2006, our revolving bank facility was
unutilized. Bank indebtedness included in our interim consolidated financial
statements at the end of the first quarter of fiscal 2007 is attributable to our
joint venture. Total indebtedness at December 31, 2006 amounted to $35.7 million
compared to $37.3 million at October 1, 2006 and $51.2 million at January 1,
2006. The year-over-year decline in total indebtedness was mainly due to the
third scheduled principal repayment of $17.5 million on our Senior Notes, which
was made on June 10, 2006, partly offset by the assumption of long-term debt
related to the acquisition of Kentucky Derby. </p>
<b>
<p>Liquidity and Capital Resources </p>
</b>
<p ALIGN="JUSTIFY">In recent years, we have funded our operations and capital
requirements with cash generated from operations. A revolving credit facility
has been periodically utilized to finance seasonal peak working capital
requirements. Our primary use of funds on an ongoing basis is related to capital
expenditures for new manufacturing facilities, inventory financing, accounts
receivable funding, and scheduled payments of principal and interest on our
Senior Notes. </p>
<p ALIGN="justify">As a result of the seasonal nature of the apparel business,
working capital requirements are variable throughout the year. Our need for
working capital typically grows throughout the first two quarters as inventories
are built up for the peak selling period in the second half of the fiscal year.
</p>
<p align="justify">Anticipated sales growth in 2007 is expected to result in increased working
capital requirements, mainly to finance trade accounts receivable and inventory.
In order to be able to support our opportunities for continuing sales growth, we
are accelerating the installation of equipment and the ramp-up of our two major
capacity expansion projects in Honduras, and are increasing our planned capital
expenditures in fiscal 2007 to approximately $145 million, compared to our
previous projection of $110 million. </p>
<p align="justify">We believe our cash flow from operating activities together with our unused
credit facilities will provide us with sufficient liquidity and capital
resources in fiscal 2007 to fund our anticipated working capital requirements,
capital expenditures and the June 2007 final principal repayment on our Senior
Notes. </p>
</font><i><font FACE="Times New Roman" SIZE="2">
<p align="right">GILDAN QUARTERLY REPORT &#150; Q1 2007 p.11</p>
</font></i><hr color="#000000" size="5"><p Style='page-break-before:always'>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2"><b>
    <td width="50%"><img border="0" src="gildan1.jpg" width="84" height="19"></td>
    </b>
    <td width="50%"><font SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
    </font>
  </tr>
</table>
<font FACE="Arial MT" SIZE="2">
<p ALIGN="JUSTIFY">&nbsp;</p>
</font><font SIZE="2" face="Times New Roman">
<p ALIGN="JUSTIFY">In order to maximize flexibility to finance our ongoing
growth and expansion and to be able to take advantage of additional new
opportunities, we do not currently pay a dividend. Periodically, the merits of
introducing a dividend are re-evaluated by our Board of Directors. </p>
<b>
<p>Off-Balance Sheet Arrangements </p>
</b>
<p ALIGN="JUSTIFY">We have no commitments that are not reflected in our balance
sheets except for operating leases and other purchase obligations, which are
included in the table of contractual obligations on page 13. As disclosed in
Note 8 to our Interim Consolidated Financial Statements, we have issued
corporate guarantees and standby letters of credit arising from various
servicing agreements amounting to $33.7 million at December 31, 2006. </p>
<p><u>Derivative Financial Instruments</u></p>
<p ALIGN="JUSTIFY">From time to time, we use forward foreign exchange contracts,
primarily in Canadian dollars, British pounds and Euros, to hedge cash flows
related to sales and operating expenses denominated in foreign currencies (non-U.S.
dollar). </p>
<p ALIGN="JUSTIFY">A forward foreign exchange contract represents an obligation
to buy or sell foreign currency with a counterparty. Credit risk exists in the
event of failure by a counterparty to meet its obligations. We reduce this risk
by dealing only with highly rated counterparties, normally major European and
North American financial institutions. Our exposure to foreign currency
fluctuations is described in more detail in the &quot;Risks and Uncertainties&quot;
section of the 2006 MD&amp;A. </p>
<p align="justify">We do not use derivative financial instruments for
speculative purposes. Forward foreign exchange contracts are entered into with
maturities not exceeding twenty-four months. </p>
<p ALIGN="JUSTIFY">All outstanding forward foreign exchange contracts are
reported on a mark-to-market basis and the gains or losses are included in
earnings, because we elected not to follow hedge accounting for these
derivatives. See &quot;Changes in Accounting Policies&quot; on page 14. </p>
<p align="justify">The following table summarizes our commitments to buy and
sell foreign currencies as at December 31, 2006 and January 1, 2006: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="30%" valign="bottom"><font FACE="Times New Roman" size="2"><i>(in
    thousands)</i></font></td>
    <td WIDTH="5%" align="right" valign="bottom">&nbsp;</td>
    <td WIDTH="10%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2">Notional</font></td>
    <td WIDTH="15%" valign="bottom" align="right">&nbsp;</td>
    <td WIDTH="30%" align="right" valign="bottom">&nbsp;</td>
    <td WIDTH="10%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2">Notional U.S.</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2">amount</font></td>
    <td WIDTH="15%" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" align="right">
    <font FACE="Times New Roman" size="2">Exchange rate</font></td>
    <td WIDTH="30%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2">Maturity</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2">equivalent</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>2007</b></font></td>
    <td WIDTH="5%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="15%" style="border-top-style: solid; border-top-width: 1" valign="bottom" align="right">&nbsp;</td>
    <td WIDTH="30%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%" valign="bottom"><font FACE="Times New Roman" size="2"><b>Buy
    contracts:</b></font></td>
    <td WIDTH="5%" align="right" valign="bottom">&nbsp;</td>
    <td WIDTH="10%" align="right" valign="bottom">&nbsp;</td>
    <td WIDTH="15%" valign="bottom" align="right">&nbsp;</td>
    <td WIDTH="30%" align="right" valign="bottom">&nbsp;</td>
    <td WIDTH="10%" align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%" valign="bottom"><font FACE="Times New Roman" size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Foreign exchange contracts</b></font></td>
    <td WIDTH="5%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>&#128;</b></font></td>
    <td WIDTH="10%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>6,767</b></font></td>
    <td WIDTH="15%" valign="bottom" align="right">
    <font FACE="Times New Roman" size="2"><b>1.2116 to 1.3210</b></font></td>
    <td WIDTH="30%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>January to June 2007</b></font></td>
    <td WIDTH="10%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>$8,426</b></font></td>
  </tr>
  <tr>
    <td WIDTH="30%" valign="bottom">&nbsp;</td>
    <td WIDTH="5%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>CA$</b></font></td>
    <td WIDTH="10%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>25,354</b></font></td>
    <td WIDTH="15%" valign="bottom" align="right">
    <font FACE="Times New Roman" size="2"><b>0.8690 to 0.8794</b></font></td>
    <td WIDTH="30%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>January to September 2007</b></font></td>
    <td WIDTH="10%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>22,190</b></font></td>
  </tr>
  <tr>
    <td WIDTH="30%" valign="bottom"><font FACE="Times New Roman" size="2"><b>
    Sell contracts:</b></font></td>
    <td WIDTH="5%" align="right" valign="bottom">&nbsp;</td>
    <td WIDTH="10%" align="right" valign="bottom">&nbsp;</td>
    <td WIDTH="15%" valign="bottom" align="right">&nbsp;</td>
    <td WIDTH="30%" align="right" valign="bottom">&nbsp;</td>
    <td WIDTH="10%" align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%" valign="bottom"><font FACE="Times New Roman" size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Foreign exchange contracts</b></font></td>
    <td WIDTH="5%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>&#128;</b></font></td>
    <td WIDTH="10%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>3,970</b></font></td>
    <td WIDTH="15%" valign="bottom" align="right">
    <font FACE="Times New Roman" size="2"><b>1.2974 to 1.3092</b></font></td>
    <td WIDTH="30%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>January to September 2007</b></font></td>
    <td WIDTH="10%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>$5,718</b></font></td>
  </tr>
  <tr>
    <td WIDTH="30%" valign="bottom">&nbsp;</td>
    <td WIDTH="5%" align="right" valign="bottom">
    <b><font size="2">&#163;</font></b></td>
    <td WIDTH="10%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>13,461</b></font></td>
    <td WIDTH="15%" valign="bottom" align="right">
    <font FACE="Times New Roman" size="2"><b>1.9100 to 1.9794</b></font></td>
    <td WIDTH="30%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>January 2007 to September 2008</b></font></td>
    <td WIDTH="10%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>26,300</b></font></td>
  </tr>
  <tr>
    <td WIDTH="30%" valign="bottom">&nbsp;</td>
    <td WIDTH="5%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>CA$</b></font></td>
    <td WIDTH="10%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>1,600</b></font></td>
    <td WIDTH="15%" valign="bottom" align="right">
    <font FACE="Times New Roman" size="2"><b>0.8584</b></font></td>
    <td WIDTH="30%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>January 2007</b></font></td>
    <td WIDTH="10%" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>1,373</b></font></td>
  </tr>
  <tr>
    <td WIDTH="30%" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">2006</font></td>
    <td WIDTH="5%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" valign="bottom" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="30%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">Buy contracts:</font></td>
    <td WIDTH="5%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" valign="bottom" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="30%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </b>Foreign exchange contracts</font></td>
    <td WIDTH="5%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">CA$</font></td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">30,800</font></td>
    <td WIDTH="15%" valign="bottom" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">0.7997 to 0.8506</font></td>
    <td WIDTH="30%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">January to September 2006</font></td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">$25,585</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">Sell contracts:</font></td>
    <td WIDTH="5%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" valign="bottom" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="30%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </b>Foreign exchange contracts</font></td>
    <td WIDTH="5%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">&#128;</font></td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">7,786</font></td>
    <td WIDTH="15%" valign="bottom" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">1.1802 to 1.3721</font></td>
    <td WIDTH="30%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">January to September 2006</font></td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">$10,372</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="5%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font size="2">&#163;</font></td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">3,330</font></td>
    <td WIDTH="15%" valign="bottom" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">1.8707 to 1.8851</font></td>
    <td WIDTH="30%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">January to September 2006</font></td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">6,248</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="5%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">CA$</font></td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">10,000</font></td>
    <td WIDTH="15%" valign="bottom" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">0.8602</font></td>
    <td WIDTH="30%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">January 2006</font></td>
    <td WIDTH="10%" align="right" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">8,602</font></td>
  </tr>
</table>
<i><font FACE="Times New Roman" SIZE="2">
<p align="right">GILDAN QUARTERLY REPORT &#150; Q1 2007 p.12</p>
</font></i><hr color="#000000" size="5"><p Style='page-break-before:always'>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2"><b>
    <td width="50%"><img border="0" src="gildan1.jpg" width="84" height="19"></td>
    </b>
    <td width="50%"><font SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
    </font>
  </tr>
</table>
<b><font FACE="Arial" SIZE="2">
<p>&nbsp;</p>
</font><font SIZE="2" face="Times New Roman">
<p>Contractual Obligations </p>
</font></b><font FACE="Times New Roman" SIZE="2">
<p ALIGN="JUSTIFY">In the normal course of business, we enter into contractual
obligations that will require us to disburse cash over future periods. The
following table sets forth our contractual obligations for the following items
as at December 31, 2006: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="45%"><font FACE="Times New Roman" size="2">Payments due by period</font></td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="45%"><font FACE="Times New Roman" size="2"><i>(in $ millions)</i></font></td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font FACE="Times New Roman" size="2"><b>Less
    than</b></font></td>
    <td WIDTH="11%" align="right"><font FACE="Times New Roman" size="2"><b>1 to
    3</b></font></td>
    <td WIDTH="11%" align="right"><font FACE="Times New Roman" size="2"><b>4 to
    5</b></font></td>
    <td WIDTH="11%" align="right"><font FACE="Times New Roman" size="2"><b>After</b></font></td>
  </tr>
  <tr>
    <td WIDTH="45%" 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 FACE="Times New Roman" size="2"><b>Total</b></font></td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2"><b>1 year</b></font></td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2"><b>years</b></font></td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2"><b>years</b></font></td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2"><b>5 years</b></font></td>
  </tr>
  <tr>
    <td WIDTH="45%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">Long-term debt</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">32.2</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">20.0</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">6.6</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">4.1</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">1.5</font></td>
  </tr>
  <tr>
    <td WIDTH="45%"><font FACE="Times New Roman" size="2">Fixed interest
    payments</font></td>
    <td WIDTH="11%" align="right"><font FACE="Times New Roman" size="2">0.8</font></td>
    <td WIDTH="11%" align="right"><font FACE="Times New Roman" size="2">0.8</font></td>
    <td WIDTH="11%" align="right"><font FACE="Times New Roman" size="2">-</font></td>
    <td WIDTH="11%" align="right"><font FACE="Times New Roman" size="2">-</font></td>
    <td WIDTH="11%" align="right"><font FACE="Times New Roman" size="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="45%" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">Operating leases</font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">32.6</font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">5.2</font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">10.8</font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">7.3</font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">9.3</font></td>
  </tr>
  <tr>
    <td WIDTH="45%"><font FACE="Times New Roman" size="2">Purchase obligations</font></td>
    <td WIDTH="11%" align="right"><font FACE="Times New Roman" size="2">122.4</font></td>
    <td WIDTH="11%" align="right"><font FACE="Times New Roman" size="2">122.4</font></td>
    <td WIDTH="11%" align="right"><font FACE="Times New Roman" size="2">-</font></td>
    <td WIDTH="11%" align="right"><font FACE="Times New Roman" size="2">-</font></td>
    <td WIDTH="11%" align="right"><font FACE="Times New Roman" size="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="45%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">Other obligations</font></td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">63.5</font></td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">50.3</font></td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">13.2</font></td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">-</font></td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="45%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font FACE="Times New Roman" size="2"><b>Total Contractual Obligations</b></font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font FACE="Times New Roman" size="2"><b>251.5</b></font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font FACE="Times New Roman" size="2"><b>198.7</b></font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font FACE="Times New Roman" size="2"><b>30.6</b></font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font FACE="Times New Roman" size="2"><b>11.4</b></font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font FACE="Times New Roman" size="2"><b>10.8</b></font></td>
  </tr>
</table>
<font FACE="Times New Roman" SIZE="2">
<p align="justify">We expect that cash flows from operations, together with our
cash balances and unutilized bank facilities, will be sufficient to meet
foreseeable cash needs for fiscal 2007. </p>
<b>
<p>Contingent Liability </p>
</b>
<p ALIGN="JUSTIFY">In November 2002, one of our Mexican subsidiaries (Gildan
Mexico) received a tax assessment from a regional taxation office relating to
duties for the 2000 fiscal year for approximately $6.0 million. The substance of
the assessment was that the Mexican tax authorities adopted the position that
Canadian-made textiles shipped to Gildan Mexico for sewing processing had not
subsequently been exported from Mexico. Gildan Mexico appealed the assessment
and was successful in obtaining a judgement in its favour. Notwithstanding the
judgement, the regional Mexican taxation office issued a new assessment in March
2005, and increased the assessed amount to approximately $7.1 million, primarily
comprised of interest and late payment penalties. Shortly after receiving the
second assessment, Gildan Mexico again filed an appeal. In July 2006, Gildan
Mexico received notification that its appeal of the second assessment for fiscal
2000 was unsuccessful. We have received legal opinions that the tax assessment
is without merit under Mexican law governing re-export from maquiladora
operations. Additionally, Gildan Mexico, a maquiladora operation, has provided
documentation to establish that the textiles imported into Mexico for sewing
were subsequently exported to the United States and Canada. We are pursuing all
available avenues to resolve this matter in our favour. At the present time, the
Mexican authorities are not attempting to enforce payment of this tax
assessment. We expect to be successful in our efforts to clarify and resolve
this matter and, accordingly, no provision has been made in the accounts for
this potential liability.</p>
<b>
<p>Outstanding Share Data </p>
</b>
<p align="justify">Our common shares are listed on the New York Stock Exchange
and the Toronto Stock Exchange (GIL). </p>
<p ALIGN="JUSTIFY">As of January 31, 2007, there were 60,142,840 common shares
issued and outstanding along with 489,549 stock options and 503,500 dilutive
restricted share units (Treasury RSUs) outstanding. Each stock option entitles
the holder to purchase one common share at the end of the vesting period at a
predetermined option price. Each Treasury RSU entitles the holder to receive one
common share from treasury 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 ALIGN="JUSTIFY">&nbsp;</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" color="#000080">Critical Accounting Estimates
    </font></td>
  </tr>
</table>
<p ALIGN="JUSTIFY">Our significant accounting policies are described in Note 2
to our 2006 audited Consolidated Financial Statements. The preparation of
financial statements in conformity with Canadian GAAP requires estimates and
assumptions that affect our results of operations and financial position. By
their nature, these judgements are subject to an inherent degree of
uncertainty and are based upon historical experience, trends in the industry and
information available from outside sources. On an ongoing basis, management
reviews its estimates and actual results could differ from those estimates. </p>
</font><i><font FACE="Times New Roman" SIZE="2">
<p align="right">GILDAN QUARTERLY REPORT &#150; Q1 2007 p.13</p>
</font></i><hr color="#000000" size="5"><p Style='page-break-before:always'>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2"><b>
    <td width="50%"><img border="0" src="gildan1.jpg" width="84" height="19"></td>
    </b>
    <td width="50%"><font SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
    </font>
  </tr>
</table>
<p>&nbsp;</p>
<font SIZE="2" face="Times New Roman">
<p align="justify">Management believes that the following accounting estimates are most
significant to assist in understanding and evaluating our financial results: </p>
</font>
<ul>
  <li>
  <p style="margin-left: -26"><font size="2" face="Times New Roman"> Sales promotional programs; </li>
  </font>
  <li>
  <p style="margin-left: -26"><font size="2" face="Times New Roman"> Trade accounts receivable; </li>
  </font>
  <li>
  <p style="margin-left: -26"><font size="2" face="Times New Roman"> Property, plant and
  equipment; </li>
  </font>
  <li>
  <p style="margin-left: -26"><font size="2" face="Times New Roman"> Cotton and yarn
  procurements; and </li>
  </font>
  <li>
  <p style="margin-left: -26"><font size="2" face="Times New Roman"> Income taxes </li>
</ul>
<p align="justify">For a more detailed discussion of these estimates, readers should review the
&quot;Critical Accounting Estimates&quot; section of the 2006 MD&amp;A, which is hereby
incorporated by reference. </p>
<p align="justify">&nbsp;</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font face="Times New Roman" color="#000080">Changes in Accounting Policies</font></td>
  </tr>
</table>
<p ALIGN="JUSTIFY">Effective the commencement of our 2007 fiscal year, we have
adopted the Canadian Institute of Chartered Accountants (CICA) Handbook Section
1530, Comprehensive Income, CICA Handbook Section 3251, Equity, CICA Handbook
Section 3855, Financial Instruments &#150; Recognition and Measurement, CICA Handbook
Section 3861, Financial Instruments &#150; Disclosure and Presentation, and CICA
Handbook Section 3865, Hedges. These new Handbook Sections, which apply to
fiscal years beginning on or after October 1, 2006, provide comprehensive
requirements for the recognition and measurement of financial instruments, as
well as standards on when and how hedge accounting may be applied. Handbook
Section 1530 also establishes standards for reporting and displaying
comprehensive income. Comprehensive income is defined as the change in equity
from transactions and other events from non-owner sources. Other comprehensive
income refers to items recognized in comprehensive income but that are excluded
from net income calculated in accordance with generally accepted accounting
principles. </p>
<p ALIGN="JUSTIFY">Under these new standards, all financial instruments are
classified into one of the following five categories: held for trading,
held-to-maturity investments, loans and receivables, available-for-sale
financial assets or other financial liabilities. All financial instruments,
including derivatives, are included on the consolidated balance sheet and are
measured at fair market value with the exception of loans and receivables,
investments held-to-maturity and other financial liabilities, which will be
measured at amortized cost. Subsequent measurement and recognition of changes in
fair value of financial instruments depend on their initial classification. Held
for trading financial investments are measured at fair value and all gains and
losses are included in net income in the period in which they arise.
Available-for-sale financial instruments are measured at fair value with
revaluation gains and losses included in other comprehensive income until the
asset is removed from the balance sheet. </p>
<p ALIGN="JUSTIFY">The standards require derivative instruments to be recorded
as either assets or liabilities measured at their fair value unless exempted
from derivative treatment as a normal purchase and sale. Certain derivatives
embedded in other contracts must also be measured at fair value. All changes in
the fair value of derivatives are recognized in earnings unless specific hedge
criteria are met, which requires that a company must formally document,
designate and assess the effectiveness of transactions that receive hedge
accounting. Derivatives that qualify as hedging instruments must be designated
as either a ''cash flow hedge,'' when the hedged item is a future cash flow, or
a ''fair value hedge,'' when the hedged item is a recognized asset or liability.
The unrealized gains and losses related to a cash flow hedge are included in
other comprehensive income. For a fair value hedge, both the derivative and the
hedged item are recorded at fair value in the consolidated balance sheet and the
unrealized gains and losses from both items are included in earnings. Any
derivative instrument that does not qualify for hedge accounting is
marked-to-market at each reporting date and the gains or losses are included in
earnings. </p>
</font>
                              <i><font FACE="Times New Roman" SIZE="2">
                              <p align="right">GILDAN QUARTERLY REPORT &#150; Q1 2007 p.14</p>
                              <hr color="#000000" size="5"><p Style='page-break-before:always'>
                              </font></i>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2"><b>
    <td width="50%"><img border="0" src="gildan1.jpg" width="84" height="19"></td>
    </b>
    <td width="50%"><font SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
    </font>
  </tr>
</table>
<font FACE="Arial MT" SIZE="2">
<p ALIGN="JUSTIFY">&nbsp;</p>
</font><font SIZE="2" face="Times New Roman">
<p ALIGN="JUSTIFY">As a result of the adoption of these standards, we have
classified our cash equivalents as available for sale. We have also classified
our accounts receivable as loans and receivables, and our accounts payable and
long-term debt as other financial liabilities, all of which are measured at
amortized cost. The adoption of these new standards also resulted in the
reclassification of an amount of $26.3 million previously recorded in
&quot;Cumulative translation adjustment&quot; to &quot;Accumulated other comprehensive income&quot;
on the consolidated balance sheets. As at October 1, 2006 and December 31, 2006,
all outstanding forward foreign exchange contracts were reported on a
mark-to-market basis and the gains or losses were included in earnings, because
we elected not to follow hedge accounting for these derivatives. </p>
<p align="justify">The adoption of these standards had no impact on the
consolidated statement of earnings. </p>
<p align="justify">&nbsp;</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font face="Times New Roman" color="#000080">Reconciliation and Definition of Non-GAAP
    Measures </font></td>
  </tr>
</table>
<p ALIGN="JUSTIFY">We use non-GAAP measures to assess our operating performance
and financial condition. The terms and definitions of the non-GAAP measures used
in this report and a reconciliation of each non-GAAP measure to the most
directly comparable GAAP measure are provided below. The non-GAAP measures are
presented on a consistent basis for all periods presented in this MD&amp;A. These
non-GAAP measures do not have any standardized meanings prescribed by Canadian
GAAP and are therefore unlikely to be comparable to similar measures presented
by other companies. Accordingly, they should not be considered in isolation. </p>
<b>
<p>Adjusted Net Earnings and Adjusted Diluted EPS </p>
</b>
<p ALIGN="JUSTIFY">To measure our performance from one period to the next,
without the variations caused by the impact of restructurin&nbsp;&nbsp;&nbsp; g
and other charges, as discussed on page 9, management uses adjusted net earnings
and adjusted diluted earnings per share, which is calculated as net earnings and
earnings per share excluding these items. We exclude these items because they
affect the comparability of our financial results and could potentially distort
the analysis of trends in our business performance. Excluding these items does
not imply they are necessarily non-recurring.</p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111" height="342">
  <tr>
    <td WIDTH="30%" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><i>(in $ millions, except per share
    amounts)</i></font></td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">Q1 2007</b></font></td>
    <td WIDTH="4%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">Q1 2006</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" height="19" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">Reported</b></font></td>
    <td WIDTH="10%" align="right" height="19" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">Adjusted</b></font></td>
    <td WIDTH="5%" align="right" height="19" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="5%" align="right" height="19" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">Reported</font></td>
    <td WIDTH="10%" align="right" height="19" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">Adjusted</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" height="20" valign="bottom">
    <font FACE="Times New Roman" size="2">Sales</font></td>
    <td WIDTH="10%" align="right" height="20" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">185.8</b></font></td>
    <td WIDTH="10%" align="right" height="20" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="20" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">185.8</b></font></td>
    <td WIDTH="5%" align="right" height="20" valign="bottom">&nbsp;</td>
    <td WIDTH="5%" align="right" height="20" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="20" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">120.3</font></td>
    <td WIDTH="10%" align="right" height="20" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="20" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">120.3</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2">Cost of sales</font></td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">131.9</b></font></td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">131.9</b></font></td>
    <td WIDTH="5%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="5%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">77.4</font></td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">77.4</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" height="15" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2">Gross profit</font></td>
    <td WIDTH="10%" align="right" height="15" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">53.9</b></font></td>
    <td WIDTH="10%" align="right" height="15" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="10%" align="right" height="15" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">53.9</b></font></td>
    <td WIDTH="5%" align="right" height="15" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    </td>
    <td WIDTH="5%" align="right" height="15" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="15" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">42.9</font></td>
    <td WIDTH="10%" align="right" height="15" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="10%" align="right" height="15" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">42.9</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" height="19" valign="bottom">
    <font FACE="Times New Roman" size="2">Selling, general and</font></td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="5%" align="right" height="19" valign="bottom">&nbsp;</td>
    <td WIDTH="5%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%" height="19" valign="bottom">
    <font FACE="Times New Roman" size="2">
    <p style="margin-left: 10">administrative expenses</font></td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">26.1</b></font></td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">26.1</b></font></td>
    <td WIDTH="5%" align="right" height="19" valign="bottom">&nbsp;</td>
    <td WIDTH="5%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">18.1</font></td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">18.1</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2">Restructuring and other charges <sup>
    (1)</sup></font></td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">1.4</b></font></td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>(1.4)</b></font></td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">-</b></font></td>
    <td WIDTH="5%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="5%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">26.4</b></font></td>
    <td WIDTH="10%" align="right" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">1.4</b></font></td>
    <td WIDTH="10%" align="right" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">27.8</b></font></td>
    <td WIDTH="5%" align="right" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="5%" align="right" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">24.8</font></td>
    <td WIDTH="10%" align="right" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="10%" align="right" height="19" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">24.8</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" height="19" valign="bottom">
    <font FACE="Times New Roman" size="2">Depreciation and amortization</font></td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">8.8</b></font></td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">8.8</b></font></td>
    <td WIDTH="5%" align="right" height="19" valign="bottom">&nbsp;</td>
    <td WIDTH="5%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">7.4</font></td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">7.4</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" height="19" valign="bottom">
    <font FACE="Times New Roman" size="2">Interest, net</font></td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">1.0</b></font></td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">1.0</b></font></td>
    <td WIDTH="5%" align="right" height="19" valign="bottom">&nbsp;</td>
    <td WIDTH="5%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">0.6</font></td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">0.6</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" height="19" valign="bottom">
    <font FACE="Times New Roman" size="2">Non-controlling interest in income</font></td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="5%" align="right" height="19" valign="bottom">&nbsp;</td>
    <td WIDTH="5%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2">
    <p style="margin-left: 10">of consolidated joint venture</font></td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>(0.1)</b></font></td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>(0.1)</b></font></td>
    <td WIDTH="5%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">&nbsp;</td>
    <td WIDTH="5%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">(0.1)</font></td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">(0.1)</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" height="15" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2">Earnings before income taxes</font></td>
    <td WIDTH="10%" align="right" height="15" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">16.7</b></font></td>
    <td WIDTH="10%" align="right" height="15" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">1.4</b></font></td>
    <td WIDTH="10%" align="right" height="15" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">18.1</b></font></td>
    <td WIDTH="5%" align="right" height="15" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    </td>
    <td WIDTH="5%" align="right" height="15" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="15" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">16.9</font></td>
    <td WIDTH="10%" align="right" height="15" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="10%" align="right" height="15" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">16.9</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" height="19" valign="bottom">
    <font FACE="Times New Roman" size="2">Income taxes</font></td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">1.1</b></font></td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">1.1</b></font></td>
    <td WIDTH="5%" align="right" height="19" valign="bottom">&nbsp;</td>
    <td WIDTH="5%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">0.7</font></td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">0.7</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" height="15" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" valign="bottom">
    <font FACE="Times New Roman" size="2">Net earnings</font></td>
    <td WIDTH="10%" align="right" height="15" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">15.6</b></font></td>
    <td WIDTH="10%" align="right" height="15" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">1.4</b></font></td>
    <td WIDTH="10%" align="right" height="15" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">17.0</b></font></td>
    <td WIDTH="5%" align="right" height="15" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" valign="bottom">
    </td>
    <td WIDTH="5%" align="right" height="15" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="15" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">16.2</font></td>
    <td WIDTH="10%" align="right" height="15" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="10%" align="right" height="15" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">16.2</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" height="19" valign="bottom">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="5%" align="right" height="19" valign="bottom">&nbsp;</td>
    <td WIDTH="5%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" height="19" valign="bottom" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%" height="15" valign="bottom">
    <font FACE="Times New Roman" size="2">Basic EPS.</font></td>
    <td WIDTH="10%" align="right" height="15" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">0.26</b></font></td>
    <td WIDTH="10%" align="right" height="15" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">0.02</b></font></td>
    <td WIDTH="10%" align="right" height="15" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">0.28</b></font></td>
    <td WIDTH="5%" align="right" height="15" valign="bottom"></td>
    <td WIDTH="5%" align="right" height="15" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="15" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">0.27</font></td>
    <td WIDTH="10%" align="right" height="15" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="10%" align="right" height="15" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">0.27</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" height="15" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2">Diluted EPS</font></td>
    <td WIDTH="10%" align="right" height="15" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">0.26</b></font></td>
    <td WIDTH="10%" align="right" height="15" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">0.02</b></font></td>
    <td WIDTH="10%" align="right" height="15" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">0.28</b></font></td>
    <td WIDTH="5%" align="right" height="15" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    </td>
    <td WIDTH="5%" align="right" height="15" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" height="15" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">0.27</font></td>
    <td WIDTH="10%" align="right" height="15" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="10%" align="right" height="15" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">0.27</font></td>
  </tr>
  <tr>
    <td WIDTH="100%" height="15" style="border-bottom-style: none; border-bottom-width: medium" valign="bottom" bgcolor="#FFFFFF" colspan="9">
    <font FACE="Times New Roman" size="2"><i><br>
    Certain minor rounding variances exist between the financial statements and
    this summary. <sup><br>
    (1)</sup>Adjustment to remove restructuring and other charges. See page 9.
    </i></font></td>
  </tr>
</table>
                              <i><font FACE="Times New Roman" SIZE="2">
                              <p align="right">GILDAN QUARTERLY REPORT &#150; Q1 2007
                              p.15</p>
                              <hr color="#000000" size="5"><p Style='page-break-before:always'>
                              </font></i>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2"><b>
    <td width="50%"><img border="0" src="gildan1.jpg" width="84" height="19"></td>
    </b>
    <td width="50%"><font SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
    </font>
  </tr>
</table>
<b><font FACE="Arial" SIZE="2">
<p>&nbsp;</p>
</font><font SIZE="2" face="Times New Roman">
<p>EBITDA</p>
</font></b><font FACE="Times New Roman" SIZE="2">
<p ALIGN="JUSTIFY">EBITDA is calculated as earnings before interest, taxes,
depreciation and amortization, and non-controlling interest in income of the
consolidated joint venture, and excludes the impact of restructuring and other
charges. We use EBITDA, among other measures, to assess the operating
performance of our business. We also believe this measure is commonly used by
investors and analysts to measure a company's ability to service debt and to
meet other payment obligations, or as a common valuation measurement. We exclude
depreciation and amortization expenses, which are non-cash in nature and can
vary significantly depending upon accounting methods or non-operating factors
such as historical cost. Excluding these items does not imply they are
necessarily non-recurring. </p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="79%" colspan="5"><font FACE="Times New Roman" size="2"><i>(in $
    millions)</i></font></td>
  </tr>
  <tr>
    <td WIDTH="46%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">Q1 2007</b></font></td>
    <td WIDTH="5%" 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" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">Q1 2006</font></td>
  </tr>
  <tr>
    <td WIDTH="46%" style="border-top-style: solid; border-top-width: 1">
    <font FACE="Times New Roman" size="2">Net earnings</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">15.6</b></font></td>
    <td WIDTH="5%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">16.2</font></td>
  </tr>
  <tr>
    <td WIDTH="46%"><font FACE="Times New Roman" size="2">Restructuring and
    other charges <sup>(1)</sup></font></td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">1.4</b></font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="46%"><font FACE="Times New Roman" size="2">Depreciation and
    amortization</font></td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">8.8</b></font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">7.4</font></td>
  </tr>
  <tr>
    <td WIDTH="46%"><font FACE="Times New Roman" size="2">Interest, net</font></td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">1.0</b></font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">0.6</font></td>
  </tr>
  <tr>
    <td WIDTH="46%"><font FACE="Times New Roman" size="2">Income taxes</font></td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">1.1</b></font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">0.7</font></td>
  </tr>
  <tr>
    <td WIDTH="46%"><font FACE="Times New Roman" size="2">Non-controlling
    interest in income of</font></td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="46%"><font FACE="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;
    consolidated joint venture</font></td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font FACE="Times New Roman" size="2"><b>(0.1)</b></font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">(0.1)</font></td>
  </tr>
  <tr>
    <td WIDTH="46%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font FACE="Times New Roman" size="2">EBITDA</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">27.8</b></font></td>
    <td WIDTH="5%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">24.8</font></td>
  </tr>
  <tr>
    <td WIDTH="85%" COLSPAN="5"><font FACE="Times New Roman" size="2"><i><br>
    Certain minor rounding variances exist between the financial statements and
    this summary.</i></font></td>
  </tr>
  <tr>
    <td WIDTH="79%" colspan="5"><font FACE="Times New Roman" size="2"><i><sup>
    (1)</sup> See page 9.</i></font></td>
  </tr>
</table>
<b>
<p>Free Cash Flow </p>
</b>
<p ALIGN="JUSTIFY">Free cash flow is defined as cash from operating activities
including net changes in non-cash working capital balances, less cash flow used
in investing activities excluding business acquisitions. We consider free cash
flow to be an important indicator of the financial strength and performance of
our business, because it shows how much cash is available after capital
expenditures to repay debt and to reinvest in our business. We believe this
measure is commonly used by investors and analysts when valuing a business and
its underlying assets. </p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="79%" colspan="5"><font FACE="Times New Roman" size="2"><i>(in $
    millions)</i></font></td>
  </tr>
  <tr>
    <td WIDTH="46%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">Q1 2007</b></font></td>
    <td WIDTH="5%" 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" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">Q1 2006</font></td>
  </tr>
  <tr>
    <td WIDTH="46%" style="border-top-style: solid; border-top-width: 1">
    <font FACE="Times New Roman" size="2"><b>Cash flows from operating
    activities</b></font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">39.5</b></font></td>
    <td WIDTH="5%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">32.1</font></td>
  </tr>
  <tr>
    <td WIDTH="46%"><font FACE="Times New Roman" size="2">Cash flows from
    investing activities</font></td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right"><font FACE="Times New Roman" size="2"><b>(30.9)</b></font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">(12.5)</font></td>
  </tr>
  <tr>
    <td WIDTH="46%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font FACE="Times New Roman" size="2"><b>Free cash flow</b></font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">8.6</b></font></td>
    <td WIDTH="5%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">19.6</font></td>
  </tr>
  <tr>
    <td WIDTH="79%" colspan="5"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="85%" COLSPAN="5"><font FACE="Times New Roman" size="2"><i>Certain
    minor rounding variances exist between the financial statements and this
    summary.</i></font></td>
  </tr>
</table>
<b>
<p>Total Indebtedness and Cash in Excess of Debt (Net Indebtedness) </p>
</b>
<p align="justify">We consider total indebtedness and net indebtedness to be
important indicators of the financial leverage of the Company. </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="79%" colspan="5"><font FACE="Times New Roman" size="2"><i>(in $
    millions)</i></font></td>
  </tr>
  <tr>
    <td WIDTH="46%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">Q1 2007</b></font></td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">Q4 2006</font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">Q1 2006</font></td>
  </tr>
  <tr>
    <td WIDTH="46%" style="border-top-style: solid; border-top-width: 1">
    <font FACE="Times New Roman" size="2">Bank indebtedness</font></td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font FACE="Times New Roman" size="2"><b>(3.5)</b></font></td>
    <td WIDTH="5%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6" style="border-top-style: solid; border-top-width: 1">
    <font FACE="Times New Roman" size="2">(3.5)</font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6" style="border-top-style: solid; border-top-width: 1">
    <font FACE="Times New Roman" size="2">(4.0)</font></td>
  </tr>
  <tr>
    <td WIDTH="46%"><font FACE="Times New Roman" size="2">Current portion of
    long-term debt</font></td>
    <td WIDTH="6%" align="right"><font FACE="Times New Roman" size="2"><b>(21.5)</b></font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">(21.8)</font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">(19.9)</font></td>
  </tr>
  <tr>
    <td WIDTH="46%"><font FACE="Times New Roman" size="2">Long-term debt</font></td>
    <td WIDTH="6%" align="right"><font FACE="Times New Roman" size="2"><b>(10.6)</b></font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">(12.0)</font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">(27.4)</font></td>
  </tr>
  <tr>
    <td WIDTH="46%"><font FACE="Times New Roman" size="2"><b>Total indebtedness</b></font></td>
    <td WIDTH="6%" align="right"><font FACE="Times New Roman" size="2"><b>(35.6)</b></font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">(37.3)</font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">(51.3)</font></td>
  </tr>
  <tr>
    <td WIDTH="46%">&nbsp;</td>
    <td WIDTH="6%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="46%"><font FACE="Times New Roman" size="2">Cash and cash
    equivalents</font></td>
    <td WIDTH="6%" align="right"><font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">36.3</b></font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">29.0</font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">90.3</font></td>
  </tr>
  <tr>
    <td WIDTH="46%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font FACE="Times New Roman" size="2"><b>Cash in excess of debt (net
    indebtedness)</b></font></td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font FACE="Times New Roman" size="2"><b>
    <p style="margin-right: 4">0.7</b></font></td>
    <td WIDTH="5%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">(8.3)</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">39.0</font></td>
  </tr>
  <tr>
    <td WIDTH="79%" colspan="5"><font FACE="Times New Roman" size="2"><i><br>
    Certain minor rounding variances exist between the financial statements and
    this summary.</i></font></td>
  </tr>
</table>
                              <i><font FACE="Times New Roman" SIZE="2">
                              <p align="right">GILDAN QUARTERLY REPORT &#150; Q1 2007
                              p.16</p>
                              <hr color="#000000" size="5"><p Style='page-break-before:always'>
                              </font></i>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2"><b>
    <td width="50%"><img border="0" src="gildan1.jpg" width="84" height="19"></td>
    </b>
    <td width="50%"><font SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
    </font>
  </tr>
</table>
<font size="2" face="Times New Roman">
<p>&nbsp;</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
<font face="Times New Roman" color="#000080">
    Risks and Uncertainties
</font>
    </td>
  </tr>
</table>
<p ALIGN="JUSTIFY">The Company is subject to a variety of business risks. The
risks listed below are risks that could materially affect our business,
financial condition and results of operations, but are not necessarily the only
ones facing the Company. Additional risks that are not currently known to us or
that we currently deem immaterial could also materially and adversely affect our
business. The most significant risks we face are as follows: </p>
</font>
<ul>
  <li>
  <p style="margin-left: -26" align="justify">
  <font size="2" face="Times New Roman">Our ability to implement our strategies
  and plans; </li>
  </font>
  <li>
  <p style="margin-left: -26" align="justify">
  <font size="2" face="Times New Roman">Our industry is competitive; </li>
  </font>
  <li>
  <p style="margin-left: -26" align="justify">
  <font size="2" face="Times New Roman">Our industry is subject to pricing
  pressures; </li>
  </font>
  <li>
  <p style="margin-left: -26" align="justify">
  <font size="2" face="Times New Roman">Our success depends on our ability to
  anticipate evolving consumer preferences and trends; </li>
  </font>
  <li>
  <p style="margin-left: -26" align="justify">
  <font size="2" face="Times New Roman">Our operations are subject to
  environmental regulation; </li>
  </font>
  <li>
  <p style="margin-left: -26" align="justify">
  <font size="2" face="Times New Roman">We rely on a relatively small number of
  significant customers; </li>
  </font>
  <li>
  <p style="margin-left: -26" align="justify">
  <font size="2" face="Times New Roman">Our customers do not commit to purchase
  minimum quantities; </li>
  </font>
  <li>
  <p style="margin-left: -26" align="justify">
  <font size="2" face="Times New Roman">We are exposed to concentrations of
  credit risk; </li>
  </font>
  <li>
  <p style="margin-left: -26" align="justify">
  <font size="2" face="Times New Roman">Our business is affected by changes in
  international trade regulation; </li>
  </font>
  <li>
  <p style="margin-left: -26" align="justify">
  <font size="2" face="Times New Roman">We currently pay income tax at a
  comparatively low effective rate, which could change in the future; </li>
  </font>
  <li>
  <p style="margin-left: -26" align="justify">
  <font size="2" face="Times New Roman">The price of the raw materials we buy is
  prone to significant fluctuations and volatility; </li>
  </font>
  <li>
  <p style="margin-left: -26" align="justify">
  <font size="2" face="Times New Roman">Our operations are subject to political,
  social and economic risks; </li>
  </font>
  <li>
  <p style="margin-left: -26" align="justify">
  <font size="2" face="Times New Roman">Our industry is subject to fluctuations
  in sales demand; </li>
  </font>
  <li>
  <p style="margin-left: -26" align="justify">
  <font size="2" face="Times New Roman">Our business operations significantly
  rely on our information systems; </li>
  </font>
  <li>
  <p style="margin-left: -26" align="justify">
  <font size="2" face="Times New Roman">We are subject to foreign currency risk;
  </li>
  </font>
  <li>
  <p style="margin-left: -26" align="justify">
  <font size="2" face="Times New Roman">Our operations could be affected by
  changes in our relationships with our employees or changes to domestic and
  foreign employment regulations; </li>
  </font>
  <li>
  <p style="margin-left: -26" align="justify">
  <font size="2" face="Times New Roman">We may suffer negative publicity if we,
  or our third-party contractors, violate labour laws or engage in practices
  that are viewed as unethical; and </li>
  </font>
  <li>
  <p style="margin-left: -26" align="justify">
  <font size="2" face="Times New Roman">We depend on key management </li>
</ul>
<p ALIGN="JUSTIFY">For a more detailed discussion of these potential business
risks, readers should review the &quot;Risks and Uncertainties&quot; section of the 2006
MD&amp;A and the Annual Information Form filed by Gildan with the Canadian
securities regulatory authorities and the Annual Report on Form 40-F filed with
the U.S. Securities and Exchange Commission, which are hereby incorporated by
reference. </p>
<p>&nbsp;</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font face="Times New Roman" color="#000080">Forward-Looking Statements </font></td>
  </tr>
</table>
<p ALIGN="JUSTIFY">Certain statements included in this MD&amp;A may constitute
&quot;forward-looking statements&quot; within the meaning of the U.S. <i>Private
Securities Litigation Reform Act of 1995</i> and Canadian securities legislation
and regulations, and are subject to important risks, uncertainties and
assumptions. This forward-looking information includes amongst others,
information with respect to our objectives and the strategies to achieve these
objectives, as well as information with respect to our beliefs, plans,
expectations, anticipations, estimates and intentions. Forward-looking
statements generally can be identified by the use of forward-looking terminology
such as &quot;may&quot;, &quot;will&quot;, &quot;expect&quot;, &quot;intend&quot;, &quot;estimate&quot;, &quot;anticipate&quot;, &quot;plan&quot;,
&quot;foresee&quot;, &quot;believe&quot; or &quot;continue&quot; or the negatives of these terms or variations
of them or similar terminology. We refer you to the Company's filings with the
Canadian securities regulatory authorities and the U.S. Securities and Exchange
Commission, as well as the &quot;Risks and Uncertainties&quot; section of the 2006 MD&amp;A
for a discussion of the various factors that may affect the Company's future
results. Material factors and assumptions that were applied in drawing a
conclusion or making a forecast or projection are also set out throughout this
document. The forward-looking information in this MD&amp;A describes our
expectations as at January 31, 2007. </p>
</font>
                              <i><font FACE="Times New Roman" SIZE="2">
                              <p align="right">GILDAN QUARTERLY REPORT &#150; Q1 2007
                              p.17</p>
                              <hr color="#000000" size="5"><p Style='page-break-before:always'>
                              </font></i>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2"><b>
    <td width="50%"><img border="0" src="gildan1.jpg" width="84" height="19"></td>
    </b>
    <td width="50%"><font SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
    </font>
  </tr>
</table>
<p>&nbsp;</p>
<font FACE="Times New Roman" SIZE="2">
<p ALIGN="justify">The results or events predicted in such forward-looking
information may differ materially from actual results or events. Material
factors, which could cause actual results or events to differ materially from a
conclusion, forecast or projection in such forward-looking information, include,
but are not limited to: </p>
<font FACE="Arial MT" SIZE="2">
<ul>
  <li>
  <p ALIGN="justify" style="margin-left: -26">&nbsp;general economic conditions
  such as currency exchange rates, commodity prices and other factors over which
  we have no control; </li>
  <li>
  <p ALIGN="justify" style="margin-left: -26">&nbsp;the impact of economic and
  business conditions, industry trends and other external and political factors
  in the countries in which we operate; </li>
  <li>
  <p ALIGN="justify" style="margin-left: -26">&nbsp;the intensity of competitive
  activity; </li>
  <li>
  <p ALIGN="justify" style="margin-left: -26">&nbsp;changes in environmental,
  tax, trade and other laws and regulations; </li>
  <li>
  <p ALIGN="justify" style="margin-left: -26">&nbsp;our ability to implement our
  strategies and plans; </li>
  <li>
  <p ALIGN="justify" style="margin-left: -26">&nbsp;our ability to complete and
  successfully integrate acquisitions;</li>
  <li>
  <p ALIGN="justify" style="margin-left: -26">&nbsp;changes in customer demand
  for our products and our ability to maintain customer relationships and grow
  our business; </li>
  <li>
  <p ALIGN="justify" style="margin-left: -26">&nbsp;the seasonality of our
  business; </li>
  <li>
  <p ALIGN="justify" style="margin-left: -26">&nbsp;our ability to attract and
  retain key personnel; </li>
  <li>
  <p ALIGN="justify" style="margin-left: -26">&nbsp;changes in accounting
  policies and estimates; and </li>
  <li>
  <p ALIGN="justify" style="margin-left: -26">&nbsp;disruption to manufacturing
  and distribution activities due to the impact of weather, natural disasters
  and other unforeseen adverse events. </li>
</ul>
</font>
<p ALIGN="justify">This may cause the Company's actual performance and financial
results in future periods to differ materially from any estimates or projections
of future performance or results expressed or implied by such forward-looking
statements. Forward-looking statements do not take into account the effect that
transactions or non-recurring or other special items announced or occurring
after the statements are made have on the Company's business. For example, they
do not include the effect of business dispositions, acquisitions, other business
transactions, asset writedowns or other charges announced or occurring after
forward-looking statements are made. The financial impact of such transactions
and nonrecurring and other special items can be complex and necessarily depends
on the facts particular to each of them.</p>
<p ALIGN="justify">We believe that the expectations represented by our
forward-looking statements are reasonable, yet there can be no assurance that
such expectations will prove to be correct. Furthermore, the forward-looking
statements contained in this report are made as of the date of this report, and
we do not undertake any obligation to update publicly or to revise any of the
included forward-looking statements, whether as a result of new information,
future events or otherwise unless required by applicable legislation or
regulation. The forward-looking statements contained in this report are
expressly qualified by this cautionary statement. </p>
<p align="justify">January 31, 2007</p>
<p align="justify">&nbsp;</p>
</font>
                              <i><font FACE="Times New Roman" SIZE="2">
                              <p align="right">GILDAN QUARTERLY REPORT &#150; Q1 2007
                              p.18</p>
                              <hr color="#000000" size="5"><p Style='page-break-before:always'>
                              </font></i>
<b><font face="Times New Roman" size="4">
<p align="center">Gildan Activewear Inc.<br>
Consolidated Balance Sheets</font><font face="Times New Roman" size="2"><br>
</font></b><font face="Times New Roman" size="2">(in thousands of U.S. dollars)</p>
</font>
<table style="BORDER-COLLAPSE: collapse" borderColor="#111111" cellSpacing="0" cellPadding="0" width="100%" border="0">
  <tr>
    <td width="639">&nbsp;</td>
    <td align="right" width="34">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="165">
    <font face="Times New Roman" size="2">December 31, 2006</font></td>
    <td align="right" width="36">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="166">
    <font face="Times New Roman" size="2">October 1, 2006</font></td>
    <td align="right" width="36">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="163">
    <font face="Times New Roman" size="2">January 1, 2006</font></td>
  </tr>
  <tr>
    <td width="639">&nbsp;</td>
    <td align="right" width="34">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="165">
    <font face="Times New Roman" size="2">(unaudited)</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="166">
    <font face="Times New Roman" size="2">(audited)</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="163">
    <font face="Times New Roman" size="2">(unaudited)</font></td>
  </tr>
  <tr>
    <td width="639">&nbsp;</td>
    <td align="right" width="34">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="639" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">Current assets:</font></td>
    <td align="right" width="34" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165" bgcolor="#E6E6E6" style="border-bottom-style: none; border-bottom-width: medium">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36" bgcolor="#E6E6E6" style="border-bottom-style: none; border-bottom-width: medium">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166" bgcolor="#E6E6E6" style="border-bottom-style: none; border-bottom-width: medium">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36" bgcolor="#E6E6E6" style="border-bottom-style: none; border-bottom-width: medium">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163" bgcolor="#E6E6E6" style="border-bottom-style: none; border-bottom-width: medium">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="639"><font face="Times New Roman" size="2">
    <p style="MARGIN-LEFT: 26px">Cash and cash equivalents</font></td>
    <td align="right" width="34" style="border-right-style: none; border-right-width: medium"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td style="BORDER-BOTTOM: medium none; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align="right" width="165">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">36,329</font></td>
    <td align="right" width="36" style="border-style: none; border-width: medium"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td style="BORDER-BOTTOM: medium none; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align="right" width="166">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">29,007</font></td>
    <td align="right" width="36" style="border-style: none; border-width: medium"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td style="BORDER-BOTTOM: medium none; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align="right" width="163">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">90,296</font></td>
  </tr>
  <tr>
    <td width="639" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-LEFT: 26px">Accounts receivable</font></td>
    <td align="right" width="34" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: medium none; " align="right" width="165" bgcolor="#E6E6E6">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">98,347</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6" style="border-top-style: none; border-top-width: medium">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: medium none; " align="right" width="166" bgcolor="#E6E6E6">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">165,870</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6" style="border-top-style: none; border-top-width: medium">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: medium none; " align="right" width="163" bgcolor="#E6E6E6">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">51,699</font></td>
  </tr>
  <tr>
    <td width="639"><font face="Times New Roman" size="2">
    <p style="MARGIN-LEFT: 26px">Inventories</font></td>
    <td align="right" width="34">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">233,514</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">200,653</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">178,844</font></td>
  </tr>
  <tr>
    <td width="639" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-LEFT: 26px">Prepaid expenses and deposits</font></td>
    <td align="right" width="34" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">6,677</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">5,757</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">3,265</font></td>
  </tr>
  <tr>
    <td width="639"><font face="Times New Roman" size="2">
    <p style="MARGIN-LEFT: 26px">Future income taxes</font></td>
    <td align="right" width="34">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">4,457</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">5,298</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">11,162</font></td>
  </tr>
  <tr>
    <td width="639" bgcolor="#E6E6E6">&nbsp;</td>
    <td align="right" width="34" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165" bgcolor="#E6E6E6" style="border-top-style: solid; border-top-width: 1"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">379,324</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166" bgcolor="#E6E6E6" style="border-top-style: solid; border-top-width: 1"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">406,585</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163" bgcolor="#E6E6E6" style="border-top-style: solid; border-top-width: 1"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">335,266</font></td>
  </tr>
  <tr>
    <td width="639">&nbsp;</td>
    <td align="right" width="34">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="639" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">Property, plant and
    equipment</font></td>
    <td align="right" width="34" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">318,007</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">302,677</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">265,338</font></td>
  </tr>
  <tr>
    <td width="639"><font face="Times New Roman" size="2">Intangible assets</font></td>
    <td align="right" width="34">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">9,352</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">9,513</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">-</font></td>
  </tr>
  <tr>
    <td width="639" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">Assets held for sale
    (note 4)</font></td>
    <td align="right" width="34" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">4,658</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">-</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">5,027</font></td>
  </tr>
  <tr>
    <td width="639"><font face="Times New Roman" size="2">Other assets</font></td>
    <td align="right" width="34">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="165">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">4,506</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="166">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">4,501</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="163">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">4,014</font></td>
  </tr>
  <tr>
    <td width="639" bgcolor="#E6E6E6">&nbsp;</td>
    <td align="right" width="34" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="165" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="166" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="163" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="639"><font face="Times New Roman" size="2">Total assets</font></td>
    <td align="right" width="34"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td style="BORDER-BOTTOM-STYLE: solid" align="right" width="165">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">715,847</font></td>
    <td align="right" width="36"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td style="BORDER-BOTTOM-STYLE: solid" align="right" width="166">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">723,276</font></td>
    <td align="right" width="36"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td style="BORDER-BOTTOM-STYLE: solid" align="right" width="163">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">609,645</font></td>
  </tr>
  <tr>
    <td width="639" bgcolor="#E6E6E6">&nbsp;</td>
    <td align="right" width="34" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="639">&nbsp;</td>
    <td align="right" width="34">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="639" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">Current liabilities:</font></td>
    <td align="right" width="34" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="639"><font face="Times New Roman" size="2">
    <p style="MARGIN-LEFT: 26px">Bank indebtedness</font></td>
    <td align="right" width="34"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td align="right" width="165"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">3,500</font></td>
    <td align="right" width="36"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td align="right" width="166"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">3,500</font></td>
    <td align="right" width="36"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td align="right" width="163"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">3,980</font></td>
  </tr>
  <tr>
    <td width="639" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-LEFT: 26px">Accounts payable and accrued liabilities</font></td>
    <td align="right" width="34" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">98,179</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">117,984</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">80,220</font></td>
  </tr>
  <tr>
    <td width="639"><font face="Times New Roman" size="2">
    <p style="MARGIN-LEFT: 26px">Income taxes payable</font></td>
    <td align="right" width="34">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">1,399</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">2,269</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">2,274</font></td>
  </tr>
  <tr>
    <td width="639" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-LEFT: 26px">Current portion of long-term debt</font></td>
    <td align="right" width="34" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="165" bgcolor="#E6E6E6">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">21,518</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="166" bgcolor="#E6E6E6">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">21,820</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="163" bgcolor="#E6E6E6">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">19,853</font></td>
  </tr>
  <tr>
    <td width="639">&nbsp;</td>
    <td align="right" width="34">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">124,596</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">145,573</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">106,327</font></td>
  </tr>
  <tr>
    <td width="639" bgcolor="#E6E6E6">&nbsp;</td>
    <td align="right" width="34" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="639"><font face="Times New Roman" size="2">Long-term debt</font></td>
    <td align="right" width="34">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">10,635</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">12,041</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">27,386</font></td>
  </tr>
  <tr>
    <td width="639" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">Future income taxes</font></td>
    <td align="right" width="34" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">28,013</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">29,443</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">32,754</font></td>
  </tr>
  <tr>
    <td width="639"><font face="Times New Roman" size="2">Non-controlling
    interest in consolidated joint venture</font></td>
    <td align="right" width="34">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">5,590</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">5,654</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">5,286</font></td>
  </tr>
  <tr>
    <td width="639" bgcolor="#E6E6E6">&nbsp;</td>
    <td align="right" width="34" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="639"><font face="Times New Roman" size="2">Shareholders' equity:</font></td>
    <td align="right" width="34">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="639" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-LEFT: 26px">Share capital (note 5)</font></td>
    <td align="right" width="34" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">86,953</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">86,584</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">85,037</font></td>
  </tr>
  <tr>
    <td width="639"><font face="Times New Roman" size="2">
    <p style="MARGIN-LEFT: 26px">Contributed surplus (note 5)</font></td>
    <td align="right" width="34">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">2,833</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">2,365</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">1,873</font></td>
  </tr>
  <tr>
    <td width="639" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-LEFT: 26px">Retained earnings</font></td>
    <td align="right" width="34" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">430,979</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">415,368</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">324,734</font></td>
  </tr>
  <tr>
    <td width="639"><font face="Times New Roman" size="2">
    <p style="MARGIN-LEFT: 26px">Accumulated other comprehensive income (note 3)</font></td>
    <td align="right" width="34">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="165">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">26,248</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="166">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">26,248</font></td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="163">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">26,248</font></td>
  </tr>
  <tr>
    <td width="639" bgcolor="#E6E6E6">&nbsp;</td>
    <td align="right" width="34" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="165" bgcolor="#E6E6E6">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">547,013</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="166" bgcolor="#E6E6E6">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">530,565</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="163" bgcolor="#E6E6E6">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">437,892</font></td>
  </tr>
  <tr>
    <td width="639">&nbsp;</td>
    <td align="right" width="34">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="639" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">Total liabilities and
    shareholders' equity</font></td>
    <td align="right" width="34" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td style="BORDER-BOTTOM-STYLE: solid" align="right" width="165" bgcolor="#E6E6E6">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">715,847</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td style="BORDER-BOTTOM-STYLE: solid" align="right" width="166" bgcolor="#E6E6E6">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">723,276</font></td>
    <td align="right" width="36" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td style="BORDER-BOTTOM-STYLE: solid" align="right" width="163" bgcolor="#E6E6E6">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">609,645</font></td>
  </tr>
  <tr>
    <td width="639">&nbsp;</td>
    <td align="right" width="34">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="165">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="166">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="36">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="163">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="639"><font face="Times New Roman" size="2">See accompanying notes
    to interim consolidated financial statements</font></td>
    <td width="34">&nbsp;</td>
    <td width="165">&nbsp;</td>
    <td width="36">&nbsp;</td>
    <td width="166">&nbsp;</td>
    <td width="36">&nbsp;</td>
    <td width="163">&nbsp;</td>
  </tr>
</table>
<font face="Arial MT" size="2"><i><font face="Times New Roman" size="2">
<p align="right">GILDAN QUARTERLY REPORT &#150; Q1 2007 p.19</font></i></p>
</font><hr color="#000000" size="5"><p Style='page-break-before:always'><b><font face="Times New Roman" size="4">
<p align="center">Gildan Activewear Inc.<br>
Consolidated Statements of Earnings</font><font face="Times New Roman" size="2"><br>
</font></b><font face="Times New Roman" size="2">(In thousands of U.S. dollars,
except per share data)</p>
</font>
<table style="BORDER-COLLAPSE: collapse" borderColor="#111111" cellSpacing="0" cellPadding="0" width="100%" border="0">
  <tr>
    <td width="757">&nbsp;</td>
    <td align="right" width="70">&nbsp;</td>
    <td align="right" width="415" bgColor="#9accff" colSpan="3">
    <font face="Times New Roman" size="2"><i><b>
    <p style="MARGIN-LEFT: 20%" align="center">Three months ended</b></i></font></td>
  </tr>
  <tr>
    <td width="757">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="172">
    <font face="Times New Roman" size="2">December 31, 2006</font></td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="173">
    <font face="Times New Roman" size="2">January 1, 2006</font></td>
  </tr>
  <tr>
    <td width="757">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="172">
    <font face="Times New Roman" size="2">(unaudited)</font></td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="173">
    <font face="Times New Roman" size="2">(unaudited)</font></td>
  </tr>
  <tr>
    <td width="757">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="757" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">Sales</font></td>
    <td align="right" width="70" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td align="right" width="172" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">185,829</font></td>
    <td align="right" width="70" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td align="right" width="173" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">120,310</font></td>
  </tr>
  <tr>
    <td width="757"><font face="Times New Roman" size="2">Cost of sales</font></td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="172">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">131,951</font></td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="173">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">77,415</font></td>
  </tr>
  <tr>
    <td width="757" bgcolor="#E6E6E6">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="172" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="173" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="757"><font face="Times New Roman" size="2">Gross profit</font></td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">53,878</font></td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">42,895</font></td>
  </tr>
  <tr>
    <td width="757" bgcolor="#E6E6E6">&nbsp;</td>
    <td align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="757"><font face="Times New Roman" size="2">Selling, general and
    administrative expenses</font></td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">26,110</font></td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">18,063</font></td>
  </tr>
  <tr>
    <td width="757" bgcolor="#E6E6E6">&nbsp;</td>
    <td align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="757"><font face="Times New Roman" size="2">Restructuring and
    other charges (note 9)</font></td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="172">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">1,391</font></td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="173">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">-</font></td>
  </tr>
  <tr>
    <td width="757" bgcolor="#E6E6E6">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="172" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="173" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="757"><font face="Times New Roman" size="2">Earnings before the
    undernoted items</font></td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">26,377</font></td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">24,832</font></td>
  </tr>
  <tr>
    <td width="757" bgcolor="#E6E6E6">&nbsp;</td>
    <td align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="757"><font face="Times New Roman" size="2">Depreciation and
    amortization</font></td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">8,774</font></td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">7,430</font></td>
  </tr>
  <tr>
    <td width="757" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">Interest, net</font></td>
    <td align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">971</font></td>
    <td align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">566</font></td>
  </tr>
  <tr>
    <td width="757"><font face="Times New Roman" size="2">Non-controlling
    interest in loss of consolidated joint venture</font></td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="172">
    <font face="Times New Roman" size="2">(64)</font></td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="70">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="173">
    <font face="Times New Roman" size="2">(108)</font></td>
  </tr>
  <tr>
    <td width="757" bgcolor="#E6E6E6">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="172" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="173" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="757"><font face="Times New Roman" size="2">Earnings before income
    taxes</font></td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">16,696</font></td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">16,944</font></td>
  </tr>
  <tr>
    <td width="757" bgcolor="#E6E6E6">&nbsp;</td>
    <td align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="757"><font face="Times New Roman" size="2">Income taxes</font></td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="172">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">1,085</font></td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="173">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">749</font></td>
  </tr>
  <tr>
    <td width="757" bgcolor="#E6E6E6">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="172" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="173" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="757"><font face="Times New Roman" size="2">Net earnings</font></td>
    <td style="BORDER-BOTTOM-STYLE: solid" align="right" width="70">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td style="BORDER-BOTTOM-STYLE: solid" align="right" width="172">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">15,611</font></td>
    <td style="BORDER-BOTTOM-STYLE: solid" align="right" width="70">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td style="BORDER-BOTTOM-STYLE: solid" align="right" width="173">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">16,195</font></td>
  </tr>
  <tr>
    <td width="757" bgcolor="#E6E6E6">&nbsp;</td>
    <td align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="757">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="757" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">Basic EPS (note 10)</font></td>
    <td align="right" width="70" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td align="right" width="172" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">0.26</font></td>
    <td align="right" width="70" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td align="right" width="173" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">0.27</font></td>
  </tr>
  <tr>
    <td width="757">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="757" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">Diluted EPS (note 10)</font></td>
    <td align="right" width="70" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td align="right" width="172" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">0.26</font></td>
    <td align="right" width="70" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td align="right" width="173" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">0.27</font></td>
  </tr>
  <tr>
    <td width="757">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="757">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td align="middle" width="1242" colSpan="5">
    <font face="Times New Roman" size="4"><b>Consolidated Statements of Retained
    Earnings</b></font></td>
  </tr>
  <tr>
    <td align="middle" width="1242" colSpan="5">
    <font face="Times New Roman" size="2">(In thousands of U.S. dollars)</font></td>
  </tr>
  <tr>
    <td width="757">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="757">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="415" bgColor="#9accff" colSpan="3">
    <font face="Times New Roman" size="2"><i><b>
    <p style="MARGIN-LEFT: 20%; MARGIN-RIGHT: 4px" align="center">Three months
    ended</b></i></font></td>
  </tr>
  <tr>
    <td width="757">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="172">
    <p style="MARGIN-RIGHT: 4px"><font face="Times New Roman" size="2">December
    31, 2006</font></td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="173">
    <p style="MARGIN-RIGHT: 4px"><font face="Times New Roman" size="2">January
    1, 2006</font></td>
  </tr>
  <tr>
    <td width="757">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="172">
    <font face="Times New Roman" size="2">(unaudited)</font></td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="173">
    <font face="Times New Roman" size="2">(unaudited)</font></td>
  </tr>
  <tr>
    <td width="757">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="757" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">Retained earnings,
    beginning of the period</font></td>
    <td align="right" width="70" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td align="right" width="172" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">415,368</font></td>
    <td align="right" width="70" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td align="right" width="173" bgcolor="#E6E6E6"><font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">308,539</font></td>
  </tr>
  <tr>
    <td width="757"><font face="Times New Roman" size="2">Net earnings</font></td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="172">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">15,611</font></td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-BOTTOM: 1px solid" align="right" width="173">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">16,195</font></td>
  </tr>
  <tr>
    <td width="757" bgcolor="#E6E6E6">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="172" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="70" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td style="BORDER-TOP: 1px solid" align="right" width="173" bgcolor="#E6E6E6">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="757"><font face="Times New Roman" size="2">Retained earnings, end
    of the period</font></td>
    <td style="BORDER-BOTTOM-STYLE: solid" align="right" width="70">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td style="BORDER-BOTTOM-STYLE: solid" align="right" width="172">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">430,979</font></td>
    <td style="BORDER-BOTTOM-STYLE: solid" align="right" width="70">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">$</font></td>
    <td style="BORDER-BOTTOM-STYLE: solid" align="right" width="173">
    <font face="Times New Roman" size="2">
    <p style="MARGIN-RIGHT: 4px">324,734</font></td>
  </tr>
  <tr>
    <td width="757">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="172">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="70">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
    <td align="right" width="173">
    <p style="MARGIN-RIGHT: 4px">&nbsp;</td>
  </tr>
  <tr>
    <td width="757"><font face="Times New Roman" size="2">See accompanying notes
    to interim consolidated financial statements</font></td>
    <td width="70">&nbsp;</td>
    <td width="172">&nbsp;</td>
    <td width="70">&nbsp;</td>
    <td width="173">&nbsp;</td>
  </tr>
</table>
<font face="Arial MT" size="2"><i><font face="Times New Roman" size="2">
<p align="right">GILDAN QUARTERLY REPORT &#150; Q1 2007 p.20</font></i></p>
</font><hr color="#000000" size="5"><p Style='page-break-before:always'>

<b><font FACE="Times New Roman" size="4">
<p align="center">Gildan Activewear Inc.<br>
Consolidated Statements of Cash Flows<br>
</font></b><font face="Times New Roman" style="font-size: 9pt">(In thousands of
U.S. dollars)</font></p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="59%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="40%" COLSPAN="3" bgcolor="#9ACCFF"><font FACE="Times New Roman" SIZE="2"><i><b>
    <p align="center">Three months ended</b></i></font></td>
  </tr>
  <tr>
    <td WIDTH="59%">&nbsp;</td>
    <td WIDTH="6%" align="right">
    &nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2">December 31, 2006</font></td>
    <td WIDTH="6%" align="right">
    &nbsp;</td>
    <td WIDTH="18%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2">January 1, 2006</font></td>
  </tr>
  <tr>
    <td WIDTH="59%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1"><font FACE="Times New Roman" size="2">(unaudited)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="25%" align="right" style="border-top-style: solid; border-top-width: 1"><font FACE="Times New Roman" size="2">(unaudited)</font></td>
  </tr>
  <tr>
    <td WIDTH="59%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="25%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="59%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">Cash flows from
    operating activities:</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Net earnings</font></td>
    <td WIDTH="3%" align="right"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="15%" align="right">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">15,611</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="25%" align="right">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">16,195</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Adjustments for:</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="25%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 52">Depreciation and amortization</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">8,774</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="25%" align="right">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">7,430</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 52">Restructuring and other charges</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">1,124</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="25%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 52">Loss on disposal and writedown of property, plant</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="25%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 78">and equipment</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">358</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="25%" align="right">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">40</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 52">Stock-based compensation costs</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">468</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="25%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">277</font></td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 52">Future income taxes</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">244</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="25%" align="right">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">227</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 52">Non-controlling interest</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(64)</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(108)</font></td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 52">Unrealized foreign exchange (gain) loss</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">(1,458)</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="25%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">255</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">
    <font FACE="Times New Roman" SIZE="2">25,057</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="25%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">
    <font FACE="Times New Roman" SIZE="2">24,316</font></td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Changes in non-cash working capital balances:</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="25%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="59%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 52">Accounts receivable</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">67,417</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="25%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">56,829</font></td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 52">Inventories</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right"><font FACE="Times New Roman" SIZE="2">(32,861)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="25%" align="right"><font FACE="Times New Roman" SIZE="2">(43,983)</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 52">Prepaid expenses and deposits</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(920)</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">1,129</font></td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 52">Accounts payable and accrued liabilities</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right"><font FACE="Times New Roman" SIZE="2">(18,444)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="25%" align="right"><font FACE="Times New Roman" SIZE="2">(6,277)</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 52">Income taxes payable</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" 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" SIZE="2">(776)</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">
    <font FACE="Times New Roman" SIZE="2">58</font></td>
  </tr>
  <tr>
    <td WIDTH="59%">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">
    <font FACE="Times New Roman" SIZE="2">39,473</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="25%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">
    <font FACE="Times New Roman" SIZE="2">32,072</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">Cash flows (used in)
    from financing activities:</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="25%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="59%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Net (decrease) increase in long-term debt</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">(1,708)</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">92</font></td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Proceeds from the issuance of shares</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">
    <font FACE="Times New Roman" SIZE="2">369</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="25%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">
    <font FACE="Times New Roman" SIZE="2">860</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">(1,339)</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">
    <font FACE="Times New Roman" SIZE="2">952</font></td>
  </tr>
  <tr>
    <td WIDTH="59%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="25%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="59%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">Cash flows used in
    investing activities:</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Purchase of property, plant and equipment</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right"><font FACE="Times New Roman" SIZE="2">(30,342)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="25%" align="right"><font FACE="Times New Roman" SIZE="2">(12,374)</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" bgcolor="#E6E6E6"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Increase in other assets</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" 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" SIZE="2">(521)</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" SIZE="2">(107)</font></td>
  </tr>
  <tr>
    <td WIDTH="59%">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font FACE="Times New Roman" SIZE="2">(30,863)</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="25%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font FACE="Times New Roman" SIZE="2">(12,481)</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">Effect of exchange
    rate changes on cash and</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="25%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">cash equivalents denominated in foreign
    currencies</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">
    <font FACE="Times New Roman" SIZE="2">51</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="25%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">(49)</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">Net increase in cash
    and cash equivalents</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="25%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">during the period</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">7,322</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="25%" align="right">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">20,494</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">Cash and cash
    equivalents, beginning of period</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">29,007</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="25%" align="right">
    <p style="margin-right: 4"><font FACE="Times New Roman" SIZE="2">69,802</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">Cash and cash
    equivalents, end of period</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <p style="margin-right: 4">
    <font FACE="Times New Roman" SIZE="2">36,329</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="25%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <p style="margin-right: 4">
    <font FACE="Times New Roman" SIZE="2">90,296</font></td>
  </tr>
  <tr>
    <td WIDTH="59%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-top-style: none; border-top-width: medium">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: none; border-top-width: medium">&nbsp;</td>
    <td WIDTH="25%" align="right" style="border-top-style: none; border-top-width: medium">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="59%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="25%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="59%"><font FACE="Times New Roman" SIZE="2">See accompanying notes
    to interim consolidated financial statements</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="25%" align="right">&nbsp;</td>
  </tr>
</table>
<i><font FACE="Times New Roman PS" SIZE="2">
<p align="right">GILDAN QUARTERLY REPORT - Q1 2007 p.21</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p align="left"><img border="0" src="gildan2.jpg" width="99" height="43"></p>
<p align="right">NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS </p>
</font></i><font FACE="Times New Roman" size="2"><b>
<p><u>NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS <br>
</u>(For the period ended December 31, 2006) <br>
(Tabular amounts in thousands or thousands of U.S. dollars, except per share
data or unless otherwise noted) <br>
(unaudited) </p>
<p>1. Basis of presentation: </p>
</b></font>
<font FACE="Times New Roman" size="2">
<p ALIGN="JUSTIFY">The accompanying unaudited interim consolidated financial
statements have been prepared in accordance with Canadian generally accepted
accounting principles for interim financial information and include all normal
and recurring entries that are necessary for a fair presentation of the
statements. Accordingly, they do not include all of the information and
footnotes required by Canadian generally accepted accounting principles for
complete financial statements, and should be read in conjunction with the
Company's annual consolidated financial statements. </p>
<p>The Company's revenues and income are subject to seasonal variations.
Consequently, the results of operations for the first fiscal quarter are
traditionally not indicative of the results to be expected for the full fiscal
year. </p>
<p>Certain comparative figures have been reclassified in order to conform with
the current period's presentation. </p>
<p>All amounts in the attached notes are unaudited unless specifically
identified. </p>
<b>
<p>2. Significant accounting policies: </p>
</b>
<p ALIGN="JUSTIFY">The Company applied the same accounting policies in the
preparation of the interim consolidated financial statements, as disclosed in
Note 2 of its audited consolidated financial statements in the Company's annual
report for the year ended October 1, 2006, except as described in note 3 below.
</p>
<b>
<p>3. Change in accounting policy: </p>
</b>
<p ALIGN="JUSTIFY">Effective the commencement of its 2007 fiscal year, the
Company has adopted the Canadian Institute of Chartered Accountants (&quot;CICA&quot;)
Handbook Section 1530, Comprehensive Income, CICA Handbook Section 3251, Equity,
CICA Handbook Section 3855, Financial Instruments&#151;Recognition and Measurement,
CICA Handbook Section 3861, Financial Instruments &#150; Disclosure and Presentation,
and CICA Handbook Section 3865, Hedges. These new Handbook Sections, which apply
to fiscal years beginning on or after October 1, 2006, provide comprehensive
requirements for the recognition and measurement of financial instruments, as
well as standards on when and how hedge accounting may be applied. Handbook
Section 1530 also establishes standards for reporting and displaying
comprehensive income. Comprehensive income is defined as the change in equity
from transactions and other events from non-owner sources. Other comprehensive
income refers to items recognized in comprehensive income but that are excluded
from net income calculated in accordance with generally accepted accounting
principles. </p>
<p align="justify">Under these new standards, all financial instruments are classified into one
of the following five categories: held for trading, held&#150;to-maturity
investments, loans and receivables, available-for-sale financial assets or other
financial liabilities. All financial instruments, including derivatives, are
included on the consolidated balance sheet and are measured either at fair
market value with the exception of loans and receivables, investments
held-to-maturity and other financial liabilities, which will be measured at
amortized cost. Subsequent measurement and recognition of changes in fair value
of financial instruments depend on their initial classification. Held for
trading financial investments are measured at fair value and all gains and
losses are included in net income in the period in which they arise.
Available-for-sale financial instruments are measured at fair value with
revaluation gains and losses included in other comprehensive income until the
asset is removed from the balance sheet. </p>
<p ALIGN="JUSTIFY">The standards require derivative instruments to be recorded
as either assets or liabilities measured at their fair value unless exempted
from derivative treatment as a normal purchase and sale. Certain derivatives
embedded in other contracts must also be measured at fair value. All changes in
the fair value of derivatives are recognized in earnings unless specific hedge
criteria are met, which requires that a company must formally document,
designate and assess the effectiveness of transactions that receive hedge
accounting. Derivatives that qualify as hedging instruments must be designated
as either a ''cash flow hedge,'' when the hedged item is a future cash flow, or
a ''fair value hedge,'' when the hedged item is a recognized asset or liability.
The unrealized gains and losses related to a cash flow hedge are included in
other comprehensive income. For a fair value hedge, both the derivative and the
hedged item are recorded at fair value in the consolidated balance sheet and the
unrealized gains and losses from both items are included in earnings. Any
derivative instrument that does not qualify for hedge accounting is
marked-to-market at each reporting date and the gains or losses are included in
earnings. </p>
<font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q1 2007 p.22 </p>
</i></font><hr color="#000000" size="5"><p Style='page-break-before:always'>
<p ALIGN="JUSTIFY"><i><font FACE="Times New Roman PS" SIZE="2">
<img border="0" src="gildan2.jpg" width="99" height="43"></font></i></p>
<p ALIGN="right"><i><font FACE="Times New Roman PS" SIZE="2">NOTES TO INTERIM
CONSOLIDATED FINANCIAL STATEMENTS </font></i></p>
</font><font FACE="Times New Roman PS"><font size="2"><b>
<p>3. Change in accounting policy (Continued): </p>
</b>
<p ALIGN="JUSTIFY">As a result of the adoption of these standards, the Company
has classified its cash equivalents as available for sale. The Company has also
classified its accounts receivable as loans and receivables, and its accounts
payable and long-term debt as other financial liabilities, all of which are
measured at amortized cost. The adoption of these new standards also resulted in
the reclassification of amount of $26.3 million previously recorded in
&quot;Cumulative translation adjustment&quot; to &quot;Accumulated other comprehensive income&quot;
on the consolidated balance sheets. As at October 1, 2006 and December 31, 2006,
all outstanding forward foreign exchange contracts were reported on a
mark-to-market basis and the gains or losses were included in earnings, because
the Company elected not to follow hedge accounting for these derivatives. The
adoption of these standards had no impact on the consolidated statement of
earnings. </p>
<b>
<p>4. Assets held for sale: </p>
</b>
<p ALIGN="JUSTIFY">During the fourth quarter of fiscal 2006, the Company
announced the closure of sock manufacturing facilities in Mount Airy, North
Carolina and Hillsville, Virginia, a textile manufacturing facility in
Valleyfield, Quebec and distribution centres in Montreal, Quebec and Mount Airy,
North Carolina. As at December 31, 2006 assets held for sale of $4.7 million
represent land, building and equipment at these locations. During the first
quarter of fiscal 2007, the Company ceased recording depreciation on these
assets, which are recorded at the lower of their net book value or fair value
less costs to sell. The Company expects these assets to be sold during the
balance of fiscal 2007. </p>
<p>As at January 1, 2006 assets held for sale of $5.0 million were related to
the closure of two Canadian yarn-spinning operations during fiscal 2005. These
assets were sold during the third quarter of fiscal 2006. </p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="458"><font FACE="Times New Roman" size="2"><b>5. Share capital
    and contributed surplus:</b></font></td>
    <td WIDTH="58">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="458">&nbsp;</td>
    <td WIDTH="176" COLSPAN="3" align="center">
    <font FACE="Times New Roman" size="2"><u>December 31, 2006</u></font></td>
    <td WIDTH="177" COLSPAN="3" align="center">
    <font FACE="Times New Roman" size="2"><u>October 1, 2006</u></font></td>
    <td WIDTH="177" COLSPAN="3" align="center">
    <font FACE="Times New Roman" size="2"><u>January 1, 2006</u></font></td>
  </tr>
  <tr>
    <td WIDTH="458">&nbsp;</td>
    <td WIDTH="58">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="177" COLSPAN="3"><font FACE="Times New Roman" size="2">
    <p align="center">(audited)</font></td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="458" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="58" style="border-bottom-style: solid; border-bottom-width: 1" align="right">
    <font FACE="Times New Roman" size="2">Shares</font></td>
    <td WIDTH="118" COLSPAN="2" style="border-bottom-style: solid; border-bottom-width: 1" align="right">
    <font FACE="Times New Roman" size="2">Book value</font></td>
    <td WIDTH="59" style="border-bottom-style: solid; border-bottom-width: 1" align="right">
    <font FACE="Times New Roman" size="2">Shares</font></td>
    <td WIDTH="118" COLSPAN="2" style="border-bottom-style: solid; border-bottom-width: 1" align="right">
    <font FACE="Times New Roman" size="2">Book value</font></td>
    <td WIDTH="59" style="border-bottom-style: solid; border-bottom-width: 1" align="right">
    <font FACE="Times New Roman" size="2">Shares</font></td>
    <td WIDTH="118" COLSPAN="2" style="border-bottom-style: solid; border-bottom-width: 1" align="right">
    <font FACE="Times New Roman" size="2">Book value</font></td>
  </tr>
  <tr>
    <td WIDTH="458" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">Authorized without limit as to number
    and without par value:</font></td>
    <td WIDTH="58" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="458"><font FACE="Times New Roman" size="2">
    <p style="margin-left: 26">First preferred shares, issuable in series,
    non-voting</font></td>
    <td WIDTH="58">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="458" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">
    <p style="margin-left: 26">Second preferred shares, issuable in series,
    non-voting</font></td>
    <td WIDTH="58" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="458" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2">
    <p style="margin-left: 26">Common shares</font></td>
    <td WIDTH="58" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="59" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="59" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="59" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="59" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="59" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="59" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="59" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="59" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="458" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">Issued and outstanding:</font></td>
    <td WIDTH="58" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="458"><font FACE="Times New Roman" size="2">
    <p style="margin-left: 26">Common shares:</font></td>
    <td WIDTH="58">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
    <td WIDTH="59">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="458" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">
    <p style="margin-left: 52">Total outstanding, beginning of period</font></td>
    <td WIDTH="58" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">60,114</font></td>
    <td WIDTH="59" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">$</font></td>
    <td WIDTH="59" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">86,584</font></td>
    <td WIDTH="59" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">59,955</font></td>
    <td WIDTH="59" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">$</font></td>
    <td WIDTH="59" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">84,177</font></td>
    <td WIDTH="59" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">59,955</font></td>
    <td WIDTH="59" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">$</font></td>
    <td WIDTH="59" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">84,177</font></td>
  </tr>
  <tr>
    <td WIDTH="458"><font FACE="Times New Roman" size="2">
    <p style="margin-left: 78">Shares issued pursuant to business acquisition</font></td>
    <td WIDTH="58" align="right"><font FACE="Times New Roman" size="2">-</font></td>
    <td WIDTH="59" align="right">&nbsp;</td>
    <td WIDTH="59" align="right"><font FACE="Times New Roman" size="2">-</font></td>
    <td WIDTH="59" align="right"><font FACE="Times New Roman" size="2">10</font></td>
    <td WIDTH="59" align="right">&nbsp;</td>
    <td WIDTH="59" align="right"><font FACE="Times New Roman" size="2">460</font></td>
    <td WIDTH="59" align="right"><font FACE="Times New Roman" size="2">-</font></td>
    <td WIDTH="59" align="right">&nbsp;</td>
    <td WIDTH="59" align="right"><font FACE="Times New Roman" size="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="458" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">
    <p style="margin-left: 78">Shares issued under employee share purchase plan</font></td>
    <td WIDTH="58" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">1</font></td>
    <td WIDTH="59" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">75</font></td>
    <td WIDTH="59" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">8</font></td>
    <td WIDTH="59" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">360</font></td>
    <td WIDTH="59" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">2</font></td>
    <td WIDTH="59" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">54</font></td>
  </tr>
  <tr>
    <td WIDTH="458" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2">
    <p style="margin-left: 78">Shares issued pursuant to exercise of stock
    options</font></td>
    <td WIDTH="58" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2">26</font></td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2">294</font></td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2">141</font></td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2">1,587</font></td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2">82</font></td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" size="2">806</font></td>
  </tr>
  <tr>
    <td WIDTH="458" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">
    <p style="margin-left: 52">Total outstanding, end of period</font></td>
    <td WIDTH="58" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">60,141</font></td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">$</font></td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">86,953</font></td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">60,114</font></td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">$</font></td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">86,584</font></td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">60,039</font></td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">$</font></td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">85,037</font></td>
  </tr>
  <tr>
    <td WIDTH="458" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="58" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="458" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">Changes in contributed surplus were as
    follows:</font></td>
    <td WIDTH="58" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="458" style="border-top-style: solid; border-top-width: 1">
    <font FACE="Times New Roman" size="2">Balance, October 1, 2006</font></td>
    <td WIDTH="58" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1">
    <font FACE="Times New Roman" size="2">$</font></td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1">
    <font FACE="Times New Roman" size="2">2,365</font></td>
  </tr>
  <tr>
    <td WIDTH="505" COLSPAN="2" bgcolor="#E6E6E6"><font FACE="Times New Roman" size="2">
    Stock-based compensation related to stock options and Treasury RSUs</font></td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font FACE="Times New Roman" size="2">468</font></td>
  </tr>
  <tr>
    <td WIDTH="458" style="border-top-style: solid; border-top-width: 1; border-bottom-style:solid; border-bottom-width:1">
    <font FACE="Times New Roman" size="2">Balance, December 31, 2006</font></td>
    <td WIDTH="58" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style:solid; border-bottom-width:1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style:solid; border-bottom-width:1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style:solid; border-bottom-width:1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style:solid; border-bottom-width:1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style:solid; border-bottom-width:1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style:solid; border-bottom-width:1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style:solid; border-bottom-width:1">&nbsp;</td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style:solid; border-bottom-width:1">
    <font FACE="Times New Roman" size="2">$</font></td>
    <td WIDTH="59" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style:solid; border-bottom-width:1">
    <font FACE="Times New Roman" size="2">2,833</font></td>
  </tr>
</table>
</font><font FACE="Times New Roman" size="2"><b>
<p>6. Stock-based compensation:</b> </p>
<p ALIGN="JUSTIFY">The Company's Long Term Incentive Plan (the &quot;LTIP&quot;) includes
stock options and restricted share units. The LTIP allows the Board of Directors
to grant stock options, dilutive restricted share units (&quot;Treasury RSUs&quot;) and
non-dilutive restricted share units (&quot;Non-Treasury RSUs&quot;) to officers and other
key employees of the Company and its subsidiaries. </p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="50%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">Changes in outstanding stock options were as follows:</font></td>
    <td WIDTH="20%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="15%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="15%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="50%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="20%" style="border-top-style: solid; border-top-width: 1" align="center">&nbsp;</td>
    <td WIDTH="29%" COLSPAN="2" align="right" rowspan="2"><font size="2">
    Weighted average<br>
    </font><font size="2" FACE="Times New Roman">exercise price</font></td>
  </tr>
  <tr>
    <td WIDTH="50%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="20%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">Number</font></td>
  </tr>
  <tr>
    <td WIDTH="50%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="20%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="29%" COLSPAN="2" style="border-top-style: solid; border-top-width: 1" align="right">
    <font size="2">
    <p>(in Canadian dollars)</font></td>
  </tr>
  <tr>
    <td WIDTH="50%" bgcolor="#E6E6E6"><font size="2">Options outstanding, October 1, 2006</font></td>
    <td WIDTH="20%" align="right" bgcolor="#E6E6E6"><font size="2">428</font></td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6"><font size="2">$</font></td>
    <td WIDTH="15%" align="right" bgcolor="#E6E6E6"><font size="2">12.70</font></td>
  </tr>
  <tr>
    <td WIDTH="50%"><font size="2">Granted</font></td>
    <td WIDTH="20%" align="right"><font size="2">89</font></td>
    <td WIDTH="15%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right"><font size="2">54.48</font></td>
  </tr>
  <tr>
    <td WIDTH="50%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">Exercised</font></td>
    <td WIDTH="20%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">(26)</font></td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">12.64</font></td>
  </tr>
  <tr>
    <td WIDTH="50%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font size="2">Options outstanding, December 31, 2006</font></td>
    <td WIDTH="20%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font size="2">491</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">$</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">20.30</font></td>
  </tr>
</table>
<font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q1 2007 p.23 </p>
</i></font><hr color="#000000" size="5"><p Style='page-break-before:always'>
<p align="left"><i><font FACE="Times New Roman PS" SIZE="2">
<img border="0" src="gildan2.jpg" width="99" height="43"></font></i></p>
<p align="right"><i>
<font FACE="Times New Roman PS" SIZE="2">NOTES TO INTERIM CONSOLIDATED FINANCIAL
STATEMENTS </font></i></p>
<b>
<p>6. Stock-based compensation (Continued):</b> </p>
<p ALIGN="JUSTIFY">As at December 31, 2006, 401,645 of the outstanding options
were exercisable at the weighted average price of CA$12.70. Based on the Black-Scholes
option pricing model, the grant date weighted average fair value of the options
granted during the first quarter ended December 31, 2006 was CA$18.34. No
options were granted during fiscal 2006. </p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="52%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">Changes in outstanding Treasury RSUs were as follows:</font></td>
    <td WIDTH="19%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="18%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="52%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="19%" align="center" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="29%" COLSPAN="2" align="center" rowspan="2">
    <p align="right"><font size="2">
    Weighted average<br>
    </font><font size="2" FACE="Times New Roman">fair value per
    unit</font></td>
  </tr>
  <tr>
    <td WIDTH="52%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="19%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">Number</font></td>
  </tr>
  <tr>
    <td WIDTH="52%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="19%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="29%" COLSPAN="2" style="border-top-style: solid; border-top-width: 1">
    <font size="2">
    <p align="right">(in Canadian dollars)</font></td>
  </tr>
  <tr>
    <td WIDTH="52%" bgcolor="#E6E6E6"><font size="2">Treasury RSUs outstanding, October 1, 2006</font></td>
    <td WIDTH="19%" align="right" bgcolor="#E6E6E6"><font size="2">417</font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font size="2">$</font></td>
    <td WIDTH="18%" align="right" bgcolor="#E6E6E6"><font size="2">29.62</font></td>
  </tr>
  <tr>
    <td WIDTH="52%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">Granted</font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">67</font></td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="18%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">60.09</font></td>
  </tr>
  <tr>
    <td WIDTH="52%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font size="2">Treasury RSUs outstanding, December 31, 2006</font></td>
    <td WIDTH="19%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font size="2">484</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="18%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font size="2">33.84</font></td>
  </tr>
</table>
</font><font FACE="Arial MT" size="2">
<p>As of December 31, 2006, none of the awarded and outstanding Treasury RSUs
were vested. </p>
<p ALIGN="JUSTIFY">The compensation expense recorded for the three month periods
ended December 31, 2006 and January 1, 2006, respectively, was $0.5 million and
$0.3 million, in respect of the Treasury RSUs and stock options. The counterpart
has been recorded as contributed surplus. When the shares are issued to the
employees, the amounts previously credited to contributed surplus are
reclassified to share capital. </p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="53%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" size="2">Changes in outstanding Non-Treasury RSUs were
    as follows:</font></td>
    <td WIDTH="18%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="18%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="53%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="18%" align="center" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="29%" COLSPAN="2" align="center" rowspan="2">
    <p align="right">
    <font FACE="Arial MT" size="2">Weighted average<br>
    fair value per unit</font></td>
  </tr>
  <tr>
    <td WIDTH="53%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="18%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" size="2">Number</font></td>
  </tr>
  <tr>
    <td WIDTH="53%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="18%" align="center" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="29%" COLSPAN="2" align="center" style="border-top-style: solid; border-top-width: 1">
    <p align="right">
    <font FACE="Arial MT" size="2">(in Canadian dollars)</font></td>
  </tr>
  <tr>
    <td WIDTH="53%" bgcolor="#E6E6E6"><font FACE="Arial MT" size="2">Non-Treasury RSUs
    outstanding, October 1, 2006</font></td>
    <td WIDTH="18%" align="right" bgcolor="#E6E6E6"><font FACE="Arial MT" size="2">-</font></td>
    <td WIDTH="11%" align="right" bgcolor="#E6E6E6"><font FACE="Arial MT" size="2">$</font></td>
    <td WIDTH="18%" align="right" bgcolor="#E6E6E6"><font FACE="Arial MT" size="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="53%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" size="2">Granted</font></td>
    <td WIDTH="18%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" size="2">34</font></td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="18%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" size="2">54.49</font></td>
  </tr>
  <tr>
    <td WIDTH="53%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font FACE="Arial MT" size="2">Non-Treasury RSUs outstanding, December 31,
    2006</font></td>
    <td WIDTH="18%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font FACE="Arial MT" size="2">34</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font FACE="Arial MT" size="2">$</font></td>
    <td WIDTH="18%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font FACE="Arial MT" size="2">54.49</font></td>
  </tr>
</table>
</font><font FACE="Times New Roman" size="2">
<p ALIGN="JUSTIFY">Non-Treasury RSUs have the same features as Treasury RSUs
except that their vesting period is a maximum of three years and they will be
settled in cash at the end of the vesting period. The settlement amount is based
on the Company's stock price at the vesting date. No Common Shares are issued
from treasury under such awards and they are therefore non-dilutive. As of
December 31, 2006, none of the awarded and outstanding non-Treasury RSUs were
vested. </p>
<p>The compensation expense recorded in respect of the non-Treasury RSUs for the
three-month period ended December 31, 2006 was $0.1 million. No non-Treasury
RSUs were issued in fiscal 2006. </p>
<p ALIGN="JUSTIFY">Effective the commencement of its fiscal 2004 fiscal year,
the Company follows the fair value-based method to account for all transactions
where services are received in exchange for stock-based compensation and other
stock-based payments. For stock options and Treasury RSUs, compensation cost is
measured at the fair value at the date of grant and is expensed over the award's
vesting period. For non-Treasury RSUs, the compensation cost is ultimately
measured based on the market price of the Company's shares at the vesting date
and is recognized by amortizing the cost over the vesting period. The offsetting
liability is marked-to-market until the vesting date with any changes in the
market value of the Company's shares resulting in a change in the measure of
compensation cost for these awards until vested, which is recorded in the
periods in which these changes occur. </p>
<b>
<p>7. Contingent liabilities: </p>
</b>
<p ALIGN="JUSTIFY">In November 2002, one of the Company's Mexican subsidiaries
(&quot;Gildan Mexico&quot;) received a tax assessment from a regional taxation office
relating to duties for the 2000 fiscal year for approximately $6.0 million. The
substance of the assessment was that the Mexican tax authorities adopted the
position that Canadian-made textiles shipped to Gildan Mexico for sewing
processing had not subsequently been exported from Mexico. Gildan Mexico
appealed the assessment and was successful in obtaining a judgment in its favour.
Notwithstanding the judgment, the regional Mexican taxation office issued a new
assessment in March 2005, and increased the assessed amount to approximately
$7.1 million, primarily comprised of interest and late payment penalties.
Shortly after receiving the second assessment, Gildan Mexico again filed an
appeal. In July 2006, Gildan Mexico received notification that its appeal of the
second assessment for fiscal 2000 was unsuccessful. The Company has received
legal opinions that the tax assessment is without merit under Mexican law
governing re-export from maquiladora operations. Additionally, Gildan Mexico, a
maquiladora operation, has provided documentation to establish that the textiles
imported into Mexico for sewing were subsequently exported to the United States
and Canada. The Company is pursuing all available avenues to resolve this matter
in its favour. At the present time, the Mexican authorities are not attempting
to enforce payment of this tax assessment. The Company expects to be successful
in its effort to clarify and resolve this matter and, accordingly, no provision
has been made in the accounts for this potential liability. </p>
<font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q1 2007 p.24 </p>
</i></font><hr color="#000000" size="5"><p Style='page-break-before:always'>
<p><i>
<font FACE="Times New Roman PS" SIZE="2">
<img border="0" src="gildan2.jpg" width="99" height="43"></font></i></p>
<p ALIGN="right"><i><font FACE="Times New Roman PS" SIZE="2">NOTES TO INTERIM
CONSOLIDATED FINANCIAL STATEMENTS </font></i></p>
<b>
<p>8. Guarantees: </p>
</b>
<p>As at December 31, 2006, significant guarantees that have been provided to
third parties are the following: </p>
<p align="justify">The Company, and some of its subsidiaries, have granted irrevocable standby
letters of credit and surety bonds, issued by highly rated financial
institutions, to third parties to indemnify them in the event the Company does
not perform its contractual obligations. As at December 31, 2006, the maximum
potential liability under these guarantees was $39.1 million of which $5.4
million was for surety bonds and $33.7 million was for corporate guarantees and
standby letters of credit. The standby letters of credit mature at various dates
during 2007, the surety bonds are automatically renewed on an annual basis and
the corporate guarantees mature at various dates up to fiscal 2011. </p>
<p align="justify">As at December 31, 2006, the Company has recorded no performance liability
with respect to these guarantees, as the Company does not expect to make any
payments for the aforementioned items. Management believes that the fair value
of the non-contingent obligations requiring performance under the guarantees in
the event that specified triggering events or conditions occur approximates the
cost of obtaining the standby letters of credit and surety bonds. </p>
<b>
<p>9. Restructuring and other charges: </p>
</b>
<p ALIGN="JUSTIFY">Restructuring charges of $1.4 million in the first quarter of
fiscal 2007 are composed of $1.1 million of accelerated depreciation related to
the change in the estimated economic lives of the Company's Canadian
manufacturing assets and $0.3 million of additional severance costs and carrying
costs relating to closed facilities following the restructuring of the
operations announced in September 2006. </p>
<b>
<p>10. Earnings per share: </p>
</b>
<p>A reconciliation between basic and diluted earnings per share is as follows:
</p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="551">&nbsp;</td>
    <td WIDTH="435" colspan="5" bgcolor="#9ACCFF">
    <p align="center"><b><i><font size="2">Three Months Ended</font></i></b></td>
  </tr>
  <tr>
    <td WIDTH="551">&nbsp;</td>
    <td WIDTH="174" COLSPAN="2" align="right"><font size="2"><u>December 31,
    2006</u></font></td>
    <td WIDTH="261" COLSPAN="3" align="right"><font size="2"><u>January 1, 2006</u></font></td>
  </tr>
  <tr>
    <td WIDTH="551" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="87" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="87" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="164" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="97" COLSPAN="2" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="551" style="border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium" bgcolor="#E6E6E6">
    <font size="2">Basic earnings per share:</font></td>
    <td WIDTH="87" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="87" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="164" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="97" COLSPAN="2" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="551" style="border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">
    <p style="margin-left: 26">Basic weighted average number of common shares
    outstanding</font></td>
    <td WIDTH="87" align="right" style="border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="87" align="right" style="border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">60,139</font></td>
    <td WIDTH="164" align="right" style="border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="97" COLSPAN="2" align="right" style="border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">59,970</font></td>
  </tr>
  <tr>
    <td WIDTH="551" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">
    <p style="margin-left: 26">Basic earnings per share</font></td>
    <td WIDTH="87" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="87" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">0.26</font></td>
    <td WIDTH="164" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="97" COLSPAN="2" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">0.27</font></td>
  </tr>
  <tr>
    <td WIDTH="551" style="border-top-style: solid; border-top-width: 1">
    <font size="2">Diluted earnings per share:</font></td>
    <td WIDTH="87" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="87" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="164" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="97" COLSPAN="2" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="551" bgcolor="#E6E6E6"><font size="2">
    <p style="margin-left: 26">Basic weighted average number of common shares
    outstanding</font></td>
    <td WIDTH="87" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="87" align="right" bgcolor="#E6E6E6"><font size="2">60,139</font></td>
    <td WIDTH="164" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="97" COLSPAN="2" align="right" bgcolor="#E6E6E6"><font size="2">59,970</font></td>
  </tr>
  <tr>
    <td WIDTH="551" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">
    <p style="margin-left: 26">Plus impact of stock options and Treasury RSUs</font></td>
    <td WIDTH="87" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="87" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">585</font></td>
    <td WIDTH="164" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="97" COLSPAN="2" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">589</font></td>
  </tr>
  <tr>
    <td WIDTH="551" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">
    <p style="margin-left: 26">Diluted weighted average number of common shares
    outstanding</font></td>
    <td WIDTH="87" 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="87" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">60,724</font></td>
    <td WIDTH="164" 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="97" COLSPAN="2" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">60,559</font></td>
  </tr>
  <tr>
    <td WIDTH="551" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">
    <p style="margin-left: 26">Diluted earnings per share</font></td>
    <td WIDTH="87" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">$</font></td>
    <td WIDTH="87" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">0.26</font></td>
    <td WIDTH="164" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">$</font></td>
    <td WIDTH="97" COLSPAN="2" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">0.27</font></td>
  </tr>
  <tr>
    <td WIDTH="551" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="87" align="right" style="border-top-style: solid; border-top-width: 1">
    </td>
    <td WIDTH="87" align="right" style="border-top-style: solid; border-top-width: 1">
    </td>
    <td WIDTH="164" align="right" style="border-top-style: solid; border-top-width: 1">
    </td>
    <td WIDTH="10" align="right" style="border-top-style: solid; border-top-width: 1">
    </td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" width="87"></td>
  </tr>
</table>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="551"><font size="2"><b>11. Other information:</b></font></td>
    <td WIDTH="87">&nbsp;</td>
    <td WIDTH="89">&nbsp;</td>
    <td WIDTH="161">&nbsp;</td>
    <td WIDTH="98">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="551">&nbsp;</td>
    <td WIDTH="435" colspan="4" bgcolor="#9ACCFF">
    <p align="center"><b><font size="2" FACE="Times New Roman"><i>
    <font size="2">Three Months Ended</font></i></font></b></td>
  </tr>
  <tr>
    <td WIDTH="551">&nbsp;</td>
    <td WIDTH="176" COLSPAN="2" align="right"><font size="2"><u>December 31,
    2006</u></font></td>
    <td WIDTH="259" COLSPAN="2" align="right"><font size="2"><u>January 1, 2006</u></font></td>
  </tr>
  <tr>
    <td WIDTH="551">&nbsp;</td>
    <td WIDTH="87" align="right">&nbsp;</td>
    <td WIDTH="89" align="right">&nbsp;</td>
    <td WIDTH="161" align="right">&nbsp;</td>
    <td WIDTH="98" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="551" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">(a) The following items were included in the determination of
    the Company's net earnings:</font></td>
    <td WIDTH="87" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="89" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="161" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="98" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="551" style="border-top-style: solid; border-top-width: 1">
    <font size="2">Depreciation of property, plant and equipment</font></td>
    <td WIDTH="87" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="89" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="161" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="98" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="551"><font size="2">
    <p style="margin-left: 26">(excluding restructuring and other charges)</font></td>
    <td WIDTH="87" align="right"><font size="2">$</font></td>
    <td WIDTH="89" align="right">
    <p style="margin-right: 4"><font size="2">8,376</font></td>
    <td WIDTH="161" align="right"><font size="2">$</font></td>
    <td WIDTH="98" align="right"><font size="2">7,187</font></td>
  </tr>
  <tr>
    <td WIDTH="551" bgcolor="#E6E6E6"><font size="2">Interest expense on long-term debt</font></td>
    <td WIDTH="87" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="89" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font size="2">678</font></td>
    <td WIDTH="161" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="98" align="right" bgcolor="#E6E6E6"><font size="2">1,031</font></td>
  </tr>
  <tr>
    <td WIDTH="551"><font size="2">Interest expense on short-term indebtedness
    and other</font></td>
    <td WIDTH="87" align="right">&nbsp;</td>
    <td WIDTH="89" align="right">
    <p style="margin-right: 4"><font size="2">467</font></td>
    <td WIDTH="161" align="right">&nbsp;</td>
    <td WIDTH="98" align="right"><font size="2">64</font></td>
  </tr>
  <tr>
    <td WIDTH="551" bgcolor="#E6E6E6"><font size="2">Foreign exchange (gain) loss</font></td>
    <td WIDTH="87" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="89" align="right" bgcolor="#E6E6E6"><font size="2">(1,845)</font></td>
    <td WIDTH="161" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="98" align="right" bgcolor="#E6E6E6"><font size="2">91</font></td>
  </tr>
  <tr>
    <td WIDTH="551"><font size="2">Amortization expense of deferred start-up
    costs and other</font></td>
    <td WIDTH="87" align="right">&nbsp;</td>
    <td WIDTH="89" align="right">
    <p style="margin-right: 4"><font size="2">237</font></td>
    <td WIDTH="161" align="right">&nbsp;</td>
    <td WIDTH="98" align="right"><font size="2">243</font></td>
  </tr>
  <tr>
    <td WIDTH="551" bgcolor="#E6E6E6"><font size="2">Amortization expense of intangible assets</font></td>
    <td WIDTH="87" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="89" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font size="2">161</font></td>
    <td WIDTH="161" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="98" align="right" bgcolor="#E6E6E6"><font size="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="551" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">Investment income</font></td>
    <td WIDTH="87" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="89" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">
    <font size="2">174</font></td>
    <td WIDTH="161" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="98" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">510</font></td>
  </tr>
  <tr>
    <td WIDTH="551" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="87" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="89" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="161" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="98" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="551" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">(b) Supplemental cash flow disclosure:</font></td>
    <td WIDTH="87" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="89" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="161" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="98" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="551" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">Cash paid during the period for:</font></td>
    <td WIDTH="87" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="89" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="161" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="98" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="551"><font size="2">
    <p style="margin-left: 26">Interest</font></td>
    <td WIDTH="87" align="right"><font size="2">$</font></td>
    <td WIDTH="89" align="right">
    <p style="margin-right: 4"><font size="2">1,161</font></td>
    <td WIDTH="161" align="right"><font size="2">$</font></td>
    <td WIDTH="98" align="right"><font size="2">1,060</font></td>
  </tr>
  <tr>
    <td WIDTH="551" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">
    <p style="margin-left: 26">Income taxes</font></td>
    <td WIDTH="87" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="89" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">
    <font size="2">1,471</font></td>
    <td WIDTH="161" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="98" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">336</font></td>
  </tr>
</table>
<font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q1 2007 p.25 </p>
</i></font><hr color="#000000" size="5"><p Style='page-break-before:always'>
<p align="left"><i><font FACE="Times New Roman PS" SIZE="2">
<img border="0" src="gildan2.jpg" width="99" height="43"></font></i></p>
<p align="right"><i>
<font FACE="Times New Roman PS" SIZE="2">NOTES TO INTERIM CONSOLIDATED FINANCIAL
STATEMENTS </font></i></p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="42%"><font size="2"><b>11. Other information (Continued):</b></font></td>
    <td WIDTH="9%">&nbsp;</td>
    <td WIDTH="9%">&nbsp;</td>
    <td WIDTH="10%">&nbsp;</td>
    <td WIDTH="10%">&nbsp;</td>
    <td WIDTH="10%">&nbsp;</td>
    <td WIDTH="10%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="42%">&nbsp;</td>
    <td WIDTH="22%" COLSPAN="2" align="right"><font size="2"><u>December 31,
    2006</u></font></td>
    <td WIDTH="23%" COLSPAN="2" align="right"><font size="2"><u>October 1, 2006</u></font></td>
    <td WIDTH="21%" COLSPAN="2" align="right"><font size="2"><u>January 1, 2006</u></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" style="border-bottom-style: solid; border-bottom-width: 1">
    <p align="right">
    <font size="2">(audited)</font></td>
    <td WIDTH="10%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">Non-cash transactions:</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="42%"><font size="2">
    <p style="margin-left: 26">Additions to property, plant and equipment
    included in</font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="42%"><font size="2">
    <p style="margin-left: 52">accounts payable and accrued liabilities</font></td>
    <td WIDTH="9%" align="right"><font size="2">$</font></td>
    <td WIDTH="9%" align="right"><font size="2">2,483</font></td>
    <td WIDTH="10%" align="right"><font size="2">$</font></td>
    <td WIDTH="10%" align="right"><font size="2">2,979</font></td>
    <td WIDTH="10%" align="right"><font size="2">$</font></td>
    <td WIDTH="10%" align="right"><font size="2">316</font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">
    <p style="margin-left: 26">Issuance of shares on acquisition of Kentucky
    Derby</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">-</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">460</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-top-style: solid; border-top-width: 1">
    <font size="2">Cash and cash equivalents consist of:</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="42%" bgcolor="#E6E6E6"><font size="2">
    <p style="margin-left: 26">Cash balances with banks</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font size="2">$</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font size="2">27,737</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font size="2">$</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font size="2">27,810</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font size="2">$</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font size="2">27,136</font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">
    <p style="margin-left: 26">Short-term investments</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">8,592</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">1,197</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">63,160</font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">36,329</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">29,007</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">90,296</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="286"><font size="2"><b>12. Financial instruments:</b></font></td>
    <td WIDTH="68">&nbsp;</td>
    <td WIDTH="73">&nbsp;</td>
    <td WIDTH="129">&nbsp;</td>
    <td WIDTH="270">&nbsp;</td>
    <td WIDTH="22">&nbsp;</td>
    <td WIDTH="129">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="286">&nbsp;</td>
    <td WIDTH="68">&nbsp;</td>
    <td WIDTH="73">&nbsp;</td>
    <td WIDTH="129">&nbsp;</td>
    <td WIDTH="270">&nbsp;</td>
    <td WIDTH="22">&nbsp;</td>
    <td WIDTH="129">&nbsp;</td>
  </tr>
  <tr>
    <td COLSPAN="7" width="977">
    <p align="justify"><font size="2">The following table summarizes the Company's
    commitments to buy and sell foreign currencies as at December 31, 2006 and </font>
    <font size="2" FACE="Times New Roman">January 1, 2006:</font></td>
  </tr>
  <tr>
    <td WIDTH="286">&nbsp;</td>
    <td WIDTH="68">&nbsp;</td>
    <td WIDTH="73">&nbsp;</td>
    <td WIDTH="129">&nbsp;</td>
    <td WIDTH="270">&nbsp;</td>
    <td WIDTH="22">&nbsp;</td>
    <td WIDTH="129">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="286" align="right">&nbsp;</td>
    <td WIDTH="68" align="right">&nbsp;</td>
    <td WIDTH="73" align="right"><font size="2">Notional</font></td>
    <td WIDTH="129" align="right">&nbsp;</td>
    <td WIDTH="270" align="right">&nbsp;</td>
    <td WIDTH="151" COLSPAN="2" align="right"><font size="2">Notional U.S.</font></td>
  </tr>
  <tr>
    <td WIDTH="286" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="68" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="73" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font size="2">amount</font></td>
    <td WIDTH="129" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font size="2">Exchange rate</font></td>
    <td WIDTH="270" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font size="2">Maturity</font></td>
    <td WIDTH="151" COLSPAN="2" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font size="2">equivalent</font></td>
  </tr>
  <tr>
    <td WIDTH="286" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6"><font size="2"><b>2007:</b></font></td>
    <td WIDTH="68" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="73" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="129" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="270" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="22" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="129" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="286"><font size="2">Buy contracts:</font></td>
    <td WIDTH="68" align="right">&nbsp;</td>
    <td WIDTH="73" align="right">&nbsp;</td>
    <td WIDTH="129" align="right">&nbsp;</td>
    <td WIDTH="270" align="right">&nbsp;</td>
    <td WIDTH="22" align="right">&nbsp;</td>
    <td WIDTH="129" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="286" bgcolor="#E6E6E6"><font size="2">
    <p style="margin-left: 26">Foreign exchange contracts</font></td>
    <td WIDTH="68" align="right" bgcolor="#E6E6E6"><font size="2">&#128;</font></td>
    <td WIDTH="73" align="right" bgcolor="#E6E6E6"><font size="2">6,767</font></td>
    <td WIDTH="129" align="right" bgcolor="#E6E6E6"><font size="2">1.2116 to 1.3210</font></td>
    <td WIDTH="270" align="right" bgcolor="#E6E6E6"><font size="2">January to June 2007</font></td>
    <td WIDTH="22" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="129" align="right" bgcolor="#E6E6E6">
    <font size="2" FACE="Times New Roman">$ </font><font size="2">8,426</font></td>
  </tr>
  <tr>
    <td WIDTH="286">&nbsp;</td>
    <td WIDTH="68" align="right"><font size="2">CA$</font></td>
    <td WIDTH="73" align="right"><font size="2">25,354</font></td>
    <td WIDTH="129" align="right"><font size="2">0.8690 to 0.8794</font></td>
    <td WIDTH="270" align="right"><font size="2">January to September 2007</font></td>
    <td WIDTH="22" align="right">&nbsp;</td>
    <td WIDTH="129" align="right"><font size="2">22,190</font></td>
  </tr>
  <tr>
    <td WIDTH="286" bgcolor="#E6E6E6"><font size="2">Sell contracts:</font></td>
    <td WIDTH="68" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="73" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="129" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="270" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="22" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="129" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="286"><font size="2">
    <p style="margin-left: 26">Foreign exchange contracts</font></td>
    <td WIDTH="68" align="right"><font size="2">&#128;</font></td>
    <td WIDTH="73" align="right"><font size="2">3,970</font></td>
    <td WIDTH="129" align="right"><font size="2">1.2974 to 1.3092</font></td>
    <td WIDTH="270" align="right"><font size="2">January to September 2007</font></td>
    <td WIDTH="22" align="right">&nbsp;</td>
    <td WIDTH="129" align="right"><font size="2" FACE="Times New Roman">$ </font><font size="2">5,178</font></td>
  </tr>
  <tr>
    <td WIDTH="286" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="68" align="right" bgcolor="#E6E6E6"><font size="2">&#163;</font></td>
    <td WIDTH="73" align="right" bgcolor="#E6E6E6"><font size="2">13,461</font></td>
    <td WIDTH="129" align="right" bgcolor="#E6E6E6"><font size="2">1.9100 to 1.9794</font></td>
    <td WIDTH="270" align="right" bgcolor="#E6E6E6"><font size="2">January 2007 to September 2008</font></td>
    <td WIDTH="22" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="129" align="right" bgcolor="#E6E6E6"><font size="2">26,300</font></td>
  </tr>
  <tr>
    <td WIDTH="286">&nbsp;</td>
    <td WIDTH="68" align="right"><font size="2">CA$</font></td>
    <td WIDTH="73" align="right"><font size="2">1,600</font></td>
    <td WIDTH="129" align="right"><font size="2">0.8584</font></td>
    <td WIDTH="270" align="right"><font size="2">January 2007</font></td>
    <td WIDTH="22" align="right">&nbsp;</td>
    <td WIDTH="129" align="right"><font size="2">1,373</font></td>
  </tr>
  <tr>
    <td WIDTH="286" bgcolor="#E6E6E6"><font size="2"><b>2006:</b></font></td>
    <td WIDTH="68" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="73" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="129" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="270" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="22" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="129" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="286"><font size="2">Buy contracts:</font></td>
    <td WIDTH="68" align="right">&nbsp;</td>
    <td WIDTH="73" align="right">&nbsp;</td>
    <td WIDTH="129" align="right">&nbsp;</td>
    <td WIDTH="270" align="right">&nbsp;</td>
    <td WIDTH="22" align="right">&nbsp;</td>
    <td WIDTH="129" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="286" bgcolor="#E6E6E6"><font size="2">
    <p style="margin-left: 26">Foreign exchange contracts</font></td>
    <td WIDTH="68" align="right" bgcolor="#E6E6E6"><font size="2">CA$</font></td>
    <td WIDTH="73" align="right" bgcolor="#E6E6E6"><font size="2">30,800</font></td>
    <td WIDTH="129" align="right" bgcolor="#E6E6E6"><font size="2">0.7997 to 0.8506</font></td>
    <td WIDTH="270" align="right" bgcolor="#E6E6E6"><font size="2">January to September 2006</font></td>
    <td WIDTH="151" COLSPAN="2" align="right" bgcolor="#E6E6E6"><font size="2">$ 25,585</font></td>
  </tr>
  <tr>
    <td WIDTH="286"><font size="2">Sell contracts:</font></td>
    <td WIDTH="68" align="right">&nbsp;</td>
    <td WIDTH="73" align="right">&nbsp;</td>
    <td WIDTH="129" align="right">&nbsp;</td>
    <td WIDTH="270" align="right">&nbsp;</td>
    <td WIDTH="22" align="right">&nbsp;</td>
    <td WIDTH="129" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="286" bgcolor="#E6E6E6"><font size="2">
    <p style="margin-left: 26">Foreign exchange contracts</font></td>
    <td WIDTH="68" align="right" bgcolor="#E6E6E6"><font size="2">&#128;</font></td>
    <td WIDTH="73" align="right" bgcolor="#E6E6E6"><font size="2">7,786</font></td>
    <td WIDTH="129" align="right" bgcolor="#E6E6E6"><font size="2">1.1802 to 1.3721</font></td>
    <td WIDTH="270" align="right" bgcolor="#E6E6E6"><font size="2">January to September 2006</font></td>
    <td WIDTH="151" COLSPAN="2" align="right" bgcolor="#E6E6E6"><font size="2">$ 10,372</font></td>
  </tr>
  <tr>
    <td WIDTH="286">&nbsp;</td>
    <td WIDTH="68" align="right"><font size="2">&#163;</font></td>
    <td WIDTH="73" align="right"><font size="2">3,330</font></td>
    <td WIDTH="129" align="right"><font size="2">1.8707 to 1.8851</font></td>
    <td WIDTH="270" align="right"><font size="2">January to September 2006</font></td>
    <td WIDTH="22" align="right">&nbsp;</td>
    <td WIDTH="129" align="right"><font size="2">6,248</font></td>
  </tr>
  <tr>
    <td WIDTH="286" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="68" align="right" bgcolor="#E6E6E6"><font size="2">CA$</font></td>
    <td WIDTH="73" align="right" bgcolor="#E6E6E6"><font size="2">10,000</font></td>
    <td WIDTH="129" align="right" bgcolor="#E6E6E6"><font size="2">0.8602</font></td>
    <td WIDTH="270" align="right" bgcolor="#E6E6E6"><font size="2">January 2006</font></td>
    <td WIDTH="22" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="129" align="right" bgcolor="#E6E6E6"><font size="2">8,602</font></td>
  </tr>
</table>
<b>
<p>13. Segmented information: </p>
</b>
<p align="justify">The Company manufactures and sells activewear, socks and underwear. The
Company operates in one business segment, being high-volume, basic, frequently
replenished, non-fashion apparel. </p>
<p ALIGN="JUSTIFY">The Company has two customers accounting for at least 10% of
total sales. For the three-month period ended December 31, 2006, Customer A
accounted for 19.0% and Customer B accounted for 10.0%. For the three-month
period ended January 1, 2006, Customer A accounted for 33.1% of total sales, and
there were no sales for Customer B. The year-over-year changes in the percentage
of total sales for both customers were affected by the Company's acquisition of
Kentucky Derby at the beginning of the fourth quarter of fiscal 2006. </p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="62%">&nbsp;</td>
    <td WIDTH="43%" colspan="4" align="center" bgcolor="#9ACCFF">
    <font size="2" FACE="Times New Roman"><i><b>Three months
    ended</b></i></font></td>
  </tr>
  <tr>
    <td WIDTH="62%">&nbsp;</td>
    <td WIDTH="18%" COLSPAN="2" align="right"><font size="2"><u>December 31,
    2006</u></font></td>
    <td WIDTH="25%" COLSPAN="2" align="right"><font size="2"><u>January 1, 2006</u></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">Sales were derived from customers located in the following
    geographic areas:</font></td>
    <td WIDTH="3%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="62%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">United States</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">169,064</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">106,652</font></td>
  </tr>
  <tr>
    <td WIDTH="62%"><font size="2">Canada</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font size="2">7,965</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font size="2">7,466</font></td>
  </tr>
  <tr>
    <td WIDTH="62%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">Europe and other</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">8,800</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font size="2">6,192</font></td>
  </tr>
  <tr>
    <td WIDTH="62%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font size="2">$</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font size="2">185,829</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font size="2">$</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font size="2">120,310</font></td>
  </tr>
  <tr>
    <td WIDTH="62%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="62%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">Sales by major product group:</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="62%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">Activewear and underwear</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">143,272</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">120,310</font></td>
  </tr>
  <tr>
    <td WIDTH="62%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">Socks</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">42,557</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="62%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font size="2">185,829</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font size="2">120,310</font></td>
  </tr>
</table>
<font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q1 2007 p.26 </p>
</i></font><hr color="#000000" size="5"><p Style='page-break-before:always'>
<p align="left"><i><font FACE="Times New Roman PS" SIZE="2">
<img border="0" src="gildan2.jpg" width="99" height="43"></font></i></p>
<p align="right"><i><font FACE="Times New Roman PS" SIZE="2">NOTES TO INTERIM
CONSOLIDATED FINANCIAL STATEMENTS </font></i></p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="45%"><font size="2"><b>13. Segmented information (Continued):</b></font></td>
    <td WIDTH="9%">&nbsp;</td>
    <td WIDTH="9%">&nbsp;</td>
    <td WIDTH="9%">&nbsp;</td>
    <td WIDTH="9%">&nbsp;</td>
    <td WIDTH="9%">&nbsp;</td>
    <td WIDTH="9%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="45%">&nbsp;</td>
    <td WIDTH="9%">&nbsp;</td>
    <td WIDTH="9%">&nbsp;</td>
    <td WIDTH="9%">&nbsp;</td>
    <td WIDTH="9%">&nbsp;</td>
    <td WIDTH="9%">&nbsp;</td>
    <td WIDTH="9%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="45%">&nbsp;</td>
    <td WIDTH="19%" COLSPAN="2" align="right"><font size="2"><u>December 31,
    2006</u></font></td>
    <td WIDTH="19%" COLSPAN="2" align="right"><font size="2"><u>October 1, 2006</u></font></td>
    <td WIDTH="19%" COLSPAN="2" align="right"><font size="2"><u>January 1, 2006</u></font></td>
  </tr>
  <tr>
    <td WIDTH="45%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">Property, plant and equipment by geographic areas are as
    follows:</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">(audited)</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="45%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">Caribbean Basin and Central America</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">217,868</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">200,170</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font size="2">147,423</font></td>
  </tr>
  <tr>
    <td WIDTH="45%"><font size="2">United States</font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right"><font size="2">71,021</font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right"><font size="2">68,591</font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right"><font size="2">66,823</font></td>
  </tr>
  <tr>
    <td WIDTH="45%" bgcolor="#E6E6E6"><font size="2">Canada</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font size="2">26,761</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font size="2">31,407</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font size="2">46,676</font></td>
  </tr>
  <tr>
    <td WIDTH="45%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">Mexico</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">2,357</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">2,509</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">4,416</font></td>
  </tr>
  <tr>
    <td WIDTH="45%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font size="2">318,007</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font size="2">302,677</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font size="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E6E6E6">
    <font size="2">265,338</font></td>
  </tr>
</table>
<font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q1 2007 p.27 </p>
</i></font><hr color="#000000" size="5">
</font></font>

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