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<SEC-DOCUMENT>0001204459-07-000651.txt : 20070508
<SEC-HEADER>0001204459-07-000651.hdr.sgml : 20070508
<ACCEPTANCE-DATETIME>20070508151137
ACCESSION NUMBER:		0001204459-07-000651
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20070401
FILED AS OF DATE:		20070508
DATE AS OF CHANGE:		20070508

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:		07827872

	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>

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

<html>

<body>

<div style="font-family: 'Times New Roman',Times,serif">
  <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: May&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: May 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" bgcolor="#E6E6E6">
        <div style="text-indent: 0px; margin-left: 0px">
          <a style="text-decoration: none" href="gildanexh991.htm">99.1 </a>
        </div>
        </td>
        <td height="15" bgcolor="#E6E6E6"></td>
        <td vAlign="center" height="15" bgcolor="#E6E6E6">
        <a style="text-decoration: none" href="gildanexh991.htm">Q2 2007 - Quarterly Report to Shareholders</a></td>
      </tr>
      <!-- End Table Body -->
      <tr vAlign="bottom">
        <td vAlign="center" height="15">
        <a style="text-decoration: none" href="gildanexh992.htm">99.2</a></td>
        <td height="15"></td>
        <td vAlign="center" height="15">
        <a style="text-decoration: none" href="gildanexh992.htm">Q2 2007 -
        Management's Discussion and Analysis</a></td>
      </tr>
      <tr vAlign="bottom">
        <td vAlign="center" height="15">
        </td>
        <td height="15"></td>
        <td vAlign="center" height="15">
        </td>
      </tr>
      </table>
  </div>
</div>
<hr color="#000000" SIZE="5">

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>gildanexh991.htm
<DESCRIPTION>QUATERLY REPORT TO SHAREHOLDERS
<TEXT>
<html>

<head>
<title>Gildan Activewear Inc.: Exhibit 99.1 - 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">&nbsp;</p>
<p align="center"><img border="0" src="gildan1.gif" width="637" height="380"></p>
<div align="right">
  <table CELLSPACING="0" BORDER="0" WIDTH="50%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
    <tr>
      <td WIDTH="94%"><font FACE="Times New Roman PSMT" SIZE="2">CONTENTS</font></td>
      <td WIDTH="6%" align="right">&nbsp;</td>
    </tr>
    <tr>
      <td WIDTH="94%">&nbsp;</td>
      <td WIDTH="6%" align="right">&nbsp;</td>
    </tr>
    <tr>
      <td WIDTH="94%">&nbsp;</td>
      <td WIDTH="6%" align="right">&nbsp;</td>
    </tr>
    <tr>
      <td WIDTH="94%"><font FACE="Times New Roman PSMT" SIZE="2">MD&amp;A</font></td>
      <td WIDTH="6%" align="right">&nbsp;</td>
    </tr>
    <tr>
      <td WIDTH="94%"><font FACE="Times New Roman PSMT" SIZE="2">
      <p style="margin-left: 20">Our Business</font></td>
      <td WIDTH="6%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">2</font></td>
    </tr>
    <tr>
      <td WIDTH="94%"><font FACE="Times New Roman PSMT" SIZE="2">
      <p style="margin-left: 20">Strategy and Financial Objectives</font></td>
      <td WIDTH="6%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">4</font></td>
    </tr>
    <tr>
      <td WIDTH="94%"><font FACE="Times New Roman PSMT" SIZE="2">
      <p style="margin-left: 20">Operating Results</font></td>
      <td WIDTH="6%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">5</font></td>
    </tr>
    <tr>
      <td WIDTH="94%"><font FACE="Times New Roman PSMT" SIZE="2">
      <p style="margin-left: 20">Financial Condition</font></td>
      <td WIDTH="6%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">9</font></td>
    </tr>
    <tr>
      <td WIDTH="94%"><font FACE="Times New Roman PSMT" SIZE="2">
      <p style="margin-left: 20">Liquidity and Capital Resources</font></td>
      <td WIDTH="6%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">10</font></td>
    </tr>
    <tr>
      <td WIDTH="94%"><font FACE="Times New Roman PSMT" SIZE="2">
      <p style="margin-left: 20">Critical Accounting Estimates</font></td>
      <td WIDTH="6%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">13</font></td>
    </tr>
    <tr>
      <td WIDTH="94%"><font FACE="Times New Roman PSMT" SIZE="2">
      <p style="margin-left: 20">Changes in Accounting Policies</font></td>
      <td WIDTH="6%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">14</font></td>
    </tr>
    <tr>
      <td WIDTH="94%"><font FACE="Times New Roman PSMT" SIZE="2">
      <p style="margin-left: 20">Reconciliation and Definition of Non-GAAP
      Measures</font></td>
      <td WIDTH="6%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">15</font></td>
    </tr>
    <tr>
      <td WIDTH="94%"><font FACE="Times New Roman PSMT" SIZE="2">
      <p style="margin-left: 20">Risks and Uncertainties</font></td>
      <td WIDTH="6%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">16</font></td>
    </tr>
    <tr>
      <td WIDTH="94%"><font FACE="Times New Roman PSMT" SIZE="2">
      <p style="margin-left: 20">Forward-Looking Statements</font></td>
      <td WIDTH="6%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">17</font></td>
    </tr>
    <tr>
      <td WIDTH="94%"><font FACE="Times New Roman PSMT" SIZE="2">Interim
      Consolidated Financial Statements</font></td>
      <td WIDTH="6%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">19</font></td>
    </tr>
    <tr>
      <td WIDTH="94%"><font FACE="Times New Roman PSMT" SIZE="2">Notes to
      Interim Consolidated Financial Statements</font></td>
      <td WIDTH="6%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">22</font></td>
    </tr>
    <tr>
      <td WIDTH="94%">&nbsp;</td>
      <td WIDTH="6%" align="right">&nbsp;</td>
    </tr>
  </table>
</div>
<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>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font FACE="Times New Roman PS" SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
  </tr>
  <tr>
    <td width="15%">&nbsp;</td>
    <td width="85%">&nbsp;</td>
  </tr>
</table>
<i><font SIZE="2">
<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 and six months ended
  April 1, 2007 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 and six months ended April 1, 2007 and the related notes, and with our
  MD&amp;A for the year ended October 1, 2006 (2006 Annual MD&amp;A), which is part of
  the fiscal 2006 Annual Report. This MD&amp;A is dated May 2, 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 5 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 <font color="#0000FF"><u>www.gildan.com</u></font>,
  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 <u><font color="#0000FF">
  www.sec.gov</font></u>. </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.
</div>
</font></i><font FACE="Arial MT" SIZE="2" color="#075DB6"></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="100%">&nbsp;</td>
  </tr>
  <tr>
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" color="#075DB6">Our Business </font></td>
  </tr>
</table>
<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 screenprint channel are produced and
sold without logos and designs. </p>
<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. </p>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.2 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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">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' athletic socks and underwear 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. 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 a
state-of-the-art integrated sock manufacturing facility and began the
construction of a technologically advanced integrated 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 this facility to full capacity
during the balance of fiscal 2007 and the first half of fiscal 2008. Production
at our fleece facility will commence in the beginning of the third quarter of
fiscal 2007 and we expect to ramp up this facility to full capacity by mid
fiscal 2008. </p>
<p align="justify">We also have established a vertically-integrated Caribbean
Basin manufacturing hub with a textile 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">We also operate sock manufacturing facilities in North
America and use third party contractors to source our non-core specialty sock
products. </p>
<p align="justify">Our sewing facilities are located in Central America and the
Caribbean Basin. We also utilize third-party sewing contractors in the Caribbean
Basin to complement our vertically-integrated production. </p>
<p align="justify">On March 27, 2007, we announced plans to close our two
remaining textile facilities in Montreal, Canada, as well as our cutting
facility in Bombay, N.Y., in the fourth quarter of fiscal 2007. In addition, we
closed our two sewing facilities in Mexico, which had been supplied with fabric
from Gildan's Canadian textile operations. Subsequent to the above closures, all
of our vertically-integrated manufacturing for T-shirts, fleece, sport shirts
and underwear will be consolidated into our manufacturing hubs in Central
America and the Caribbean Basin, where we are investing in major capacity
expansion projects, as described above. </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. By the end of the second quarter of fiscal 2007, we substantially
completed the relocation and consolidation of Kentucky Derby's multiple
distribution centres into our new retail distribution centre in Martinsville,
Virginia. 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>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.3 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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>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>
<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.
</p>
<p>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>We believe that growth for our activewear products has been driven by several
market trends such as the following: </p>
<ul>
  <li>continued use of activewear for event merchandising (such as concerts,
  festivals, etc.);</li>
  <li>continued evolution of the entertainment/sports licensing and
  merchandising businesses;</li>
  <li>the growing use of activewear for uniform applications;</li>
  <li>the growing use of activewear for corporate promotions;</li>
  <li>continued increase in use of activewear products for travel and tourism;</li>
  <li>an increased emphasis on physical fitness; and</li>
  <li>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>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="100%">&nbsp;</td>
  </tr>
  <tr>
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" color="#075DB6">Strategy and Financial
    Objectives</font></td>
  </tr>
</table>
<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>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.4 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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">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>
  <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 objective of
approximately tripling our unit sales volumes by 2010 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: 26">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: 26">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: 26">3.&nbsp;&nbsp;&nbsp;&nbsp;
Increase penetration in Europe and other international markets; and </p>
<p align="justify" style="text-indent: -26; margin-left: 26">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 Annual 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>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman">
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" color="#075DB6">Operating Results</font></td>
    </font>
  </tr>
</table>
<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, and 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 (8) 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><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.5 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font FACE="Times New Roman PS" SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
  </tr>
</table>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="374">&nbsp;</td>
    <td WIDTH="76">&nbsp;</td>
    <td WIDTH="76">&nbsp;</td>
    <td WIDTH="76">&nbsp;</td>
    <td WIDTH="76">&nbsp;</td>
    <td WIDTH="76">&nbsp;</td>
    <td WIDTH="77">&nbsp;</td>
    <td WIDTH="77">&nbsp;</td>
    <td WIDTH="77">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="374">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right" style="border-right-style: solid; border-right-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">2007</font></td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right" style="border-right-style: solid; border-right-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">2006</font></td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right" style="border-right-style: solid; border-right-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">2005</font></td>
  </tr>
  <tr>
    <td WIDTH="374" 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="76" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 5">Q2</b></font></td>
    <td WIDTH="76" 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">
    <p style="margin-right: 5">Q1</font></td>
    <td WIDTH="76" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">Q4</font></td>
    <td WIDTH="76" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">Q3</font></td>
    <td WIDTH="76" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">Q2</font></td>
    <td WIDTH="77" 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">
    <p style="margin-right: 5">Q1</font></td>
    <td WIDTH="77" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">Q4</font></td>
    <td WIDTH="77" 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">
    <p style="margin-right: 5">Q3</font></td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">Sales</font></td>
    <td WIDTH="76" align="right"><font SIZE="2"><b>
    <p style="margin-right: 5">232.1</b></font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">185.8</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">235.2</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">233.9</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">183.8</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">120.3</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">180.7</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">198.9</font></td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">Net earnings</font></td>
    <td WIDTH="76" align="right"><font SIZE="2"><b>
    <p style="margin-right: 5">21.1</b></font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">15.6</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">16.8</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">42.8</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">31.0</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">16.2</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">29.2</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">34.1</font></td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">Net earnings per share</font></td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">
    <p style="margin-left: 26">Basic EPS</font></td>
    <td WIDTH="76" align="right"><font SIZE="2"><b>
    <p style="margin-right: 5">0.35</b></font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.26</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.28</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.71</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.52</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.27</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.49</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.57</font></td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">
    <p style="margin-left: 26">Diluted EPS</font></td>
    <td WIDTH="76" align="right"><font SIZE="2"><b>
    <p style="margin-right: 5">0.35</b></font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.26</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.28</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.71</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.51</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.27</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.48</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.57</font></td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">Total assets</font></td>
    <td WIDTH="76" align="right"><font SIZE="2"><b>
    <p style="margin-right: 5">795.6</b></font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">715.8</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">723.3</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">673.1</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">643.8</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">609.6</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">597.5</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">551.6</font></td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">Total long-term financial liabilities<sup>1</sup></font></td>
    <td WIDTH="76" align="right"><font SIZE="2"><b>
    <p style="margin-right: 5">88.4</b></font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">44.2</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">47.1</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">46.4</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">64.8</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">65.4</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">64.1</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">58.1</font></td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">Average number of shares</font></td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">
    <p style="margin-left: 15">outstanding <i>(in thousands)</i></font></td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">
    <p style="margin-left: 26">Basic</font></td>
    <td WIDTH="76" align="right"><font SIZE="2"><b>
    <p style="margin-right: 5">60,160</b></font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">60,139</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">60,105</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">60,077</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">60,054</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">59,970</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">59,924</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">59,816</font></td>
  </tr>
  <tr>
    <td WIDTH="374" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-left: 26">Diluted</font></td>
    <td WIDTH="76" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 5">60,764</b></font></td>
    <td WIDTH="76" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">60,724</font></td>
    <td WIDTH="76" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">60,670</font></td>
    <td WIDTH="76" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">60,627</font></td>
    <td WIDTH="76" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">60,647</font></td>
    <td WIDTH="77" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">60,559</font></td>
    <td WIDTH="77" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">60,414</font></td>
    <td WIDTH="77" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">60,270</font></td>
  </tr>
  <tr>
    <td WIDTH="985" 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 FACE="Arial MT" SIZE="2">
<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. Demand for fleece is typically highest
in the third and fourth quarters of each fiscal year. The seasonality of
specific product-lines is consistent with that experienced by other companies in
the activewear industry. 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. 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. </p>
<p align="justify">Material restructuring and other charges impacted net
earnings in the second quarter of fiscal 2007 and the fourth quarter of fiscal
2006. </p>
</font><font FACE="Times New Roman" SIZE="2"><b>
<p align="justify">Sales </p>
</b></font><font FACE="Arial MT" SIZE="2">
<p align="justify">Sales of $232.1 million for the three months ended April 1,
2007 grew 26.3% from $183.8 million in the second quarter of fiscal 2006. The
increase in sales was due to $32.8 million of sock sales pursuant to the
acquisition of Kentucky Derby and an 11.2% increase in unit sales volumes for
activewear, partially offset by a reduction in unit selling prices for
activewear of approximately 2% compared to the same period last year. For the
six months ended April 1, 2007, sales were $418.0 million, up 37.4% compared to
the same period last year. The growth in sales reflected $75.4 million of sock
sales, an increase of 12.7% in unit sales volumes for activewear and a
higher-valued activewear product-mix, partially offset by a decrease in unit
selling prices for activewear. Excluding the sock product-line, sales were up
8.4% for the second quarter of fiscal 2007 and 12.6% on a year-to-date basis
compared to the same periods of fiscal 2006. </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 market
shares and industry growth in the U.S. distributor channel for the quarter ended
March 31, 2007: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="304">&nbsp;</td>
    <td WIDTH="340" COLSPAN="2" align="center"><font SIZE="2"><b>Three months
    ended March 31</b></font></td>
    <td WIDTH="341" COLSPAN="2" align="center"><font SIZE="2"><b>Three months
    ended March 31</b></font></td>
  </tr>
  <tr>
    <td WIDTH="304">&nbsp;</td>
    <td WIDTH="340" align="center" colspan="2"><font SIZE="2"><b>2007 vs 2006</b></font></td>
    <td WIDTH="170" align="center"><font SIZE="2"><b>2007</b></font></td>
    <td WIDTH="171" align="center"><font SIZE="2"><b>2006</b></font></td>
  </tr>
  <tr>
    <td WIDTH="304" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="340" COLSPAN="2" align="center" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>Unit Growth</b></font></td>
    <td WIDTH="341" COLSPAN="2" align="center" 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="304" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="170" align="center" 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="170" align="center" 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="170" align="center" 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="171" align="center" 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="304"><font SIZE="2">All Products</font></td>
    <td WIDTH="170" align="center"><font SIZE="2">14.4%</font></td>
    <td WIDTH="170" align="center"><font SIZE="2">(0.4)%</font></td>
    <td WIDTH="170" align="center"><font SIZE="2"><b>47.4%</b></font></td>
    <td WIDTH="171" align="center"><font SIZE="2">38.7%</font></td>
  </tr>
  <tr>
    <td WIDTH="304"><font SIZE="2">T-shirts</font></td>
    <td WIDTH="170" align="center"><font SIZE="2">12.8%</font></td>
    <td WIDTH="170" align="center"><font SIZE="2">(0.8)%</font></td>
    <td WIDTH="170" align="center"><font SIZE="2"><b>48.2%</b></font></td>
    <td WIDTH="171" align="center"><font SIZE="2">39.6%</font></td>
  </tr>
  <tr>
    <td WIDTH="304"><font SIZE="2">Fleece</font></td>
    <td WIDTH="170" align="center"><font SIZE="2">59.8%</font></td>
    <td WIDTH="170" align="center"><font SIZE="2">11.5%</font></td>
    <td WIDTH="170" align="center"><font SIZE="2"><b>42.5%</b></font></td>
    <td WIDTH="171" align="center"><font SIZE="2">30.5%</font></td>
  </tr>
  <tr>
    <td WIDTH="304" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">Sport shirts</font></td>
    <td WIDTH="170" align="center" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">10.9%</font></td>
    <td WIDTH="170" align="center" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">(4.7)%</font></td>
    <td WIDTH="170" align="center" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>35.7%</b></font></td>
    <td WIDTH="171" align="center" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">32.5%</font></td>
  </tr>
</table>
<font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.6 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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 growth in activewear unit sales was primarily due to
continuing market share penetration in all product categories in the U.S.
distributor channel. The slight decline in overall U.S. industry unit shipments
for T-shirts in the March quarter was attributed primarily to unseasonably cold
weather conditions, which, however, had a positive impact on shipments for
fleece. In addition, shipments into the U.S. wholesale distributor channel were
negatively impacted by the consolidation of warehouses being undertaken by the
largest wholesale distributor, in order to reduce its inventory levels. In the
T-shirt category, we grew unit volumes by 12.8% for the three months ended March
31, 2007 compared to the same period last year, and increased our leading share
in this category to 48.2%. In the fleece category, our volume growth of 59.8%
significantly exceeded that of the industry, and our share increased to 42.5%,
positioning Gildan as the market share leader for the first time. We increased
our leading brand position in sport shirts by achieving a 35.7% market share,
and our volume grew in this segment by 10.9%, compared with an overall decline
of 4.7% for the industry. </p>
<p align="justify">Growth in Gildan's activewear sales in international markets
in the second quarter was strong. In particular, unit shipments in Europe
increased 34% compared with the second quarter of fiscal 2006. </p>
<p align="justify">In March, we began shipment of our first branded sock program
to a national retailer. Initial sell-through of Gildan branded product to
consumers has exceeded expectations. </p>
<b>
<p align="justify">Gross Profit </p>
</b>
<p align="justify">Gross profit for the second quarter of fiscal 2007 was $78.7
million, or 33.9% of sales, up from $61.4 million, or 33.4% of sales in the
second quarter of fiscal 2006. The increase in gross margins was due to higher
margins for activewear, largely offset by the impact of 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 progress
with the ramp-up of our new state-of-the-art sock manufacturing facility in
Honduras. Excluding the impact of sock sales, gross margins in the second
quarter of fiscal 2007 were 37.2%. The increase in gross margins for activewear
compared to last year was due to further manufacturing efficiencies, together
with more favourable product-mix, partially offset by lower selling prices and
higher cotton costs, and the non-recurrence of a $1.1 million reversal of a
litigation reserve which positively impacted gross margins by 0.6% in the second
quarter of fiscal 2006. </p>
<p align="justify">For the first six months of fiscal 2007, gross margins of
31.7% were down from 34.3% in the same period last year largely attributable to
the impact of margins from the sale of socks. Excluding the impact of the sock
sales, gross margins for activewear increased to 35.6%. This increase was due to
manufacturing efficiency gains for the period and the impact of a higher-valued
product mix, which more than offset a reduction in unit selling prices, higher
cotton costs compared to the low point in cotton prices in the first half of
fiscal 2006, and the non-recurrence of the reversal of the litigation reserve in
fiscal 2006. </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
second quarter were $28.5 million, or 12.3% of sales, compared to $20.7 million,
or 11.3% of sales, in the second quarter of last year. For the six months ended
April 1, 2007, SG&amp;A expenses were $54.7 million, or 13.1% of sales, compared to
$38.8 million, or 12.7% of sales for the same period last year. The increase in
SG&amp;A expenses was largely attributable to the impact of the acquisition of
Kentucky Derby and the non-recurrence of a favourable adjustment to the reserve
for doubtful accounts recorded in the second quarter of fiscal 2006. SG&amp;A
expenses for the quarter and on a year-to-date basis also reflected higher
volume-related distribution costs and increased administration and information
technology costs to support our continuing growth. SG&amp;A expenses for the first
six months of fiscal 2007 were also up as a result of a $1.1 million charge in
the first quarter of fiscal 2007 for the replacement of the aircraft leased by
the Company, partially offset by the non-recurrence of a $0.6 million severance
charge incurred in the first quarter of fiscal 2006. </p>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.7 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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 align="justify">Restructuring and Other Charges </p>
</b>
<p align="justify">The following table summarizes the components of
restructuring and other charges: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="515" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><i>(in $ millions)</i></font></td>
    <td WIDTH="117" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">Q2 2007</b></font></td>
    <td WIDTH="117" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 4">Q2 2006</font></td>
    <td WIDTH="118" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">YTD 2007</b></font></td>
    <td WIDTH="118" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 4">YTD 2006</font></td>
  </tr>
  <tr>
    <td WIDTH="515"><font SIZE="2">Accelerated depreciation (a)</font></td>
    <td WIDTH="117" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">1.0</b></font></td>
    <td WIDTH="117" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="118" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">2.1</b></font></td>
    <td WIDTH="118" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="515"><font SIZE="2">Gain on disposal of long-lived assets (b)</font></td>
    <td WIDTH="117" align="right"><font SIZE="2"><b>(1.8)</b></font></td>
    <td WIDTH="117" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="118" align="right"><font SIZE="2"><b>(1.8)</b></font></td>
    <td WIDTH="118" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="515"><font SIZE="2">Asset impairment loss (c)</font></td>
    <td WIDTH="117" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">3.6</b></font></td>
    <td WIDTH="117" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="118" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">3.6</b></font></td>
    <td WIDTH="118" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="515"><font SIZE="2">Severance (c)</font></td>
    <td WIDTH="117" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">11.9</b></font></td>
    <td WIDTH="117" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="118" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">12.0</b></font></td>
    <td WIDTH="118" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="515"><font SIZE="2">Other (d)</font></td>
    <td WIDTH="117" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">1.7</b></font></td>
    <td WIDTH="117" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="118" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">1.8</b></font></td>
    <td WIDTH="118" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="515" style="border-top-style: solid; border-top-width: 2; border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">Restructuring and other charges</font></td>
    <td WIDTH="117" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>
    <p style="margin-right: 4">16.4</b></font></td>
    <td WIDTH="117" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="118" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>
    <p style="margin-right: 4">17.7</b></font></td>
    <td WIDTH="118" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
</table>
<font FACE="Arial MT" SIZE="2">
<p align="justify" style="text-indent: -30; margin-left: 30">(a)&nbsp;&nbsp;&nbsp;&nbsp;
In September 2006, we announced a restructuring of our Canadian manufacturing
operations, involving the closure of our textile manufacturing facility in
Valleyfield, Quebec and the downsizing of our Montreal, Quebec knitting
facility, to take effect in December 2006. In the fourth quarter of fiscal 2006,
we recorded severance charges of $2.1 million and other exit costs of $1.6
million relating to this restructuring. In addition, during the fourth quarter
of fiscal 2006, we recorded an impairment loss of $15.1 million on all Canadian
textile and related manufacturing assets, and reduced our estimate of the
remaining economic lives of these assets. The effect of this change in estimate,
amounting to $1.0 million in the second quarter of fiscal 2007 and $2.1 million
for the first six months of fiscal 2007, has been classified as accelerated
depreciation and included in restructuring and other charges. An additional $1.2
million of accelerated depreciation will be recorded in the second half of
fiscal 2007. </p>
<p align="justify" style="text-indent: -30; margin-left: 30">(b)&nbsp;&nbsp;&nbsp;&nbsp;
During the fourth quarter of fiscal 2006, we announced the relocation and
consolidation of our U.S. retail distribution centres, which was substantially
completed by the end of the second quarter of fiscal 2007, and the closure of
our Canadian distribution centre in Montreal, effective October 2006. We also
announced the closure and downsizing of sock manufacturing capacity located in
North Carolina and Virginia. During the second quarter of fiscal 2007, we sold
some of the assets related to these facilities and recorded a gain of $1.8
million. </p>
<p align="justify" style="text-indent: -30; margin-left: 30">(c)&nbsp;&nbsp;&nbsp;&nbsp;
On March 27, 2007, we announced plans to close our two remaining textile
facilities in Montreal, Canada, as well as our cutting facility in Bombay, N.Y.,
in the fourth quarter of fiscal 2007. In addition, we closed two sewing
facilities in Mexico, which had been supplied with fabric from Gildan's Canadian
textile operations. In the second quarter of fiscal 2007, we recorded severance
costs of $11.9 million primarily relating to these plant closures. We expect to
recognize additional severance of $4.0 million during the balance of fiscal
2007. Concurrent with the restructuring of the Canadian textile operations, we
also announced plans to relocate our corporate office, which is currently
located in the same building as our Montreal knitting facility, into leased
premises in the Montreal area. In the second quarter of fiscal 2007, we recorded
a $3.6 million asset impairment loss relating to our corporate head office
facility. </p>
<p align="justify" style="text-indent: -30; margin-left: 30">(d)&nbsp;&nbsp;&nbsp;&nbsp;
Other costs of $1.7 million relate to exit costs incurred in connection with the
closures noted above, including carrying and dismantling costs associated with
assets held for sale. We expect to incur additional exit costs relating to these
closures of approximately $2.1 million, which will be accounted for as incurred
during the balance of fiscal 2007. </p>
<b>
<p align="justify">Depreciation and Interest Expense </p>
</b>
<p align="justify">Depreciation and amortization expense of $9.5 million in the
second quarter and $18.2 million for the first six months of fiscal 2007,
reflected increases of $1.8 million and $3.1 million, respectively, compared to
the same periods last year. 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>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.8 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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">Net interest expense for the second quarter and the first six
months of 2007 amounted to $1.1 million and $2.0 million, respectively, up $0.4
million and $0.8 million compared to the same periods of fiscal 2006. The
increase in net interest expense reflected lower investment income during the
first six months of fiscal 2007, mainly due to the use of funds for the
acquisition of Kentucky Derby and the acceleration of the Company's capital
expenditure program. </p>
<b>
<p align="justify">Income Taxes </p>
</b>
<p align="justify">The effective income tax rate for the three months and six
months ended April 1, 2007 was 8.5% and 7.7%, respectively. This compared to
effective income tax rates of 3.5% and 3.8% for the respective periods of fiscal
2006. Excluding the impact of restructuring and other charges, the effective
income tax rate was 5.0% for the second quarter and 5.3% for the first six
months of fiscal 2007. This increase was mainly due to higher income from our
Canadian operations, which is taxed at a higher effective income tax rate. We
expect the effective tax rate for fiscal 2007 to be approximately 5.5% excluding
the impact of restructuring and other charges. </p>
<b>
<p align="justify">Net Earnings </p>
</b>
<p align="justify">Net earnings for the second quarter were $21.1 million, or
$0.35 per share on a diluted basis (EPS), down from net earnings of $31.0
million, or $0.51 per share on a diluted basis for the second quarter last year.
For the first six months of fiscal 2007, net earnings amounted to $36.8 million,
or $0.61 per share on a diluted basis compared to net earnings of $47.2 million,
or $0.78 per share on a diluted basis for the same period in fiscal 2006. The
decrease in net earnings for the second quarter and for the first six months of
fiscal 2007 was entirely attributable to restructuring and other charges of
$16.4 million, or $0.27 per share and $17.8 million, or $0.29 per share
reflected in the respective periods. </p>
<p align="justify">Adjusted net earnings, which represent net earnings before
restructuring and other charges amounted to $37.5 million, or $0.62 per share on
a diluted basis for the second quarter, up respectively, 21.0% and 21.6%,
compared to the second quarter of fiscal 2006. The growth in adjusted net
earnings and adjusted diluted EPS for the quarter was due to higher gross
margins for activewear and continuing growth in activewear unit sales volumes,
partially offset by increased SG&amp;A and depreciation expenses. For the first six
months of fiscal 2007, adjusted net earnings increased to $54.5 million, or
$0.90 per share on a diluted basis. The increase in adjusted net earnings and
adjusted diluted EPS was due to manufacturing efficiencies, growth in activewear
unit sales volumes and a higher-valued product-mix for activewear, partially
offset by 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 was dilutive by approximately $0.03 per share in the
second quarter of fiscal 2007 and $0.02 per share on a year-to-date basis, due
primarily to short-term inefficiencies in manufacturing and distribution costs
which are expected to be eliminated by the fourth quarter, as we progress with
the implementation of our integration plan. </p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman">
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" color="#075DB6">Financial Condition </font></td>
    </font>
  </tr>
</table>
<p align="justify">Accounts receivable decreased to $139.8 million in the second
quarter of fiscal 2007 from $165.9 million at October 1, 2006 and grew by $36.4
million compared to the second quarter of the prior year. The decrease in
accounts receivable from the end of fiscal 2006 was due to a reduction in days
sales outstanding on trade accounts receivable. The increase in accounts
receivable compared to the second quarter of fiscal 2006 was mainly due to the
8.4% increase in activewear sales in the second quarter over the prior year and
the inclusion of $22.3 million accounts receivable for Kentucky Derby. In
addition, accounts receivable as at April 1, 2007, included an amount of $3.3
million for proceeds receivable primarily as a result of the sale of our
distribution centre in Montreal, Quebec during the second quarter, and an amount
of $1.9 million for an insurance claim relating to a fire that destroyed one of
our sewing facilities located at San Marcos, Nicaragua in fiscal 2006. </p>
<p align="justify">Inventories of $242.6 million were up $41.9 million, or 20.9%
from October 1, 2006 and by $56.0 million, or 30.0% compared to the second
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 primarily
reflected the inclusion of sock inventory following our acquisition of Kentucky
Derby, and the increase in activewear sales over the prior year. </p>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.9 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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">Property, plant and equipment, which are net of accumulated
depreciation and asset impairment losses, amounted to $348.8 million at the end
of the second quarter of fiscal 2007, up $46.1 million from October 1, 2006.
This increase was primarily due to net capital expenditures of $75.5 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. In the second quarter of fiscal 2007, we sold
distribution centres in Montreal and North Carolina and a manufacturing facility
in Virginia for $5.3 million. As at April 2, 2006, assets held for sale of $5.0
million 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 $795.6 million at April 1, 2007, compared
to $723.3 million at October 1, 2006 and $643.8 million at the end of the second
quarter of fiscal 2006. Working capital was $291.7 million at the end of the
second quarter of fiscal 2007 compared to $261.0 million at October 1, 2006, and
$243.3 million at April 2, 2006. </p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman">
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" color="#075DB6">Liquidity and Capital Resources</font></td>
    </font>
  </tr>
</table>
<b>
<p align="justify">Cash Flows </p>
</b>
<p align="justify">Cash flows from operating activities in the second quarter of
fiscal 2007 were $0.3 million, compared to cash outflows from operating
activities of $18.0 million in the previous year. The increase in cash flows
from operating activities was mainly due to a lower seasonal increase in
accounts receivable compared to the second quarter of fiscal 2006. For the first
six months of fiscal 2007, cash flows from operating activities were $39.8
million compared to cash flows from operating activities of $14.0 million in the
same period last year mainly as a result of a higher seasonal decrease in
accounts receivable and a lower seasonal increase in inventories compared to the
same period last year. </p>
<p align="justify">Cash flows used in investing activities were $43.6 million in
the second quarter and $74.5 million for the six months ended April 1, 2007,
compared to $24.0 million and $36.5 million in the respective periods of fiscal
2006, mainly due to higher net capital expenditures. The higher capital spending
was primarily related to our major textile and sock manufacturing expansion
projects in Honduras, as well as for our new U.S. retail distribution centre and
the expansion of our sewing capacity. </p>
<p align="justify">Cash flows from financing activities were $42.4 million in
the second quarter and $41.1 million for the first six months of fiscal 2007
funded primarily by a $43.0 million drawdown on our credit facility. </p>
<p align="justify">We ended the second quarter of fiscal 2007 with cash and cash
equivalents of $35.5 million compared to $48.1 million at the end of the second
quarter last year and $29.0 million at October 1, 2006. Total indebtedness at
April 1, 2007 amounted to $77.7 million compared to $37.3 million at October 1,
2006 and $50.6 million at April 2, 2006. The $27.1 million year-over-year
increase in total indebtedness was mainly due to the increase in long-term debt
from the use of our credit facility, partially offset by the third scheduled
principal repayment of $17.5 million on our Senior Notes, which was made on June
10, 2006. Net indebtedness, defined as total indebtedness net of cash and cash
equivalents, at the end of the second quarter of fiscal 2007 was $42.2 million.
The Company had net indebtedness at April 1, 2007 due substantially to higher
capital expenditures for the first half of the fiscal year and working capital
requirements to support the seasonal build-up of our inventories. </p>
<b>
<p align="justify">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>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.10 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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">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 T-shirt 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 addition, 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. We are increasing our planned fiscal 2007 capital expenditures to $170
million compared with our most recent projection of approximately $145 million,
primarily due to two new major cost reduction projects, which will primarily be
undertaken during fiscal 2008. The total combined capital investment required
for the two projects amounts to approximately $60 million, to be spent over the
next 18 to 24 months. The projects are expected to result in annual savings in
energy and chemical costs totalling approximately $15 million once completed.
</p>
<p align="justify">At the end of the second quarter of fiscal 2007, $43.0
million was drawn on our credit facility due to the acceleration of our capacity
expansion plans and seasonal working capital requirements. There were no amounts
drawn under this facility at October 1, 2006 and April 2, 2006. We believe our
cash flow from operating activities together with our 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
May 2007 final principal repayment on our Senior Notes. Furthermore, we continue
to have significant unused debt financing capacity and financing flexibility to
invest in capital expenditures for further capacity expansion and cost reduction
initiatives in excess of our current plans, as well as to pursue other potential
acquisition opportunities. </p>
<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 align="justify">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 12. As disclosed in
Note 9 to our Interim Consolidated Financial Statements, we have issued
corporate guarantees and standby letters of credit arising from various
servicing agreements amounting to $31.6 million at April 1, 2007. </p>
<p align="justify"><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 Annual 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. The mark-to-market adjustments relating to the contracts were not
significant in either 2007 and 2006. See &quot;Changes in Accounting Policies&quot; on
page 14. </p>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.11 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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 following table summarizes our commitments to buy and
sell foreign currencies as at April 1, 2007 and April 2, 2006: </font>
<font FACE="Arial MT" SIZE="1"></p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="25%"><font size="2"><i>(in thousands)</i></font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">Notional</font></td>
    <td WIDTH="15%" align="right">&nbsp;</td>
    <td WIDTH="30%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right"><font SIZE="2">Notional U.S.</font></td>
  </tr>
  <tr>
    <td WIDTH="25%" style="border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">amount</font></td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">Exchange rate</font></td>
    <td WIDTH="30%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">Maturity</font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">equivalent</font></td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2"><b>2007</b></font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
    <td WIDTH="30%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2"><b>Buy contracts:</b></font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
    <td WIDTH="30%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2"><b>
    <p style="margin-left: 26">Foreign exchange contracts</b></font></td>
    <td WIDTH="5%" align="right"><font SIZE="2"><b>&#128;</b></font></td>
    <td WIDTH="12%" align="right"><font SIZE="2"><b>5,777</b></font></td>
    <td WIDTH="15%" align="right"><font SIZE="2"><b>1.2171 to 1.3365</b></font></td>
    <td WIDTH="30%" align="right"><font SIZE="2"><b>April to September 2007</b></font></td>
    <td WIDTH="13%" align="right"><font SIZE="2"><b>$7,411</b></font></td>
  </tr>
  <tr>
    <td WIDTH="25%">
    <p style="margin-left: 26">&nbsp;</td>
    <td WIDTH="5%" align="right"><font SIZE="2"><b>CA$</b></font></td>
    <td WIDTH="12%" align="right"><font SIZE="2"><b>43,811</b></font></td>
    <td WIDTH="15%" align="right"><font SIZE="2"><b>0.8482 to 0.8794</b></font></td>
    <td WIDTH="30%" align="right"><font SIZE="2"><b>April to September 2007</b></font></td>
    <td WIDTH="13%" align="right"><font SIZE="2"><b>37,711</b></font></td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2"><b>Sell contracts:</b></font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
    <td WIDTH="30%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2"><b>
    <p style="margin-left: 26">Foreign exchange contracts</b></font></td>
    <td WIDTH="5%" align="right"><font SIZE="2"><b>&#128;</b></font></td>
    <td WIDTH="12%" align="right"><font SIZE="2"><b>12,495</b></font></td>
    <td WIDTH="15%" align="right"><font SIZE="2"><b>1.3023 to 1.3495</b></font></td>
    <td WIDTH="30%" align="right"><font SIZE="2"><b>April 2007 to September 2008</b></font></td>
    <td WIDTH="13%" align="right"><font SIZE="2"><b>$16,660</b></font></td>
  </tr>
  <tr>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="5%" align="right"><font SIZE="2"><b>&#163;</b></font></td>
    <td WIDTH="12%" align="right"><font SIZE="2"><b>12,291</b></font></td>
    <td WIDTH="15%" align="right"><font SIZE="2"><b>1.9100 to 1.9793</b></font></td>
    <td WIDTH="30%" align="right"><font SIZE="2"><b>April 2007 to September 2008</b></font></td>
    <td WIDTH="13%" align="right"><font SIZE="2"><b>24,053</b></font></td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2">2006</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
    <td WIDTH="30%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2">Buy contracts:</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
    <td WIDTH="30%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2">
    <p style="margin-left: 26">Foreign exchange contracts</font></td>
    <td WIDTH="5%" align="right"><font SIZE="2">CA$</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">40,967</font></td>
    <td WIDTH="15%" align="right"><font SIZE="2">0.7997 to 0.8642</font></td>
    <td WIDTH="30%" align="right"><font SIZE="2">April to September 2006</font></td>
    <td WIDTH="13%" align="right"><font SIZE="2">$34,596</font></td>
  </tr>
  <tr>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="5%" align="right"><font SIZE="2">&#128;</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">11,147</font></td>
    <td WIDTH="15%" align="right"><font SIZE="2">1.1991 to 1.2208</font></td>
    <td WIDTH="30%" align="right"><font SIZE="2">July 2006 to June 2007</font></td>
    <td WIDTH="13%" align="right"><font SIZE="2">13,480</font></td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2">Sell contracts:</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
    <td WIDTH="30%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2">
    <p style="margin-left: 26">Foreign exchange contracts</font></td>
    <td WIDTH="5%" align="right"><font SIZE="2">&#128;</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">5,600</font></td>
    <td WIDTH="15%" align="right"><font SIZE="2">1.2097 to 1.3525</font></td>
    <td WIDTH="30%" align="right"><font SIZE="2">April to September 2006</font></td>
    <td WIDTH="13%" align="right"><font SIZE="2">$7,355</font></td>
  </tr>
  <tr>
    <td WIDTH="25%" style="border-bottom-style: solid; border-bottom-width: 3">&nbsp;</td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font SIZE="2">&#163;</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font SIZE="2">2,850</font></td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font SIZE="2">1.7379 to 1.8783</font></td>
    <td WIDTH="30%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font SIZE="2">April to September 2006</font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font SIZE="2">5,306</font></td>
  </tr>
</table>
<font FACE="Times New Roman" SIZE="2"><b>
<p align="justify">Contractual Obligations </p>
</b>
<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 April 1, 2007: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="36%"><font FACE="Arial MT" SIZE="2">Payments due by period</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="36%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2"><i>(in $ millions)</i></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2"><b>Total</b></font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2"><b>1 year</b></font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2"><b>years</b></font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2"><b>years</b></font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2"><b>5 years</b></font></td>
  </tr>
  <tr>
    <td WIDTH="36%"><font FACE="Arial MT" SIZE="2">Long-term debt</font></td>
    <td WIDTH="12%" align="right"><font FACE="Arial MT" SIZE="2">74.2</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">19.2</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">49.3</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">4.2</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">1.5</font></td>
  </tr>
  <tr>
    <td WIDTH="36%"><font FACE="Arial MT" SIZE="2">Fixed interest payments</font></td>
    <td WIDTH="12%" align="right"><font FACE="Arial MT" SIZE="2">0.4</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">0.4</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">-</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">-</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="36%"><font FACE="Arial MT" SIZE="2">Operating leases</font></td>
    <td WIDTH="12%" align="right"><font FACE="Arial MT" SIZE="2">31.2</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">3.7</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">10.7</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">7.5</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">9.3</font></td>
  </tr>
  <tr>
    <td WIDTH="36%"><font FACE="Arial MT" SIZE="2">Purchase obligations</font></td>
    <td WIDTH="12%" align="right"><font FACE="Arial MT" SIZE="2">152.0</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">127.7</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">24.3</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">-</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="36%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2">Other obligations</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2">85.8</font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2">65.7</font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2">20.1</font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2">-</font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="36%" style="border-bottom-style: double; border-bottom-width: 5">
    <font FACE="Arial MT" SIZE="2"><b>Total Contractual Obligations</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font FACE="Arial MT" SIZE="2"><b>343.6</b></font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font FACE="Arial MT" SIZE="2"><b>216.7</b></font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font FACE="Arial MT" SIZE="2"><b>104.4</b></font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font FACE="Arial MT" SIZE="2"><b>11.7</b></font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font FACE="Arial MT" SIZE="2"><b>10.8</b></font></td>
  </tr>
</table>
<font FACE="Arial MT" SIZE="2">
<p align="justify">We expect that cash flows from operations, together with our
cash balances and bank facilities, will be sufficient to meet foreseeable cash
needs for fiscal 2007. </p>
<b>
<p align="justify">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 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. 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. </p>
<p align="justify">In April 2007, a new law, which was approved by the Mexican
Congress in December 2006, was adopted by Hacienda (the Mexican tax
authorities). The provisions of this law allow Gildan Mexico to apply for the
forgiveness of all of the interest and penalties and a substantial amount of the
principal related to this tax assessment. In May 2007, Gildan Mexico will file
an application requesting that the provisions of the new law be applied to its
outstanding tax assessment. The Company expects to receive notification in the
fourth quarter regarding the applicability of the new law to Gildan's tax
assessment. Based on the Company's legal advice on this matter, the Company
anticipates that its liability will be restricted to approximately $0.4 million,
and has recorded a charge for this amount, which has been reflected in selling,
general and administrative expenses in the second quarter of fiscal 2007.
Management believes that no other provision is required in the accounts for this
matter. </p>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.12 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font FACE="Times New Roman PS" SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
  </tr>
</table>
<font SIZE="2"><b>
<p align="justify">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 April 30, 2007, there were 60,174,423 common shares
issued and outstanding along with 460,558 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
pre-determined 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.
</font><b></p>
<font SIZE="2">
<p align="justify">Stock split </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY">On May 2, 2007, the Board of Directors of the Company
approved a two-for-one stock split, to be effected in the form of a stock
dividend. The stock split is applicable to all shareholders of record on May 18,
2007. On or about May 25, 2007, the Company's registrar and transfer agent will
mail new certificates for the additional shares to all registered Gildan
shareholders as at May 18, 2007. The Company's shares are expected to commence
trading on a post-split basis on May 16, 2007, on the TSX and on May 28, 2007,
on the NYSE, in accordance with the respective requirements of these exchanges.
All earnings per share and share data in this Interim MD&amp;A are stated prior to
the stock split. </p>
</font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" SIZE="3" color="#075DB6">Critical Accounting Estimates
    </font></td>
    </font>
  </tr>
</table>
<font FACE="Arial MT" SIZE="2">
<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>
<p align="justify">Management believes that the following accounting estimates
are most significant to assist in understanding and evaluating our financial
results:</p>
<ul>
  <li>
  <p align="justify">Sales promotional programs;</li>
  <li>
  <p align="justify">Trade accounts receivable;</li>
  <li>
  <p align="justify">Property, plant and equipment;</li>
  <li>
  <p align="justify">Cotton and yarn procurements; and</li>
  <li>
  <p align="justify">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 Annual
MD&amp;A, which is hereby incorporated by reference. </p>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.13 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font FACE="Times New Roman PS" SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
  </tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" SIZE="3" color="#075DB6">
    <font FACE="Arial MT" SIZE="3">Changes in Accounting Policies </font></font>
    </td>
    </font>
  </tr>
</table>
<font FACE="Arial MT" SIZE="2">
<p align="justify">Effective with 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 &quot;cash flow hedge,&quot; when the hedged item is a future cash flow, or
a &quot;fair value hedge,&quot; 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>
<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 April 1, 2007, 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>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.14 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font FACE="Times New Roman PS" SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
  </tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" SIZE="3" color="#075DB6">
    <font FACE="Arial MT" SIZE="3">Reconciliation and Definition of Non-GAAP
    Measures </font></font></td>
    </font>
  </tr>
</table>
<font FACE="Arial MT" SIZE="2">
<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 align="justify">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 after-tax impact of restructuring and other
charges, as discussed on page 8, 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">
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><i>(in $ millions, except per share amounts)</i></font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">Q2 2007</b></font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">YTD 2007</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 2">
    <p style="text-indent: -26; margin-left: 26">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">Reported</b></font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">Adjusted</b></font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">Reported</b></font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">Adjusted</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Sales</font></td>
    <td WIDTH="9%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">232.1</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">232.1</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">418.0</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">418.0</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Cost of sales</font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">153.4</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">153.4</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">285.4</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">285.4</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Gross profit</font></td>
    <td WIDTH="9%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">78.7</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">78.7</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">132.6</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">132.6</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Selling, general and
    administrative expenses</font></td>
    <td WIDTH="9%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">28.5</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">28.5</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">54.7</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">54.7</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Restructuring and other charges
    <sup>(1)</sup></font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">16.4</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>(16.4)</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">-</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">17.7</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>(17.7)</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">-</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%">
    <p style="text-indent: -26; margin-left: 26">&nbsp;</td>
    <td WIDTH="9%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">33.8</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">16.4</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">50.2</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">60.2</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">17.7</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">77.9</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Depreciation and amortization</font></td>
    <td WIDTH="9%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">9.5</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">9.5</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">18.2</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">18.2</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Interest, net</font></td>
    <td WIDTH="9%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">1.1</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">1.1</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">2.0</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">2.0</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Non-controlling interest in
    income of consolidated joint venture</font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.1</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.1</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.1</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.1</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Earnings before income taxes</font></td>
    <td WIDTH="9%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">23.1</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">16.4</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">39.5</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">39.9</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">17.7</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">57.6</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Income taxes</font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">2.0</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">2.0</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">3.1</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">3.1</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Net earnings</font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>
    <p style="margin-right: 4">21.1</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>
    <p style="margin-right: 4">16.4</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>
    <p style="margin-right: 4">37.5</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>
    <p style="margin-right: 4">36.8</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>
    <p style="margin-right: 4">17.7</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>
    <p style="margin-right: 4">54.5</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Basic EPS</font></td>
    <td WIDTH="9%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">0.35</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">0.27</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">0.62</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">0.61</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">0.29</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">0.90</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Diluted EPS</font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.35</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.27</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.62</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.61</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.29</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.90</b></font></td>
  </tr>
</table>
<font FACE="Times New Roman" style="font-size: 9pt"><i>
</font>
<font style="font-size: 9pt">
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="42%">&nbsp;</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%">&nbsp;</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%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><i>(in $ millions, except per share amounts)</i></font></td>
    </font>
<font FACE="Times New Roman" style="font-size: 9pt">
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">Q2 2006</font></td>
    </font>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">YTD 2006</font></td>
  </tr>
  </font>
  <tr>
    <td WIDTH="42%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">Reported</font></td>
    </font>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">Adjusted</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">Reported</font></td>
    </font>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">Adjusted</font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Sales</font></td>
    </font>
<font FACE="Times New Roman" style="font-size: 9pt">
<font style="font-size: 9pt">
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">183.8</font></td>
    </font>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">183.8</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">304.1</font></td>
    </font>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">304.1</font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">Cost of sales</font></td>
    </font>
<font FACE="Times New Roman" style="font-size: 9pt">
<font style="font-size: 9pt">
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">122.4</font></td>
    </font>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">122.4</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">199.8</font></td>
    </font>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">199.8</font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Gross profit</font></td>
    </font>
<font FACE="Times New Roman" style="font-size: 9pt">
<font style="font-size: 9pt">
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">61.4</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">61.4</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">104.3</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">104.3</font></td>
  </tr>
  <tr>
    <td WIDTH="42%"><font SIZE="2">Selling, general and</font></td>
    </font>
<font FACE="Times New Roman" style="font-size: 9pt">
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
  </tr>
<font style="font-size: 9pt">
  <tr>
    <td WIDTH="42%"><font SIZE="2">&nbsp;&nbsp;&nbsp; administrative expenses</font></td>
    </font>
<font FACE="Times New Roman" style="font-size: 9pt">
<font style="font-size: 9pt">
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF"><font SIZE="2">20.7</font></td>
    </font>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">20.7</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">38.8</font></td>
    </font>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">38.8</font></td>
  </tr>
  </font>
  <tr>
    <td WIDTH="42%">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF"><font SIZE="2">40.7</font></td>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF"><font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">40.7</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">65.5</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">65.5</font></td>
  </tr>
  <tr>
    <td WIDTH="42%"><font SIZE="2">Depreciation and amortization</font></td>
    </font>
<font FACE="Times New Roman" style="font-size: 9pt">
<font style="font-size: 9pt">
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF"><font SIZE="2">7.7</font></td>
    </font>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">7.7</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">15.1</font></td>
    </font>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">15.1</font></td>
  </tr>
  <tr>
    <td WIDTH="42%"><font SIZE="2">Interest, net</font></td>
    </font>
<font FACE="Times New Roman" style="font-size: 9pt">
<font style="font-size: 9pt">
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF"><font SIZE="2">0.7</font></td>
    </font>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">0.7</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">1.3</font></td>
    </font>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">1.3</font></td>
  </tr>
  <tr>
    <td WIDTH="42%"><font SIZE="2">Non-controlling interest in income</font></td>
    </font>
<font FACE="Times New Roman" style="font-size: 9pt">
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
  </tr>
<font style="font-size: 9pt">
  <tr>
    <td WIDTH="42%" style="border-bottom: 2px solid #000000"><font SIZE="2">&nbsp;&nbsp;&nbsp;
    of consolidated joint venture</font></td>
    </font>
<font FACE="Times New Roman" style="font-size: 9pt">
<font style="font-size: 9pt">
    <td WIDTH="9%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">
    <font SIZE="2">0.2</font></td>
    </font>
    <td WIDTH="9%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">
    <font SIZE="2">0.2</font></td>
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">
    <font SIZE="2">-</font></td>
    </font>
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">
    <font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="42%"><font SIZE="2">Earnings before income taxes</font></td>
    </font>
<font FACE="Times New Roman" style="font-size: 9pt">
<font style="font-size: 9pt">
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF"><font SIZE="2">32.1</font></td>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF"><font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">32.1</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">49.1</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">49.1</font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom: 2px solid #000000"><font SIZE="2">
    Income taxes</font></td>
    </font>
<font FACE="Times New Roman" style="font-size: 9pt">
<font style="font-size: 9pt">
    <td WIDTH="9%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">
    <font SIZE="2">1.1</font></td>
    </font>
    <td WIDTH="9%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">
    <font SIZE="2">1.1</font></td>
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">
    <font SIZE="2">1.9</font></td>
    </font>
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">
    <font SIZE="2">1.9</font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">Net earnings</font></td>
    </font>
<font FACE="Times New Roman" style="font-size: 9pt">
<font style="font-size: 9pt">
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">31.0</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">31.0</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">47.2</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">47.2</font></td>
  </tr>
  <tr>
    <td WIDTH="42%"><font SIZE="2">Basic EPS</font></td>
    </font>
<font FACE="Times New Roman" style="font-size: 9pt">
<font style="font-size: 9pt">
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF"><font SIZE="2">0.52</font></td>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF"><font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">0.52</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">0.79</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">0.79</font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">Diluted EPS</font></td>
    </font>
<font FACE="Times New Roman" style="font-size: 9pt">
<font style="font-size: 9pt">
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">0.51</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">0.51</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">0.78</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">0.78</font></td>
  </tr>
</table>
</font>
<p>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 8. </p>
</font></font></font></font></font></font></font></font></font></font></font></font></font></font></font>
</i><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.15 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font FACE="Times New Roman PS" SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
  </tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
</table>
<font SIZE="2"><b>
<p align="justify">EBITDA </p>
</b>
<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>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="419" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><i>(in $ millions)</i></font></td>
    <td WIDTH="141" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>Q2 2007</b></font></td>
    <td WIDTH="141" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">Q2 2006</font></td>
    <td WIDTH="142" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>YTD 2007</b></font></td>
    <td WIDTH="142" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">YTD 2006</font></td>
  </tr>
  <tr>
    <td WIDTH="419"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Net earnings</font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2"><b>21.1</b></font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2">31.0</font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2"><b>36.8</b></font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2">47.2</font></td>
  </tr>
  <tr>
    <td WIDTH="419"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Restructuring and other charges
    <sup>(1)</sup></font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2"><b>16.4</b></font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2">-</font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2"><b>17.7</b></font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="419"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Depreciation and amortization</font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2"><b>9.5</b></font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2">7.7</font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2"><b>18.2</b></font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2">15.1</font></td>
  </tr>
  <tr>
    <td WIDTH="419"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Interest, net</font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2"><b>1.1</b></font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2">0.7</font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2"><b>2.0</b></font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2">1.3</font></td>
  </tr>
  <tr>
    <td WIDTH="419"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Income taxes</font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2"><b>2.0</b></font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2">1.1</font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2"><b>3.1</b></font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2">1.9</font></td>
  </tr>
  <tr>
    <td WIDTH="419" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Non-controlling interest in
    income of consolidated joint venture</font></td>
    <td WIDTH="141" align="right" style="border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <font SIZE="2"><b>0.1</b></font></td>
    <td WIDTH="141" align="right" style="border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <font SIZE="2">0.2</font></td>
    <td WIDTH="142" align="right" style="border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <font SIZE="2"><b>0.1</b></font></td>
    <td WIDTH="142" align="right" style="border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="419" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">EBITDA</font></td>
    <td WIDTH="141" align="right" style="border-bottom-style: double; border-bottom-width: 5" valign="bottom">
    <font SIZE="2"><b>50.2</b></font></td>
    <td WIDTH="141" align="right" style="border-bottom-style: double; border-bottom-width: 5" valign="bottom">
    <font SIZE="2">40.7</font></td>
    <td WIDTH="142" align="right" style="border-bottom-style: double; border-bottom-width: 5" valign="bottom">
    <font SIZE="2"><b>77.9</b></font></td>
    <td WIDTH="142" align="right" style="border-bottom-style: double; border-bottom-width: 5" valign="bottom">
    <font SIZE="2">65.5</font></td>
  </tr>
</table>
<font FACE="Times New Roman" style="font-size: 9pt"><i>
<p align="justify">Certain minor rounding variances exist between the financial
statements and this summary. <sup><br>
(1)</sup> See page 8. </p>
</i></font><font FACE="Times New Roman" SIZE="2"><b>
<p>Total Indebtedness and Net Indebtedness </p>
</b>
<p>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="44%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><i>(in $ millions)</i></font></td>
    <td WIDTH="18%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">Q2 2007</b></font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 4">Q4 2006</font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 4">Q2 2006</font></td>
  </tr>
  <tr>
    <td WIDTH="44%"><font SIZE="2">Bank indebtedness</font></td>
    <td WIDTH="18%" align="right"><font SIZE="2"><b>(3.5)</b></font></td>
    <td WIDTH="19%" align="right"><font SIZE="2">(3.5)</font></td>
    <td WIDTH="19%" align="right"><font SIZE="2">(4.0)</font></td>
  </tr>
  <tr>
    <td WIDTH="44%"><font SIZE="2">Current portion of long-term debt</font></td>
    <td WIDTH="18%" align="right"><font SIZE="2"><b>(21.5)</b></font></td>
    <td WIDTH="19%" align="right"><font SIZE="2">(21.8)</font></td>
    <td WIDTH="19%" align="right"><font SIZE="2">(19.7)</font></td>
  </tr>
  <tr>
    <td WIDTH="44%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">Long-term debt</font></td>
    <td WIDTH="18%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>(52.7)</b></font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">(12.0)</font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">(26.9)</font></td>
  </tr>
  <tr>
    <td WIDTH="44%"><font SIZE="2"><b>Total indebtedness</b></font></td>
    <td WIDTH="18%" align="right"><font SIZE="2"><b>(77.7)</b></font></td>
    <td WIDTH="19%" align="right"><font SIZE="2">(37.3)</font></td>
    <td WIDTH="19%" align="right"><font SIZE="2">(50.6)</font></td>
  </tr>
  <tr>
    <td WIDTH="44%">&nbsp;</td>
    <td WIDTH="18%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="19%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="19%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="44%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">Cash and cash equivalents</font></td>
    <td WIDTH="18%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">35.5</b></font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 4">29.0</font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 4">48.1</font></td>
  </tr>
  <tr>
    <td WIDTH="44%" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>Net indebtedness</b></font></td>
    <td WIDTH="18%" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>(42.2)</b></font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">(8.3)</font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">(2.5)</font></td>
  </tr>
</table>
<font style="font-size: 9pt"><i>
<p>Certain minor rounding variances exist between the financial statements and
this summary. </p>
</i></font><font SIZE="2">
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" SIZE="3" color="#075DB6">Risks and Uncertainties
    </font></td>
    </font>
  </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><font FACE="Wingdings" LANG="JA" SIZE="2">
<ul>
  <li></font><font SIZE="2">Our ability to implement our strategies and plans;</font></li>
  <li><font SIZE="2">Our industry is competitive;</font></li>
  <li><font SIZE="2">Our industry is subject to pricing pressures;</font></li>
  <li><font SIZE="2">Our success depends on our ability to anticipate evolving
  consumer preferences and trends;</font></li>
  <li><font SIZE="2">Our operations are subject to environmental regulation;</li>
</ul>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.16 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font FACE="Times New Roman PS" SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
  </tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
</table>
<font FACE="Wingdings" LANG="JA" SIZE="2">
<ul>
  <li>
  <p align="justify"></font><font FACE="Arial MT" SIZE="2">We rely on a
  relatively small number of significant customers;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">Our customers do not commit
  to purchase minimum quantities;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">We are exposed to
  concentrations of credit risk;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">Our business is affected by
  changes in international trade legislation;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">We currently pay income tax
  at a comparatively low effective rate, which could change in the future;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">The price of the raw
  materials we buy is prone to significant fluctuations and volatility;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">Our operations are subject
  to political, social and economic risks;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">Our industry is subject to
  fluctuations in sales demand;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">Our business operations
  significantly rely on our information systems;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">We are subject to foreign
  currency risk;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">Our operations could be
  affected by changes in our relationships with our employees or changes to
  domestic and foreign employment regulations;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">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</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">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
Annual 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>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" SIZE="3" color="#075DB6"><font FACE="Arial MT">
    Forward-Looking Statements</font></font></td>
    </font>
  </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 Annual
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 May 2, 2007. </p>
<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>
<ul>
  <li>
  <p ALIGN="justify">general economic conditions such as currency exchange
  rates, commodity prices and other factors over which we have no control;</li>
  <li>
  <p ALIGN="justify">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">the intensity of competitive activity;</li>
  <li>
  <p ALIGN="justify">changes in environmental, tax, trade and other laws and
  regulations;</li>
  <li>
  <p ALIGN="justify">our ability to implement our strategies and plans;</li>
  <li>
  <p ALIGN="justify">our ability to complete and successfully integrate
  acquisitions;</li>
  <li>
  <p ALIGN="justify">changes in customer demand for our products and our ability
  to maintain customer relationships and grow our business;</li>
  <li>
  <p ALIGN="justify">the seasonality of our business;</li>
</ul>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.17 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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">
<ul>
  <li>
  <p align="justify">our ability to attract and retain key personnel;</li>
  <li>
  <p align="justify">changes in accounting policies and estimates; and</li>
  <li>
  <p align="justify">disruption to manufacturing and distribution activities due
  to the impact of weather, natural disasters and other unforeseen adverse
  events.</li>
</ul>
<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">May 2, 2007</p>
</font>
<p>&nbsp;</p>
<p>&nbsp;</p>
<font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.18 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>

<b><font FACE="Times New Roman" style="font-size: 14pt">
<p align="center">Gildan Activewear Inc.</font><font FACE="Times New Roman" size="2"><br>
Consolidated Balance Sheets<br>
</font></b><font FACE="Times New Roman" size="2">(in thousands of U.S. dollars)</p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="51%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" size="2"><u>April
    1, 2007</u></font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" size="2"><u>
    October 1, 2006</u></font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" size="2"><u>April
    2, 2006</u></font></td>
  </tr>
  <tr>
    <td WIDTH="51%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" size="2">(unaudited)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" size="2">
    (audited)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" size="2">(unaudited)</font></td>
  </tr>
  <tr>
    <td WIDTH="51%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">Current assets:</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 20">Cash and cash equivalents</font></td>
    <td WIDTH="3%" align="right"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">35,481</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">29,007</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">48,129</font></td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 20">Accounts receivable</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">139,754</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">165,870</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">103,376</font></td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 20">Inventories</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">242,589</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">200,653</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">186,591</font></td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 20">Prepaid expenses and deposits</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">7,074</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">5,757</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">3,889</font></td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 20">Future income taxes</font></td>
    <td WIDTH="3%" 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">5,038</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" 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">5,298</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" 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">10,580</font></td>
  </tr>
  <tr>
    <td WIDTH="51%">
    <p style="margin-left: 20">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">429,936</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">406,585</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">352,565</font></td>
  </tr>
  <tr>
    <td WIDTH="51%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">Property, plant and
    equipment</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">348,809</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">302,677</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">282,086</font></td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">Intangible assets</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">9,191</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">9,513</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">Assets held for sale</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">2,895</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">-</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">5,027</font></td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">Other assets</font></td>
    <td WIDTH="3%" 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">4,724</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" 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">4,501</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" 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">4,135</font></td>
  </tr>
  <tr>
    <td WIDTH="51%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">Total assets</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">795,555</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">723,276</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">643,813</font></td>
  </tr>
  <tr>
    <td WIDTH="51%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="51%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="51%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">Current liabilities:</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 20">Bank indebtedness (note 4)</font></td>
    <td WIDTH="3%" align="right"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">3,500</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">3,500</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right"><font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">3,980</font></td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 20">Accounts payable and accrued liabilities</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">113,086</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">117,984</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">83,413</font></td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 20">Income taxes payable</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">237</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">2,269</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">2,209</font></td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 20">Current portion of long-term debt (note 5)</font></td>
    <td WIDTH="3%" 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">21,449</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" 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">21,820</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" 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">19,712</font></td>
  </tr>
  <tr>
    <td WIDTH="51%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">138,272</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">145,573</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">109,314</font></td>
  </tr>
  <tr>
    <td WIDTH="51%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">Long-term debt (note
    5)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">52,730</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">12,041</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">26,854</font></td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">Future income taxes</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">29,908</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">29,443</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">32,461</font></td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">Non-controlling
    interest in consolidated joint venture</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">5,776</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">5,654</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">5,442</font></td>
  </tr>
  <tr>
    <td WIDTH="51%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">Shareholders' equity:</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">Share capital (note 6)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">87,353</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">86,584</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">85,624</font></td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">Contributed surplus
    (note 6)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">3,143</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">2,365</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">2,121</font></td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">Retained earnings</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">452,125</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">415,368</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font FACE="Times New Roman" SIZE="2">355,749</font></td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">Accumulated other
    comprehensive income</font></td>
    <td WIDTH="3%" 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">26,248</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" 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">26,248</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" 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">26,248</font></td>
  </tr>
  <tr>
    <td WIDTH="51%">&nbsp;</td>
    <td WIDTH="3%" 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">568,869</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" 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">530,565</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" 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">469,742</font></td>
  </tr>
  <tr>
    <td WIDTH="51%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">Contingent liabilities
    (note 8)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">Subsequent event (note
    15)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="51%">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="51%"><font FACE="Times New Roman" SIZE="2">Total liabilities and
    shareholders' equity</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">795,555</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">723,276</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font FACE="Times New Roman" SIZE="2">643,813</font></td>
  </tr>
</table>
<p><font FACE="Arial MT" SIZE="2">See accompanying notes to interim consolidated
financial statements.</font></p>
<p align="right"><i><font face="Arial MT" size="2">GILDAN QUARTERLY REPORT - Q2
2007 p.19</font></i></p>
<hr color="#000000" size="5"><p Style='page-break-before:always'><b>
<font FACE="Times New Roman" style="font-size: 14pt">
<p align="center">Gildan Activewear Inc.</font><font FACE="Times New Roman" size="2"><br>
Consolidated Balance Sheets<br>
</font></b><font FACE="Times New Roman" size="2">(in thousands of U.S. dollars)</p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="27%" height="19" align="center" colspan="5" bgcolor="#9ACCFF">
    <font FACE="Times New Roman" size="2"><font SIZE="2"><i><b>Three months
    ended</b></i></font></font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="27%" height="19" align="center" colspan="5" bgcolor="#9ACCFF">
    <font FACE="Times New Roman" size="2"><font SIZE="2"><i><b>Six months ended</b></i></font></font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font size="2"><u>April 1, 2007</u></font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font size="2"><u>April 2, 2006</u></font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font size="2"><u>April 1, 2007</u></font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font size="2"><u>April 2, 2006</u></font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font size="2">(unaudited)</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font size="2">(unaudited)</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font size="2">(unaudited)</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font size="2">(unaudited)</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="15"><font SIZE="2">Sales</font></td>
    <td WIDTH="3%" height="15" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right"><font SIZE="2">232,134</font></td>
    <td WIDTH="3%" height="15" align="right"></td>
    <td WIDTH="3%" height="15" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right"><font SIZE="2">183,783</font></td>
    <td WIDTH="3%" height="15" align="right"></td>
    <td WIDTH="3%" height="15" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right"><font SIZE="2">417,963</font></td>
    <td WIDTH="3%" height="15" align="right"></td>
    <td WIDTH="3%" height="15" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right"><font SIZE="2">304,093</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19"><font SIZE="2">Cost of sales</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">153,386</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">122,375</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">285,337</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">199,790</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19"><font SIZE="2">Gross profit</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">78,748</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">61,408</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">132,626</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">104,303</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19"><font SIZE="2">Selling, general and
    administrative expenses</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">28,540</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">20,706</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">54,650</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">38,769</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19"><font SIZE="2">Restructuring and other charges
    (note 10)</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">16,359</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">-</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">17,750</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19"><font SIZE="2">Earnings before undernoted items</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">33,849</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">40,702</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">60,226</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">65,534</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19"><font SIZE="2">Depreciation and amortization</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">9,475</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">7,712</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">18,249</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">15,142</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19"><font SIZE="2">Interest, net</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">1,077</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">703</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">2,048</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">1,269</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19"><font SIZE="2">
    <font SIZE="2" FACE="Times New Roman">Non-controlling interest in income of
    </font>consolidated joint venture</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">186</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">156</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">122</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">48</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19"><font SIZE="2">Earnings before income taxes</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">23,111</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">32,131</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">39,807</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font SIZE="2">49,075</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19"><font SIZE="2">Income taxes</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">1,965</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">1,116</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">3,050</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">1,865</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="15"><font SIZE="2">Net earnings</font></td>
    <td WIDTH="3%" height="15" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">21,146</font></td>
    <td WIDTH="3%" height="15" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    </td>
    <td WIDTH="3%" height="15" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">31,015</font></td>
    <td WIDTH="3%" height="15" align="right"></td>
    <td WIDTH="3%" height="15" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">36,757</font></td>
    <td WIDTH="3%" height="15" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    </td>
    <td WIDTH="3%" height="15" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">47,210</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="15"><font SIZE="2">Basic EPS (note 11)</font></td>
    <td WIDTH="3%" height="15" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right"><font SIZE="2">0.35</font></td>
    <td WIDTH="3%" height="15" align="right"></td>
    <td WIDTH="3%" height="15" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right"><font SIZE="2">0.52</font></td>
    <td WIDTH="3%" height="15" align="right"></td>
    <td WIDTH="3%" height="15" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right"><font SIZE="2">0.61</font></td>
    <td WIDTH="3%" height="15" align="right"></td>
    <td WIDTH="3%" height="15" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right"><font SIZE="2">0.79</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="15"><font SIZE="2">Diluted EPS (note 11)</font></td>
    <td WIDTH="3%" height="15" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right"><font SIZE="2">0.35</font></td>
    <td WIDTH="3%" height="15" align="right"></td>
    <td WIDTH="3%" height="15" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right"><font SIZE="2">0.51</font></td>
    <td WIDTH="3%" height="15" align="right"></td>
    <td WIDTH="3%" height="15" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right"><font SIZE="2">0.61</font></td>
    <td WIDTH="3%" height="15" align="right"></td>
    <td WIDTH="3%" height="15" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right"><font SIZE="2">0.78</font></td>
  </tr>
</table>
<b>
<p align="center">&nbsp;</p>
<p align="center">Consolidated Statements of Retained Earnings<br>
</b>(In thousands of U.S. dollars)</p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <font FACE="Times New Roman" size="2">
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="27%" height="19" align="center" colspan="5" bgcolor="#9ACCFF">
    <font FACE="Times New Roman" size="2"><font SIZE="2"><i><b>Three months
    ended</b></i></font></font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="27%" height="19" align="center" colspan="5" bgcolor="#9ACCFF">
    <font FACE="Times New Roman" size="2"><font SIZE="2"><i><b>Six months ended</b></i></font></font></td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman" size="2">
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font size="2"><u>April 1, 2007</u></font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font size="2"><u>April 2, 2006</u></font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font size="2"><u>April 1, 2007</u></font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font size="2"><u>April 2, 2006</u></font></td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman" size="2">
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font size="2">(unaudited)</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font size="2">(unaudited)</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font size="2">(unaudited)</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right"><font size="2">(unaudited)</font></td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman" size="2">
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right">&nbsp;</td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman" size="2">
    <td WIDTH="43%" height="15"><font SIZE="2">Retained earnings, beginning of
    the period</font></td>
    <td WIDTH="3%" height="15" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right"><font SIZE="2">430,979</font></td>
    <td WIDTH="3%" height="15" align="right"></td>
    <td WIDTH="3%" height="15" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right"><font SIZE="2">324,734</font></td>
    <td WIDTH="3%" height="15" align="right"></td>
    <td WIDTH="3%" height="15" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right"><font SIZE="2">415,368</font></td>
    <td WIDTH="3%" height="15" align="right"></td>
    <td WIDTH="3%" height="15" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" height="15" align="right"><font SIZE="2">308,539</font></td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman" size="2">
    <td WIDTH="43%" height="19"><font SIZE="2">Net earnings</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">21,146</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">31,015</font></td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">36,757</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">47,210</font></td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman" size="2">
    <td WIDTH="43%" height="19">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman" size="2">
    <td WIDTH="43%" height="1"><font SIZE="2">Retained earnings, end of the
    period</font></td>
    <td WIDTH="3%" height="1" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" height="1" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font SIZE="2">452,125</font></td>
    <td WIDTH="3%" height="1" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    </td>
    <td WIDTH="3%" height="1" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" height="1" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font SIZE="2">355,749</font></td>
    <td WIDTH="3%" height="1" align="right"></td>
    <td WIDTH="3%" height="1" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" height="1" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font SIZE="2">452,125</font></td>
    <td WIDTH="3%" height="1" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    </td>
    <td WIDTH="3%" height="1" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" height="1" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font SIZE="2">355,749</font></td>
    </font>
  </tr>
</table>
<p><font FACE="Arial MT" SIZE="2">See accompanying notes to interim consolidated
financial statements.</font></p>
<p align="right"><i><font face="Arial MT" size="2">GILDAN QUARTERLY REPORT - Q2
2007 p.20</font></i></p>
<hr color="#000000" size="5"><p Style='page-break-before:always'><b>
<font FACE="Times New Roman" style="font-size: 14pt">
<p align="center">Gildan Activewear Inc.</font><font FACE="Times New Roman" size="2"><br>
Consolidated Balance Sheets<br>
</font></b><font FACE="Times New Roman" size="2">(in thousands of U.S. dollars)</p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" height="1014" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="43%" height="19">
    <p style="text-indent: -20; margin-left: 40">&nbsp;</td>
    <td WIDTH="27%" height="19" align="center" colspan="5" bgcolor="#9ACCFF">
    <font FACE="Times New Roman" SIZE="2"><i><b>
    <p style="margin-right: 4">Three months ended</b></i></font></td>
    <td WIDTH="3%" height="19" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="27%" height="19" align="center" colspan="5" bgcolor="#9ACCFF">
    <font FACE="Times New Roman" SIZE="2"><i><b>
    <p style="margin-right: 4">Six months ended</b></i></font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4"><u>April 1, 2007</u></font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4"><u>April 2, 2006</u></font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4"><u>April 1, 2007</u></font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4"><u>April 2, 2006</u></font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">(unaudited)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">(unaudited)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">(unaudited)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" size="2">
    <p style="margin-right: 4">(unaudited)</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 20">Cash flows from operating
    activities:</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="15" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 40">Net earnings</font></td>
    <td WIDTH="3%" height="15" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="9%" height="15" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">21,146</font></td>
    <td WIDTH="3%" height="15" align="right" valign="bottom">
    <p style="margin-right: 4"></td>
    <td WIDTH="3%" height="15" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="9%" height="15" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">31,015</font></td>
    <td WIDTH="3%" height="15" align="right" valign="bottom">
    <p style="margin-right: 4"></td>
    <td WIDTH="3%" height="15" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="9%" height="15" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">36,757</font></td>
    <td WIDTH="3%" height="15" align="right" valign="bottom">
    <p style="margin-right: 4"></td>
    <td WIDTH="3%" height="15" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="9%" height="15" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">47,210</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 40">Adjustments for:</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 60">Depreciation and amortization</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">10,477</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">7,712</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">20,375</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">15,142</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 60">Impairment loss and writedown
    of property, plant and equipment</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">3,560</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">3,560</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 60">(Gain) loss on disposal of
    assets held for sale and property, plant and equipment</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(2,096)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">302</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(1,738)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">342</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 60">Stock-based compensation costs</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">310</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">248</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">778</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">525</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 60">Future income taxes</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">1,235</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">191</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">1,479</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">418</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 60">Non-controlling interest</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">186</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">156</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">122</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">48</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 60">Unrealized foreign exchange
    (gain) loss</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(130)</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(136)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(1,588)</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">119</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="16" valign="bottom">
    <p style="text-indent: -20; margin-left: 40"></td>
    <td WIDTH="3%" height="16" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4"></td>
    <td WIDTH="9%" height="16" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">34,688</font></td>
    <td WIDTH="3%" height="16" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4"></td>
    <td WIDTH="3%" height="16" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4"></td>
    <td WIDTH="9%" height="16" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">39,488</font></td>
    <td WIDTH="3%" height="16" align="right" valign="bottom">
    <p style="margin-right: 4"></td>
    <td WIDTH="3%" height="16" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4"></td>
    <td WIDTH="9%" height="16" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">59,745</font></td>
    <td WIDTH="3%" height="16" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4"></td>
    <td WIDTH="3%" height="16" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4"></td>
    <td WIDTH="9%" height="16" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">63,804</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 40">Changes in non-cash working
    capital balances:</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 60">Accounts receivable</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(37,971)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(51,573)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">29,446</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">5,256</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 60">Inventories</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(9,075)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(7,747)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(41,936)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(51,730)</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 60">Prepaid expenses and deposits</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(397)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(624)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(1,317)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">505</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 60">Accounts payable and accrued
    liabilities</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">14,209</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">2,485</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(4,235)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(3,792)</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 60">Income taxes payable</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(1,169)</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(73)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(1,945)</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(15)</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">285</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(18,044)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">39,758</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">14,028</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 20">Cash flows from (used in)
    financing activities:</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 40">Increase in revolving term
    credit facility</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">43,000</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">43,000</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 40">Net decrease in long-term debt</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(974)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(673)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(2,682)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(581)</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 40">Proceeds from the issuance of
    shares</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">400</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">587</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">769</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">1,447</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">42,426</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(86)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">41,087</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">866</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 20">Cash flows used in investing
    activities:</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 40">Purchase of property, plant and
    equipment</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(45,109)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(23,849)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(75,451)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(36,223)</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 40">Proceeds from assets held for
    sale</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">1,995</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">1,995</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 40">Increase in other assets</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(487)</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(144)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(1,008)</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(251)</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(43,601)</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(23,993)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(74,464)</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(36,474)</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 40">Effect of exchange rate changes
    on cash and cash equivalents denominated in foreign currencies</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">42</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(44)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">93</font></td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(93)</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 40">Net (decrease) increase in cash
    and cash equivalents during the period</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(848)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(42,167)</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">6,474</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">(21,673)</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 40">Cash and cash equivalents,
    beginning of period</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">36,329</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">90,296</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">29,007</font></td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">69,802</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" height="19" valign="bottom">
    <p style="text-indent: -20; margin-left: 40">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" height="19" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" height="15" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="text-indent: -20; margin-left: 40">Cash and cash equivalents, end
    of period</font></td>
    <td WIDTH="3%" height="15" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 3" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="9%" height="15" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 3" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">35,481</font></td>
    <td WIDTH="3%" height="15" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 3" valign="bottom">
    <p style="margin-right: 4"></td>
    <td WIDTH="3%" height="15" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 3" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="9%" height="15" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 3" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">48,129</font></td>
    <td WIDTH="3%" height="15" align="right" valign="bottom">
    <p style="margin-right: 4"></td>
    <td WIDTH="3%" height="15" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 3" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="9%" height="15" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 3" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">35,481</font></td>
    <td WIDTH="3%" height="15" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 3" valign="bottom">
    <p style="margin-right: 4"></td>
    <td WIDTH="3%" height="15" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 3" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="9%" height="15" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 3" valign="bottom">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">48,129</font></td>
  </tr>
</table>
<p><font FACE="Arial MT" SIZE="2">Supplemental disclosure of cash flow
information (note 12 (b))<br>
See accompanying notes to interim consolidated financial statements.</font></p>
<p align="right"><i><font face="Arial MT" size="2">GILDAN QUARTERLY REPORT - Q2
2007 p.21</font></i></p>

<font SIZE="2"><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>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font size="2"><i>
<p align="right">NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS </p>
</i>
</font></td>
  </tr>
</table>
</i><b>
<p><u>NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS <br>
</u>(For the period ended April 1, 2007) <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: of presentation </p>
</b>
<p ALIGN="JUSTIFY">The accompanying unaudited interim consolidated financial
statements have been prepared in accordance with Canadian generally accepted
accounting principles for interim financial information and include all normal
and recurring entries that are necessary for a fair presentation of the
statements. Accordingly, they do not include all of the information and
footnotes required by Canadian generally accepted accounting principles for
complete financial statements, and should be read in conjunction with the
Company's annual consolidated financial statements. </p>
<p>The Company's revenues and income are subject to seasonal variations.
Consequently, the results of operations for the second 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 with 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 &quot;cash flow hedge,&quot; when the hedged item is a future cash flow, or
a &quot;fair value hedge,&quot; 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>
<i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p. 22</i> </p>
</font><hr color="#000000" size="5"><p Style='page-break-before:always'><font size="2"><b>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <i>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font size="2"><i>
<p align="right">NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS </p>
</i>
</font></td>
</i>
  </tr>
</table>
<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 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 April 1, 2007, 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>
</font><b>
<p><font size="2">4.</font></b><font size="2"> </font><b><font size="2">Bank
indebtedness: </font></p>
</b><font size="2">
<p ALIGN="JUSTIFY">The Company's joint venture, CanAm, has a revolving line of
credit in the amount of $4.0 million. As at April 1, 2007 and October 1, 2006,
the joint venture had utilized $3.5 million of its line of credit. As at April
2, 2006 the joint venture had utilized $4.0 million. The borrowings are due on
demand and bear interest at 30-day LIBOR plus 2.25%. The line of credit is
secured by a first ranking security interest on the assets of the joint venture.
</p>
</font><b>
<p><font size="2">5.</font></b><font size="2"> </font><b><font size="2">
Long-term debt : </font></b></p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="37%">&nbsp;</td>
    <td WIDTH="20%" COLSPAN="2" align="right"><font SIZE="2"><u>April 1, 2007</u></font></td>
    <td WIDTH="21%" COLSPAN="2" align="right"><font SIZE="2"><u>October 1, 2006</u></font></td>
    <td WIDTH="23%" COLSPAN="2" align="right"><font SIZE="2"><u>April 2, 2006</u></font></td>
  </tr>
  <tr>
    <td WIDTH="37%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(audited)</font></td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="37%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Senior notes (a)</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">17,500</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">17,500</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">35,000</font></td>
  </tr>
  <tr>
    <td WIDTH="37%"><font SIZE="2">Revolving term credit facility (b)</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">43,000</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">-</font></td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Other</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">13,679</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">16,361</font></td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">11,566</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" 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">
    <font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">74,179</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">33,861</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">46,566</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Current portion of long term-debt</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">21,449</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">21,820</font></td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">19,712</font></td>
  </tr>
  <tr>
    <td WIDTH="37%" style="border-top-style: solid; border-top-width: 1; border-bottom: 2px solid #000000">
    <font SIZE="2">Total long-term debt</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom: 2px solid #000000">
    <font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom: 2px solid #000000">
    <font SIZE="2">52,730</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom: 2px solid #000000">
    <font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom: 2px solid #000000">
    <font SIZE="2">12,041</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom: 2px solid #000000">
    <font SIZE="2">$</font></td>
    <td WIDTH="11%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom: 2px solid #000000">
    <font SIZE="2">26,854</font></td>
  </tr>
</table>
<font SIZE="2">
<p style="text-indent: -26; margin-left: 26">(a)&nbsp;&nbsp; The notes bear
interest at 9.51% on $13.8 million and 9.88% on $3.7 million, and are secured by
tangible and intangible property of the Company. The notes mature in May 2007.
</p>
<p ALIGN="JUSTIFY" style="text-indent: -26; margin-left: 26">(b)&nbsp;&nbsp; The
Company has a revolving term credit facility for a maximum of $200 million which
matures in July 2009. The facility is secured by a first ranking moveable
hypothec and security interest on the majority of the Company's accounts
receivable, inventories, intangible assets, equipment and tangible moveable
assets. As at April 1, 2007, $43.0 million was drawn on this facility. There
were no amounts drawn under this facility at October 1, 2006 or April 2, 2006.
</p>
<b>
<p>6. Share capital and contributed surplus: </p>
</b></font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="418">&nbsp;</td>
    <td WIDTH="165" align="right" colspan="3"><font SIZE="2">
    <p align="center"><u>April 1, 2007</u></font></td>
    <td WIDTH="33" align="right">&nbsp;</td>
    <td WIDTH="168" align="center" colspan="3"><font SIZE="2"><u>October 1, 2006</u></font></td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="168" align="right" colspan="3"><font SIZE="2">
    <p align="center"><u>April 2, 2006</u></font></td>
  </tr>
  <tr>
    <td WIDTH="418">&nbsp;</td>
    <td WIDTH="66" align="right">&nbsp;</td>
    <td WIDTH="33" align="right">&nbsp;</td>
    <td WIDTH="66" align="right">&nbsp;</td>
    <td WIDTH="33" align="right">&nbsp;</td>
    <td WIDTH="168" align="center" colspan="3"><font SIZE="2">(audited)</font></td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right">&nbsp;</td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="418" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="66" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Shares</font></td>
    <td WIDTH="99" align="right" colspan="2" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Book value</font></td>
    <td WIDTH="33" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Shares</font></td>
    <td WIDTH="101" align="right" colspan="2" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Book value</font></td>
    <td WIDTH="34" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Shares</font></td>
    <td WIDTH="101" align="right" colspan="2" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Book value</font></td>
  </tr>
  <tr>
    <td WIDTH="418" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Authorized without limit as to number and without par value:</font></td>
    <td WIDTH="66" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="33" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="66" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="33" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="418"><font SIZE="2">
    <p style="margin-left: 26">First preferred shares, issuable in series,
    non-voting</font></td>
    <td WIDTH="66" align="right">&nbsp;</td>
    <td WIDTH="33" align="right">&nbsp;</td>
    <td WIDTH="66" align="right">&nbsp;</td>
    <td WIDTH="33" align="right">&nbsp;</td>
    <td WIDTH="67" align="right">&nbsp;</td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right">&nbsp;</td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right">&nbsp;</td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="418"><font SIZE="2">
    <p style="margin-left: 26">Second preferred shares, issuable in series,
    non-voting</font></td>
    <td WIDTH="66" align="right">&nbsp;</td>
    <td WIDTH="33" align="right">&nbsp;</td>
    <td WIDTH="66" align="right">&nbsp;</td>
    <td WIDTH="33" align="right">&nbsp;</td>
    <td WIDTH="67" align="right">&nbsp;</td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right">&nbsp;</td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right">&nbsp;</td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="418" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-left: 26">Common shares</font></td>
    <td WIDTH="66" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="33" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="66" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="33" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="418" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Issued and outstanding:</font></td>
    <td WIDTH="66" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="33" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="66" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="33" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="418"><font SIZE="2">
    <p style="margin-left: 26">Common shares:</font></td>
    <td WIDTH="66" align="right">&nbsp;</td>
    <td WIDTH="33" align="right">&nbsp;</td>
    <td WIDTH="66" align="right">&nbsp;</td>
    <td WIDTH="33" align="right">&nbsp;</td>
    <td WIDTH="67" align="right">&nbsp;</td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right">&nbsp;</td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right">&nbsp;</td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="418"><font SIZE="2">
    <p style="margin-left: 35">Total outstanding, beginning of year</font></td>
    <td WIDTH="66" align="right"><font SIZE="2">60,114</font></td>
    <td WIDTH="33" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="66" align="right"><font SIZE="2">86,584</font></td>
    <td WIDTH="33" align="right">&nbsp;</td>
    <td WIDTH="67" align="right"><font SIZE="2">59,955</font></td>
    <td WIDTH="34" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="67" align="right"><font SIZE="2">84,177</font></td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right"><font SIZE="2">59,955</font></td>
    <td WIDTH="34" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="67" align="right"><font SIZE="2">84,177</font></td>
  </tr>
  <tr>
    <td WIDTH="418"><font SIZE="2">
    <p style="margin-left: 52">Shares issued pursuant to business acquisition</font></td>
    <td WIDTH="66" align="right"><font SIZE="2">-</font></td>
    <td WIDTH="33" align="right">&nbsp;</td>
    <td WIDTH="66" align="right"><font SIZE="2">-</font></td>
    <td WIDTH="33" align="right">&nbsp;</td>
    <td WIDTH="67" align="right"><font SIZE="2">10</font></td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right"><font SIZE="2">460</font></td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right"><font SIZE="2">-</font></td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="418"><font SIZE="2">
    <p style="margin-left: 52">Shares issued under employee share purchase plan</font></td>
    <td WIDTH="66" align="right"><font SIZE="2">5</font></td>
    <td WIDTH="33" align="right">&nbsp;</td>
    <td WIDTH="66" align="right"><font SIZE="2">228</font></td>
    <td WIDTH="33" align="right">&nbsp;</td>
    <td WIDTH="67" align="right"><font SIZE="2">8</font></td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right"><font SIZE="2">360</font></td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right"><font SIZE="2">3</font></td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right"><font SIZE="2">119</font></td>
  </tr>
  <tr>
    <td WIDTH="418" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-left: 52">Shares issued pursuant to exercise of stock
    options</font></td>
    <td WIDTH="66" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">55</font></td>
    <td WIDTH="33" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="66" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">541</font></td>
    <td WIDTH="33" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">141</font></td>
    <td WIDTH="34" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">1,587</font></td>
    <td WIDTH="34" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">115</font></td>
    <td WIDTH="34" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">1,328</font></td>
  </tr>
  <tr>
    <td WIDTH="418" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-left: 35">Total outstanding, end of period</font></td>
    <td WIDTH="66" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">60,174</font></td>
    <td WIDTH="33" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">$</font></td>
    <td WIDTH="66" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">87,353</font></td>
    <td WIDTH="33" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">60,114</font></td>
    <td WIDTH="34" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">$</font></td>
    <td WIDTH="67" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">86,584</font></td>
    <td WIDTH="34" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">60,073</font></td>
    <td WIDTH="34" 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="67" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">85,624</font></td>
  </tr>
  <tr>
    <td WIDTH="418">&nbsp;</td>
    <td WIDTH="66" align="right">&nbsp;</td>
    <td WIDTH="33" align="right">&nbsp;</td>
    <td WIDTH="66" align="right">&nbsp;</td>
    <td WIDTH="33" align="right">&nbsp;</td>
    <td WIDTH="67" align="right">&nbsp;</td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right">&nbsp;</td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right">&nbsp;</td>
    <td WIDTH="34" align="right">&nbsp;</td>
    <td WIDTH="67" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="418" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Changes in contributed surplus were as follows:</font></td>
    <td WIDTH="66" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="33" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="66" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="33" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="418" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Balance, October 1, 2006</font></td>
    <td WIDTH="66" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="33" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="66" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="33" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="67" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">2,365</font></td>
  </tr>
  <tr>
    <td WIDTH="484" COLSPAN="2" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Stock-based compensation related to stock options and
    Treasury RSUs</font></td>
    <td WIDTH="33" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="66" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="33" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">778</font></td>
  </tr>
  <tr>
    <td WIDTH="418" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Balance, April 1, 2007</font></td>
    <td WIDTH="66" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="33" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="66" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="33" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="34" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="67" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="34" 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="67" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">3,143</font></td>
  </tr>
</table>
<font SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p. 23</i> </p>
</font><hr color="#000000" size="5"><p Style='page-break-before:always'><font SIZE="2"><i>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font size="2"><i>
<p align="right">NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS </p>
</i>
</font></td>
  </tr>
</table>
</i><b>
<p>7. 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>
<p>Changes in outstanding stock options were as follows: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="57%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="26%" COLSPAN="2" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Weighted average</font></td>
  </tr>
  <tr>
    <td WIDTH="57%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Number</font></td>
    <td WIDTH="26%" COLSPAN="2" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">exercise price</font></td>
  </tr>
  <tr>
    <td WIDTH="57%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="26%" COLSPAN="2" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(in Canadian dollars)</font></td>
  </tr>
  <tr>
    <td WIDTH="57%"><font SIZE="2">Options outstanding, October 1, 2006</font></td>
    <td WIDTH="16%" align="right"><font SIZE="2">428</font></td>
    <td WIDTH="17%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">12.70</font></td>
  </tr>
  <tr>
    <td WIDTH="57%"><font SIZE="2">Granted</font></td>
    <td WIDTH="16%" align="right"><font SIZE="2">90</font></td>
    <td WIDTH="17%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">54.56</font></td>
  </tr>
  <tr>
    <td WIDTH="57%"><font SIZE="2">Exercised</font></td>
    <td WIDTH="16%" align="right"><font SIZE="2">(55)</font></td>
    <td WIDTH="17%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">11.27</font></td>
  </tr>
  <tr>
    <td WIDTH="57%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Forfeited</font></td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(2)</font></td>
    <td WIDTH="17%" 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">54.34</font></td>
  </tr>
  <tr>
    <td WIDTH="57%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Options outstanding, April 1, 2007</font></td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">461</font></td>
    <td WIDTH="17%" 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="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">20.88</font></td>
  </tr>
</table>
<font SIZE="2">
<p align="justify">As at April 1, 2007, 372,478 of the outstanding options were
exercisable at the weighted average price of CA$12.91. Based on the Black-Scholes
option pricing model, the grant date weighted average fair value of the options
granted during the first six months ended April 1, 2007 was CA$16.91. No options
were granted during fiscal 2006. </p>
<p>Changes in outstanding Treasury RSUs were as follows: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="57%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="27%" COLSPAN="2" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Weighted average</font></td>
  </tr>
  <tr>
    <td WIDTH="57%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Number</font></td>
    <td WIDTH="27%" COLSPAN="2" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">fair value per unit</font></td>
  </tr>
  <tr>
    <td WIDTH="57%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="27%" COLSPAN="2" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(in Canadian dollars)</font></td>
  </tr>
  <tr>
    <td WIDTH="57%"><font SIZE="2">Treasury RSUs outstanding, October 1, 2006</font></td>
    <td WIDTH="16%" align="right"><font SIZE="2">417</font></td>
    <td WIDTH="17%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">29.62</font></td>
  </tr>
  <tr>
    <td WIDTH="57%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Granted</font></td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">87</font></td>
    <td WIDTH="17%" 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">59.21</font></td>
  </tr>
  <tr>
    <td WIDTH="57%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Treasury RSUs outstanding, April 1, 2007</font></td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">504</font></td>
    <td WIDTH="17%" 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="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">34.73</font></td>
  </tr>
</table>
<font SIZE="2">
<p>As of April 1, 2007, none of the awarded and outstanding Treasury RSUs were
vested. </p>
<p ALIGN="JUSTIFY">The compensation expense recorded for the three-month periods
ended April 1, 2007 and April 2, 2006, respectively, was $0.3 million and $0.4
million, in respect of the Treasury RSUs and stock options. The compensation
expense recorded for the six-month periods<b> </b>ended April 1, 2007 and April
2, 2006, respectively, was $0.8 million and $0.7 million, in respect of the
Treasury RSUs and stock options. The counterpart has been recorded as
contributed surplus. When the shares are issued to the employees, the amounts
previously credited to contributed surplus are reclassified to share capital.
</p>
<p>Changes in outstanding Non-Treasury RSUs were as follows: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="57%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="28%" COLSPAN="2" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Weighted average</font></td>
  </tr>
  <tr>
    <td WIDTH="57%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Number</font></td>
    <td WIDTH="28%" COLSPAN="2" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">fair value per unit</font></td>
  </tr>
  <tr>
    <td WIDTH="57%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="28%" COLSPAN="2" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(in Canadian dollars)</font></td>
  </tr>
  <tr>
    <td WIDTH="57%"><font SIZE="2">Non-Treasury RSUs outstanding, October 1,
    2006</font></td>
    <td WIDTH="16%" align="right"><font SIZE="2">-</font></td>
    <td WIDTH="17%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="57%"><font SIZE="2">Granted</font></td>
    <td WIDTH="16%" align="right"><font SIZE="2">35</font></td>
    <td WIDTH="17%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">68.00</font></td>
  </tr>
  <tr>
    <td WIDTH="57%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Forfeited</font></td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(1)</font></td>
    <td WIDTH="17%" 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">68.00</font></td>
  </tr>
  <tr>
    <td WIDTH="57%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Non-Treasury RSUs outstanding, April 1, 2007</font></td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">34</font></td>
    <td WIDTH="17%" 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="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">68.00</font></td>
  </tr>
</table>
<font 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 April
1, 2007, none of the awarded and outstanding Non-Treasury RSUs were vested. </p>
<p align="justify">The compensation expense recorded in respect of the
Non-Treasury RSUs for the three-month period and six-month period ended April 1,
2007 was $0.2 million and $0.3 million, respectively. No Non-Treasury RSUs were
issued in fiscal 2006. </p>
</font><font FACE="Times New Roman PSMT" SIZE="2">
<p align="right"></font><font SIZE="2"><i>GILDAN QUARTERLY REPORT &#150; Q2 2007 p.
24</i> </font></p>
<hr color="#000000" size="5"><p Style='page-break-before:always'><font SIZE="2"><b>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <i>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font size="2"><i>
<p align="right">NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS </p>
</i>
</font></td>
</i>
  </tr>
</table>
<p>7. Stock-based compensation (Continued):</b> </p>
<p ALIGN="JUSTIFY">Effective the commencement of its 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>8. 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. </p>
<p ALIGN="JUSTIFY">In April 2007, a new law which was approved by the Mexican
Congress in December 2006, was adopted by Hacienda (the Mexican tax
authorities). The provisions of this law allow Gildan Mexico to apply for the
forgiveness of all of the interest and penalties and a substantial amount of the
principal related to this tax assessment. In May 2007, Gildan Mexico will file
an application requesting that the provisions of the new law be applied to its
outstanding tax assessment. The Company expects to receive notification in the
fourth quarter regarding the applicability of the new law to Gildan's tax
assessment. Based on the Company's legal advice on this matter, the Company
anticipates that its liability will be restricted to approximately $0.4 million,
and has recorded a charge for this amount, which has been reflected in selling,
general and administrative expenses in the second quarter of fiscal 2007.
Management believes that no other provision is required in the accounts for this
matter. </p>
<b>
<p>9. Guarantees: </p>
</b>
<p align="justify">As at April 1, 2007, 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 April 1, 2007, the
maximum potential liability under these guarantees was $37.0 million, of which
$5.4 million was for surety bonds and $31.6 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 2012. </p>
<p align="justify">As at April 1, 2007, 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>
</font><font FACE="Times New Roman PSMT" SIZE="2">
<p align="right"></font><font SIZE="2"><i>GILDAN QUARTERLY REPORT &#150; Q2 2007 p.
25</i> </font></p>
<hr color="#000000" size="5"><p Style='page-break-before:always'><font SIZE="2"><b>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <i>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font size="2"><i>
<p align="right">NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS </p>
</i>
</font></td>
</i>
  </tr>
</table>
<p>10. Restructuring and other charges: </p>
</b>
<p>The following table summarizes the components of restructuring and other
charges: </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="56%" COLSPAN="4" align="right" bgcolor="#9ACCFF">
    <p align="center"><i><b><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Three months ended</font></b></i></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="37%" COLSPAN="4" align="right" bgcolor="#9ACCFF">
    <p align="center"><i><b><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Six months ended</font></b></i></td>
  </tr>
  <tr>
    <td WIDTH="34%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="32%" COLSPAN="2" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">April 1, 2007</font></td>
    <td WIDTH="24%" align="right" colspan="2" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">April 2, 2006</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    &nbsp;</td>
    <td WIDTH="18%" COLSPAN="2" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">April 1, 2007</font></td>
    <td WIDTH="38%" align="right" colspan="2" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">April 2, 2006</font></td>
  </tr>
  <tr>
    <td WIDTH="34%">
    <font SIZE="2">Accelerated depreciation (a)</font></td>
    <td WIDTH="4%" align="right">
    <font SIZE="2">$</font></td>
    <td WIDTH="11%" align="right">
    <font SIZE="2">1,002</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">
    <font SIZE="2">-</font></td>
    <td WIDTH="1%" align="right">
    &nbsp;</td>
    <td WIDTH="4%" align="right">
    <font SIZE="2">$</font></td>
    <td WIDTH="11%" align="right">
    <font SIZE="2">2,126</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">
    <font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="34%"><font SIZE="2">Gain on disposal of long-lived assets (b)</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">(1,778)</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">-</font></td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">(1,778)</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="34%"><font SIZE="2">Asset impairment loss (c)</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">3,560</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">-</font></td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">3,560</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="34%"><font SIZE="2">Severance (c)</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">11,858</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">-</font></td>
    <td WIDTH="1%" align="right">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">12,062</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="34%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Other (d)</font></td>
    <td WIDTH="4%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">1,717</font></td>
    <td WIDTH="4%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">-</font></td>
    <td WIDTH="1%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="4%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">1,780</font></td>
    <td WIDTH="4%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="34%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="4%" 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">16,359</font></td>
    <td WIDTH="4%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">&nbsp;</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">-</font></td>
    <td WIDTH="1%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    &nbsp;</td>
    <td WIDTH="4%" 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">17,750</font></td>
    <td WIDTH="4%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">&nbsp;</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">-</font></td>
  </tr>
</table>
<font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: -26; margin-left: 26">(a)&nbsp;&nbsp; In
September 2006, the Company announced a restructuring of its Canadian
manufacturing operations, involving the closure of its textile manufacturing
facility in Valleyfield, Quebec and the downsizing of its Montreal, Quebec
knitting facility, to take effect in December 2006. In the fourth quarter of
fiscal 2006, the Company recorded severance charges of $2.1 million and other
exit costs of $1.6 million relating to this restructuring. In addition, during
the fourth quarter of fiscal 2006, the Company recorded an impairment loss of
$15.1 million on all Canadian textile and related manufacturing assets, and
reduced its estimate of the remaining economic lives of these assets. The effect
of this change in estimate, amounting to $1.0 million in the second quarter of
fiscal 2007 and $2.1 million for the first six months of fiscal 2007, has been
classified as accelerated depreciation and included in restructuring and other
charges. An additional $1.2 million of accelerated depreciation will be recorded
in the second half of fiscal 2007. </p>
<p ALIGN="JUSTIFY" style="text-indent: -26; margin-left: 26">(b)&nbsp;&nbsp;
During the fourth quarter of fiscal 2006 the Company announced the relocation
and consolidation of its U.S. retail distribution centres, which was
substantially completed by the end of the second quarter of fiscal 2007, and the
closure of its Canadian distribution centre in Montreal, effective October 2006.
The Company also announced the closure and downsizing of sock manufacturing
capacity located in North Carolina and Virginia. During the second quarter of
fiscal 2007, the Company sold some of the assets related to these facilities and
recorded a gain of $1.8 million. </p>
<p ALIGN="JUSTIFY" style="text-indent: -26; margin-left: 26">(c)&nbsp;&nbsp; On
March 27, 2007, the Company announced plans to close its two remaining textile
facilities in Montreal, Canada, as well as its cutting facility in Bombay, N.Y.,
in the fourth quarter of fiscal 2007. In addition, the Company closed two sewing
facilities in Mexico, which had been supplied with fabric from Gildan's Canadian
textile operations. In the second quarter of fiscal 2007, the Company recorded
severance costs of $11.9 million primarily relating to these plant closures. The
Company expects to recognize additional severance of $4.0 million during the
balance of fiscal 2007. Concurrent with the restructuring of the Canadian
textile operations, the Company also announced plans to relocate its corporate
office, which is currently located in the same building as its Montreal knitting
facility, into leased premises in the Montreal area. In the second quarter of
fiscal 2007, the Company recorded a $3.6 million asset impairment loss relating
to its corporate head office facility. </p>
<p ALIGN="JUSTIFY" style="text-indent: -26; margin-left: 26">(d)&nbsp;&nbsp;
Other costs of $1.7 million relate to exit costs incurred in connection with the
closures noted above, including carrying and dismantling costs associated with
assets held for sale. The Company expects to incur additional exit costs
relating to these closures of approximately $2.1 million, which will be
accounted for as incurred during the balance of fiscal 2007. </p>
<p>Accounts payable and accrued liabilities include amounts relating to
severance costs, as follows: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="62%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Balance in accounts payable and accrued liabilities at
    October 1, 2006</font></td>
    <td WIDTH="19%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="19%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">3,641</font></td>
  </tr>
  <tr>
    <td WIDTH="62%"><font SIZE="2">2007 severance costs</font></td>
    <td WIDTH="19%" align="right">&nbsp;</td>
    <td WIDTH="19%" align="right"><font SIZE="2">12,062</font></td>
  </tr>
  <tr>
    <td WIDTH="62%"><font SIZE="2">Less:</font></td>
    <td WIDTH="19%" align="right">&nbsp;</td>
    <td WIDTH="19%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="62%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash
    payments</font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(2,495)</font></td>
  </tr>
  <tr>
    <td WIDTH="62%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Balance in accounts payable and accrued liabilities at April
    1, 2007</font></td>
    <td WIDTH="19%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="19%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">13,208</font></td>
  </tr>
</table>
<font SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p. 26</i> </p>
</font><hr color="#000000" size="5"><p Style='page-break-before:always'><font SIZE="2"><b>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <i>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font size="2"><i>
<p align="right">NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS </p>
</i>
</font></td>
</i>
  </tr>
</table>
<p>10. Restructuring and other charges (Continued) : </p>
</b>
<p ALIGN="JUSTIFY">Accounts payable and accrued liabilities also includes
management's best estimate of the cost of financial obligations pursuant to an
employment contract with the former Chairman and Co-Chief Executive Officer of
the Company. The employment contract includes variable components related to the
Company's financial and operating performance to fiscal 2009. Most of the
payments under this contract are payable in Canadian dollars. Adjustments
relating to the variable components of the Company's obligations under this
contract are included in restructuring and other charges. Movements in the
accrual from the end of fiscal 2006 were as follows: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="62%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Balance in accounts payable and accrued liabilities at
    October 1, 2006</font></td>
    <td WIDTH="19%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="19%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">3,288</font></td>
  </tr>
  <tr>
    <td WIDTH="62%"><font SIZE="2">Adjustments related to variable components of
    contractual obligations</font></td>
    <td WIDTH="19%" align="right">&nbsp;</td>
    <td WIDTH="19%" align="right"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="62%"><font SIZE="2">Foreign exchange adjustment</font></td>
    <td WIDTH="19%" align="right">&nbsp;</td>
    <td WIDTH="19%" align="right"><font SIZE="2">(135)</font></td>
  </tr>
  <tr>
    <td WIDTH="62%"><font SIZE="2">Less:</font></td>
    <td WIDTH="19%" align="right">&nbsp;</td>
    <td WIDTH="19%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="62%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash
    payments</font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(843)</font></td>
  </tr>
  <tr>
    <td WIDTH="62%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Balance in accounts payable and accrued liabilities at April
    1, 2007</font></td>
    <td WIDTH="19%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="19%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">2,310</font></td>
  </tr>
</table>
<font SIZE="2"><b>
<p>11. Earnings per share: </p>
</b>
<p>A reconciliation between basic and diluted earnings per share is as follows:
</p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="43%">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="26%" align="center" colspan="3" bgcolor="#9ACCFF"><i><b><font size="2">Three months ended</font></b></i></td>
    <td WIDTH="3%" align="center">&nbsp;</td>
    <td WIDTH="24%" align="center" colspan="3" bgcolor="#9ACCFF"><i><b><font size="2">Six months ended</font></b></i></td>
  </tr>
  <tr>
    <td WIDTH="43%">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">April 1,</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">April 2,</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">April 1,</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">April 2,</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">2007</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">2006</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">2007</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">2006</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Basic earnings per share:</font></td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-left: 15">Basic weighted average number of common shares
    outstanding</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">60,160</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">60,054</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">60,149</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">60,012</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-left: 15">Basic earnings per share</font></td>
    <td WIDTH="7%" 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="7%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">0.35</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">0.52</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">0.61</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">0.79</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Diluted earnings per share:</font></td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%"><font SIZE="2">
    <p style="margin-left: 15">Basic weighted average number of common shares
    outstanding</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">60,160</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">60,054</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">60,149</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">60,012</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-left: 15">Plus impact of stock options and Treasury RSUs</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">604</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">593</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">595</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">591</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">
    <p style="margin-left: 15">Diluted weighted average number of common shares</font></td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-left: 15">&nbsp;&nbsp;&nbsp; outstanding</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">60,764</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">60,647</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">60,744</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">60,603</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-left: 15">Diluted earnings per share</font></td>
    <td WIDTH="7%" 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="7%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">0.35</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">0.51</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">0.61</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">0.78</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%"><font SIZE="2"><b>12. Other information:</b></font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="26%" align="center" colspan="3" bgcolor="#9ACCFF"><i><b><font size="2">Three months ended</font></b></i></td>
    <td WIDTH="3%" align="center">&nbsp;</td>
    <td WIDTH="24%" align="center" colspan="3" bgcolor="#9ACCFF"><i><b><font size="2">Six months ended</font></b></i></td>
  </tr>
  <tr>
    <td WIDTH="43%">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">April 1,</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">April 2,</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">April 1,</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">April 2,</font></td>
  </tr>
  <tr>
    <td WIDTH="43%">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">2007</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">2006</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">2007</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">2006</font></td>
  </tr>
  <tr>
    <td WIDTH="43%">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="96%" COLSPAN="7" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(a) The following items were included in the determination of
    the Company's net earnings:</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Depreciation of property, plant and equipment</font></td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; (excluding
    restructuring and other charges)</font></td>
    <td WIDTH="7%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="7%" align="right"><font SIZE="2">8,803</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">7,426</font></td>
    <td WIDTH="3%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">17,179</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">14,613</font></td>
  </tr>
  <tr>
    <td WIDTH="43%"><font SIZE="2">Interest expense on long-term debt</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">1,132</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">1,089</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">2,185</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">2,120</font></td>
  </tr>
  <tr>
    <td WIDTH="43%"><font SIZE="2">Interest expense on short-term indebtedness
    and other</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">86</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">68</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">178</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">132</font></td>
  </tr>
  <tr>
    <td WIDTH="43%"><font SIZE="2">Foreign exchange gain</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">547</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">120</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">2,392</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">29</font></td>
  </tr>
  <tr>
    <td WIDTH="43%"><font SIZE="2">Amortization expense of deferred start-up
    costs and other</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">511</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">286</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">748</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">529</font></td>
  </tr>
  <tr>
    <td WIDTH="43%"><font SIZE="2">Amortization expense of intangible assets</font></td>
    <td WIDTH="7%" align="right">&nbsp;</td>
    <td WIDTH="7%" align="right"><font SIZE="2">161</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">-</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">322</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Investment income</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">141</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">409</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">315</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">919</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(b) Supplemental cash flow disclosure:</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Cash paid during the period for:</font></td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="43%"><font SIZE="2">
    <p style="margin-left: 15">Interest</font></td>
    <td WIDTH="7%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="7%" align="right"><font SIZE="2">1,062</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">1,100</font></td>
    <td WIDTH="3%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">2,223</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">2,160</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-left: 15">Income taxes</font></td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="7%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">1,845</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">935</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">3,316</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">1,271</font></td>
  </tr>
</table>
<font SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p. 27</i> </p>
</font><hr color="#000000" size="5"><p Style='page-break-before:always'><font SIZE="2"><b>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <i>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font size="2"><i>
<p align="right">NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS </p>
</i>
</font></td>
</i>
  </tr>
</table>
<p>12. Other information (Continued): </p>
</b></font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="41%">&nbsp;</td>
    <td WIDTH="20%" COLSPAN="2" align="right"><font SIZE="2"><u>April 1, 2007</u></font></td>
    <td WIDTH="20%" 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>April 2, 2006</u></font></td>
  </tr>
  <tr>
    <td WIDTH="41%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(b) Supplemental cash flow disclosure (continued):</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="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(audited)</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">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="41%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Non-cash transactions:</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="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>
  </tr>
  <tr>
    <td WIDTH="41%"><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="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>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">
    <p style="margin-left: 26">&nbsp;&nbsp;&nbsp; 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">3,002</font></td>
    <td WIDTH="9%" 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">943</font></td>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">
    <p style="margin-left: 26">Proceeds on disposition of long-lived assets in</font></td>
    <td WIDTH="9%" align="right">&nbsp;</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>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">
    <p style="margin-left: 26">&nbsp;&nbsp;&nbsp; accounts receivable</font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right"><font SIZE="2">3,325</font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
    <td WIDTH="10%" align="right"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" style="border-bottom-style: solid; border-bottom-width: 1">
    <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">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">-</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">460</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">-</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" 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="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>
  </tr>
  <tr>
    <td WIDTH="41%"><font SIZE="2">
    <p style="margin-left: 26">Cash balances with banks</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">35,481</font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">27,810</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">32,329</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-left: 26">Short-term investments</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">-</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">1,197</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">15,800</font></td>
  </tr>
  <tr>
    <td WIDTH="41%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">35,481</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">29,007</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">$</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">48,129</font></td>
  </tr>
</table>
<font SIZE="2"><b>
<p>13. Financial instruments: </p>
</b>
<p>The following table summarizes the Company's commitments to buy and sell
foreign currencies as at April 1, 2007 and April 2, 2006: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="27%">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">Notional</font></td>
    <td WIDTH="16%" align="right">&nbsp;</td>
    <td WIDTH="22%" align="right">&nbsp;</td>
    <td WIDTH="17%" COLSPAN="2" align="right"><font SIZE="2">Notional U.S.</font></td>
  </tr>
  <tr>
    <td WIDTH="27%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">amount</font></td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Exchange rate</font></td>
    <td WIDTH="22%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Maturity</font></td>
    <td WIDTH="17%" COLSPAN="2" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">equivalent</font></td>
  </tr>
  <tr>
    <td WIDTH="27%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2"><b>2007:</b></font></td>
    <td WIDTH="6%" 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">&nbsp;</td>
    <td WIDTH="16%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="22%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="6%" 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">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="27%"><font SIZE="2">Buy contracts:</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="16%" align="right">&nbsp;</td>
    <td WIDTH="22%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="27%"><font SIZE="2">
    <p style="margin-left: 26">Foreign exchange contracts</font></td>
    <td WIDTH="6%" align="right"><font SIZE="2">&#128;</font></td>
    <td WIDTH="11%" align="right"><font SIZE="2">5,777</font></td>
    <td WIDTH="16%" align="right"><font SIZE="2">1.2171 to 1.3365</font></td>
    <td WIDTH="22%" align="right"><font SIZE="2">April to September 2007</font></td>
    <td WIDTH="6%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="11%" align="right"><font SIZE="2">7,411</font></td>
  </tr>
  <tr>
    <td WIDTH="27%">&nbsp;</td>
    <td WIDTH="6%" align="right"><font SIZE="2">CA$</font></td>
    <td WIDTH="11%" align="right"><font SIZE="2">43,811</font></td>
    <td WIDTH="16%" align="right"><font SIZE="2">0.8482 to 0.8794</font></td>
    <td WIDTH="22%" align="right"><font SIZE="2">April to September 2007</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">37,711</font></td>
  </tr>
  <tr>
    <td WIDTH="27%"><font SIZE="2">Sell contracts:</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="16%" align="right">&nbsp;</td>
    <td WIDTH="22%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="27%"><font SIZE="2">
    <p style="margin-left: 26">Foreign exchange contracts</font></td>
    <td WIDTH="6%" align="right"><font SIZE="2">&#128;</font></td>
    <td WIDTH="11%" align="right"><font SIZE="2">12,495</font></td>
    <td WIDTH="16%" align="right"><font SIZE="2">1.3023 to 1.3495</font></td>
    <td WIDTH="22%" align="right"><font SIZE="2">April 2007 to September 2008</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">$ </font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">16,660</font></td>
  </tr>
  <tr>
    <td WIDTH="27%">&nbsp;</td>
    <td WIDTH="6%" align="right"><font LANG="JA" SIZE="2">&#163;</font></td>
    <td WIDTH="11%" align="right"><font SIZE="2">12,291</font></td>
    <td WIDTH="16%" align="right"><font SIZE="2">1.9100 to 1.9793</font></td>
    <td WIDTH="22%" align="right"><font SIZE="2">April 2007 to September 2008</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">24,053</font></td>
  </tr>
  <tr>
    <td WIDTH="27%">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="16%" align="right">&nbsp;</td>
    <td WIDTH="22%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="27%"><font SIZE="2"><b>2006:</b></font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="16%" align="right">&nbsp;</td>
    <td WIDTH="22%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="27%"><font SIZE="2">Buy contracts:</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="16%" align="right">&nbsp;</td>
    <td WIDTH="22%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="27%"><font SIZE="2">
    <p style="margin-left: 26">Foreign exchange contracts</font></td>
    <td WIDTH="6%" align="right"><font SIZE="2">CA$</font></td>
    <td WIDTH="11%" align="right"><font SIZE="2">40,967</font></td>
    <td WIDTH="16%" align="right"><font SIZE="2">0.7997 to 0.8642</font></td>
    <td WIDTH="22%" align="right"><font SIZE="2">April to September 2006</font></td>
    <td WIDTH="8%" align="right"><font SIZE="2">$ </font></td>
    <td WIDTH="9%" align="right"><font SIZE="2">34,596</font></td>
  </tr>
  <tr>
    <td WIDTH="27%">&nbsp;</td>
    <td WIDTH="6%" align="right"><font SIZE="2">&#128;</font></td>
    <td WIDTH="11%" align="right"><font SIZE="2">11,147</font></td>
    <td WIDTH="16%" align="right"><font SIZE="2">1.1991 to 1.2208</font></td>
    <td WIDTH="22%" align="right"><font SIZE="2">July 2006 to June 2007</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right"><font SIZE="2">13,480</font></td>
  </tr>
  <tr>
    <td WIDTH="27%"><font SIZE="2">Sell contracts:</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
    <td WIDTH="16%" align="right">&nbsp;</td>
    <td WIDTH="22%" align="right">&nbsp;</td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="11%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="27%"><font SIZE="2">
    <p style="margin-left: 26">Foreign exchange contracts</font></td>
    <td WIDTH="6%" align="right"><font SIZE="2">&#128;</font></td>
    <td WIDTH="11%" align="right"><font SIZE="2">5,600</font></td>
    <td WIDTH="16%" align="right"><font SIZE="2">1.2097 to 1.3525</font></td>
    <td WIDTH="22%" align="right"><font SIZE="2">April to September 2006</font></td>
    <td WIDTH="6%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="11%" align="right"><font SIZE="2">7,355</font></td>
  </tr>
  <tr>
    <td WIDTH="27%" 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 LANG="JA" SIZE="2">&#163;</font></td>
    <td WIDTH="11%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">2,850</font></td>
    <td WIDTH="16%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">1.7379 to 1.8783</font></td>
    <td WIDTH="22%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">April to September 2006</font></td>
    <td WIDTH="6%" 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">5,306</font></td>
  </tr>
</table>
<font SIZE="2">
<p ALIGN="JUSTIFY">All outstanding forward foreign exchange contracts are
reported on a mark-to-market basis and the gain or losses are included in
earnings, because the Company elected not to follow hedge accounting for these
derivatives. The mark-to-market adjustments relating to the contracts were not
significant in either 2007 or 2006. </p>
<b>
<p>14. 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 one customer accounting for greater than 10%
of total sales. For the three-month periods ended April 1, 2007 and April 2,
2006, this customer accounted for 24.9% and 27.8% of total sales, respectively.
For the six-month periods ended April 1, 2007 and April 2, 2006, this customer
accounted for 22.3% and 29.9% of total sales, respectively. </p>
</font><font FACE="Times New Roman PSMT" SIZE="2">
<p align="right"></font><font SIZE="2"><i>GILDAN QUARTERLY REPORT &#150; Q2 2007 p.
28</i> </font></p>
<hr color="#000000" size="5"><p Style='page-break-before:always'><font SIZE="2"><b>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <i>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font size="2"><i>
<p align="right">NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS </p>
</i>
</font></td>
</i>
  </tr>
</table>
<p>14. Segmented information (Continued):</b> </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="35%">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="26%" COLSPAN="3" align="center" bgcolor="#9ACCFF"><b><i><font size="2">Three months ended</font></i></b></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="25%" align="center" colspan="3" bgcolor="#9ACCFF"><b><i><font size="2">Six months ended</font></i></b></td>
  </tr>
  <tr>
    <td WIDTH="35%">&nbsp;</td>
    <td WIDTH="17%" COLSPAN="2" align="right"><font SIZE="2"><u>April 1, 2007</u></font></td>
    <td WIDTH="18%" COLSPAN="2" align="right"><font SIZE="2"><u>April 2, 2006</u></font></td>
    <td WIDTH="18%" COLSPAN="2" align="right"><font SIZE="2"><u>April 1, 2007</u></font></td>
    <td WIDTH="17%" COLSPAN="2" align="right"><font SIZE="2"><u>April 2, 2006</u></font></td>
  </tr>
  <tr>
    <td WIDTH="52%" COLSPAN="3" 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="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" 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="35%" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">United States</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">203,413</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">160,498</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">372,477</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">267,150</font></td>
  </tr>
  <tr>
    <td WIDTH="35%"><font SIZE="2">Canada</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">14,600</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">14,160</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right"><font SIZE="2">22,565</font></td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right"><font SIZE="2">21,626</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">Europe and other</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">14,121</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">9,125</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">22,921</font></td>
    <td WIDTH="8%" 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">15,317</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="8%" 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="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font SIZE="2">232,134</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font SIZE="2">183,783</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font SIZE="2">417,963</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font SIZE="2">304,093</font></td>
  </tr>
  <tr>
    <td WIDTH="35%">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="8%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="35%" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">Sales by major product group:</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="35%" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">Activewear and underwear</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">199,287</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">183,783</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">342,559</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">304,093</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">Socks</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">32,847</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">-</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">75,404</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="35%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font SIZE="2">232,134</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font SIZE="2">183,783</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font SIZE="2">417,963</font></td>
    <td WIDTH="8%" 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="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font SIZE="2">304,093</font></td>
  </tr>
</table>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="46%">&nbsp;</td>
    <td WIDTH="19%" COLSPAN="2" align="right">&nbsp;</td>
    <td WIDTH="19%" COLSPAN="2" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="46%">&nbsp;</td>
    <td WIDTH="19%" COLSPAN="2" align="right"><font SIZE="2"><u>April 1, 2007</u></font></td>
    <td WIDTH="19%" COLSPAN="2" align="right"><font SIZE="2"><u>October 1, 2006</u></font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right"><font SIZE="2"><u>April 2, 2006</u></font></td>
  </tr>
  <tr>
    <td WIDTH="46%" 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="46%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Caribbean Basin and Central America</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">254,749</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">200,170</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">166,854</font></td>
  </tr>
  <tr>
    <td WIDTH="46%"><font SIZE="2">United States</font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right"><font SIZE="2">70,507</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">66,012</font></td>
  </tr>
  <tr>
    <td WIDTH="46%"><font SIZE="2">Canada</font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right"><font SIZE="2">21,358</font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right"><font SIZE="2">31,407</font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="9%" align="right"><font SIZE="2">45,022</font></td>
  </tr>
  <tr>
    <td WIDTH="46%" 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">2,195</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">4,198</font></td>
  </tr>
  <tr>
    <td WIDTH="46%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">348,809</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">$</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <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">
    <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">
    <font SIZE="2">282,086</font></td>
  </tr>
</table>
<font SIZE="2"><b>
<p>15. Subsequent event: </p>
</b>
<p ALIGN="JUSTIFY">On May 2, 2007, the Board of Directors of the Company
approved a two-for-one stock split, to be effected in the form of a stock
dividend. The stock split is applicable to all shareholders of record on May 18,
2007. On or about May 25, 2007, the Company's registrar and transfer agent will
mail new certificates for the additional shares to all registered Gildan
shareholders as at May 18, 2007. The Company's shares are expected to commence
trading on a post-split basis on May 16, 2007, on the TSX and on May 28, 2007,
on the NYSE, in accordance with the respective requirements of these exchanges.
All earnings per share and share data in these interim consolidated financial
statements and notes are stated prior to the stock split. </p>
</font><font FACE="Times New Roman PSMT" SIZE="2">
<p align="right"></font><font SIZE="2"><i>GILDAN QUARTERLY REPORT &#150; Q2 2007 p.
29</i> </font></p>
<hr color="#000000" size="5">

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>gildanexh992.htm
<DESCRIPTION>MANAGEMENTS DISCUSSION AND ANALYSIS
<TEXT>
<html>

<head>
<title>Gildan Activewear Inc.: Exhibit 99.2 - 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>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font FACE="Times New Roman PS" SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
  </tr>
  <tr>
    <td width="15%">&nbsp;</td>
    <td width="85%">&nbsp;</td>
  </tr>
</table>
<i><font SIZE="2">
<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 and six months ended
  April 1, 2007 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 and six months ended April 1, 2007 and the related notes, and with our
  MD&amp;A for the year ended October 1, 2006 (2006 Annual MD&amp;A), which is part of
  the fiscal 2006 Annual Report. This MD&amp;A is dated May 2, 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 5 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 <font color="#0000FF"><u>www.gildan.com</u></font>,
  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 <u><font color="#0000FF">
  www.sec.gov</font></u>. </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.
</div>
</font></i><font FACE="Arial MT" SIZE="2" color="#075DB6"></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="100%">&nbsp;</td>
  </tr>
  <tr>
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" color="#075DB6">Our Business </font></td>
  </tr>
</table>
<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 screenprint channel are produced and
sold without logos and designs. </p>
<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. </p>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.2 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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">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' athletic socks and underwear 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. 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 a
state-of-the-art integrated sock manufacturing facility and began the
construction of a technologically advanced integrated 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 this facility to full capacity
during the balance of fiscal 2007 and the first half of fiscal 2008. Production
at our fleece facility will commence in the beginning of the third quarter of
fiscal 2007 and we expect to ramp up this facility to full capacity by mid
fiscal 2008. </p>
<p align="justify">We also have established a vertically-integrated Caribbean
Basin manufacturing hub with a textile 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">We also operate sock manufacturing facilities in North
America and use third party contractors to source our non-core specialty sock
products. </p>
<p align="justify">Our sewing facilities are located in Central America and the
Caribbean Basin. We also utilize third-party sewing contractors in the Caribbean
Basin to complement our vertically-integrated production. </p>
<p align="justify">On March 27, 2007, we announced plans to close our two
remaining textile facilities in Montreal, Canada, as well as our cutting
facility in Bombay, N.Y., in the fourth quarter of fiscal 2007. In addition, we
closed our two sewing facilities in Mexico, which had been supplied with fabric
from Gildan's Canadian textile operations. Subsequent to the above closures, all
of our vertically-integrated manufacturing for T-shirts, fleece, sport shirts
and underwear will be consolidated into our manufacturing hubs in Central
America and the Caribbean Basin, where we are investing in major capacity
expansion projects, as described above. </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. By the end of the second quarter of fiscal 2007, we substantially
completed the relocation and consolidation of Kentucky Derby's multiple
distribution centres into our new retail distribution centre in Martinsville,
Virginia. 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>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.3 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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>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>
<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.
</p>
<p>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>We believe that growth for our activewear products has been driven by several
market trends such as the following: </p>
<ul>
  <li>continued use of activewear for event merchandising (such as concerts,
  festivals, etc.);</li>
  <li>continued evolution of the entertainment/sports licensing and
  merchandising businesses;</li>
  <li>the growing use of activewear for uniform applications;</li>
  <li>the growing use of activewear for corporate promotions;</li>
  <li>continued increase in use of activewear products for travel and tourism;</li>
  <li>an increased emphasis on physical fitness; and</li>
  <li>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>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="100%">&nbsp;</td>
  </tr>
  <tr>
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" color="#075DB6">Strategy and Financial
    Objectives</font></td>
  </tr>
</table>
<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>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.4 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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">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>
  <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 objective of
approximately tripling our unit sales volumes by 2010 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: 26">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: 26">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: 26">3.&nbsp;&nbsp;&nbsp;&nbsp;
Increase penetration in Europe and other international markets; and </p>
<p align="justify" style="text-indent: -26; margin-left: 26">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 Annual 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>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman">
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" color="#075DB6">Operating Results</font></td>
    </font>
  </tr>
</table>
<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, and 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 (8) 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><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.5 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font FACE="Times New Roman PS" SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
  </tr>
</table>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="374">&nbsp;</td>
    <td WIDTH="76">&nbsp;</td>
    <td WIDTH="76">&nbsp;</td>
    <td WIDTH="76">&nbsp;</td>
    <td WIDTH="76">&nbsp;</td>
    <td WIDTH="76">&nbsp;</td>
    <td WIDTH="77">&nbsp;</td>
    <td WIDTH="77">&nbsp;</td>
    <td WIDTH="77">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="374">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right" style="border-right-style: solid; border-right-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">2007</font></td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right" style="border-right-style: solid; border-right-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">2006</font></td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right" style="border-right-style: solid; border-right-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">2005</font></td>
  </tr>
  <tr>
    <td WIDTH="374" 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="76" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 5">Q2</b></font></td>
    <td WIDTH="76" 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">
    <p style="margin-right: 5">Q1</font></td>
    <td WIDTH="76" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">Q4</font></td>
    <td WIDTH="76" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">Q3</font></td>
    <td WIDTH="76" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">Q2</font></td>
    <td WIDTH="77" 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">
    <p style="margin-right: 5">Q1</font></td>
    <td WIDTH="77" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">Q4</font></td>
    <td WIDTH="77" 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">
    <p style="margin-right: 5">Q3</font></td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">Sales</font></td>
    <td WIDTH="76" align="right"><font SIZE="2"><b>
    <p style="margin-right: 5">232.1</b></font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">185.8</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">235.2</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">233.9</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">183.8</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">120.3</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">180.7</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">198.9</font></td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">Net earnings</font></td>
    <td WIDTH="76" align="right"><font SIZE="2"><b>
    <p style="margin-right: 5">21.1</b></font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">15.6</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">16.8</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">42.8</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">31.0</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">16.2</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">29.2</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">34.1</font></td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">Net earnings per share</font></td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">
    <p style="margin-left: 26">Basic EPS</font></td>
    <td WIDTH="76" align="right"><font SIZE="2"><b>
    <p style="margin-right: 5">0.35</b></font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.26</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.28</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.71</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.52</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.27</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.49</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.57</font></td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">
    <p style="margin-left: 26">Diluted EPS</font></td>
    <td WIDTH="76" align="right"><font SIZE="2"><b>
    <p style="margin-right: 5">0.35</b></font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.26</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.28</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.71</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.51</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.27</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.48</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">0.57</font></td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">Total assets</font></td>
    <td WIDTH="76" align="right"><font SIZE="2"><b>
    <p style="margin-right: 5">795.6</b></font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">715.8</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">723.3</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">673.1</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">643.8</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">609.6</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">597.5</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">551.6</font></td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">Total long-term financial liabilities<sup>1</sup></font></td>
    <td WIDTH="76" align="right"><font SIZE="2"><b>
    <p style="margin-right: 5">88.4</b></font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">44.2</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">47.1</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">46.4</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">64.8</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">65.4</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">64.1</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">58.1</font></td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">Average number of shares</font></td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">
    <p style="margin-left: 15">outstanding <i>(in thousands)</i></font></td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="76" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
    <td WIDTH="77" align="right">
    <p style="margin-right: 5">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="374"><font SIZE="2">
    <p style="margin-left: 26">Basic</font></td>
    <td WIDTH="76" align="right"><font SIZE="2"><b>
    <p style="margin-right: 5">60,160</b></font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">60,139</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">60,105</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">60,077</font></td>
    <td WIDTH="76" align="right"><font SIZE="2">
    <p style="margin-right: 5">60,054</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">59,970</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">59,924</font></td>
    <td WIDTH="77" align="right"><font SIZE="2">
    <p style="margin-right: 5">59,816</font></td>
  </tr>
  <tr>
    <td WIDTH="374" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-left: 26">Diluted</font></td>
    <td WIDTH="76" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 5">60,764</b></font></td>
    <td WIDTH="76" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">60,724</font></td>
    <td WIDTH="76" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">60,670</font></td>
    <td WIDTH="76" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">60,627</font></td>
    <td WIDTH="76" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">60,647</font></td>
    <td WIDTH="77" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">60,559</font></td>
    <td WIDTH="77" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">60,414</font></td>
    <td WIDTH="77" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 5">60,270</font></td>
  </tr>
  <tr>
    <td WIDTH="985" 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 FACE="Arial MT" SIZE="2">
<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. Demand for fleece is typically highest
in the third and fourth quarters of each fiscal year. The seasonality of
specific product-lines is consistent with that experienced by other companies in
the activewear industry. 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. 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. </p>
<p align="justify">Material restructuring and other charges impacted net
earnings in the second quarter of fiscal 2007 and the fourth quarter of fiscal
2006. </p>
</font><font FACE="Times New Roman" SIZE="2"><b>
<p align="justify">Sales </p>
</b></font><font FACE="Arial MT" SIZE="2">
<p align="justify">Sales of $232.1 million for the three months ended April 1,
2007 grew 26.3% from $183.8 million in the second quarter of fiscal 2006. The
increase in sales was due to $32.8 million of sock sales pursuant to the
acquisition of Kentucky Derby and an 11.2% increase in unit sales volumes for
activewear, partially offset by a reduction in unit selling prices for
activewear of approximately 2% compared to the same period last year. For the
six months ended April 1, 2007, sales were $418.0 million, up 37.4% compared to
the same period last year. The growth in sales reflected $75.4 million of sock
sales, an increase of 12.7% in unit sales volumes for activewear and a
higher-valued activewear product-mix, partially offset by a decrease in unit
selling prices for activewear. Excluding the sock product-line, sales were up
8.4% for the second quarter of fiscal 2007 and 12.6% on a year-to-date basis
compared to the same periods of fiscal 2006. </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 market
shares and industry growth in the U.S. distributor channel for the quarter ended
March 31, 2007: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="304">&nbsp;</td>
    <td WIDTH="340" COLSPAN="2" align="center"><font SIZE="2"><b>Three months
    ended March 31</b></font></td>
    <td WIDTH="341" COLSPAN="2" align="center"><font SIZE="2"><b>Three months
    ended March 31</b></font></td>
  </tr>
  <tr>
    <td WIDTH="304">&nbsp;</td>
    <td WIDTH="340" align="center" colspan="2"><font SIZE="2"><b>2007 vs 2006</b></font></td>
    <td WIDTH="170" align="center"><font SIZE="2"><b>2007</b></font></td>
    <td WIDTH="171" align="center"><font SIZE="2"><b>2006</b></font></td>
  </tr>
  <tr>
    <td WIDTH="304" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="340" COLSPAN="2" align="center" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>Unit Growth</b></font></td>
    <td WIDTH="341" COLSPAN="2" align="center" 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="304" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="170" align="center" 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="170" align="center" 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="170" align="center" 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="171" align="center" 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="304"><font SIZE="2">All Products</font></td>
    <td WIDTH="170" align="center"><font SIZE="2">14.4%</font></td>
    <td WIDTH="170" align="center"><font SIZE="2">(0.4)%</font></td>
    <td WIDTH="170" align="center"><font SIZE="2"><b>47.4%</b></font></td>
    <td WIDTH="171" align="center"><font SIZE="2">38.7%</font></td>
  </tr>
  <tr>
    <td WIDTH="304"><font SIZE="2">T-shirts</font></td>
    <td WIDTH="170" align="center"><font SIZE="2">12.8%</font></td>
    <td WIDTH="170" align="center"><font SIZE="2">(0.8)%</font></td>
    <td WIDTH="170" align="center"><font SIZE="2"><b>48.2%</b></font></td>
    <td WIDTH="171" align="center"><font SIZE="2">39.6%</font></td>
  </tr>
  <tr>
    <td WIDTH="304"><font SIZE="2">Fleece</font></td>
    <td WIDTH="170" align="center"><font SIZE="2">59.8%</font></td>
    <td WIDTH="170" align="center"><font SIZE="2">11.5%</font></td>
    <td WIDTH="170" align="center"><font SIZE="2"><b>42.5%</b></font></td>
    <td WIDTH="171" align="center"><font SIZE="2">30.5%</font></td>
  </tr>
  <tr>
    <td WIDTH="304" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">Sport shirts</font></td>
    <td WIDTH="170" align="center" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">10.9%</font></td>
    <td WIDTH="170" align="center" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">(4.7)%</font></td>
    <td WIDTH="170" align="center" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>35.7%</b></font></td>
    <td WIDTH="171" align="center" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">32.5%</font></td>
  </tr>
</table>
<font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.6 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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 growth in activewear unit sales was primarily due to
continuing market share penetration in all product categories in the U.S.
distributor channel. The slight decline in overall U.S. industry unit shipments
for T-shirts in the March quarter was attributed primarily to unseasonably cold
weather conditions, which, however, had a positive impact on shipments for
fleece. In addition, shipments into the U.S. wholesale distributor channel were
negatively impacted by the consolidation of warehouses being undertaken by the
largest wholesale distributor, in order to reduce its inventory levels. In the
T-shirt category, we grew unit volumes by 12.8% for the three months ended March
31, 2007 compared to the same period last year, and increased our leading share
in this category to 48.2%. In the fleece category, our volume growth of 59.8%
significantly exceeded that of the industry, and our share increased to 42.5%,
positioning Gildan as the market share leader for the first time. We increased
our leading brand position in sport shirts by achieving a 35.7% market share,
and our volume grew in this segment by 10.9%, compared with an overall decline
of 4.7% for the industry. </p>
<p align="justify">Growth in Gildan's activewear sales in international markets
in the second quarter was strong. In particular, unit shipments in Europe
increased 34% compared with the second quarter of fiscal 2006. </p>
<p align="justify">In March, we began shipment of our first branded sock program
to a national retailer. Initial sell-through of Gildan branded product to
consumers has exceeded expectations. </p>
<b>
<p align="justify">Gross Profit </p>
</b>
<p align="justify">Gross profit for the second quarter of fiscal 2007 was $78.7
million, or 33.9% of sales, up from $61.4 million, or 33.4% of sales in the
second quarter of fiscal 2006. The increase in gross margins was due to higher
margins for activewear, largely offset by the impact of 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 progress
with the ramp-up of our new state-of-the-art sock manufacturing facility in
Honduras. Excluding the impact of sock sales, gross margins in the second
quarter of fiscal 2007 were 37.2%. The increase in gross margins for activewear
compared to last year was due to further manufacturing efficiencies, together
with more favourable product-mix, partially offset by lower selling prices and
higher cotton costs, and the non-recurrence of a $1.1 million reversal of a
litigation reserve which positively impacted gross margins by 0.6% in the second
quarter of fiscal 2006. </p>
<p align="justify">For the first six months of fiscal 2007, gross margins of
31.7% were down from 34.3% in the same period last year largely attributable to
the impact of margins from the sale of socks. Excluding the impact of the sock
sales, gross margins for activewear increased to 35.6%. This increase was due to
manufacturing efficiency gains for the period and the impact of a higher-valued
product mix, which more than offset a reduction in unit selling prices, higher
cotton costs compared to the low point in cotton prices in the first half of
fiscal 2006, and the non-recurrence of the reversal of the litigation reserve in
fiscal 2006. </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
second quarter were $28.5 million, or 12.3% of sales, compared to $20.7 million,
or 11.3% of sales, in the second quarter of last year. For the six months ended
April 1, 2007, SG&amp;A expenses were $54.7 million, or 13.1% of sales, compared to
$38.8 million, or 12.7% of sales for the same period last year. The increase in
SG&amp;A expenses was largely attributable to the impact of the acquisition of
Kentucky Derby and the non-recurrence of a favourable adjustment to the reserve
for doubtful accounts recorded in the second quarter of fiscal 2006. SG&amp;A
expenses for the quarter and on a year-to-date basis also reflected higher
volume-related distribution costs and increased administration and information
technology costs to support our continuing growth. SG&amp;A expenses for the first
six months of fiscal 2007 were also up as a result of a $1.1 million charge in
the first quarter of fiscal 2007 for the replacement of the aircraft leased by
the Company, partially offset by the non-recurrence of a $0.6 million severance
charge incurred in the first quarter of fiscal 2006. </p>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.7 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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 align="justify">Restructuring and Other Charges </p>
</b>
<p align="justify">The following table summarizes the components of
restructuring and other charges: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="515" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><i>(in $ millions)</i></font></td>
    <td WIDTH="117" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">Q2 2007</b></font></td>
    <td WIDTH="117" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 4">Q2 2006</font></td>
    <td WIDTH="118" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">YTD 2007</b></font></td>
    <td WIDTH="118" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 4">YTD 2006</font></td>
  </tr>
  <tr>
    <td WIDTH="515"><font SIZE="2">Accelerated depreciation (a)</font></td>
    <td WIDTH="117" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">1.0</b></font></td>
    <td WIDTH="117" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="118" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">2.1</b></font></td>
    <td WIDTH="118" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="515"><font SIZE="2">Gain on disposal of long-lived assets (b)</font></td>
    <td WIDTH="117" align="right"><font SIZE="2"><b>(1.8)</b></font></td>
    <td WIDTH="117" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="118" align="right"><font SIZE="2"><b>(1.8)</b></font></td>
    <td WIDTH="118" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="515"><font SIZE="2">Asset impairment loss (c)</font></td>
    <td WIDTH="117" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">3.6</b></font></td>
    <td WIDTH="117" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="118" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">3.6</b></font></td>
    <td WIDTH="118" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="515"><font SIZE="2">Severance (c)</font></td>
    <td WIDTH="117" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">11.9</b></font></td>
    <td WIDTH="117" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="118" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">12.0</b></font></td>
    <td WIDTH="118" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="515"><font SIZE="2">Other (d)</font></td>
    <td WIDTH="117" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">1.7</b></font></td>
    <td WIDTH="117" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="118" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">1.8</b></font></td>
    <td WIDTH="118" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="515" style="border-top-style: solid; border-top-width: 2; border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">Restructuring and other charges</font></td>
    <td WIDTH="117" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>
    <p style="margin-right: 4">16.4</b></font></td>
    <td WIDTH="117" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="118" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>
    <p style="margin-right: 4">17.7</b></font></td>
    <td WIDTH="118" align="right" style="border-top-style: solid; border-top-width: 2; border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
</table>
<font FACE="Arial MT" SIZE="2">
<p align="justify" style="text-indent: -30; margin-left: 30">(a)&nbsp;&nbsp;&nbsp;&nbsp;
In September 2006, we announced a restructuring of our Canadian manufacturing
operations, involving the closure of our textile manufacturing facility in
Valleyfield, Quebec and the downsizing of our Montreal, Quebec knitting
facility, to take effect in December 2006. In the fourth quarter of fiscal 2006,
we recorded severance charges of $2.1 million and other exit costs of $1.6
million relating to this restructuring. In addition, during the fourth quarter
of fiscal 2006, we recorded an impairment loss of $15.1 million on all Canadian
textile and related manufacturing assets, and reduced our estimate of the
remaining economic lives of these assets. The effect of this change in estimate,
amounting to $1.0 million in the second quarter of fiscal 2007 and $2.1 million
for the first six months of fiscal 2007, has been classified as accelerated
depreciation and included in restructuring and other charges. An additional $1.2
million of accelerated depreciation will be recorded in the second half of
fiscal 2007. </p>
<p align="justify" style="text-indent: -30; margin-left: 30">(b)&nbsp;&nbsp;&nbsp;&nbsp;
During the fourth quarter of fiscal 2006, we announced the relocation and
consolidation of our U.S. retail distribution centres, which was substantially
completed by the end of the second quarter of fiscal 2007, and the closure of
our Canadian distribution centre in Montreal, effective October 2006. We also
announced the closure and downsizing of sock manufacturing capacity located in
North Carolina and Virginia. During the second quarter of fiscal 2007, we sold
some of the assets related to these facilities and recorded a gain of $1.8
million. </p>
<p align="justify" style="text-indent: -30; margin-left: 30">(c)&nbsp;&nbsp;&nbsp;&nbsp;
On March 27, 2007, we announced plans to close our two remaining textile
facilities in Montreal, Canada, as well as our cutting facility in Bombay, N.Y.,
in the fourth quarter of fiscal 2007. In addition, we closed two sewing
facilities in Mexico, which had been supplied with fabric from Gildan's Canadian
textile operations. In the second quarter of fiscal 2007, we recorded severance
costs of $11.9 million primarily relating to these plant closures. We expect to
recognize additional severance of $4.0 million during the balance of fiscal
2007. Concurrent with the restructuring of the Canadian textile operations, we
also announced plans to relocate our corporate office, which is currently
located in the same building as our Montreal knitting facility, into leased
premises in the Montreal area. In the second quarter of fiscal 2007, we recorded
a $3.6 million asset impairment loss relating to our corporate head office
facility. </p>
<p align="justify" style="text-indent: -30; margin-left: 30">(d)&nbsp;&nbsp;&nbsp;&nbsp;
Other costs of $1.7 million relate to exit costs incurred in connection with the
closures noted above, including carrying and dismantling costs associated with
assets held for sale. We expect to incur additional exit costs relating to these
closures of approximately $2.1 million, which will be accounted for as incurred
during the balance of fiscal 2007. </p>
<b>
<p align="justify">Depreciation and Interest Expense </p>
</b>
<p align="justify">Depreciation and amortization expense of $9.5 million in the
second quarter and $18.2 million for the first six months of fiscal 2007,
reflected increases of $1.8 million and $3.1 million, respectively, compared to
the same periods last year. 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>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.8 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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">Net interest expense for the second quarter and the first six
months of 2007 amounted to $1.1 million and $2.0 million, respectively, up $0.4
million and $0.8 million compared to the same periods of fiscal 2006. The
increase in net interest expense reflected lower investment income during the
first six months of fiscal 2007, mainly due to the use of funds for the
acquisition of Kentucky Derby and the acceleration of the Company's capital
expenditure program. </p>
<b>
<p align="justify">Income Taxes </p>
</b>
<p align="justify">The effective income tax rate for the three months and six
months ended April 1, 2007 was 8.5% and 7.7%, respectively. This compared to
effective income tax rates of 3.5% and 3.8% for the respective periods of fiscal
2006. Excluding the impact of restructuring and other charges, the effective
income tax rate was 5.0% for the second quarter and 5.3% for the first six
months of fiscal 2007. This increase was mainly due to higher income from our
Canadian operations, which is taxed at a higher effective income tax rate. We
expect the effective tax rate for fiscal 2007 to be approximately 5.5% excluding
the impact of restructuring and other charges. </p>
<b>
<p align="justify">Net Earnings </p>
</b>
<p align="justify">Net earnings for the second quarter were $21.1 million, or
$0.35 per share on a diluted basis (EPS), down from net earnings of $31.0
million, or $0.51 per share on a diluted basis for the second quarter last year.
For the first six months of fiscal 2007, net earnings amounted to $36.8 million,
or $0.61 per share on a diluted basis compared to net earnings of $47.2 million,
or $0.78 per share on a diluted basis for the same period in fiscal 2006. The
decrease in net earnings for the second quarter and for the first six months of
fiscal 2007 was entirely attributable to restructuring and other charges of
$16.4 million, or $0.27 per share and $17.8 million, or $0.29 per share
reflected in the respective periods. </p>
<p align="justify">Adjusted net earnings, which represent net earnings before
restructuring and other charges amounted to $37.5 million, or $0.62 per share on
a diluted basis for the second quarter, up respectively, 21.0% and 21.6%,
compared to the second quarter of fiscal 2006. The growth in adjusted net
earnings and adjusted diluted EPS for the quarter was due to higher gross
margins for activewear and continuing growth in activewear unit sales volumes,
partially offset by increased SG&amp;A and depreciation expenses. For the first six
months of fiscal 2007, adjusted net earnings increased to $54.5 million, or
$0.90 per share on a diluted basis. The increase in adjusted net earnings and
adjusted diluted EPS was due to manufacturing efficiencies, growth in activewear
unit sales volumes and a higher-valued product-mix for activewear, partially
offset by 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 was dilutive by approximately $0.03 per share in the
second quarter of fiscal 2007 and $0.02 per share on a year-to-date basis, due
primarily to short-term inefficiencies in manufacturing and distribution costs
which are expected to be eliminated by the fourth quarter, as we progress with
the implementation of our integration plan. </p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman">
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" color="#075DB6">Financial Condition </font></td>
    </font>
  </tr>
</table>
<p align="justify">Accounts receivable decreased to $139.8 million in the second
quarter of fiscal 2007 from $165.9 million at October 1, 2006 and grew by $36.4
million compared to the second quarter of the prior year. The decrease in
accounts receivable from the end of fiscal 2006 was due to a reduction in days
sales outstanding on trade accounts receivable. The increase in accounts
receivable compared to the second quarter of fiscal 2006 was mainly due to the
8.4% increase in activewear sales in the second quarter over the prior year and
the inclusion of $22.3 million accounts receivable for Kentucky Derby. In
addition, accounts receivable as at April 1, 2007, included an amount of $3.3
million for proceeds receivable primarily as a result of the sale of our
distribution centre in Montreal, Quebec during the second quarter, and an amount
of $1.9 million for an insurance claim relating to a fire that destroyed one of
our sewing facilities located at San Marcos, Nicaragua in fiscal 2006. </p>
<p align="justify">Inventories of $242.6 million were up $41.9 million, or 20.9%
from October 1, 2006 and by $56.0 million, or 30.0% compared to the second
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 primarily
reflected the inclusion of sock inventory following our acquisition of Kentucky
Derby, and the increase in activewear sales over the prior year. </p>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.9 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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">Property, plant and equipment, which are net of accumulated
depreciation and asset impairment losses, amounted to $348.8 million at the end
of the second quarter of fiscal 2007, up $46.1 million from October 1, 2006.
This increase was primarily due to net capital expenditures of $75.5 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. In the second quarter of fiscal 2007, we sold
distribution centres in Montreal and North Carolina and a manufacturing facility
in Virginia for $5.3 million. As at April 2, 2006, assets held for sale of $5.0
million 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 $795.6 million at April 1, 2007, compared
to $723.3 million at October 1, 2006 and $643.8 million at the end of the second
quarter of fiscal 2006. Working capital was $291.7 million at the end of the
second quarter of fiscal 2007 compared to $261.0 million at October 1, 2006, and
$243.3 million at April 2, 2006. </p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman">
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" color="#075DB6">Liquidity and Capital Resources</font></td>
    </font>
  </tr>
</table>
<b>
<p align="justify">Cash Flows </p>
</b>
<p align="justify">Cash flows from operating activities in the second quarter of
fiscal 2007 were $0.3 million, compared to cash outflows from operating
activities of $18.0 million in the previous year. The increase in cash flows
from operating activities was mainly due to a lower seasonal increase in
accounts receivable compared to the second quarter of fiscal 2006. For the first
six months of fiscal 2007, cash flows from operating activities were $39.8
million compared to cash flows from operating activities of $14.0 million in the
same period last year mainly as a result of a higher seasonal decrease in
accounts receivable and a lower seasonal increase in inventories compared to the
same period last year. </p>
<p align="justify">Cash flows used in investing activities were $43.6 million in
the second quarter and $74.5 million for the six months ended April 1, 2007,
compared to $24.0 million and $36.5 million in the respective periods of fiscal
2006, mainly due to higher net capital expenditures. The higher capital spending
was primarily related to our major textile and sock manufacturing expansion
projects in Honduras, as well as for our new U.S. retail distribution centre and
the expansion of our sewing capacity. </p>
<p align="justify">Cash flows from financing activities were $42.4 million in
the second quarter and $41.1 million for the first six months of fiscal 2007
funded primarily by a $43.0 million drawdown on our credit facility. </p>
<p align="justify">We ended the second quarter of fiscal 2007 with cash and cash
equivalents of $35.5 million compared to $48.1 million at the end of the second
quarter last year and $29.0 million at October 1, 2006. Total indebtedness at
April 1, 2007 amounted to $77.7 million compared to $37.3 million at October 1,
2006 and $50.6 million at April 2, 2006. The $27.1 million year-over-year
increase in total indebtedness was mainly due to the increase in long-term debt
from the use of our credit facility, partially offset by the third scheduled
principal repayment of $17.5 million on our Senior Notes, which was made on June
10, 2006. Net indebtedness, defined as total indebtedness net of cash and cash
equivalents, at the end of the second quarter of fiscal 2007 was $42.2 million.
The Company had net indebtedness at April 1, 2007 due substantially to higher
capital expenditures for the first half of the fiscal year and working capital
requirements to support the seasonal build-up of our inventories. </p>
<b>
<p align="justify">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>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.10 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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">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 T-shirt 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 addition, 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. We are increasing our planned fiscal 2007 capital expenditures to $170
million compared with our most recent projection of approximately $145 million,
primarily due to two new major cost reduction projects, which will primarily be
undertaken during fiscal 2008. The total combined capital investment required
for the two projects amounts to approximately $60 million, to be spent over the
next 18 to 24 months. The projects are expected to result in annual savings in
energy and chemical costs totalling approximately $15 million once completed.
</p>
<p align="justify">At the end of the second quarter of fiscal 2007, $43.0
million was drawn on our credit facility due to the acceleration of our capacity
expansion plans and seasonal working capital requirements. There were no amounts
drawn under this facility at October 1, 2006 and April 2, 2006. We believe our
cash flow from operating activities together with our 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
May 2007 final principal repayment on our Senior Notes. Furthermore, we continue
to have significant unused debt financing capacity and financing flexibility to
invest in capital expenditures for further capacity expansion and cost reduction
initiatives in excess of our current plans, as well as to pursue other potential
acquisition opportunities. </p>
<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 align="justify">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 12. As disclosed in
Note 9 to our Interim Consolidated Financial Statements, we have issued
corporate guarantees and standby letters of credit arising from various
servicing agreements amounting to $31.6 million at April 1, 2007. </p>
<p align="justify"><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 Annual 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. The mark-to-market adjustments relating to the contracts were not
significant in either 2007 and 2006. See &quot;Changes in Accounting Policies&quot; on
page 14. </p>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.11 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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 following table summarizes our commitments to buy and
sell foreign currencies as at April 1, 2007 and April 2, 2006: </font>
<font FACE="Arial MT" SIZE="1"></p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="25%"><font size="2"><i>(in thousands)</i></font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">Notional</font></td>
    <td WIDTH="15%" align="right">&nbsp;</td>
    <td WIDTH="30%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right"><font SIZE="2">Notional U.S.</font></td>
  </tr>
  <tr>
    <td WIDTH="25%" style="border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">amount</font></td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">Exchange rate</font></td>
    <td WIDTH="30%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">Maturity</font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">equivalent</font></td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2"><b>2007</b></font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
    <td WIDTH="30%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2"><b>Buy contracts:</b></font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
    <td WIDTH="30%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2"><b>
    <p style="margin-left: 26">Foreign exchange contracts</b></font></td>
    <td WIDTH="5%" align="right"><font SIZE="2"><b>&#128;</b></font></td>
    <td WIDTH="12%" align="right"><font SIZE="2"><b>5,777</b></font></td>
    <td WIDTH="15%" align="right"><font SIZE="2"><b>1.2171 to 1.3365</b></font></td>
    <td WIDTH="30%" align="right"><font SIZE="2"><b>April to September 2007</b></font></td>
    <td WIDTH="13%" align="right"><font SIZE="2"><b>$7,411</b></font></td>
  </tr>
  <tr>
    <td WIDTH="25%">
    <p style="margin-left: 26">&nbsp;</td>
    <td WIDTH="5%" align="right"><font SIZE="2"><b>CA$</b></font></td>
    <td WIDTH="12%" align="right"><font SIZE="2"><b>43,811</b></font></td>
    <td WIDTH="15%" align="right"><font SIZE="2"><b>0.8482 to 0.8794</b></font></td>
    <td WIDTH="30%" align="right"><font SIZE="2"><b>April to September 2007</b></font></td>
    <td WIDTH="13%" align="right"><font SIZE="2"><b>37,711</b></font></td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2"><b>Sell contracts:</b></font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
    <td WIDTH="30%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2"><b>
    <p style="margin-left: 26">Foreign exchange contracts</b></font></td>
    <td WIDTH="5%" align="right"><font SIZE="2"><b>&#128;</b></font></td>
    <td WIDTH="12%" align="right"><font SIZE="2"><b>12,495</b></font></td>
    <td WIDTH="15%" align="right"><font SIZE="2"><b>1.3023 to 1.3495</b></font></td>
    <td WIDTH="30%" align="right"><font SIZE="2"><b>April 2007 to September 2008</b></font></td>
    <td WIDTH="13%" align="right"><font SIZE="2"><b>$16,660</b></font></td>
  </tr>
  <tr>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="5%" align="right"><font SIZE="2"><b>&#163;</b></font></td>
    <td WIDTH="12%" align="right"><font SIZE="2"><b>12,291</b></font></td>
    <td WIDTH="15%" align="right"><font SIZE="2"><b>1.9100 to 1.9793</b></font></td>
    <td WIDTH="30%" align="right"><font SIZE="2"><b>April 2007 to September 2008</b></font></td>
    <td WIDTH="13%" align="right"><font SIZE="2"><b>24,053</b></font></td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2">2006</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
    <td WIDTH="30%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2">Buy contracts:</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
    <td WIDTH="30%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2">
    <p style="margin-left: 26">Foreign exchange contracts</font></td>
    <td WIDTH="5%" align="right"><font SIZE="2">CA$</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">40,967</font></td>
    <td WIDTH="15%" align="right"><font SIZE="2">0.7997 to 0.8642</font></td>
    <td WIDTH="30%" align="right"><font SIZE="2">April to September 2006</font></td>
    <td WIDTH="13%" align="right"><font SIZE="2">$34,596</font></td>
  </tr>
  <tr>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="5%" align="right"><font SIZE="2">&#128;</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">11,147</font></td>
    <td WIDTH="15%" align="right"><font SIZE="2">1.1991 to 1.2208</font></td>
    <td WIDTH="30%" align="right"><font SIZE="2">July 2006 to June 2007</font></td>
    <td WIDTH="13%" align="right"><font SIZE="2">13,480</font></td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2">Sell contracts:</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="15%" align="right">&nbsp;</td>
    <td WIDTH="30%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="25%"><font SIZE="2">
    <p style="margin-left: 26">Foreign exchange contracts</font></td>
    <td WIDTH="5%" align="right"><font SIZE="2">&#128;</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">5,600</font></td>
    <td WIDTH="15%" align="right"><font SIZE="2">1.2097 to 1.3525</font></td>
    <td WIDTH="30%" align="right"><font SIZE="2">April to September 2006</font></td>
    <td WIDTH="13%" align="right"><font SIZE="2">$7,355</font></td>
  </tr>
  <tr>
    <td WIDTH="25%" style="border-bottom-style: solid; border-bottom-width: 3">&nbsp;</td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font SIZE="2">&#163;</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font SIZE="2">2,850</font></td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font SIZE="2">1.7379 to 1.8783</font></td>
    <td WIDTH="30%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font SIZE="2">April to September 2006</font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 3">
    <font SIZE="2">5,306</font></td>
  </tr>
</table>
<font FACE="Times New Roman" SIZE="2"><b>
<p align="justify">Contractual Obligations </p>
</b>
<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 April 1, 2007: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="36%"><font FACE="Arial MT" SIZE="2">Payments due by period</font></td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="36%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2"><i>(in $ millions)</i></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2"><b>Total</b></font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2"><b>1 year</b></font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2"><b>years</b></font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2"><b>years</b></font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2"><b>5 years</b></font></td>
  </tr>
  <tr>
    <td WIDTH="36%"><font FACE="Arial MT" SIZE="2">Long-term debt</font></td>
    <td WIDTH="12%" align="right"><font FACE="Arial MT" SIZE="2">74.2</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">19.2</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">49.3</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">4.2</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">1.5</font></td>
  </tr>
  <tr>
    <td WIDTH="36%"><font FACE="Arial MT" SIZE="2">Fixed interest payments</font></td>
    <td WIDTH="12%" align="right"><font FACE="Arial MT" SIZE="2">0.4</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">0.4</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">-</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">-</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="36%"><font FACE="Arial MT" SIZE="2">Operating leases</font></td>
    <td WIDTH="12%" align="right"><font FACE="Arial MT" SIZE="2">31.2</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">3.7</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">10.7</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">7.5</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">9.3</font></td>
  </tr>
  <tr>
    <td WIDTH="36%"><font FACE="Arial MT" SIZE="2">Purchase obligations</font></td>
    <td WIDTH="12%" align="right"><font FACE="Arial MT" SIZE="2">152.0</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">127.7</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">24.3</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">-</font></td>
    <td WIDTH="13%" align="right"><font FACE="Arial MT" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="36%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2">Other obligations</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2">85.8</font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2">65.7</font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2">20.1</font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2">-</font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font FACE="Arial MT" SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="36%" style="border-bottom-style: double; border-bottom-width: 5">
    <font FACE="Arial MT" SIZE="2"><b>Total Contractual Obligations</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font FACE="Arial MT" SIZE="2"><b>343.6</b></font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font FACE="Arial MT" SIZE="2"><b>216.7</b></font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font FACE="Arial MT" SIZE="2"><b>104.4</b></font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font FACE="Arial MT" SIZE="2"><b>11.7</b></font></td>
    <td WIDTH="13%" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font FACE="Arial MT" SIZE="2"><b>10.8</b></font></td>
  </tr>
</table>
<font FACE="Arial MT" SIZE="2">
<p align="justify">We expect that cash flows from operations, together with our
cash balances and bank facilities, will be sufficient to meet foreseeable cash
needs for fiscal 2007. </p>
<b>
<p align="justify">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 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. 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. </p>
<p align="justify">In April 2007, a new law, which was approved by the Mexican
Congress in December 2006, was adopted by Hacienda (the Mexican tax
authorities). The provisions of this law allow Gildan Mexico to apply for the
forgiveness of all of the interest and penalties and a substantial amount of the
principal related to this tax assessment. In May 2007, Gildan Mexico will file
an application requesting that the provisions of the new law be applied to its
outstanding tax assessment. The Company expects to receive notification in the
fourth quarter regarding the applicability of the new law to Gildan's tax
assessment. Based on the Company's legal advice on this matter, the Company
anticipates that its liability will be restricted to approximately $0.4 million,
and has recorded a charge for this amount, which has been reflected in selling,
general and administrative expenses in the second quarter of fiscal 2007.
Management believes that no other provision is required in the accounts for this
matter. </p>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.12 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font FACE="Times New Roman PS" SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
  </tr>
</table>
<font SIZE="2"><b>
<p align="justify">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 April 30, 2007, there were 60,174,423 common shares
issued and outstanding along with 460,558 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
pre-determined 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.
</font><b></p>
<font SIZE="2">
<p align="justify">Stock split </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY">On May 2, 2007, the Board of Directors of the Company
approved a two-for-one stock split, to be effected in the form of a stock
dividend. The stock split is applicable to all shareholders of record on May 18,
2007. On or about May 25, 2007, the Company's registrar and transfer agent will
mail new certificates for the additional shares to all registered Gildan
shareholders as at May 18, 2007. The Company's shares are expected to commence
trading on a post-split basis on May 16, 2007, on the TSX and on May 28, 2007,
on the NYSE, in accordance with the respective requirements of these exchanges.
All earnings per share and share data in this Interim MD&amp;A are stated prior to
the stock split. </p>
</font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" SIZE="3" color="#075DB6">Critical Accounting Estimates
    </font></td>
    </font>
  </tr>
</table>
<font FACE="Arial MT" SIZE="2">
<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>
<p align="justify">Management believes that the following accounting estimates
are most significant to assist in understanding and evaluating our financial
results:</p>
<ul>
  <li>
  <p align="justify">Sales promotional programs;</li>
  <li>
  <p align="justify">Trade accounts receivable;</li>
  <li>
  <p align="justify">Property, plant and equipment;</li>
  <li>
  <p align="justify">Cotton and yarn procurements; and</li>
  <li>
  <p align="justify">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 Annual
MD&amp;A, which is hereby incorporated by reference. </p>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.13 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font FACE="Times New Roman PS" SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
  </tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" SIZE="3" color="#075DB6">
    <font FACE="Arial MT" SIZE="3">Changes in Accounting Policies </font></font>
    </td>
    </font>
  </tr>
</table>
<font FACE="Arial MT" SIZE="2">
<p align="justify">Effective with 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 &quot;cash flow hedge,&quot; when the hedged item is a future cash flow, or
a &quot;fair value hedge,&quot; 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>
<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 April 1, 2007, 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>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.14 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font FACE="Times New Roman PS" SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
  </tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" SIZE="3" color="#075DB6">
    <font FACE="Arial MT" SIZE="3">Reconciliation and Definition of Non-GAAP
    Measures </font></font></td>
    </font>
  </tr>
</table>
<font FACE="Arial MT" SIZE="2">
<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 align="justify">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 after-tax impact of restructuring and other
charges, as discussed on page 8, 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="303">
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><i>(in $ millions, except per share amounts)</i></font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><b>
    <p style="margin-right: 4">Q2 2007</b></font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><b>
    <p style="margin-right: 4">YTD 2007</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <p style="text-indent: -26; margin-left: 26">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><b>
    <p style="margin-right: 4">Reported</b></font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><b>
    <p style="margin-right: 4">Adjusted</b></font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><b>
    <p style="margin-right: 4">Reported</b></font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><b>
    <p style="margin-right: 4">Adjusted</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" height="19"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Sales</font></td>
    <td WIDTH="9%" valign="bottom" align="right" height="19"><font SIZE="2"><b>
    <p style="margin-right: 4">232.1</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" height="19">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right" height="19"><font SIZE="2"><b>
    <p style="margin-right: 4">232.1</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="19"><font SIZE="2"><b>
    <p style="margin-right: 4">418.0</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="19">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right" height="19"><font SIZE="2"><b>
    <p style="margin-right: 4">418.0</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Cost of sales</font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><b>
    <p style="margin-right: 4">153.4</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><b>
    <p style="margin-right: 4">153.4</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><b>
    <p style="margin-right: 4">285.4</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><b>
    <p style="margin-right: 4">285.4</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" height="15"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Gross profit</font></td>
    <td WIDTH="9%" valign="bottom" align="right" height="15"><font SIZE="2"><b>
    <p style="margin-right: 4">78.7</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" height="15"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="15"><font SIZE="2"><b>
    <p style="margin-right: 4">78.7</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="15"><font SIZE="2"><b>
    <p style="margin-right: 4">132.6</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="15"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="15"><font SIZE="2"><b>
    <p style="margin-right: 4">132.6</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" height="19"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Selling, general and
    administrative expenses</font></td>
    <td WIDTH="9%" valign="bottom" align="right" height="19"><font SIZE="2"><b>
    <p style="margin-right: 4">28.5</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" height="19">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right" height="19"><font SIZE="2"><b>
    <p style="margin-right: 4">28.5</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="19"><font SIZE="2"><b>
    <p style="margin-right: 4">54.7</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="19">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right" height="19"><font SIZE="2"><b>
    <p style="margin-right: 4">54.7</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 2" height="19">
    <font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Restructuring and other charges
    <sup>(1)</sup></font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="19">
    <font SIZE="2"><b>
    <p style="margin-right: 4">16.4</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="19">
    <font SIZE="2"><b>(16.4)</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="19">
    <font SIZE="2"><b>
    <p style="margin-right: 4">-</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="19">
    <font SIZE="2"><b>
    <p style="margin-right: 4">17.7</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="19">
    <font SIZE="2"><b>(17.7)</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="19">
    <font SIZE="2"><b>
    <p style="margin-right: 4">-</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" height="19">
    <p style="text-indent: -26; margin-left: 26">&nbsp;</td>
    <td WIDTH="9%" valign="bottom" align="right" height="19"><font SIZE="2"><b>
    <p style="margin-right: 4">33.8</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" height="19"><font SIZE="2"><b>
    <p style="margin-right: 4">16.4</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="19"><font SIZE="2"><b>
    <p style="margin-right: 4">50.2</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="19"><font SIZE="2"><b>
    <p style="margin-right: 4">60.2</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="19"><font SIZE="2"><b>
    <p style="margin-right: 4">17.7</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="19"><font SIZE="2"><b>
    <p style="margin-right: 4">77.9</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" height="19"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Depreciation and amortization</font></td>
    <td WIDTH="9%" valign="bottom" align="right" height="19"><font SIZE="2"><b>
    <p style="margin-right: 4">9.5</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" height="19">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right" height="19"><font SIZE="2"><b>
    <p style="margin-right: 4">9.5</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="19"><font SIZE="2"><b>
    <p style="margin-right: 4">18.2</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="19">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right" height="19"><font SIZE="2"><b>
    <p style="margin-right: 4">18.2</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" height="18"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Interest, net</font></td>
    <td WIDTH="9%" valign="bottom" align="right" height="18"><font SIZE="2"><b>
    <p style="margin-right: 4">1.1</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" height="18">
    <p style="margin-right: 4"></td>
    <td WIDTH="10%" valign="bottom" align="right" height="18"><font SIZE="2"><b>
    <p style="margin-right: 4">1.1</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="18"><font SIZE="2"><b>
    <p style="margin-right: 4">2.0</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="18">
    <p style="margin-right: 4"></td>
    <td WIDTH="10%" valign="bottom" align="right" height="18"><font SIZE="2"><b>
    <p style="margin-right: 4">2.0</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Non-controlling interest in
    income of consolidated joint venture</font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.1</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.1</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.1</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.1</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" height="15"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Earnings before income taxes</font></td>
    <td WIDTH="9%" valign="bottom" align="right" height="15"><font SIZE="2"><b>
    <p style="margin-right: 4">23.1</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" height="15"><font SIZE="2"><b>
    <p style="margin-right: 4">16.4</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="15"><font SIZE="2"><b>
    <p style="margin-right: 4">39.5</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="15"><font SIZE="2"><b>
    <p style="margin-right: 4">39.9</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="15"><font SIZE="2"><b>
    <p style="margin-right: 4">17.7</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="15"><font SIZE="2"><b>
    <p style="margin-right: 4">57.6</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Income taxes</font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><b>
    <p style="margin-right: 4">2.0</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><b>
    <p style="margin-right: 4">2.0</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><b>
    <p style="margin-right: 4">3.1</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="21">
    <font SIZE="2"><b>
    <p style="margin-right: 4">3.1</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: double; border-bottom-width: 5" height="20">
    <font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Net earnings</font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5" height="20">
    <font SIZE="2"><b>
    <p style="margin-right: 4">21.1</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5" height="20">
    <font SIZE="2"><b>
    <p style="margin-right: 4">16.4</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5" height="20">
    <font SIZE="2"><b>
    <p style="margin-right: 4">37.5</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5" height="20">
    <font SIZE="2"><b>
    <p style="margin-right: 4">36.8</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5" height="20">
    <font SIZE="2"><b>
    <p style="margin-right: 4">17.7</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5" height="20">
    <font SIZE="2"><b>
    <p style="margin-right: 4">54.5</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" height="15"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Basic EPS</font></td>
    <td WIDTH="9%" valign="bottom" align="right" height="15"><font SIZE="2"><b>
    <p style="margin-right: 4">0.35</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" height="15"><font SIZE="2"><b>
    <p style="margin-right: 4">0.27</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="15"><font SIZE="2"><b>
    <p style="margin-right: 4">0.62</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="15"><font SIZE="2"><b>
    <p style="margin-right: 4">0.61</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="15"><font SIZE="2"><b>
    <p style="margin-right: 4">0.29</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" height="15"><font SIZE="2"><b>
    <p style="margin-right: 4">0.90</b></font></td>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-bottom-style: double; border-bottom-width: 5" height="20">
    <font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Diluted EPS</font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5" height="20">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.35</b></font></td>
    <td WIDTH="9%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5" height="20">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.27</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5" height="20">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.62</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5" height="20">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.61</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5" height="20">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.29</b></font></td>
    <td WIDTH="10%" valign="bottom" align="right" style="border-bottom-style: double; border-bottom-width: 5" height="20">
    <font SIZE="2"><b>
    <p style="margin-right: 4">0.90</b></font></td>
  </tr>
</table>
<font FACE="Times New Roman" style="font-size: 9pt"><i>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
<font style="font-size: 9pt">
    <td WIDTH="42%">&nbsp;</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>
    </font>
  </tr>
  <tr>
<font style="font-size: 9pt">
    <td WIDTH="42%">&nbsp;</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>
    </font>
  </tr>
  <tr>
<font style="font-size: 9pt">
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><i>(in $ millions, except per share amounts)</i></font></td>
    </font>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">Q2 2006</font></td>
    </font>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">YTD 2006</font></td>
    </font>
  </tr>
  <tr>
    <td WIDTH="42%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">Reported</font></td>
    </font>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">Adjusted</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">Reported</font></td>
    </font>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">Adjusted</font></td>
    </font>
  </tr>
  <tr>
<font style="font-size: 9pt">
    <td WIDTH="42%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Sales</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">183.8</font></td>
    </font>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">183.8</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">304.1</font></td>
    </font>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">304.1</font></td>
    </font>
  </tr>
  <tr>
<font style="font-size: 9pt">
    <td WIDTH="42%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">Cost of sales</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">122.4</font></td>
    </font>
    <td WIDTH="9%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">122.4</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">199.8</font></td>
    </font>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#9ACCFF">
    <font SIZE="2">199.8</font></td>
    </font>
  </tr>
  <tr>
<font style="font-size: 9pt">
    <td WIDTH="42%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Gross profit</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">61.4</font></td>
    <td WIDTH="9%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">61.4</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">104.3</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#9ACCFF">
    <font SIZE="2">104.3</font></td>
    </font>
  </tr>
  <tr>
<font style="font-size: 9pt">
    <td WIDTH="42%"><font SIZE="2">Selling, general and</font></td>
    </font>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
  </tr>
  <tr>
<font style="font-size: 9pt">
    <td WIDTH="42%"><font SIZE="2">&nbsp;&nbsp;&nbsp; administrative expenses</font></td>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF"><font SIZE="2">20.7</font></td>
    </font>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">20.7</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">38.8</font></td>
    </font>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">38.8</font></td>
    </font>
  </tr>
  <tr>
    <td WIDTH="42%">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF"><font SIZE="2">40.7</font></td>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF"><font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">40.7</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">65.5</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">65.5</font></td>
    </font>
  </tr>
  <tr>
<font style="font-size: 9pt">
    <td WIDTH="42%"><font SIZE="2">Depreciation and amortization</font></td>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF"><font SIZE="2">7.7</font></td>
    </font>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">7.7</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">15.1</font></td>
    </font>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">15.1</font></td>
    </font>
  </tr>
  <tr>
<font style="font-size: 9pt">
    <td WIDTH="42%"><font SIZE="2">Interest, net</font></td>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF"><font SIZE="2">0.7</font></td>
    </font>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">0.7</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">1.3</font></td>
    </font>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">1.3</font></td>
    </font>
  </tr>
  <tr>
<font style="font-size: 9pt">
    <td WIDTH="42%"><font SIZE="2">Non-controlling interest in income</font></td>
    </font>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF">&nbsp;</td>
  </tr>
  <tr>
<font style="font-size: 9pt">
    <td WIDTH="42%" style="border-bottom: 2px solid #000000"><font SIZE="2">&nbsp;&nbsp;&nbsp;
    of consolidated joint venture</font></td>
    <td WIDTH="9%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">
    <font SIZE="2">0.2</font></td>
    </font>
    <td WIDTH="9%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">
    <font SIZE="2">0.2</font></td>
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">
    <font SIZE="2">-</font></td>
    </font>
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">
    <font SIZE="2">-</font></td>
    </font>
  </tr>
  <tr>
<font style="font-size: 9pt">
    <td WIDTH="42%"><font SIZE="2">Earnings before income taxes</font></td>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF"><font SIZE="2">32.1</font></td>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF"><font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">32.1</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">49.1</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">49.1</font></td>
    </font>
  </tr>
  <tr>
<font style="font-size: 9pt">
    <td WIDTH="42%" style="border-bottom: 2px solid #000000"><font SIZE="2">
    Income taxes</font></td>
    <td WIDTH="9%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">
    <font SIZE="2">1.1</font></td>
    </font>
    <td WIDTH="9%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">
    <font SIZE="2">1.1</font></td>
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">
    <font SIZE="2">1.9</font></td>
    </font>
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">&nbsp;</td>
<font style="font-size: 9pt">
    <td WIDTH="10%" align="right" style="border-bottom: 2px solid #000000" bgcolor="#9ACCFF">
    <font SIZE="2">1.9</font></td>
    </font>
  </tr>
  <tr>
<font style="font-size: 9pt">
    <td WIDTH="42%" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">Net earnings</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">31.0</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">31.0</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">47.2</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">47.2</font></td>
    </font>
  </tr>
  <tr>
<font style="font-size: 9pt">
    <td WIDTH="42%"><font SIZE="2">Basic EPS</font></td>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF"><font SIZE="2">0.52</font></td>
    <td WIDTH="9%" align="right" bgcolor="#9ACCFF"><font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">0.52</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">0.79</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" bgcolor="#9ACCFF"><font SIZE="2">0.79</font></td>
    </font>
  </tr>
  <tr>
<font style="font-size: 9pt">
    <td WIDTH="42%" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">Diluted EPS</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">0.51</font></td>
    <td WIDTH="9%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">0.51</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">0.78</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">-</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: double; border-bottom-width: 5" bgcolor="#9ACCFF">
    <font SIZE="2">0.78</font></td>
    </font>
  </tr>
</table>
<p>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 8. </p>
</i></font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.15 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font FACE="Times New Roman PS" SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
  </tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
</table>
<font SIZE="2"><b>
<p align="justify">EBITDA </p>
</b>
<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>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="419" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><i>(in $ millions)</i></font></td>
    <td WIDTH="141" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>Q2 2007</b></font></td>
    <td WIDTH="141" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">Q2 2006</font></td>
    <td WIDTH="142" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>YTD 2007</b></font></td>
    <td WIDTH="142" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">YTD 2006</font></td>
  </tr>
  <tr>
    <td WIDTH="419"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Net earnings</font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2"><b>21.1</b></font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2">31.0</font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2"><b>36.8</b></font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2">47.2</font></td>
  </tr>
  <tr>
    <td WIDTH="419"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Restructuring and other charges
    <sup>(1)</sup></font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2"><b>16.4</b></font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2">-</font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2"><b>17.7</b></font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="419"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Depreciation and amortization</font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2"><b>9.5</b></font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2">7.7</font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2"><b>18.2</b></font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2">15.1</font></td>
  </tr>
  <tr>
    <td WIDTH="419"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Interest, net</font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2"><b>1.1</b></font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2">0.7</font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2"><b>2.0</b></font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2">1.3</font></td>
  </tr>
  <tr>
    <td WIDTH="419"><font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Income taxes</font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2"><b>2.0</b></font></td>
    <td WIDTH="141" align="right" valign="bottom"><font SIZE="2">1.1</font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2"><b>3.1</b></font></td>
    <td WIDTH="142" align="right" valign="bottom"><font SIZE="2">1.9</font></td>
  </tr>
  <tr>
    <td WIDTH="419" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Non-controlling interest in
    income of consolidated joint venture</font></td>
    <td WIDTH="141" align="right" style="border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <font SIZE="2"><b>0.1</b></font></td>
    <td WIDTH="141" align="right" style="border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <font SIZE="2">0.2</font></td>
    <td WIDTH="142" align="right" style="border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <font SIZE="2"><b>0.1</b></font></td>
    <td WIDTH="142" align="right" style="border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="419" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">EBITDA</font></td>
    <td WIDTH="141" align="right" style="border-bottom-style: double; border-bottom-width: 5" valign="bottom">
    <font SIZE="2"><b>50.2</b></font></td>
    <td WIDTH="141" align="right" style="border-bottom-style: double; border-bottom-width: 5" valign="bottom">
    <font SIZE="2">40.7</font></td>
    <td WIDTH="142" align="right" style="border-bottom-style: double; border-bottom-width: 5" valign="bottom">
    <font SIZE="2"><b>77.9</b></font></td>
    <td WIDTH="142" align="right" style="border-bottom-style: double; border-bottom-width: 5" valign="bottom">
    <font SIZE="2">65.5</font></td>
  </tr>
</table>
<font FACE="Times New Roman" style="font-size: 9pt"><i>
<p align="justify">Certain minor rounding variances exist between the financial
statements and this summary. <sup><br>
(1)</sup> See page 8. </p>
</i></font><font FACE="Times New Roman" SIZE="2"><b>
<p>Total Indebtedness and Net Indebtedness </p>
</b>
<p>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="44%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><i>(in $ millions)</i></font></td>
    <td WIDTH="18%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">Q2 2007</b></font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 4">Q4 2006</font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 4">Q2 2006</font></td>
  </tr>
  <tr>
    <td WIDTH="44%"><font SIZE="2">Bank indebtedness</font></td>
    <td WIDTH="18%" align="right"><font SIZE="2"><b>(3.5)</b></font></td>
    <td WIDTH="19%" align="right"><font SIZE="2">(3.5)</font></td>
    <td WIDTH="19%" align="right"><font SIZE="2">(4.0)</font></td>
  </tr>
  <tr>
    <td WIDTH="44%"><font SIZE="2">Current portion of long-term debt</font></td>
    <td WIDTH="18%" align="right"><font SIZE="2"><b>(21.5)</b></font></td>
    <td WIDTH="19%" align="right"><font SIZE="2">(21.8)</font></td>
    <td WIDTH="19%" align="right"><font SIZE="2">(19.7)</font></td>
  </tr>
  <tr>
    <td WIDTH="44%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">Long-term debt</font></td>
    <td WIDTH="18%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>(52.7)</b></font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">(12.0)</font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">(26.9)</font></td>
  </tr>
  <tr>
    <td WIDTH="44%"><font SIZE="2"><b>Total indebtedness</b></font></td>
    <td WIDTH="18%" align="right"><font SIZE="2"><b>(77.7)</b></font></td>
    <td WIDTH="19%" align="right"><font SIZE="2">(37.3)</font></td>
    <td WIDTH="19%" align="right"><font SIZE="2">(50.6)</font></td>
  </tr>
  <tr>
    <td WIDTH="44%">&nbsp;</td>
    <td WIDTH="18%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="19%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="19%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="44%" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">Cash and cash equivalents</font></td>
    <td WIDTH="18%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2"><b>
    <p style="margin-right: 4">35.5</b></font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 4">29.0</font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 4">48.1</font></td>
  </tr>
  <tr>
    <td WIDTH="44%" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>Net indebtedness</b></font></td>
    <td WIDTH="18%" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2"><b>(42.2)</b></font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">(8.3)</font></td>
    <td WIDTH="19%" align="right" style="border-bottom-style: double; border-bottom-width: 5">
    <font SIZE="2">(2.5)</font></td>
  </tr>
</table>
<font style="font-size: 9pt"><i>
<p>Certain minor rounding variances exist between the financial statements and
this summary. </p>
</i></font><font SIZE="2">
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" SIZE="3" color="#075DB6">Risks and Uncertainties
    </font></td>
    </font>
  </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><font FACE="Wingdings" LANG="JA" SIZE="2">
<ul>
  <li></font><font SIZE="2">Our ability to implement our strategies and plans;</font></li>
  <li><font SIZE="2">Our industry is competitive;</font></li>
  <li><font SIZE="2">Our industry is subject to pricing pressures;</font></li>
  <li><font SIZE="2">Our success depends on our ability to anticipate evolving
  consumer preferences and trends;</font></li>
  <li><font SIZE="2">Our operations are subject to environmental regulation;</li>
</ul>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.16 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><font FACE="Times New Roman PS" SIZE="2"><i>
    <p align="right">MANAGEMENT'S DISCUSSION AND ANALYSIS </i></font></td>
  </tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
</table>
<font FACE="Wingdings" LANG="JA" SIZE="2">
<ul>
  <li>
  <p align="justify"></font><font FACE="Arial MT" SIZE="2">We rely on a
  relatively small number of significant customers;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">Our customers do not commit
  to purchase minimum quantities;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">We are exposed to
  concentrations of credit risk;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">Our business is affected by
  changes in international trade legislation;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">We currently pay income tax
  at a comparatively low effective rate, which could change in the future;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">The price of the raw
  materials we buy is prone to significant fluctuations and volatility;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">Our operations are subject
  to political, social and economic risks;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">Our industry is subject to
  fluctuations in sales demand;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">Our business operations
  significantly rely on our information systems;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">We are subject to foreign
  currency risk;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">Our operations could be
  affected by changes in our relationships with our employees or changes to
  domestic and foreign employment regulations;</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">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</font></li>
  <li>
  <p align="justify"><font FACE="Arial MT" SIZE="2">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
Annual 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>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%">&nbsp;</td>
    </font>
  </tr>
  <tr>
    <font FACE="Times New Roman" SIZE="2">
    <td width="100%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Arial MT" SIZE="3" color="#075DB6"><font FACE="Arial MT">
    Forward-Looking Statements</font></font></td>
    </font>
  </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 Annual
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 May 2, 2007. </p>
<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>
<ul>
  <li>
  <p ALIGN="justify">general economic conditions such as currency exchange
  rates, commodity prices and other factors over which we have no control;</li>
  <li>
  <p ALIGN="justify">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">the intensity of competitive activity;</li>
  <li>
  <p ALIGN="justify">changes in environmental, tax, trade and other laws and
  regulations;</li>
  <li>
  <p ALIGN="justify">our ability to implement our strategies and plans;</li>
  <li>
  <p ALIGN="justify">our ability to complete and successfully integrate
  acquisitions;</li>
  <li>
  <p ALIGN="justify">changes in customer demand for our products and our ability
  to maintain customer relationships and grow our business;</li>
  <li>
  <p ALIGN="justify">the seasonality of our business;</li>
</ul>
</font><font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.17 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></i></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="15%"><img border="0" src="gildan2.jpg" width="110" height="35"></td>
    <td width="85%"><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">
<ul>
  <li>
  <p align="justify">our ability to attract and retain key personnel;</li>
  <li>
  <p align="justify">changes in accounting policies and estimates; and</li>
  <li>
  <p align="justify">disruption to manufacturing and distribution activities due
  to the impact of weather, natural disasters and other unforeseen adverse
  events.</li>
</ul>
<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">May 2, 2007</p>
</font>
<p>&nbsp;</p>
<p>&nbsp;</p>
<font FACE="Times New Roman PS" SIZE="2"><i>
<p align="right">GILDAN QUARTERLY REPORT &#150; Q2 2007 p.18 </p>
<hr color="#000000" size="5"></i></font>

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