Good day ladies and gentlemen, and welcome to third quarter 2007 Gildan Activewear Earnings Conference Call. My name is Denial and I will be your coordinator for today. At this time all, participants are in a listen-only mode. We will be conducting a question-and-answer session towards the end of this conference. [Operator Instructions]. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to Miss Sophie Argiriou, Director of Investor Communications. Please proceed, ma’am.

Thank you, Denial. Good morning everyone and thank you for joining us on the call today. With me here are Glenn Chamandy, our President and Chief Executive Officer and Laurence Sellyn, our Executive Vice President and Chief Financial and Administrator Officer. Before we begin, I want to remind everyone that certain statements included in this conference call may constitute forward-looking statements within the meanings of the U.S. Private Security Litigation Reform Act of 1995. Such forward-looking statements involve unknown and known risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. We refer you to the Company's filings with the U.S. Security and Exchange Commission and Canadian Securities Regulatory Authority that may affect the Company's future results. I would now like to turn the call over to Laurence Sellyn. Laurence?

Good morning and welcome to Gildan’s third quarter conference call. I apologize for the delay and starting the call, which was due to very high volumes of participants speak process into call. We will review our results for the June quarter and our outlook for our fourth quarter then cover the assumptions underlying our fiscal 2008 EPS and capital expenditure guidance. EPS for the third quarter before restructuring charges was $0.47 per share, which includes the $0.05 benefit of an income tax recovery relating to the first year of our international tax structure 1999, which became statute barred in June of this year. Compared to the third quarter of fiscal 2006, EPS before restructuring charges grew by 34% including the benefit of the tax recovery and by 20% excluding the tax recovery. The growth in EPS was due to the $0.10 per share favorable impact of favorable manufacturing efficiencies compared to last year, and the $0.07 impact of higher unit sales volumes. Partially offset by a slight reduction of approximately 0.5% in unit selling prices. And the $0.03 per share impact of higher cost, higher SG&A and depreciation expenses, and the continuing dilution from the Kentucky Derby acquisition, which amounted to $0.03 in the quarter. Unit sales increased by 66% from the third quarter of last year. Excluding the impact of socks, unit sales increased by 11.6% due to higher market share in all product categories in the U.S. screenprint channel. 3% growth in overall industry demand in the channel during the June quarter and 38% unit growth in activewear shipments in international markets outside North America. Pricing is relatively stable in the channel, and industry supply demand is in very good balance. According to Starts, total inventory in the channel at the end of June was down by 6.2%…

Thank you, sir. [Operator Instructions]. Your first question will come from the line of Jessy Hayem with Desjardins Securities. Please proceed.

Thank you. Laurence, if you don’t mind can you go over the comments that you made on Rio Nance 3 in Kentucky with regards to the accretion? I missed some of the details, so please.

The accretion in fiscal 2008.

You mentioned something with regards to $0.20 up from $0.15, is that the dilution that you… the accretion that you are expecting in fiscal ‘0--?

Yes, I will go through that again slowly. So, we are projecting a $0.15 accretion impact in ’08, which is the number that we have always projected. But because ’07 will be diluted for the full year by $0.05, the year-over-year increase is not $0.15, but $0.20 from the lower 2007 base.

Okay. Fair enough.

And then when I breakdown the $0.20, there are three components of that, $0.18 for manufacturing cost reductions, $0.05 from lower distribution costs that have resulted in implemented the consolidation of our distribution centers and also from integrating our administration and field support into Gildan. So, I think That 18 plus 5 is 23 and then negative $0.03 from absorbing the balance of our higher cost inventories produced in ’07 in ’08.

Okay. Great. Thank you. And just I guess a clarification why was the dilution greater on the sequential basis versus the second quarter obviously?

Because of the fact that 50% of our sales in the third quarter came from the new programs, which due to the reorders from the first program and supplying the sales for the second program were greater than we had anticipated. And in order to meet these requirements, we had to source a significant proportion from high cost contractures which generate margins for us in the low single digit. So, I think we have to look at this as short-term pain for long-term gain. And we are… the integration will be complete during the fourth quarter… by the end of the fourth quarter. All of the manufacturing will be integrated into Rio Nance. The distribution consolidation will be complete. The sales and admin will be completely consolidated into Gildan.

Okay. Great. Thanks. And maybe Glenn, can you just give us a bit of I guess feedback on the first program that’s been… that started to ship in June? Can you confirm with the retailers is now who you have displaced and just general feedback that you got maybe from the retailer and acceptance from consumers on the product.

The first program is also doing very well which is the program that we started to ship to Dollar General. The second program which we have received in June was a Wal-Mart program. I mean it is also doing very well and is in stores today. We are very excited about the opportunities with both of these and they are doing very well.

And have you sort of discussed… started discussions for additional program or is there a certain I guess maybe when the next round of planning would occur, with these mass merchants where you start actually planning additional programs or are you sort of taking a pause given your capacity expansion plans that are taking place right now? Glenn J. Chamandy - President & Chief Executive Officer: Following the contrary, we have already forecasted 1.5 million dozens in our forecast for next year for additional programs with additional customers, more the regional retailers. We have two test orders right now that could be quite significant for next year, one in underwear and one in activewear. They are not factored into our forecast at this point in time, but they are only being tested today in retail. And as we put the consolidation of this acquisition of Kentucky Derby behind us, we really have our sales force right now geared to focus on selling additional programs and really pushing into the retail strategy as everything is ready to go, and we have all the customers and relationships online as we go forward.

Okay. And just a clarification, Laurence, on that you mentioned that your U.S. growth rate within your assumptions for fiscal ’08 with 14% in activewear of which how much was destined to wholesale?

We said out of the growth in units 1.5 million dozens was retail of the balance.

Okay. Great. Thank you very much. I will circle back for more.

Your next question will come from the line of Richard Pittico with CIBC World Markets. Please proceed.

Hey, guys. Sort of just a quick follow-up on the last question, Glenn, the tests that are currently being conducted in underwear and activewear, is that also the regional accounts or is that mass?

No, that’s mass.

That’s mass. Okay, perfect. And then from just a quick follow-up on the delayed capital for Honduras with the rest of the equipment, is that assuming that you will meet the end of 2000… Q2 ’08 additional capacity in Honduras? Or is that pushed back into Q3?

These are very minor timing delays. There is a lot of equipment flowing into these plants, and this is more a question of deliveries in October versus September rather than any delay. We started Rio Nance 2 a little bit later and I guess it will be the beginning of the third quarter by the time it’s ramped-up to a full capacity, apart from that we are fully on track to meet the ramp-up objectives that were given you before.

Right. Okay. Not about material then. And then just other quick technical question the inventory turns in the quarter seemed a little bit less impressive than in the past. Is that because of building up of inventory in anticipation for the back half and perhaps the rationalization of the North American facilities?

I think the only factor there really is the buildup of sock inventories for the major programs.

Okay, perfect.

And also a little more fleece inventory to support our fleece sales as we go forward into the back half of the year [inaudible] which we build inventory through the year.

Right. That totally makes sense. The new sock facility, can you give any metrics as to how big that’s going to be when it’s fully ramped-up?

Right now, it’s projected to be a little bit smaller than the first Rio Nance is going to be providing a little bit more specialty types products to give us a good balance and Rio Nance is really going to be our basic work horse. But we projecting today to be roughly about a third to two-thirds… one-third less from Rio Nance basically in terms of its ultimate size.

But the building will be big enough for further expansion to the same scale as Rio Nance 3.

Okay, perfect. And then just last question with regards to pricing just wondering is there anything in the retail channel either contractually or otherwise that you think will make it more difficult to take price increase next year because the commodity closure relative to what you could think it also?

We are pricing at such low prices in retail that we feel we would have room to increase price aids. And there are no contractual commitments that prevent us from doing that. But really the majority of our volume is still in the wholesale channel. And traditionally in the whole sale channel inflationary cost increases and other raw material that being passed through into a higher selling price aids.

And we have such a competitive advantage today relative to the pricing in the retail market that… it’s almost irrelevant to us.

And I guess just a final question, a related question. Is there… when you say you’re not including the price increases that have already been taken for wholesale next year, is it really based on conservatism or is there something you are seeing or hearing in the wholesale channel that questions whether promotional investments will have to offset that price?

It’s simply a question of it being premature. We… we’ve just announced the price increase and it would be premature to include it in our guidance.

Perfect. Thanks a lot guys.

Your next question will come from the line of David Glick with Buckingham Research. Please proceed.

Good morning. Laurence, I was wondering if you could give us some color on ‘08 in terms of the quarterly flow, obviously the consumption of the higher cost inventory being consumed in the first half of the year might fell at towards the back half, but if you can give us some color on that. You’ve given us a lot of great detail on certainly on how you build it up from ’07 to ’08. So, that’s the first question. And then a follow-up for, Glenn, on some of the retail programs.

Well, first of all, we’re not yet ready to initiate our quarterly guidance. But in terms of an overall directional question whether we expect the EPS growth to be weighted towards the back half of the year, the answer is, no, even with the absorption the opening inventories. I mentioned that we are looking at $0.04 EPS accretion from Kentucky Derby in the first quarter. So, there is no reason to think that each of the quarters won’t be accreted inline with our full year guidance, but we’ll be doing a more detail for any breakdown in the coming months.

Okay. Great. That’s helpful. Glenn, the 1.5 million units in the new programs, you said that was the regional retailers. So, that would not be Dollar General or Wal-Mart. And are you getting into new categories with some of those regional retailers? If you could give us some color on that it would be helpful.

Well, we keep expanding with each one of the retailers and basically adding more products to individual programs we have. There will be some of that… will actually being shipped to additional products into Dollar General. But most of the products are basically just continuing to consolidate our position with the regional retailers. And we really haven’t forecasted any significant major programs today.

Are you starting to get more of a foothold in the underwear business I you know the more brand driven business? You mentioned a test… I don’t know if it’s at Dollar General or Wal-Mart, but can you give us some sense of the progress you are making in the underwear category and then in the fleece category.

Well, right now, we have test on both those product lines. We believe that we have a big opportunity and as we bring on capacity, and then our capacity restraint has always prohibited from obtaining big large programs and as we build capacity and have available capacity, we will… we believe that this is a viable opportunity for us. And we’re focusing our energies and efforts to make sure that this is really the guts of our whole growth strategy. So, we’re looking forward to a great year.

Okay. So, is fair to say one test in fleece and on test in underwear?

Yes.

And that’s from one of the two… at the two national retailers that you mentioned earlier?

Well, there are more than two national retailers. So, maybe that’s just half of them.

Okay. So, maybe a test outside of those two is what you’re saying?

We certainly don’t want to comment.

Okay. I’m just trying to clarify to the best of my ability. Thank you very much and good luck.

Your next question will come from the line of Sarah O’Brien with RBC Capital Markets. Please proceed. Sarah O’Brien - RBC Capital Markets: Hi, guys. A quick question on cotton costs, just wondering how the impact of higher 20% up cotton cost year-over-year, can impact your retail pricing. I know you said that your pricing is still low now, so that you have room to increase that. But given competitors do not have room to sort of renegotiate on price on the short-term. Can you still protect a 30% plus gross margins going out with new category programs, or are you worried that that margin might be impacted with your pricing strategy?

We’re not concerned at all. We have… the way we’ve priced our products. Obviously our margins are going to be most likely north of 30% anyway. So, for us, we’re going to go after new additional programs. So, we have the ability to price them accordingly to our cost structure. And in socks, cotton is not a big part of the overall cost of the sock because it doesn’t take a lot of material like a sweatshirt or a t-shirt does so. We feel very comfortable with our margin structure as we go forward even with these types of prices of cotton. Sarah O’Brien - RBC Capital Markets: Okay. And in terms of the guidance that you gave, if you don’t have price increasing going through to compensate for cotton, I mean, you didn’t sort of say what the negative impact would be on… in your guidance from the cost of cotton. Do you have that estimate?

Well, what we’re saying is that number is already included in $80 to $85 with conservatively assume that the proportion of cotton is uncovered… has been… is purchased as a high premium in the future prices. So, that’s already included in our guidance, but we haven’t recovered any of that and higher selling prices. And how much we have uncovered we prefer not to discuss due to competitive reasons. Sarah O’Brien - RBC Capital Markets: Okay.

And just to clarify on the price increase, I mean we are raising our prices on October the 1st. Sarah O’Brien - RBC Capital Markets: Right.

And the question will be is how much do we have to discount of those higher prices, is what we don’t know today. Sarah O’Brien - RBC Capital Markets: Okay. But I guess sort of everyone in the channel tends to sort of follow the same trend. So, you’d expect everyone to be increasing their pricing at the same time?

Well, that’s what we don’t know. And basically that’s the unknown at this point of time, and that’s why we haven’t included it into our guidance. Sarah O’Brien - RBC Capital Markets: Okay. Is it safe to say though that if those price increases do get through and you don’t have to discount significantly that you could have some serious upside to the 180 to 185?

Well, you can work out with a 3% to 5% test selling price increase translates into… Sarah, it is a material number. Sarah O’Brien - RBC Capital Markets: Okay. And also, we’ve been hearing recently from the mass channel, particularly Wal-Mart that they’re getting into a little more private label program. How much do you think you can benefit of this going forward? Is it sort of a quarterly phenomenon and consumer’s spend goes down in the back half of the year? Or do you think that this is sort of the new shift that they’re looking at, so, that by the time your capacity comes on, you can really fulfill some of this need?

Well, I think it’s… the reality for us is we see the retail opportunity as quite significant. Each one of the retailers are continuing to look for higher margins and that’s our whole growth strategy, is better product and better prices and higher margins for the retailers. So, we fit the profile obvious retailers. And then including our supply chain and our efficiencies so we can bring product to market, we have everything that a retailer needs and we can offer everything that a retailer needs. So, we are very excited about the opportunity, and this is the reason why we are focusing this as our growth strategy. Sarah O’Brien - RBC Capital Markets: Okay. And then maybe just a question on volumes in the quarter. A little bit lighter than we expected and just wondered is that because you weren’t pricing as aggressively as in the past and so market share gains weren’t as great as we expected?

Volume growth was exactly inline with the assumption in our guidance, Sarah. Sarah O’Brien - RBC Capital Markets: Okay.

Market share gains that we now have 48% of the U.S. t-shirt market, and we’re up 13% year-over-year. So, despite the high market share, we’ve grown our t-shirts market share quite significantly. And we’ve grown our fleece share close to 10% year-over-year also… at 10 points year-over-year. And we’re still mounting momentum. So, we’re very happy with our market share gain in activewear. And more so, the big opportunity for us right now is really internationally. We’re really focusing on our international markets. Shipments were up significantly in Europe. And for next year, we also are putting in additional product lines by European market price that are more unique to Europe, and we believe that we’re going to have significant increases in Europe. And we’ve just opened up a major distributor in Japan, which is going to be an all new business for us, both who have serviced both retail and wholesale, our products. And we’re also looking at Asia-Pacific in general, and we believe that there is… like I have said in the past, but we would say that by next year, we’ll be shipping products into China as well to capture some of that market as well. So, that’s going to be a big part of our international expansion. It will be a big part of our growth in wholesale as we go forward. Sarah O’Brien - RBC Capital Markets: Okay. So, next year’s shipping into China is wholesale or retail?

Wholesale. Sarah O’Brien - RBC Capital Markets: Wholesale, okay. Any--?

This time, will be both. Sarah O’Brien - RBC Capital Markets: And Japan retail will be branded or unbranded?

Branded. Sarah O’Brien - RBC Capital Markets: Okay. So, we’re talking socks here?

Socks, underwear, sweatshirts, t-shirts the whole product line. Sarah O’Brien - RBC Capital Markets: Okay. Great. Thank you very much.

Your next question comes from the line of Margaret Whitfield with Sterne, Agee. Please proceed. Margaret Whitfield - Sterne, Agee & Leach: Yes, following-up on the comments you made about the retail test. How long did these tests usually take and when might we know if there is going to be a follow-on order?

Well, the product is going to be tested as we speak, probably in August, September and while I say we know sometime December. Margaret Whitfield - Sterne, Agee & Leach: By December, okay. Curious if Broder Brothers within the market put your goods in Q2 and what the outlook is for that large customer?

Sorry. Margaret Whitfield - Sterne, Agee & Leach: Is your large customer Broder buying your product in Q3 rather, and will they be in the market in the future?

Broder Brothers is… has for many years been the largest distributor in the wholesale channel. And therefore being a major customer for Gildan throughout our history, this year, next quarter, next year. Margaret Whitfield - Sterne, Agee & Leach: Okay. I don’t think that we’re doing some consolidation of inventories then their business was less for--?

Yes, within their purchases, they have been going through a process of inventory warehouse consolidation and careful inventory management, which was reflected in our guidance. And there are… I don’t think they want to talk about sales to a particular customer. But we… they will have completed this process of inventory consolidation and will continue to be a very valued customer and partner to us as we go forward. Margaret Whitfield - Sterne, Agee & Leach: So, business then start to ramp-up soon then.

We think the inventory consolidation process should be completed end of this year, yes. Margaret Whitfield - Sterne, Agee & Leach: Okay. What tax rate is embedded in your guidance for the fiscal ’08 year?

Pardon me. Margaret Whitfield - Sterne, Agee & Leach: What tax rate is embedded in your guidance for fiscal ’08?

Below 4%. Margaret Whitfield - Sterne, Agee & Leach: And how about a gross margin range? I know you can’t be specific because of all the variables for your guidance in ’08.

We’d expect gross margins next year for Gildan will be couple of 100 basis points higher than this year. And we’ll be looking at significant margin expansion in Kentucky Derby, obviously, as we price off the cost structure from Rio Nance 3. Margaret Whitfield - Sterne, Agee & Leach: Okay. Thank you and congratulations.

Thank you.

Your next question will come from the line of Susan Sansbury with Miller Tabak & Company. Please proceed. Susan Sansbury - Miller Tabak & Company: Hi. Yes, thanks very much. Laurence, can you parse the 44% increase in the inventories, how much of it was Kentucky Derby? How much of it is the fourth quarter delivery versus fiscal ’08? What’s for the end of the year and coming in, when you expect to get rid of higher costs… inventory produced in fiscal year 2007, for the sock program? Can you talk generally about the inventory?

Well, what we said Susan is that during the first quarter of fiscal ’08, we will consume the balance of both higher cost socks inventories that were produced during 2007 as well as higher costs to Canadian textile that were produced prior to the closure of the Canadian textile facilities. And we also said that even with this absorption of the higher costs previously manufactured inventories; we expected the sock business to have $0.04 accretion in the first quarter of next year. So, we are expecting good EPS growth in the first quarter of next year. As far as breaking down our inventories, I think I prefer not to give a detailed breakdown of our inventories by product. Susan Sansbury - Miller Tabak & Company: Okay.

As you know that what we reconfirm is that the reasons for increases in inventories are self-inventories in place to support our new programs and seasonal fleece inventories. Susan Sansbury - Miller Tabak & Company: Okay. In terms of the third quarter unit buy-ins, can you discuss what they actually were and can you give me the breakdown between the sock, the activewear and the new test program or retail program?

Not in… Susan Sansbury - Miller Tabak & Company: Providing them?

That’s a detail breakdown of our sales. Susan Sansbury - Miller Tabak & Company: Okay. Great. I will get back in the queue. Thanks very much.

[Operator Instructions]. You next question comes from the line of Doug Cooper with Paradigm Capital. Please proceed.

Hi gentlemen. Laurence, can you just remind me of the extra capacity for ’07 and what do you think the extra capacity for ’08 would be, and maybe by facility if you can?

We wouldn’t provide it by facility, but Glenn can talk generally about our capacity.

Yes. Our capacity exit will be roughly about 72 million dozens exiting ’07, and that’s based on the reduction of enclosure of the Canadian Textiles.

Okay.

And in the year ’08 would be roughly about $85 million, and actually our rate was an opportunity around $95 million to $100 million. That includes socks.

Right. Sorry, 72 exit this year and ’08 you said exit 95 to 100?

Yes.

And so what was the 85?

That would be about in year’08.

A mid-year ’08?

Yes.

And then obviously, the new sock facility would be come on line sometime you think in ’09?

The sock facility would come on line, probably still, may be potentially in the back half of ’08.

And that was not included in your 95 to 100?

There might be a couple of million dozens in that number.

Great. And you said there was before sort of two-third the size of Rio Nancy III or plan to be right now, and Rio Nancy III I think --?

47 million dozen, but it has room to grow because the building will be pretty about the same size. So our first projection would be to make it about two-third the size but with room to expand.

Okay. My back of the envelope would be then, ’09 capacity should be without any major programs in terms of added capacity about 20% more?

’09, because we are going to be ramping it up… because the facility will come on at the end of ’08 and be ramped up during ’09, so there will be some timing…

Right, just on a pro if you will… pro forma basis if you will.

Yes.

Yes. Okay. And just a question, again here to the great climate that you have hired a sort of M&A guy to head up a new team there, is that… first of all, is that true I guess? And second what would that imply in terms of M&A focus in ’08 and ’09?

We are seeing great additions to go in the company to our senior management team. And we have… indeed in the last couple of months, hired a VP of Corporate Development, who is a great addition to our team, His name is Patrice Remake [ph] who has got a background in investment banking. And clearly, one of his main focuses will be to help us implement our acquisition strategy. We are looking at ending next year with unused debt capacity and approximately $100 million of cash. So, we have set all along that our intention is to redeploy that cash back in the business a new high-growth opportunities, not only for further organic growth in excess of our base case assumptions, but also to do acquisitions. And during the coming months, the first thing we will be doing, we will be doing a good job of developing our strategic plan and our acquisition criteria as a focus for pursuing acquisitions in areas that have attractive economics for us and fit with our business model and our core competencies.

Okay. That’s great. Thank you very much.

Your next question will come from the line Monica Logani with Wall Street Access. Please proceed.

Thank you. Laurence can you… I am sorry if I missed at the beginning. Could you give the usual breakdown of the gross margins that you do, just contributions from different aspects?

For what period? Monica Logani – Wall Street Access: For the quarter. Just in terms of how much manufacturing efficiencies held in raw materials etcetera.

Well, I will say it works okay. So the gross margins for activewear went from 32.4 to 34.7. Manufacturing efficiencies were positive by about 560 basis points. Cotton was negative, 150 basis points. Setting price of mix was negative about 100 basis points and the negative impact of exchange on our Canadian operations was about 50 basis points, so that nets up to 2.5%, 250 basis points which was the year-over-year difference.

Okay, great. Also could just… sorry if you said this but I am just wondering should I have try in terms of your excess capacity in ‘08 for additional retail program?

The excess capacity would probably be probably be roughly about 5% on sales.

Okay. And then finally, just looking back at the KD acquisition. When you first announced acquisition, we were looking for some accretion in the second half of this year. And I think if I remember correctly, like $0.30 in ’08… if I am understanding it correctly the reason it’s back just because you guys are pricing the product as a year… at a good capacity… I am sorry good amount of volume is being produced at these facilities… at these lower cost facilities. I am just trying to understand kind of where the calculation was wrong in the beginning? What changed over the course of the year?

Monica, as far as ‘08 is concerned, the $0.30 was pre-split and the $0.15 is closed pro-split. So, the EPS accretion that we are projecting and including our guidance for next year is exactly inline with our original targets not withstanding the fact that there is some absorption of the opening inventory produced in ’07, so that’s completely on track. And as far as the reason why it’s been dilutive in ’07, is for the reasons that we said that we fund our sales of major new programs that are price-faced on the ramp-up cost structure, the Rio Nance 3 have come more quickly than have been projected to some degree lower victim of our success because we are achieving these programs very quickly by having to source them from higher cost U.S. manufacturing and U.S. contractors. But it’s taken some time to go through the consolidation and ramp-up of the new retail distribution center. But by the end of this year, all aspects of the integration will be complete, the manufacturing, the distribution, the administration and we will be in good shape to achieve our EPS accretion targets next year. Plus have a template in a business model for our retail business and for socks that will allow us we believe to very quickly and seamlessly integrate any future sock or other retail acquisitions.

Okay. Very good. And just on the dollar general contract, I know that in the beginning… basically the sell-through rate has been very good and you are start expanding to other types of products. And I was just curious if we have any feedback on the sell-through rate?

Sell-through is still going fantastic and we are very pleased with the performance.

Okay, good. And there should be opportunity, obviously then for it?

Our objective is to leverage these opportunities as we go forward.

Okay, great. Well thank you and good quarter.

Thank you.

You have a follow-up from the line of Richard Piticco with CIBC World Markets. Please proceed.

Hey guys. Just a quick question… a follow-up on the activewear capacity. I know you talked about another facility potentially presenting that in fiscal ’08, I guess the question is would be there a lot of stuff firing at you in ’08? What's the catalyst or timing that you are looking for before you feel comfortable in terms of committing a equipment of facility?

I don’t think we want to put socks in box as far as any expectations on timing focuses, the impact will be to drive you few retail programs and as we do that, we will evaluate our needs to add more capacity during ’09, assuming we are successful in filling the balance of the capacity from Rio Nance 2 or 3 ramp a total.

Great. Thanks guys.

Your last question is a follow-up from the line of Jessy Hayem with Desjardins Securities. Please proceed.

Just a clarification, Glenn. Is it fair to say that the excess capacity that you just alluded to in fiscal ’08 would mainly be in t-shirt in Fleece and not in socks because you are pretty much sold out in socks in fiscal ’08?

Right now, we are pretty sold out in socks but towards end of fiscal ’08, we will obviously are going to hopefully have production coming online from new facility towards the back half of the year. The last will come towards end of the year. And we are also still operating some small portion of the U.S. production today which we still have… could still utilize if need be.

Okay, great. So, if I mean sock capacity… excess sock capacity exist, it would be from the additional new facility that you just announced right now.

That’s our focus right now.

Okay, great. Thank you.

And we have a follow-up from the line of Sara O'Brien with RBC Capital Markets. Please proceed.

Hi, just again a follow-up on the excess capacity, Glenn. At the end of next year, if you do have a home run with one of these new retail programs either in fleece or t-shirts, would you use the same kind of strategy of building capacity but using outsourcing in the meantime if you had to? Or would you take on smaller contract in placing ramp-up slow through one of your more efficient facilities.

We are going to imagine our capacity because it’s very difficult in the activewear and underwear type product categories to find good contractual work in these types of volumes. So, we are going to manage our capacity which one is different programs based on availability. And we have capacity coming on because we are ramping-up Rio 2 basically and as… that is a still being ramped-up now. Basically, it’s starting off certain level today and if it’s going up during the third quarter when it get fully ramped-up. But if you look on a year-over-year basis, we are going to have still capacity available. So, we believe that our capacity sufficient and hopefully we can obtain additional 5% in sales for this year. But then on a go forward basis year-over-year, we will have still some availability as we go forward as well. So, it depends on other programs so forth and the timing of them.

Okay. So, if the underwear or t-shirt sort of testing program or fleece program has been solid, you have the capacity to respond to that immediately?

It depends on the type of program, yes.

Okay. Thank you.

I would now like to turn the presentation back over to Mr. Glenn Chamandy for closing remarks.

So, I would just like to thank you everybody for attending our third quarter conference call. And we will speak to you soon. Thank you very much.

Ladies and gentlemen this concludes your presentation. You may now disconnect. And have a great day.