During the third quarter, the Company generated U.S. $15.9 million of free cash flow. (Free cash flow is defined as cash flow from operating activities less cash flow from investing activities.) Capital expenditures amounted to U.S. $23.6 million, including the investment in a new yarn-spinning facility by Gildan's joint venture with Frontier Spinning Mills Inc, which is now fully consolidated in Gildan's financial statements. The Company utilized U.S. $17.5 million in the third quarter for the second scheduled principal repayment of Gildan's U.S. senior notes, and ended the quarter with cash and cash equivalents of U.S. $30.8 million.
Gildan continues to project capital expenditures of approximately U.S. $85 million for the full 2005 fiscal year. The Company expects to generate free cash flow of approximately U.S. $10 million in fiscal 2005, and to end the fiscal year with cash and cash equivalents of approximately U.S. $65 million.
Gildan also announced that it planned to spend approximately U.S. $105 million for its capital expenditure program in fiscal 2006. In addition to completing the ramp-up and expansion of the Company's new textile facility in the Dominican Republic, the Company intends to construct two new facilities at its Rio Nance site in Honduras, one for the manufacture of its existing products, and one for production of athletic socks. Gildan believes that entry into the athletic sock market represents a significant growth opportunity for the Company, which will complement its overall retail strategy and leverage its existing core competencies and low-cost offshore manufacturing expertise.
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