SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549
                                 ---------------

                                    FORM 10-Q

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934

                                       OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934

                   FOR QUARTERLY PERIOD ENDED JUNE 28, 1997

                         Commission File Number: 0-18054

                             BRAZOS SPORTSWEAR, INC.
             (Exact name of registrant as specified in its charter)

                 DELAWARE                              91-1770931
       (STATE OR OTHER JURISDICTION                   (IRS EMPLOYER
     OF INCORPORATION OR ORGANIZATION)             IDENTIFICATION NO.)

                              3860 VIRGINIA AVENUE
                             CINCINNATI, OHIO 45227
             (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

       Registrant's telephone number, including area code 513-272-3600

      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares of each of the issuer's classes of common stock,
as of the latest practicable date.

                                  4,392,319
          (SHARES OF COMMON STOCK OUTSTANDING AS OF AUGUST 6, 1997)

<PAGE>

                            BRAZOS SPORTSWEAR, INC.

                                   FORM 10-Q
                         FOR THE QUARTERLY PERIOD ENDED
                                 JUNE 28, 1997

                                                                            Page
PART I -- FINANCIAL INFORMATION

      ITEM 1:     FINANCIAL STATEMENTS

                  Consolidated Condensed Balance Sheets as of June 28,
                  1997 and December 28, 1996 (unaudited)....................   4

                  Consolidated Condensed Statements of Operations for
                  the twenty-six weeks ended June 28, 1997 (unaudited)
                  and June 29, 1996 (unaudited) and the thirteen weeks
                  ended June 28, 1997 (unaudited) and June 29, 1996
                  (unaudited)...............................................   6

                  Consolidated Condensed Statements of Cash Flows for
                  the twenty-six weeks ended June 28,1997 (unaudited)
                  and June 29, 1996 (unaudited).............................   7

                  Notes to Financial Statements (unaudited).................   8

      ITEM 2:     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
                  CONDITION AND RESULTS OF OPERATIONS.......................  13

PART II -- OTHER INFORMATION................................................  17
                  
                  
<PAGE>
                        PART I -- FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

                           BRAZOS SPORTSWEAR, INC.

              CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)

                  AS OF JUNE 28, 1997 AND DECEMBER 28, 1996
                            (DOLLARS IN THOUSANDS)

                                                             1997        1996
                                                           ---------   --------
ASSETS
CURRENT ASSETS:
   Cash .................................................  $     547   $    561
   Accounts receivable, net of allowance for doubtful
     accounts of $3,114 and $2,760, respectively ........     33,374     22,118
   Inventory (Note 2(b)) ................................     59,033     25,338
   Prepaid expenses .....................................      2,778      1,786
   Income tax receivable ................................      1,290       --
   Deferred tax assets ..................................      1,817      1,797
                                                           ---------   --------
            Total current assets ........................     98,839     51,600
                                                           ---------   --------
PROPERTY, PLANT AND EQUIPMENT-net, at cost ..............      6,394      6,873
                                                           ---------   --------
INTANGIBLE ASSETS:
   Costs in excess of fair value of assets acquired .....     21,476     21,456
                                                           ---------   --------
   Less- accumulated amortization .......................       (946)      (624)
                                                           ---------   --------
                                                              20,530     20,832
                                                           ---------   --------
   Other ................................................      3,499      3,359
   Less- accumulated amortization .......................     (1,207)      (922)
                                                           ---------   --------
                                                               2,292      2,437
                                                           ---------   --------
            Total intangible assets .....................     22,822     23,269
                                                           ---------   --------
OTHER ASSETS ............................................      1,479        940
                                                           ---------   --------
                                                           $ 129,534   $ 82,682
                                                           =========   ========

              The accompanying notes are an integral part of these
                     consolidated condensed balance sheets.
<PAGE>
                           BRAZOS SPORTSWEAR, INC.

              CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)

                  AS OF JUNE 28, 1997 AND DECEMBER 28, 1996
                            (DOLLARS IN THOUSANDS)

                                                          1997      1996
                                                      ---------   -------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
   Borrowings pursuant to revolving credit agreement  $  45,467   $23,524
   Current portion of other debt ...................      4,689     3,070
   Current portion of capital leases ...............        358       349
   Earnout payable .................................      1,950     2,950
   Accounts payable ................................     31,134     9,998
   Accrued liabilities .............................      5,932     7,042
                                                      ---------   -------
            Total current liabilities ..............     89,530    46,933
                                                      ---------   -------
LONG-TERM OBLIGATIONS - LESS SCHEDULED MATURITIES:
   Borrowings pursuant to credit agreement .........      8,350     8,800
   Notes payable ...................................       --          41
   Subordinated debt due to related parties ........     10,620    13,590
   Capital lease liability .........................        968     1,175
                                                      ---------   -------
                                                         19,938    23,606
                                                      ---------   -------
DEFERRED INCOME TAXES PAYABLE AND OTHER LIABILITIES       1,217     1,301

MANDATORILY REDEEMABLE PREFERRED STOCK .............        898     7,613

MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK .      8,083      --

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
   Common stock, $.001 par value, 10,000,000 shares
   authorized and 4,319,158 and 3,676,008 shares
   issued and outstanding at June 28, 1997 and
   December 28, 1996, respectively .................          4         5
   Additional paid-in capital ......................     10,539     2,927
   Retained earnings (deficit) .....................       (675)      297
                                                      ---------   -------
            Total shareholders' equity .............      9,868     3,229
                                                      ---------   -------
                                                      $ 129,534   $82,682
                                                      =========   =======

                 The accompanying notes are an integral part
               of these consolidated condensed balance sheets.
<PAGE>
                           BRAZOS SPORTSWEAR, INC.

         CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

               (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
                                               FOR THE THIRTEEN       FOR THE TWENTY-SIX
                                                 WEEKS ENDED              WEEKS ENDED
                                        -------------------------  -------------------------
                                           JUNE 28,     JUNE 29,    JUNE 28,     JUNE 29,
                                             1997         1996       1997          1996
                                        -----------   ----------  -----------   -----------
<S>                                     <C>           <C>         <C>           <C>        
   NET SALES .........................  $    56,198   $   39,407  $    91,105   $    69,539
   COST OF GOODS SOLD ................       41,915       30,072       68,435        52,833
                                        -----------   ----------  -----------   -----------
               Gross profit ..........       14,283        9,335       22,670        16,706

   OPERATING EXPENSES:
      Selling, general and administrative
        expenses .....................       11,706        7,030       20,023        13,289
      Amortization of intangible assets
        and non-compete payments .....          305           52          590           134
                                        -----------   ----------  -----------   -----------
               Total operating expenses      12,011        7,082       20,613        13,423
               Operating income ......        2,272        2,253        2,057         3,283
                                        -----------   ----------  -----------   -----------
   OTHER EXPENSE (INCOME):
      Interest expense ...............        1,791          956        2,936         1,767
      Other, net .....................          (71)          28           54          (205)
                                        -----------   ----------  -----------   -----------
               Income (loss) before
                 provision (credit) for
                 income taxes ........          552        1,296         (933)        1,721
   PROVISION (CREDIT) FOR INCOME TAXES          236           13         (373)           13
                                        -----------   ----------  -----------   -----------
               Net income (loss) .....          316        1,256         (560)        1,708

   DIVIDENDS AND ACCRETION ON PREFERRED
     STOCK ...........................          247         --            412          --
                                        -----------   ----------  -----------   -----------
      Net income (loss) available for
        common shareholders ..........  $        69   $    1,256  $      (972)  $     1,708
                                        ===========   ==========  ===========   ===========
   PER SHARE DATA:

      Earnings (loss) per common and
        common equivalent share ......  $       .01   $      .31  $      (.23)  $       .42
                                        ===========   ==========  ===========   ===========
   WEIGHTED AVERAGE COMMON AND COMMON
     EQUIVALENT SHARES OUTSTANDING ...    4,930,169    4,106,769    4,159,012     4,110,265
                                        ===========   ==========  ===========   ===========
</TABLE>
                 The accompanying notes are an integral part of these
                  consolidated condensed financial statements.
<PAGE>
                             BRAZOS SPORTSWEAR, INC.

           CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

         FOR THE TWENTY-SIX WEEKS ENDED JUNE 28, 1997 AND JUNE 29, 1996
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                          1997      1996
                                                                       --------   -------
<S>                                                                    <C>        <C>    
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss) ................................................  $   (560)  $ 1,708
   Adjustments to reconcile net income (loss) to net cash
     used in operating activities-
      Depreciation ..................................................       758       522
      Amortization of intangible assets .............................       590       150
      Increase in accounts receivable ...............................    (4,312)   (9,456)
      Increase in inventory .........................................   (20,439)   (5,985)
      Increase in prepaid expenses ..................................      (121)     (141)
      Increase in income tax receivable .............................      (256)     --
      Increase in other noncurrent assets ...........................    (1,993)      (30)
      Increase in accounts payable and accrued liabilities ..........    14,540     6,496
                                                                       --------   -------
            Net cash used in operating activities ...................   (11,793)   (6,736)
                                                                       --------   -------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of Sun Sportswear, Inc., net of cash acquired ...........    (4,613)     --
   Purchases of property, plant and equipment, net ..................      (211)     (298)
                                                                       --------   -------
            Net cash used in investing activities ...................    (4,824)     (298)
                                                                       --------   -------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Borrowings pursuant to revolving credit agreement, net ...........    18,239     7,269
   Borrowings of long-term debt pursuant to credit agreement ........     1,000      --
   Repayments of long-term debt pursuant to credit agreement ........    (1,250)     (800)
   Repayments of subordinated debt ..................................    (2,998)     --
   Repayment of capital lease obligations and industrial
     revenue bonds ..................................................      (290)     (158)
   Payments made under non-compete agreements .......................       (58)     --
   Payments for deferred financing costs ............................      (140)     --
   Payments received on notes receivable from shareholders ..........      --          30
   Issuance of common stock .........................................       100      --
   Issuance of preferred stock and related stock purchase
     warrants .......................................................     2,000      --
                                                                       --------   -------
            Net cash provided by financing activities ...............    16,603     6,341
                                                                       --------   -------
NET  DECREASE IN CASH ...............................................       (14)     (693)

CASH AT BEGINNING OF PERIOD .........................................       561       755
                                                                       --------   -------
CASH AT END OF PERIOD ...............................................  $    547   $    62
                                                                       ========   =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

   Cash paid for interest ...........................................  $  2,763   $ 1,517
   Cash paid for income taxes .......................................     1,479         3

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:
   Payments of PIK dividends and accretion on preferred stock .......       412      --
</TABLE>
              The accompanying notes are an integral part of these
                       consolidated condensed statements.
<PAGE>
                             BRAZOS SPORTSWEAR, INC.
                          NOTES TO FINANCIAL STATEMENTS

                    AS OF JUNE 28, 1997 AND DECEMBER 28, 1996

(1)  ACQUISITIONS AND ISSUANCE OF SENIOR NOTES-

     On March 14, 1997, BSI Holdings, Inc. (Holdings) consummated a merger with
     Sun Sportswear, Inc. (Sun) (hereinafter referred to as the "Merger")
     whereby the Stockholders of Holdings acquired an 86% ownership interest in
     Sun. The Merger has been accounted for as a reverse acquisition with Sun
     being the surviving legal entity and Holdings being the aquiror for
     accounting purposes. Concurrent with the Merger, Sun was reincorporated in
     the State of Delaware under the name Brazos Sportswear, Inc.(Brazos).

     On July 2, 1997, Brazos issued $100 million of 10 1/2% senior notes due
     2007 (hereinafter referred to as the "Offering"). The net proceeds from the
     Offering, after deducting discounts to the initial purchasers and other
     transaction costs, of $95.5 million were used to finance the acquisition by
     Brazos of (i) all the outstanding capital stock of SolarCo, Inc., the
     parent company of Morning Sun, Inc. ("Morning Sun"),(ii) all of the assets
     of Premier Sports Group, Inc ("Premier"), and repay certain debt
     obligations of Brazos, Morning Sun and Premier.

     The purchase price for SolarCo was approximately $31.9 million, consisting
     of (i) $29.4 million of cash paid at closing, (ii) 73,171 shares of Brazos
     common stock, (iii) additional estimated consideration of $1.8 million and
     (iv) estimated transaction costs of $125,000. Brazos also assumed debt of
     approximately $8.4 million which was repaid with a portion of the Offering
     proceeds. This transaction will be accounted for as a purchase with an
     estimated $25 million of the excess of acquisition cost over the fair value
     of net assets acquired being assigned to goodwill.

     The purchase price for Premier was approximately $7.6 million, consisting
     of (i) $2 million of cash, (ii) a $1.5 million subordinated note which is
     convertible into and payable only through the issuance of 136,364 shares of
     Brazos common stock, (iii) "earnout consideration" of up to $4 million and
     (iv) estimated transaction costs of $125,000. Brazos also assumed debt of
     approximately $8 million which was repaid with a portion of the Offering
     proceeds. As of June 28, 1997, Premier had a nominal amount of net assets.
     Accordingly, it is anticipated that substantially all of the purchase price
     will be reflected as goodwill.

(2)  SIGNIFICANT ACCOUNTING POLICIES-

     (a) INTERIM FINANCIAL STATEMENTS--The accompanying consolidated condensed
         financial statements of Brazos for the twenty-six week period ended
         June 28, 1997 reflect the results of operations of Sun from the date of
         acquisition, March 14, 1997. The accompanying consolidated condensed
         financial statements of Brazos prior to March 14, 1997, reflect
         Holdings' historical results prior to the Merger.

         The accompanying consolidated condensed financial statements of Brazos
         are unaudited. These unaudited interim financial statements and related
         notes have been prepared pursuant to the rules and regulations of the
         Securities and Exchange Commission. Accordingly, certain information
         and footnote disclosures normally included in financial statements
         prepared in accordance with generally accepted accounting principles
         have been omitted pursuant to such rules and regulations. However, in
         the opinion of management, the accompanying consolidated condensed
         financial statements include all adjustments, consisting of only normal
         recurring adjustments, necessary for a fair presentation of the results
         for the interim periods. These consolidated condensed financial
         statements and notes thereto should be read in conjunction with the
         consolidated financial statements and notes thereto included in Brazos'
         Current Report on Form 8-K/A dated May 12, 1997.

         The results of operations for the interim periods are not necessarily
         indicative of the results to be expected for the year.
<PAGE>
     (b) INVENTORIES--Inventories are comprised of:

                                                      JUNE 28,    DECEMBER 28,
              INVENTORY CATEGORY         METHOD         1997          1996
                                        --------      --------      --------
          Raw Materials                   LIFO        $  3,677      $  3,012
          Work-in-Process                 LIFO               -             -
          Finished Goods                  LIFO          21,143        10,595
                                                       -------       ------- 
                                                        24,820        13,607
          Less--LIFO reserve                              (182)         (182)
                                                       -------       ------- 
                Total LIFO                              24,638        13,425
                                                       -------       ------- 
          Raw Materials                   FIFO          25,776         8,272
          Work-in-Process                 FIFO             281           150
          Finished Goods                  FIFO           8,338         3,491
                                                       -------       ------- 
                Total FIFO                              34,395        11,913
                                                       -------       ------- 
                Total inventory                        $59,033       $25,338
                                                       =======       =======

         Finished goods on a LIFO basis include blank garments of $19.7 million
         and $9.4 million at June 28, 1997 and December 28, 1996, respectively,
         which are sold by Brazos' wholesale distribution division.

     (c) EARNINGS (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE--Earnings (loss)
         per share is based on the weighted average number of common shares
         outstanding and includes the effect of the issuance of shares in
         connection with the assumed exercise of stock options and warrants.

         Earnings (loss) per share has also been computed in accordance with
         Securities and Exchange Commission Staff Accounting Bulletin No. 83
         (SAB No. 83). SAB No. 83 requires that options and warrants granted in
         the twelve-month period preceding a proposed public offering be
         included in the calculation of common and common equivalent shares as
         if they were outstanding for all periods presented. Warrants issued in
         1996 and 1997 to purchase 1,287,174 shares of common stock at prices
         ranging from $.0013 per share to $6.59 per share were subject to this
         requirement.

         Fully-diluted earnings (loss) per share has not been presented because
         such per share amounts were anti-dilutive to primary earnings (loss)
         per share.

         All share and per share information included in the accompanying
         consolidated condensed financial statements has been restated for all
         periods presented to reflect the 37.912252-for-1 stock split pursuant
         to the Merger and 1-for-5 reverse stock split pursuant to the
         Reincorporation.
<PAGE>
     (d) NEW  ACCOUNTING  PRONOUNCEMENTS--During  February 1997, the Financial
         Accounting  Standards Board issued Statement of Financial  Accounting
         Standards  No. 128,  EARNINGS PER SHARE (SFAS No. 128).  SFAS No. 128
         replaces  the  current  presentation  of  primary  and  fully-diluted
         earnings per share with a presentation of basic and diluted  earnings
         per  share.  Pursuant  to the  provisions  of  SFAS  No.  128,  basic
         earnings per share  excludes any dilution.  The current  presentation
         of primary  earnings per share includes the dilutive effect of common
         stock  equivalents  such as options and warrants.  Brazos  intends to
         adopt the  provisions  of SFAS No. 128  during the fourth  quarter of
         1997.

         Assuming profitable results of operations, management expects that the
         adoption of the provisions of SFAS No. 128 will have the effect of
         reporting an amount of basic earnings per share which is greater than
         the current presentation of primary earnings per share because the
         dilutive effect of common stock equivalents, such as options and
         warrants, will be excluded from the calculation of basic earnings per
         share.

         Pro forma  earnings  (loss) per share assuming the provisions of SFAS
         No. 128 had been applied follow.

                                         THIRTEEN-WEEK       TWENTY-SIX WEEK
                                         PERIODS ENDED        PERIODS ENDED
                                      -------------------   --------------------
                                      JUNE 28,   JUNE 29,   JUNE 28,    JUNE 29,
                                        1997       1996      1997        1996
                                      --------   --------   --------    --------
          Basic  earnings  (loss) per
          share ...................   $    .02   $   .35   $   (.23)   $    .51

          Diluted earnings (loss)
          per share ...............        .02       .31       (.23)        .42


         Diluted loss per share would not be presented for the thirteen-week
         period nor the twenty-six week period ended June 28, 1997 because the
         effect of common stock equivalents and convertible securities would be
         anti-dilutive. 

         In June 1997, the Financial Accounting Standards Board (FASB) issued
         Statement of Financial Accounting Standards No. 130, REPORTING
         COMPREHENSIVE INCOME (SFAS No. 130), which requires that comprehensive
         income and the associated income tax expense or benefit be reported in
         a financial statement with the same prominence as other financial
         statements with an aggregate amount of comprehensive income reported in
         that same financial statement. SFAS No. 130 permits the statement of
         changes in shareholder's equity to be used to meet this requirement.
         "Other Comprehensive Income" refers to revenues, expenses, gains and
         losses that under GAAP are included in comprehensive income but bypass
         net income. The Company intends to adopt SFAS No. 130 the first quarter
         of fiscal 1998. The Company anticipates that adoption of SFAS No. 130
         will not have a material impact on its results of operations.

         In June 1997, the FASB issued Statement of Financial Accounting
         Standards No. 131, DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND
         RELATED INFORMATION (SFAS No. 131), which requires disclosures for each
         segment in which the chief operating decision maker organizes these
         segments within a company for making operating decisions and assessing
         performance. Reportable segments are based on products and services,
         geography, legal structure, management structure and any manner in
         which management disaggregates a company. The Company intends to adopt
         SFAS No. 131 in the first quarter of fiscal 1998. The Company
         anticipates that adoption of SFAS No. 131 will not have a material
         impact on its results of operations.
<PAGE>
(3)  ACQUISITION OF SUN-

     Pro forma results of Brazos and Sun combined, including Brazos' acquisition
     of Plymouth Mills, Inc.("Plymouth"), effective August 2, 1996, assuming
     that the acquisitions had been made as of the beginning of fiscal 1996,
     follow. Such information reflects adjustments to reflect the elimination of
     Sun's historical depreciation expense for the write-off of net equipment
     and leasehold improvements resulting from the application of purchase
     accounting, elimination of pre-merger acquisition expenses incurred by Sun,
     amortization of goodwill related to the Plymouth acquisition, additional
     interest expense related to increased net indebtedness, and dividends on
     additional preferred stock issued.

                               THIRTEEN-WEEK PERIODS    TWENTY-SIX WEEK PERIODS
                                      ENDED                     ENDED
                               ----------------------   -----------------------
                                JUNE 28,     JUNE 29,    JUNE 28,     JUNE 29,
                                  1997         1996        1997         1996
                               ---------     --------   ---------     --------  
                                      (000's except per share amounts)
       Net sales               $  56,198    $  71,927 $  100,295    $  135,652
       Net income (loss)             316        2,296     (1,301)        3,519
       Net income (loss)                        
         available to common                    
         shareholders                 64        2,059     (1,802)        3,048 
       Earnings (loss) per common                            
         and common equivalent                 
         share                 $     .01    $     .44 $     (.41)   $      .65
                                                               
     A preliminary summary of the Merger, pending completion of certain
     appraisals and analysis of the net assets acquired, utilizing March 14,
     1997 balances, is as follows:

                                                                         (000'S
                                                                        OMITTED)
      Fair value of assets acquired, including:
         Accounts receivable .......................................     $ 6,912
         Inventories ...............................................      13,256
         Other current assets ......................................       2,059
                                                                         -------
      Total fair value of assets acquired ..........................      22,227
                                                                         -------
      Less:
         Purchase Price-
            Cash ...................................................     $ 4,680
            Subordinated note to Seafirst ..........................       1,500

            Equity interest in Holdings subsequent to the Merger
              (587,927 remaining Sun shares at $11.00 per share) ...       6,467
                                                                         -------
                                                                          12,647
            Transaction costs ......................................       1,451

            Financing costs ........................................         137
                                                                         -------
      Total purchase price .........................................      14,235
                                                                         -------
      Liabilities assumed ..........................................     $ 7,992
                                                                         =======
<PAGE>
     The purchase price was financed through a combination of borrowings under
     Brazos' credit agreement ($6.3 million short-term, $1.0 million long-term),
     the issuance of Brazos convertible, mandatorily redeemable preferred stock
     ($2.0 million - Series B-3), and the issuance of a subordinated debenture
     to Seafirst ($1.5 million). In connection with this transaction, the above
     proceeds were used to retire $3.0 million of the subordinated debentures
     payable to the seller of Plymouth Mills, Inc. 

     The Series B-3 mandatorily redeemable preferred stock contained detachable
     warrants to purchase 272,968 shares of Brazos' common stock at a purchase
     price of $6.59 per share. The warrants were valued at $1,044,000 which
     represents the portion of the $2,000,000 proceeds allocated to the warrants
     based on the relative individual fair values of the preferred stock and
     warrants on the date of grant. These warrants have been recorded as
     additional paid-in capital.

 (4) SIGNIFICANT CUSTOMERS-

     Brazos had net sales of $13.6 million to one customer for the
     twenty-six week period ended June 28, 1997 and $20.4 million to two
     customers for the twenty-six week period ended June 29, 1996. These amounts
     represented 15% and 29% of total net sales during the twenty-six week
     periods ended June 28, 1997 and June 29, 1996, respectively. The
     accompanying consolidated condensed balance sheets include accounts
     receivable of $6.3 million and $5.4 million at June 28, 1997 and December
     28, 1996, respectively, due from such customers.
 
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

      THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE COMPANY'S
FINANCIAL STATEMENTS AND RELATED NOTES CONTAINED ELSEWHERE HEREIN.

ACQUISITIONS

     On July 2, 1997, the Company consummated the acquisition of (i) all of the
outstanding capital stock of SolarCo, Inc., the parent of Morning Sun, Inc.
("Morning Sun") and (ii) all of the assets of Premier Sports Group, Inc.
("Premier") (collectively, the "Acquisitions"). The Company also completed the
private placement of $100 million in Senior Notes (the "Notes"). Brazos utilized
the net proceeds from the Notes primarily to pay the cash portion of the
aggregate purchase price of the Acquisitions and to repay certain outstanding
indebtedness.

      Morning Sun is a designer, manufacturer and marketer of moderately-priced
imprinted and embroidered tops for women age 35 and over. Morning Sun sells its
products under proprietary brand names and various private labels to major
department store chains, catalogue companies and specialty stores.

      Premier is an importer of high quality, low cost "fashion fleece" and
other garments for domestic distributors and provides merchandising, design and
sourcing services for apparel companies.

     The Acquisitions have broadened Brazos' product lines, expanded and
diversified its customer base, generated enhanced purchasing power and allowed
Brazos to realize certain economies of scale in manufacturing, marketing,
distribution and administration. The purchase of Morning Sun provides the
Company with additional product lines as well as entry into new markets. The
Premier purchase provides for more cost efficient sourcing of garments from
overseas sources which will enable the Company to maintain low raw material
costs and support the increasingly large supply of garments that the Company
requires. See Note 1 to the Notes to Financial Statements for further
information.

RESULTS OF OPERATIONS

     The following table sets forth, for the periods indicated, the components
of Brazos' statements of operations expressed as a percentage of net sales on a
historical basis prior to the acquisitions.
<TABLE>
<CAPTION>
                                                                 
                                                                      THIRTEEN WEEKS ENDED                TWENTY-SIX WEEKS ENDED
                                                                    ------------------------            --------------------------
                                                                   June 28,          June 29,          June 28,            June 29,
                                                                     1997              1996              1997                1996
                                                                    ------            ------            ------              ------  
<S>                                                                  <C>               <C>               <C>                 <C>    
Net sales ...............................................            100.0%            100.0%            100.0%              100.0% 
                                                                                                                                    
Cost of goods sold ......................................             74.6%             76.3%             75.1%               76.0% 
                                                                    ------            ------            ------              ------  
Gross profit ............................................             25.4%             23.7%             24.9%               24.0% 
                                                                                                                                    
Operating expense .......................................             21.4%             18.0%             22.6%               19.3% 
                                                                    ------            ------            ------              ------  
Operating income ........................................              4.0%              5.7%              2.3%                4.7% 
                                                                                                                                    
Other expense (income)                                                                                                              
        Interest expense ................................              3.2%              2.4%              3.2%                2.5% 
                                                                                                                                    
        Other, net ......................................              (.2%)              .1%               .1%                (.3%)
                                                                    ------            ------            ------              ------  
                                                                                                                                    
Income (loss) before provision                                                                                                      
(credit) for income taxes ...............................              1.0%              3.2%             (1.0%)               2.5% 
                                                                                                                                    
Provision (credit) for income                                                                                                       
taxes ...................................................               .4%               .0%              (.4%)                .0% 
                                                                    ------            ------            ------              ------  
Net income (loss) .......................................               .6%              3.2%              (.6%)               2.5% 
                                                                    ======            ======            ======              ======  
</TABLE>
<PAGE>
      THIRTEEN WEEKS ENDED JUNE 28, 1997 COMPARED WITH THE THIRTEEN WEEKS ENDED
JUNE 29, 1996

     Brazos' net sales increased approximately $16.8 million, or 42.6%, from
$39.4 million in 1996 to $56.2 million in 1997. This increase was primarily
attributable to the acquisition of the assets of Plymouth Mills, Inc.
("Plymouth") on August 2, 1996 and the merger with Sun Sportswear, Inc. ("Sun")
on March 14, 1997. These acquisitions contributed $23.7 million of sales during
the period. Excluding these acquisitions, sales declined approximately $6.9
million or 17.5% during the quarter.

     This decline was principally attributable to lower sales of certain
licensed character products resulting from (i) a decrease in customer demand for
Mickey Mouse products, which was partially offset by an increase in Winnie the
Pooh product sales, (ii) a strategic decision by management to stop selling
licensed character products to one of its major customer's men's and boy's
department in order to position the Company to sell to that customer's women's
department, which management believes has significantly higher long-term revenue
potential; and (iii) repositioned foreign sales relationships in the Far East,
which resulted in a temporary decline in sales.

      The Company's gross profit increased $5.0 million, or 53.0%, from $9.3
million in 1996 to $14.3 million in 1997, principally as a result of the
increase in sales volume resulting from the acquired companies. Overall gross
profit margin increased to 25.4% in 1997 from 23.7% in 1996, primarily as a
result of a more favorable sales mix of higher margin screen printed products
compared to lower margin undecorated products.

     Operating expenses increased $4.9 million, or 70.0%, from $7.1 million in
1996 to $12.0 million in 1997. As a percentage of sales, operating expenses
increased from 18.0% in 1996 to 21.4% in 1997. The increase was directly
attributable to the Plymouth acquisition and Sun merger, which added $5.7
million in operating expenses to the quarter. Excluding these acquisitions,
operating expenses fell $0.8 million or 6.0%. The decline in operating expenses
resulted primarily from reduced commission and royalty expenses but was
partially offset by an increase in bad debt expense due to the Chapter 11
reorganization of Montgomery Ward.

      Interest expense increased $0.8 million, or 87.3%, from $1.0 million in
1996 to $1.8 million in 1997, primarily as a result of increased borrowings
under the Company's credit facility to fund its increased working capital
requirements and borrowings incurred in connection with the Plymouth acquisition
and Sun merger.

      TWENTY-SIX WEEKS ENDED JUNE 28, 1997 COMPARED WITH THE TWENTY-SIX WEEKS
ENDED JUNE 29, 1996

      Brazos' net sales increased approximately $21.6 million, or 31.0%, from
$69.5 million in 1996 to $91.1 million in 1997. This increase was attributable
to the Plymouth acquisition and Sun merger. These acquisitions contributed $32.7
million of sales during the period. Excluding these acquisitions, sales declined
approximately $11.1 million or 16.0% for the period.

     This decline was principally attributable to lower sales of certain
licensed character products resulting from (i) a decrease in customer demand for
Mickey Mouse products, which was partially offset by an increase in Winnie the
Pooh product sales, (ii) a strategic decision by management to stop selling
licensed character products to one of its major customer's men's and boy's
department in order to position the Company to sell to that customer's women's
department, which management believes has significantly higher long-term revenue
potential, (iii) repositioned foreign sales relationships in the Far East and
(iv) delays in restructuring the Company's sales force during the period prior
to the completion of the Sun merger. The extended period prior to the closing of
the Sun merger prohibited the Company from effectively integrating the sales and
marketing programs among the Company, Plymouth and Sun, which caused confusion
among certain customers and licensors and hindered the Company's ability to
effectively develop and market a coordinated line of licensed character products
for its spring offering. Subsequent to the completion of the Sun merger, the
Company effectively realigned its sales and marketing personnel in a manner
which it believes maximizes future sales opportunities.

     The Company's gross profit increased $6.0 million, or 35.7%, from $16.7
million in 1996 to $22.7 million in 1997, principally as result of the increase
in sales volume attributable to the Plymouth acquisition and Sun merger. Overall
gross profit increased to 24.9% in 1997 from 24.0% in 1996, primarily as a
result of a more favorable sales mix of higher margin screen printed products
compared to lower margin undecorated products.

     Operating expenses increased $7.2 million, or 53.6%, from $13.4 million in
1996 to $20.6 million in 1997. As a percentage of sales, operating expenses
increased from 19.3% in 1996 to 22.6% in 1997. The increase was directly
attributable to the Plymouth acquisition and Sun merger, which added $8.2
million for the period ended. Excluding these acquisitions, operating expenses
fell $1.1 million or 7.9%. The decline in operating expenses resulted primarily
from reduced commission and royalty expenses but was partially offset by an
increase in bad debt expense due to the Chapter 11 reorganization of Montgomery
Ward.

      Interest expense increased $1.2 million, or 66.2%, from $1.7 million in
1996 to $2.9 million in 1997, primarily as a result of increased borrowings
under the Company's credit facility to fund its increased working capital
requirements and borrowings incurred in connection with the Plymouth acquisition
and Sun merger.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

      Brazos has financed its acquisitions and sales growth through borrowings
under its bank lines of credit, private placements of debt securities, seller
financing and operating cash flow. The Company's cash requirements consist of
its general working capital needs, capital expenditures, and obligations under
its leases.

      On July 2, 1997, Brazos completed the sale of $100 million of 10.5% Senior
Notes due 2007. The Notes were issued at a discount of $760,000. The net
proceeds of the Notes were used to pay the cash portion of the purchase price of
the Acquisitions and to repay certain outstanding indebtedness. Interest on the
Notes is payable semi-annually on January 1 and July 1 of each year, commencing
January 1, 1998. The Notes contain certain covenants, including covenants
limiting the incurrence of additional indebtedness and the consummation of
mergers, consolidations and sales of assets. At any time prior to July 1, 2000,
Brazos may redeem up to 35% of the aggregate principal amount of the Notes
originally issued with the net proceeds of one or more public equity offerings,
at a redemption price of 110.5% of the principal amount thereof. In addition, on
or after July 1, 2002, Brazos may redeem at its option, in whole or in part, at
various premiums depending on when the redemption occurs, any or all of the
Notes outstanding.

      On July 2, 1997, the Company entered into a Third Amended and Restated
Loan and Security Agreement with its primary lender, which makes a revolving
line of credit (the "Credit Facility") available to its principal operating
subsidiary, Brazos, Inc. (the "Borrower"), in an aggregate principal amount of
up to $50.0 million, subject to collateral limitations. Advances under this line
are based on a percentage of Brazos' inventory and receivables and various other
reserves established from time to time by the lenders. Interest on the line of
credit is payable at prime plus .25% or the Eurodollar base rate plus 2.00%. The
Credit Facility includes certain covenants applicable to the Borrower, including
requirements that the Borrower comply with certain financial ratios. The Credit
Facility has an initial term of three years, subject to extension, and
borrowings under the Credit Facility are guaranteed by the Company. As of June
28, 1997, Brazos had a borrowing base under its former line of credit of $54.0
million, based on existing collateral. Of its borrowing base, $8.1 million
remained unused at June 28, 1997. Brazos' term loan facility, $11.0 million at
June 28, 1997, was repaid with the cash proceeds of the Notes offering. Under
the Company's new Credit Facility, Brazos had a borrowing base of $42.3 million.
Of its borrowing base, $8.3 million was unused at July 21, 1997.

      Brazos used $11.8 million of cash from operating activities in 1997 versus
cash used in operating activities in 1996 of $6.7 million. Contributing to the
use of cash were: (i) operating losses of $0.6 million, (ii) working capital
investments of $10.6 million; and (iii) transaction costs for the purchase of
Sun of $1.0 million and for the purchase and financing of Morning Sun and
Premier of $1.0 million.

      Brazos invested $4.6 million of cash in 1997 to acquire Sun and incurred
capital expenditures net of disposals of $0.2 million in 1997 and $0.3 million
in 1996.

      Financing activities provided $16.6 million of cash in 1997 through net
borrowings of $18.0 million under existing credit facilities and through the
issuance of $2.0 million in preferred stock with detachable common stock
purchase warrants and $0.1 million in common stock. Brazos repaid $3.0 million
of subordinated debt in connection with the Sun merger. Capital lease payments,
deferred financing costs for the Sun merger and industrial revenue bond payments
aggregating $0.5 million further reduced the cash flow from financing
activities. In 1996, net borrowings of debt amounted to $6.3 million.

      Management believes that funds available under its principal credit
facility, together with cash generated from operations, will be sufficient to
meet the Company's anticipated cash requirements for 1997.

SEASONALITY

      The Company's sales levels are generally higher in the second and third
quarters of each year. During these periods, spring, summer, back-to-school and
pre-holiday season products are produced and sold. The Company expects that the
seasonal nature of apparel sales will continue in future periods.

INFORMATION REGARDING FORWARD LOOKING STATEMENTS

      This Quarterly Report on Form 10-Q includes forward looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securites Exchange Act of 1934. Although the Company believes that its
expectations are based on reasonable assumptions, it can give no assurance that
such expectations will be achieved. Other factors could cause actual results to
differ materially from those in the forward looking statements herein.
<PAGE>                          
                          PART II -- OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

      As described in the Company's Form 10-K dated April 11, 1997, a lawsuit is
pending in the Supreme Court of the State of New York against the Company,
E.R.O. Industries, Inc., Toys "R" Us, Grace International Apparel, Inc., and
Bradlees Department Store. The plaintiff in that lawsuit seeks compensatory and
punitive damages against each defendant under various tort theories. Subsequent
to the date of the Company's Form 10-K, the punitive damage claims against the
Company were dismissed.

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      By written consent dated June 24, 1997, stockholders holding an aggregate
of (i) 3,252,488 shares of Common Stock and 2,269,452 shares of Series B-2
Preferred Stock (representing 76% of the Company's voting securities) and (ii)
650,000, 300,000, 4,400,968, 2,269,452 and 1,740,000 shares of the Company's
Series A-1, A-2, B-1, B-2 and B-3 Preferred Stock, respectively (representing at
least a majority of the shares of each series of preferred stock), approved an
amendment (the "Charter Amendment") to the Company's Restated Certificate of
Incorporation (the "Restated Certificate"). The Charter Amendment (i) permits
the Company's optional redemption of shares of Series A-1 and A-2 Preferred
Stock notwithstanding that any shares of Series B-1, B-2 or B-3 Preferred Stock
(collectively, the "Senior Preferred Stock") are outstanding, and to permit the
optional redemption of the Series A-1 Preferred Stock concurrently with the
Series A-2 Preferred Stock, (ii) extends the mandatory redemption date of the
Senior Preferred Stock to the earlier to occur of (a) the occurrence of a Sale
(as defined in the Restated Certificate) or (b) December 31, 2008 and (iii)
makes certain clarifying changes relating to the voting rights of the Series
A-1, A-2, B-1 and B-3 Preferred Stock and the automatic conversion provisions of
the Senior Preferred Stock.

      On August 7, 1997, the Company filed with the Securities Exchange
Commission a preliminary Schedule 14C relating to the above stockholder action
and will promptly mail it to the stockholders upon clearance with the
Commission. Under applicable rules of the Securities Exchange Act of 1934, as
amended, the authorization of the Charter Amendment by the Company's board of
directors and stockholders will not become effective until at least 20 days
after mailing of the information statement to the stockholders.

<PAGE>
ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

      A.    EXHIBITS

EXHIBIT NO.       DESCRIPTION

     2.1     -- Agreement and Plan of Merger ("Merger Agreement") dated as of
                November 13, 1996, as amended, by and between the Company
                (formerly Sun Sportswear, Inc.) and BSI Holdings, Inc. (filed as
                an appendix to Form S-4 Registration Statement (No. 333-17871)
                and incorporated herein by reference).

     2.2     -- Plan and Agreement of Merger with respect to reincorporation
                in Delaware (filed as an appendix to Form S-4 Registration
                Statement (No. 333-17871) and incorporated herein by reference).

     3.1     -- Restated Certificate of Incorporation of the Company (filed
                as an exhibit to Form 10-K for the year ended December 31, 1996
                and incorporated herein by reference).

     3.2     -- Bylaws of the Registrant, as amended (filed as an exhibit to
                Form 10-K for the year ended December 31, 1996 and incorporated
                herein by reference).

     4.1     -- See Exhibits 3.1 and 3.2 for provisions of the Certificate of
                Incorporation and Bylaws of the registrant defining the rights
                of holders of common and preferred stock.

    27.1     -- Financial Data Schedule.

      B.    REPORTS ON FORM 8-K

            1.    The Company filed a report on Form 8-K dated May 13, 1997 with
                  respect to the Company's change in certifying accountant and
                  fiscal year.

            2.    The Company filed a report on Form 8-K/A dated May 13, 1997
                  with respect to the financial statements of BSI Holdings, Inc.
                  and proforma financial information required as a result of the
                  merger with BSI Holdings, Inc. and related reincorporation in
                  Delaware.

<PAGE>
                                  SIGNATURE

      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.

                                    BRAZOS SPORTSWEAR, INC.

                                /s/   F. CLAYTON CHAMBERS,
                                      F. Clayton Chambers,
                                      Vice President and Chief Financial Officer

Date: August 8, 1997