##### Table of Contents

---

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549



---

FORM 10-Q



---

(Mark One)



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

FOR THE QUARTERLY PERIOD ENDED APRIL 1, 2006

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

FOR THE TRANSITION PERIOD FROM  TO

Commission File Number: 333-110029



---

Broder Bros.,
Co.

(Exact name of Registrant as specified in its charter)



---



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Michigan                                                       |  | 38-1911112                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|Six Neshaminy Interplex, 6thFloor, Trevose,
PA                 |  | 19053                               
|(Address of principal executive office)                        |  | (Zip code)                          

(215) 291-6140

(Registrants telephone number, including area code)



---

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 ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):



|                         |  |                    |  |                         
|------------------------ |  | ------------------ |  | ------------------------
|Large accelerated filer ̈ |  | Accelerated filer ̈ |  | Non-accelerated filer  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).    Yes ̈No  x

As of May 12, 2006, there were 963,637 shares of Class L, Series 1 common stock outstanding; 931,635 shares of Class L, Series 2 common stock
outstanding; 2,788,393 shares of Class L, Series 3 common stock outstanding; 2,695,799 shares of Class L, Series 4 common stock outstanding; 9,695,252 shares of Class A common stock outstanding; and 28,751,440 shares of Class B common stock
outstanding.



---



1



---

##### Table of Contents

BRODER BROS., CO. AND SUBSIDIARY

Quarterly Report for the Period Ended April 1, 2006

Table of Contents



|                                                                                                  |  |     
|------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                  |  | PAGE
|Part I.    Financial Information                                                                  |  |     
|                                                                                                  | 
|Item 1.    Consolidated Financial Statements (Unaudited)                                          |  |     
|                                                                                                  | 
|Consolidated Balance Sheets as of April 1, 2006 and December 31, 2005                             |  | 3   
|                                                                                                  | 
|Consolidated Statements of Operations for the Three Months Ended April 1, 2006 and March 26, 2005 |  | 4   
|                                                                                                  | 
|Consolidated Statements of Cash Flows for the Three Months Ended April 1, 2006 and March 26, 2005 |  | 5   
|                                                                                                  | 
|Notes to Consolidated Financial Statements                                                        |  | 6   
|                                                                                                  | 
|Item 2.    Managements Discussion and Analysis of Financial Condition and Results of Operations  |  | 15  
|                                                                                                  | 
|Item 3.    Quantitative and Qualitative Disclosures About Market Risk                             |  | 22  
|                                                                                                  | 
|Item 4.    Controls and Procedures                                                                |  | 22  
|                                                                                                  | 
|Part II.  Other Information                                                                       |  |     
|                                                                                                  | 
|Item 1.    Legal Proceedings                                                                      |  | 23  
|                                                                                                  | 
|Item 1A. Risk Factors                                                                             |  | 23  
|                                                                                                  | 
|Item 2.    Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities       |  | 23  
|                                                                                                  | 
|Item 3.    Defaults Upon Senior Securities                                                        |  | 23  
|                                                                                                  | 
|Item 4.    Submission of Matters to a Vote of Security Holders                                    |  | 23  
|                                                                                                  | 
|Item 5.    Other Information                                                                      |  | 23  
|                                                                                                  | 
|Item 6.    Exhibits                                                                               |  | 23  
|                                                                                                  | 
|Signatures                                                                                        |  | 24  

Broder Bros., Co. (the Company) is the issuer of $225.0 million aggregate principal
amount of 111/4% Senior Notes due October 15, 2010. A total of $175.0 million aggregate principal amount
of the Senior Notes (the Initial Notes) were the subject of an exchange offer that was registered with the Securities and Exchange Commission (SEC) (File No. 333-110029). A total of $50.0 million aggregate principal
amount of the Senior Notes (the Notes) were the subject of an exchange offer that was registered with the SEC (File No. 333-123991). The Notes are additional debt securities issued under an indenture dated September 22, 2003,
under which the Company previously issued the Initial Notes.

As used herein, unless the context indicates otherwise:
(i) Broder, Company, we, our, and us, refer collectively to Broder Bros., Co. and its consolidated subsidiary; (ii) Alpha refers to the Companys Alpha Shirt
Company Division for periods after its acquisition by the Company and to Alpha Shirt Holdings, Inc. and its consolidated subsidiaries for periods prior to such acquisition; (iii) Broder division refers to the Companys Broder
Division; and (iv) NES refers to the Companys NES Clothing Company Division for periods after the acquisition by the Company and to NES Clothing Holdings Trust and its consolidated subsidiaries for periods prior to such
acquisition.



2



---

##### Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

BRODER BROS., CO. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                 |         |   |                  |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | April 1,2006                                    |         |   | December 31,2005 |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | (unaudited)                                     |         |   |                  |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | (dollars in thousands,except per share amounts) |        
|ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                 |         |   |                  |   |         |  
|Current assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                 |         |   |                  |   |         |  
|Cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | $                                               | 3,019   |   |                  | $ | 3,305   |  
|Accounts receivable, net of allowance for doubtful accounts of $5,642 at April 1, 2006 and $5,352 at December 31,
2005                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                 | 89,452  |   |                  |   | 83,627  |  
|Finished goods inventory                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                 | 222,571 |   |                  |   | 216,551 |  
|Prepaid and other current assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                 | 9,716   |   |                  |   | 11,348  |  
|Deferred income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                 | 9,661   |   |                  |   | 8,815   |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                 |         |   |                  |   |         |  
|Total current assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                                 | 334,419 |   |                  |   | 323,646 |  
|Fixed assets, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                 | 17,357  |   |                  |   | 17,571  |  
|Goodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                 | 136,980 |   |                  |   | 136,980 |  
|Other intangibles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                 | 67,710  |   |                  |   | 70,546  |  
|Deferred financing fees, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                                 | 13,023  |   |                  |   | 13,932  |  
|Deferred income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                 | 4,624   |   |                  |   | 2,563   |  
|Other assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                                 | 2,873   |   |                  |   | 1,224   |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                 |         |   |                  |   |         |  
|Total assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | $                                               | 576,986 |   |                  | $ | 566,462 |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                 |         |   |                  |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                                 |         |   |                  |   |         |  
|Current liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                                                 |         |   |                  |   |         |  
|Current portion of long-term debt and capital lease obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | $                                               | 1,185   |   |                  | $ | 1,203   |  
|Accounts payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                 | 123,401 |   |                  |   | 100,187 |  
|Accrued expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                 | 16,515  |   |                  |   | 20,011  |  
|Accrued interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                 | 13,459  |   |                  |   | 7,138   |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                 |         |   |                  |   |         |  
|Total current liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |                                                 | 154,560 |   |                  |   | 128,539 |  
|Long-term debt and capital lease obligations, net of current portion                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                                 | 308,976 |   |                  |   | 317,945 |  
|Deferred income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                 | 36,551  |   |                  |   | 37,578  |  
|Other long-term liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                 | 8,877   |   |                  |   | 7,602   |  
|Redeemable securities, net of employee note receivable at December 31, 2005 (see Note 4)                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                 | 390     |   |                  |   | 1,485   |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                 |         |   |                  |   |         |  
|Total liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                 | 509,354 |   |                  |   | 493,149 |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                
|Commitments and contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                 |         |   |                  |   |         |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                
|Shareholders equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                                 |         |   |                  |   |         |  
|Class L, Series 1 common stock; par value $0.01 per share; 2,000,000 shares authorized; 963,637 shares issued and outstanding (aggregate
liquidation preference of $31,405 and $30,461 as of April 1, 2006 and December 31, 2005, respectively)                                                                                                                                                                                                                                                                   |  |                                                 | 10      |   |                  |   | 10      |  
|Class L, Series 2 common stock; par value $0.01 per share; 2,000,000 shares authorized; 931,635 shares issued and outstanding (aggregate
liquidation preference of $22,834 and $21,996 as of April 1, 2006 and December 31, 2005, respectively)                                                                                                                                                                                                                                                                   |  |                                                 | 10      |   |                  |   | 10      |  
|Class L, Series 3 common stock; par value $0.01 per share; 4,000,000 shares authorized; 2,778,057 shares issued and outstanding (aggregate
liquidation preference of $90,537 and $87,814 as of April 1, 2006 and December 31, 2005, respectively)                                                                                                                                                                                                                                                                 |  |                                                 | 28      |   |                  |   | 28      |  
|Class L, Series 4 common stock; par value $0.01 per share; 4,000,000 shares authorized; 2,685,802 shares issued and outstanding (aggregate
liquidation preference of $65,829 and $63,412 as of April 1, 2006 and December 31, 2005, respectively)                                                                                                                                                                                                                                                                 |  |                                                 | 27      |   |                  |   | 27      |  
|Class A, common stock; par value $0.01 per share; 15,000,000 shares authorized; 9,695,252 shares issued and outstanding                                                                                                                                                                                                                                                                                                                                                                                           |  |                                                 | 102     |   |                  |   | 96      |  
|Class B, common stock; par value $0.01 per share; 35,000,000 shares authorized; 28,644,854 shares issued and outstanding                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                 | 287     |   |                  |   | 286     |  
|WarrantsClass L, Series 3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                                 | 1,476   |   |                  |   | 1,472   |  
|Additional paid-in capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                                 | 122,414 |   |                  |   | 120,807 |  
|Accumulated other comprehensive income                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                 | (29     | ) |                  |   | (34     | )
|Accumulated deficit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                                                 | (53,734 | ) |                  |   | (48,417 | )
|Treasury stock; 615,859 and 100,000 shares of Class A common stock; 267,190 and 175,422 shares of Class B common stock; 36,363 and 0 shares of
Class L, Series 1 common stock; 35,156 and 0 shares of Class L, Series 2 common stock; 25,914 and 17,014 shares of Class L, Series 3 common stock; 25,051 and 16,447 shares of Class L, Series 4 common stock; 5,930 and 1,890 Class L, Series 1
warrants; and 989 and 0 Class L, Series 3 warrants, at cost, at April 1, 2006 and December 31, 2005, respectively |  |                                                 | (2,959  | ) |                  |   | (972    | )
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                 |         |   |                  |   |         |  
|Total shareholders equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                                 | 67,632  |   |                  |   | 73,313  |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                 |         |   |                  |   |         |  
|Total liabilities and shareholders equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  | $                                               | 576,986 |   |                  | $ | 566,462 |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                 |         |   |                  |   |         |  

The accompanying notes are an integral part of the consolidated financial statements.



3



---

##### Table of Contents

BRODER BROS., CO. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended April 1, 2006 and March 26, 2005



|                                               |  |                                    |         |   |      |   |         |  
|---------------------------------------------- |  | ---------------------------------- | ------- | - | ---- | - | ------- | -
|                                               |  | 2006                               |         |   | 2005 |  
|                                               |  | (unaudited) (dollars in thousands) |        
|Net sales                                      |  | $                                  | 209,618 |   |      | $ | 197,739 |  
|Cost of sales                                  |  |                                    | 171,618 |   |      |   | 162,010 |  
|                                               |  |                                    |         |   |      |   |         |  
|Gross profit                                   |  |                                    | 38,000  |   |      |   | 35,729  |  
|Warehousing, selling and administrative        |  |                                    | 37,611  |   |      |   | 35,898  |  
|Restructuring and asset impairment charges     |  |                                    | 831     |   |      |   | 943     |  
|                                               |  |                                    |         |   |      |   |         |  
|Total operating expenses                       |  |                                    | 38,442  |   |      |   | 36,841  |  
|                                               |  |                                    |         |   |      |   |         |  
|Loss from operations                           |  |                                    | (442    | ) |      |   | (1,112  | )
|Other (income) expense                         |  |                                    |         |   |      |   |         |  
|Interest                                       |  |                                    | 9,331   |   |      |   | 8,852   |  
|Change in fair value of interest rate swaps    |  |                                    | (150    | ) |      |   | (568    | )
|Amortization of SFAS 133 transition adjustment |  |                                    | 7       |   |      |   | 28      |  
|                                               |  |                                    |         |   |      |   |         |  
|Total other expense                            |  |                                    | 9,188   |   |      |   | 8,312   |  
|                                               |  |                                    |         |   |      |   |         |  
|Loss before income taxes                       |  |                                    | (9,630  | ) |      |   | (9,424  | )
|Income tax benefit                             |  |                                    | (4,313  | ) |      |   | (3,977  | )
|                                               |  |                                    |         |   |      |   |         |  
|Net loss                                       |  | $                                  | (5,317  | ) |      | $ | (5,447  | )
|                                               |  |                                    |         |   |      |   |         |  

The accompanying notes are an integral part of the consolidated financial statements.



4



---

##### Table of Contents

BRODER BROS., CO. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended April 1, 2006 and March 26, 2005



|                                                                                         |  |                        |         |   |      |   |         |  
|---------------------------------------------------------------------------------------- |  | ---------------------- | ------- | - | ---- | - | ------- | -
|                                                                                         |  | 2006                   |         |   | 2005 |  
|                                                                                         |  | (unaudited)            |        
|                                                                                         |  | (dollars in thousands) |        
|Cash flows from operating activities                                                     |  |                        |         |   |      |   |         |  
|Net loss                                                                                 |  | $                      | (5,317  | ) |      | $ | (5,447  | )
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities |  |                        |         |   |      |   |         |  
|Depreciation                                                                             |  |                        | 1,689   |   |      |   | 1,636   |  
|Amortization                                                                             |  |                        | 3,657   |   |      |   | 4,192   |  
|Provision for losses on accounts receivable                                              |  |                        | 379     |   |      |   | 970     |  
|Deferred income taxes                                                                    |  |                        | (3,934  | ) |      |   | (3,900  | )
|Amortization of SFAS 133 transition adjustment                                           |  |                        | 5       |   |      |   | 19      |  
|Stock-based compensation                                                                 |  |                        | 64      |   |      |   | 60      |  
|Change in fair value of interest rate swaps                                              |  |                        | (150    | ) |      |   | (568    | )
|Asset impairment charges                                                                 |  |                        | 107     |   |      |   | 52      |  
|Changes in operating accounts                                                            |  |                        |         |   |      |   |         |  
|Accounts receivable                                                                      |  |                        | (6,204  | ) |      |   | 1,135   |  
|Finished goods inventory                                                                 |  |                        | (6,020  | ) |      |   | (47,295 | )
|Prepaid and other current assets                                                         |  |                        | (17     | ) |      |   | (4,910  | )
|Accounts payable                                                                         |  |                        | 16,721  |   |      |   | 38,242  |  
|Accrued liabilities and other                                                            |  |                        | 4,316   |   |      |   | 161     |  
|                                                                                         |  |                        |         |   |      |   |         |  
|Net cash provided by (used in) operating activities                                      |  |                        | 5,296   |   |      |   | (15,653 | )
|                                                                                         |  |                        |         |   |      |   |         |  
|Cash flows from investing activities                                                     |  |                        |         |   |      |   |         |  
|Acquisition of fixed assets                                                              |  |                        | (1,627  | ) |      |   | (1,680  | )
|                                                                                         |  |                        |         |   |      |   |         |  
|Net cash used in investing activities                                                    |  |                        | (1,627  | ) |      |   | (1,680  | )
|                                                                                         |  |                        |         |   |      |   |         |  
|Cash flows from financing activities                                                     |  |                        |         |   |      |   |         |  
|Borrowings on revolving credit agreement                                                 |  |                        | 88,700  |   |      |   | 103,800 |  
|Repayments on revolving credit agreement                                                 |  |                        | (97,300 | ) |      |   | (70,800 | )
|Payment for treasury stock purchase                                                      |  |                        | (1,987  | ) |      |   |        |  
|Proceeds from payment of employee note receivable                                        |  |                        | 463     |   |      |   |        |  
|Payments of principal on capital lease obligations                                       |  |                        | (324    | ) |      |   |        |  
|Payments of financing fees                                                               |  |                        |        |   |      |   | (280    | )
|Change in book overdraft                                                                 |  |                        | 6,493   |   |      |   | (10,025 | )
|                                                                                         |  |                        |         |   |      |   |         |  
|Net cash provided by (used in) financing activities                                      |  |                        | (3,955  | ) |      |   | 22,695  |  
|                                                                                         |  |                        |         |   |      |   |         |  
|Net increase (decrease) in cash                                                          |  |                        | (286    | ) |      |   | 5,362   |  
|Cash at beginning of period                                                              |  |                        | 3,305   |   |      |   | 2,321   |  
|                                                                                         |  |                        |         |   |      |   |         |  
|Cash at end of period                                                                    |  | $                      | 3,019   |   |      | $ | 7,683   |  
|                                                                                         |  |                        |         |   |      |   |         |  
|Supplemental disclosure of cash flow information                                         |  |                        |         |   |      |   |         |  
|Interest paid                                                                            |  | $                      | 2,188   |   |      | $ | 1,442   |  
|                                                                                         |  |                        |         |   |      |   |         |  
|Taxes paid, net of refunds                                                               |  | $                      | 33      |   |      | $ | 339     |  
|                                                                                         |  |                        |         |   |      |   |         |  
|Assets acquired as a result of capital lease obligations                                 |  | $                      |        |   |      | $ | 1,442   |  
|                                                                                         |  |                        |         |   |      |   |         |  

The accompanying notes are an integral part of the consolidated financial statements.



5



---

##### Table of Contents

BRODER BROS., CO. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. The Company and Summary of
Significant Accounting Policies

Description of the Company

Broder Bros., Co. together with its consolidated subsidiary (the Company) is a national wholesale distributor of imprintable sportswear and
related products which include undecorated or blank T-shirts, sweatshirts, polo shirts, fleece, caps, bags and other imprintable accessories that are decorated primarily for advertising and promotional purposes. Products are sold to
screen printers, embroiderers and advertising specialty companies through sixteen distribution centers strategically located throughout the United States. These customers decorate the Companys products with corporate logos, brands and other
promotional images, then sell the imprinted sportswear and accessories to a highly diversified range of end-customers, including Fortune 1000 companies, sporting venues, concert promoters, athletic leagues, educational institutions and travel
resorts.

In June 2003, the Company completed the purchase of T-Shirts & More, Inc. (TSM) through an asset purchase
agreement, and in September 2003, the Company acquired all of the outstanding capital stock of Alpha Shirt Holdings, Inc. (Alpha). In August 2004, the Company acquired all of the shares of beneficial interest of NES, a leading
distributor of imprintable sportswear in New England. Immediately after consummation of the acquisitions, Alpha and its subsidiaries and NES and its subsidiary were merged with and into Broder Bros., Co., except for ASHI, Inc., which became a
direct, wholly owned non-operating subsidiary of the Company until it also was subsequently merged with and into Broder Bros., Co. in fiscal year 2005.

The Company operates on a 52/53-week year basis with the year ending on the last Saturday of December. The three months ended April 1, 2006 and March 26, 2005 each consisted of thirteen weeks. Fiscal periods
are identified according to the calendar period that they most accurately represent. For example, the quarterly period ended April 1, 2006 is referred to herein as the three months ended March 31, 2006 and the balance sheet
date of April 1, 2006 is referred to herein as March 31, 2006.

Basis of Presentation of Unaudited Interim Financial
Information

The unaudited consolidated financial information herein has been prepared in accordance with generally accepted accounting
principles and is in accordance with the Securities and Exchange Commission (SEC) regulations for interim financial reporting. In the opinion of management, the financial statements include all adjustments, consisting only of normal
recurring adjustments that are considered necessary for a fair statement of the Companys financial position, results of operations and cash flows for the interim periods. Operating results for the three months ended March 31, 2006 are not
necessarily indicative of results that may be expected for the entire year. This financial information should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2005 of the Company,
which are included in the Form 10-K filed with the SEC on March 31, 2006.

Principles of Consolidation and Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make
estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. These assumptions also affect the reported
amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates and assumptions.

Inventory

Inventory is stated at the lower of cost or market using the first-in, first-out method. Inventory consists of
finished goods held for sale. The Companys reported inventory cost consists of the cost of product, net of vendor incentives related to unsold inventory, and certain costs incurred to bring inventory to its existing condition or location,
including freight-in, purchasing, receiving, inspection and other material handling costs. Amounts due to the Company related to vendor incentives are recorded as reductions to vendor payables.

The Company maintains an allowance for potential losses on the disposal of its discontinued and slow-moving inventory. The allowance for excess and
discontinued inventory balances at March 31, 2006 and December 31, 2005 were approximately $6.1 million and $5.5 million, respectively.



6



---

##### Table of Contents

Stock options

Effective December 26, 2004, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 123R, Share-Based Payment (SFAS No. 123R). SFAS No. 123R
is a revision of SFAS No. 123, and its related implementation guidance. With the adoption of SFAS No. 123R, the Company is required to record compensation expense on stock options granted to employees. In accordance with SFAS
No. 123R, the Company has applied the prospective transition method, whereby it will continue to account for any portion of awards outstanding at the date of transition using the accounting principles originally applied to those awards.
Accordingly, upon adoption of SFAS No. 123R, there was no effect on income from continuing operations, income before income taxes, net income, cash flow from operations, or cash flow from financing activities. During the period from adoption
through March 31, 2006, there were no modifications, repurchases or cancellations of existing awards.

In January 2006, options to
purchase 150,903 shares of Class B common stock, 16,261 shares of Class L, Series 3 common stock and 14,150 shares of Class L, Series 4 common stock were issued, which resulted in the recognition of approximately $12,000 in stock-compensation
expense. No compensation expense was recorded in the first quarter of 2005 for share-based payments.

The Black-Scholes option pricing
model was used to estimate the fair value for the new option grants. The Company used the fair value method using a risk-free rate of 5.0%, an expected life of 5 years, a volatility of 1.0% and a dividend yield of zero.

Income Taxes

The difference between
the U.S. federal statutory rate and the effective rate relates primarily to the impact of state and local taxes and meals and entertainment.

Recent
Accounting Pronouncements

In November 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 151,
Inventory Costs - An amendment of ARB No. 43, Chapter 4 (SFAS No. 151). SFAS No. 151 amends the guidance in ARB No. 43, Chapter 4, Inventory Pricing, to clarify the accounting for abnormal
amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated that under some circumstances, items such as idle facility expense, excessive spoilage, double
freight, and rehandling costs may be so abnormal as to require treatment as current period charges. SFAS No. 151 requires that those items be recognized as current-period charges regardless of whether they meet the criterion of so
abnormal. In addition, SFAS No. 151 requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The provisions of SFAS No. 151 shall be applied
prospectively and became effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The Company adopted SFAS No. 151 effective January 1, 2006 and the adoption had no material impact on its financial
condition, results of operations or cash flows.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets
- An amendment of APB Opinion No. 29 (SFAS No. 153). SFAS No. 153 addresses the measurement of exchanges of nonmonetary assets. It eliminates the exception from fair value measurement for nonmonetary exchanges of
similar productive assets in paragraph 21(b) of APB Opinion No. 29, Accounting for Nonmonetary Transactions, and replaces it with an exception for exchanges that do not have commercial substance. SFAS No. 153 specifies that a
nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The provisions of SFAS No. 153 shall be applied prospectively, effective for nonmonetary
asset exchanges occurring in fiscal periods beginning after June 15, 2005. The Company has not entered into nonmonetary exchanges; accordingly, the Companys adoption of SFAS No. 153 effective January 1, 2006 did not have an
effect on its financial condition, results of operations or cash flows.

In February 2006, the FASB issued SFAS No. 155,
Accounting for Certain Hybrid Financial Instruments  An Amendment of SFAS Nos. 133 and 140 (SFAS No. 155). SFAS No. 155 is effective for all financial instruments acquired or issued after the beginning of an
entitys first fiscal year that begins after September 15, 2006. One of the primary objectives of SFAS No. 155 is to simplify the accounting for certain hybrid financial instruments by permitting fair value accounting for any hybrid
financial instrument that contains an embedded derivative that otherwise would require bifurcation. The Company anticipates that SFAS No. 155 will not have a material effect on its financial condition, results of operations or cash flows.



7



---

##### Table of Contents

2. Comprehensive Loss



|                                                                                        |  |                             |        |   |      |   |        |  
|--------------------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                        |  | Three Months EndedMarch 31, |       
|                                                                                        |  | 2006                        |        |   | 2005 |  
|                                                                                        |  | (dollars in thousands)      |       
|Net loss                                                                                |  | $                           | (5,317 | ) |      | $ | (5,447 | )
|Amortization of SFAS 133 transition adjustment, net of taxes of $2 and $9, respectively |  |                             | 5      |   |      |   | 19     |  
|                                                                                        |  |                             |        |   |      |   |        |  
|Comprehensive loss                                                                      |  | $                           | (5,312 | ) |      | $ | (5,428 | )
|                                                                                        |  |                             |        |   |      |   |        |  

3. Long-Term Debt and Capital Lease Obligations

Long-term debt and capital lease obligations consisted of the following:



|                                                                              |  |                        |         |                  |   |        
|----------------------------------------------------------------------------- |  | ---------------------- | ------- | ---------------- | - | -------
|                                                                              |  | March 31,2006          |         | December 31,2005
|                                                                              |  | (dollars in thousands)
|Revolving credit facility                                                     |  | $                      | 81,400  |                  | $ | 90,000 
|Senior notes                                                                  |  |                        | 225,000 |                  |   | 225,000
|Unamortized debt premium                                                      |  |                        | 1,156   |                  |   | 1,219  
|Capital lease obligations                                                     |  |                        | 2,605   |                  |   | 2,929  
|                                                                              |  |                        |         |                  |   |        
|                                                                              |  |                        | 310,161 |                  |   | 319,148
|Less: current portion                                                         |  |                        | 1,185   |                  |   | 1,203  
|                                                                              |  |                        |         |                  |   |        
|Total long-term debt and capital lease obligations, excluding current portion |  | $                      | 308,976 |                  | $ | 317,945
|                                                                              |  |                        |         |                  |   |        

Principal payments on the revolving credit facility, senior notes and capital lease obligations
for the next five years ending March 31 are as follows:



|           |  |                       |        
|---------- |  | --------------------- | -------
|           |  | (dollars inthousands)
|2007       |  | $                     | 1,185  
|2008       |  |                       | 1,091  
|2009       |  |                       | 81,621 
|2010       |  |                       | 92     
|2011       |  |                       | 225,016
|Thereafter |  |                       |       

Revolving Credit Facility

In connection with the Alpha acquisition in 2003, the Company retired its existing revolving credit facility and entered into an amended revolving credit
facility. The amended revolving credit facility is available until September 2008 and provides for aggregate borrowings of up to $175.0 million, subject to borrowing base limitations. In September 2005, the Company exercised its option to increase
the revolving credit facility by $50.0 million for total borrowings of up to $225.0 million. The amended revolving credit facility is secured by first priority pledges of all the equity interests owned by the Company in its domestic subsidiaries and
66% of all equity interests in any future foreign subsidiaries. The amended revolving credit facility is also secured by first priority interests in, and mortgages on, substantially all tangible and intangible assets of the Company and each of its
direct and indirect domestic subsidiaries. Availability under the amended revolving credit facility is based on a borrowing base calculated using advance rates applied to eligible accounts receivable and eligible inventory. The revolving credit
facility contains both affirmative and negative covenants which, among other things, may require the Company to meet certain financial tests (including a minimum interest coverage ratio and minimum levels of EBITDA, as defined in the credit
facility), and places limits upon capital expenditures, disposals of assets, mergers and acquisitions, further indebtedness, transactions with affiliates and other customary restrictions. The occurrence of certain of these events may accelerate
required repayment. As of March 31, 2006, the Company was in compliance with all covenants.

The revolver agreement provides for
interest based upon a fixed spread above the banks prime lending rate, or other rate options which are periodically fixed at a spread over the banks LIBOR lending rate. In addition, an unused credit facility fee ranging from 0.375% to
0.5% is charged quarterly on the average daily unused portion of the facility. The unused credit facility fees were approximately $0.1 million for the three months ended March 31, 2006 and 2005, respectively. The



8



---

##### Table of Contents

effective interest rate at March 31, 2006 was 7.1% and the weighted average interest rate on the amended revolving
credit facility for the three months ended March 31, 2006 was 6.7%. As of March 31, 2006, outstanding borrowings on the revolving credit facility were $81.4 million, which left $88.9 million of available borrowing capacity as determined by
borrowing base availability. The effective interest rate at December 31, 2005 was 6.6%. As of December 31, 2005, outstanding borrowings on the revolving credit facility were $90.0 million, which left $69.3 million of available borrowing
capacity as determined by borrowing base availability.

Deferred financing fees related to the revolving credit facility of $7.3 million
are being amortized on a straight-line basis over the life of the facility.

The revolving credit facility also contains a provision for up
to $25.0 million of letters of credit, subject to borrowing base availability and total amounts outstanding under the revolving credit agreement of $225.0 million. As of March 31, 2006 and December 31, 2005, the Company had approximately
$12.0 million and $10.8 million, respectively, of outstanding letters of credit primarily related to commitments for the purchase of inventory.

Senior Notes

In September 2003, the Company completed a private offering of $175.0 million 111/4% senior notes due 2010. The proceeds of the private offering were used to finance the Alpha acquisition, repay existing
indebtedness and to pay related fees and expenses. In November 2004, the Company completed a private offering of an additional $50.0 million 111/4% senior notes due 2010. The proceeds of the private placement were used to repay borrowings under the revolving credit facility. All senior notes were issued under the same indenture. The senior
notes are guaranteed on a senior unsecured basis by all existing and future material domestic subsidiaries, and pay interest semi-annually in arrears on April 15 and October 15 of each year.

The indenture governing the senior notes and the revolving credit facility, among other things, (i) restrict the ability of the Company and its
subsidiaries, including the guarantors of the senior notes, to incur additional indebtedness, issue shares of preferred stock, incur liens, pay dividends or make certain other restricted payments and enter into certain transactions with affiliates,
(ii) prohibit certain restrictions on the ability of certain of the Companys subsidiaries, including the guarantors of the senior notes, to pay dividends or make certain payments to the Company and (iii) place restrictions on the
ability of the Company and its subsidiaries, including the guarantors of the senior notes, to merge or consolidate with any other person or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets. The
indenture related to the senior notes and the revolving credit facility also contain various covenants which limit the Companys discretion in the operation of its businesses. As of March 31, 2006, the Company was in compliance with all
covenants under the indenture and the credit facility.

Interest Rate Swaps

As a condition of its revolving credit facility that was retired in September 2003, the Company was required to enter into interest rate protection
agreements (swaps). The Company does not use derivatives for speculative purposes. The Company had an outstanding interest rate swap agreement with a commercial bank that had a notional amount of $10.0 million at March 31, 2006 and
December 31, 2005. The interest rate swap agreement matures in October 2008.

The Company is exposed to credit loss in the event of
nonperformance by the counter party. The Company does not anticipate nonperformance to be likely. The Company has elected to not apply hedge accounting for this swap agreement. The fair value of this interest rate swap approximated $(0.5) million
and $(0.6) million at March 31, 2006 and December 31, 2005, respectively. This decrease in negative value during the three months ended March 31, 2006 has been recognized in earnings. In addition, approximately $5,000 and $19,000, net
of tax, of the initial transition adjustment was reclassified to earnings during the three months ended March 31, 2006 and 2005, respectively. The Company expects to reclassify less than $0.1 million, net of tax, during the next 12 months. The
swaps are classified on the consolidated balance sheets based on the expected timing of the cash flows related to the swaps. Approximately $0.5 million and $0.6 million were classified as other long-term liabilities at March 31, 2006 and
December 31, 2005, respectively.

Redeemable Securities

Certain key executives of the Company hold common shares that may be put to the Company at their then fair market value if the executive is terminated for
any reason other than for cause, or if the executive resigns with good reason as defined in the employment agreements. As of December 31, 2005, the recorded fair value of the redeemable securities was net of the related executive note
receivable outstanding of approximately $0.5 million. This note receivable was repaid during the three months ended March 31, 2006. See Note 4.



9



---

##### Table of Contents

During 2004, Bain Capital sold shares of its common stock to certain executives at their fair market
value. These shares may be put to the Company at their fair market value if the executive is terminated for any reason other than for cause, or if the executive resigns with good reason as defined in the employment agreement and are recorded as
other long-term liabilities on the consolidated balance sheets at March 31, 2006 and December 31, 2005 in accordance with SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and
Equity. An executive who held Company shares left the Company during 2005 and the Company purchased the executives shares, which resulted in increases to additional paid-in capital and treasury stock during the three months ended
March 31, 2006. See Note 4.

These shares, net of the related note receivable, have been recorded on the consolidated balance sheets
at each of the following dates:



|                  |  |                        |  |                         |     |                          |   |                      |  |   |        
|----------------- |  | ---------------------- |  | ----------------------- | --- | ------------------------ | - | -------------------- |  | - | -------
|                  |  | Numberof Shares        |  | CommonStock atPar Value |     | AdditionalPaid-inCapital |   | LiquidatedPreference
|                  |  | (dollars in thousands)
|March 31, 2006    |  |                        |  |                         |     |                          |   |                      |  |   |        
|Class A           |  |                       |  | $                       |    |                          | $ |                     |  | $ |       
|Class B           |  | 113,643                |  |                         | 1.1 |                          |   | 24                   |  |   |       
|Class L, Series 1 |  |                       |  |                         |    |                          |   |                     |  |   |       
|Class L, Series 2 |  |                       |  |                         |    |                          |   |                     |  |   |       
|Class L, Series 3 |  | 11,023                 |  |                         | 0.1 |                          |   | 198                  |  |   | 359.2  
|Class L, Series 4 |  | 10,654                 |  |                         | 0.1 |                          |   | 166                  |  |   | 261.1  
|                  |  |                        |  |                        
|December 31, 2005 |  |                        |  |                         |     |                          |   |                      |  |   |        
|Class A           |  | 515,859                |  | $                       | 5.2 |                          | $ | 95                   |  | $ |       
|Class B           |  | 205,413                |  |                         | 2.1 |                          |   | 44                   |  |   |       
|Class L, Series 1 |  | 36,363                 |  |                         | 0.4 |                          |   | 572                  |  |   | 1,149.4
|Class L, Series 2 |  | 35,156                 |  |                         | 0.4 |                          |   | 553                  |  |   | 830.0  
|Class L, Series 3 |  | 19,921                 |  |                         | 0.2 |                          |   | 363                  |  |   | 629.7  
|Class L, Series 4 |  | 19,260                 |  |                         | 0.2 |                          |   | 305                  |  |   | 454.7  

4. Related Party Transactions

In connection with the Alpha acquisition, the Company amended and restated its existing advisory services agreement with Bain Capital (the Advisory Services Agreement). The Advisory Services Agreement is a
discretionary, contingency-based agreement, subject to certain limitations set forth therein. Before any such management fees may be paid, EBITDA, as defined in the amended and restated Advisory Services Agreement, after giving effect to payment of
the management fee, must be greater than $52.0 million in order for Bain Capital to earn a fee. The Company believes that the terms of such advisory services agreement with Bain Capital are no less favorable than those that could have been obtained
pursuant to a similar agreement with an unrelated third party. The Advisory Services Agreement states that for each full fiscal year beginning in fiscal 2006, Bain Capital may be paid a fee up to an annual maximum of $3.0 million at the discretion
of the Companys board of directors. The Advisory Services Agreement also requires the Company to pay investment banking fees in the amount of one percent of certain prescribed transactions.

Under the Advisory Services Agreement, for the first two full fiscal years following the acquisition and related equity investment by Bain Capital, Bain
Capital could be paid a management fee for strategic, financial and other advisory services up to an annual maximum of $1.5 million at the discretion of the Companys board of directors. The Company paid Bain Capital a fee of $1.5 million for
fiscal 2005 in December 2005. During the three months ended March 31, 2006, the Company recorded management fee expense of $0.3 million, which is included in accrued expenses.

In March 2006, the Company entered into a separation agreement with its former chief executive officer. The agreement provided for, among other items,
payments to the former executive in an aggregate amount of approximately $1.8 million, payable in 39 monthly installments; the purchase by the Company of equity securities owned by the former executive for an aggregate purchase price of
approximately $2.0 million; and repayment to the Company by the former executive of approximately $0.5 million in payment of notes receivable issued by the Company in connection with the recapitalization which occurred in fiscal 2000. The monthly
payments to the former executive are being made in consideration for a twenty-four month extension of a non-compete period, which resulted in a forty-two month non-compete period. At March 31, 2006, the consolidated balance sheet includes
approximately $0.6 million and $1.2 million in accrued expenses and other long-term liabilities related to the future payments.



10



---

##### Table of Contents

5. Commitments and Contingencies

Self-Insured Health Plan

The Company maintains a self-insured health plan for some of its employees.
The Company has purchased stop loss insurance to supplement the health plan, which will reimburse the Company for individual claims in excess of $0.1 million annually or aggregate claims exceeding approximately $2.5 million. At March 31, 2006
and December 31, 2005, approximately $0.8 million and $0.7 million, respectively, were included in accrued liabilities for self-insured health plan costs.

Litigation

The Company is a party to various lawsuits arising out of the normal conduct of its business, none of which,
individually or in the aggregate, are expected to have a material adverse effect on the Companys results of operations or financial position.

Employment Agreements

The Company has entered into employment agreements with certain employees, which provide that the
employee will not compete in the wholesale distribution of imprintable sportswear and accessories business for a specified period after their respective termination dates. The employment agreements also define employment terms including salary,
bonus and benefits to be provided to the respective employees.

Advisory Agreement

In connection with the acquisition of Alpha, the Company entered into a new Advisory Services Agreement with Bain Capital in September 2003. See Note 4.

6. Segment Information

In accordance
with SFAS No. 131, Disclosure About Segments of an Enterprise and Related Information, the Company has three operating segments: the Broder division; and with the September 2003 acquisition of Alpha, the Alpha division; and with the
August 2004 acquisition of NES, the NES division. Operating segments are defined as components of the business for which separate information is available and is evaluated regularly by the chief operating decision makers in deciding how to allocate
resources and in assessing performance. The following table presents information used by the Companys chief operating decision makers in deciding how to allocate resources and in assessing performance.

Statement of Operations Information



|              |  |                              |        |       |   |         |  |              |        |        |   |         |  |     |        |              |   |        |  |   |        |  |   |        
|------------- |  | ---------------------------- | ------ | ----- | - | ------- |  | ------------ | ------ | ------ | - | ------- |  | --- | ------ | ------------ | - | ------ |  | - | ------ |  | - | -------
|              |  | Three Months Ended March 31,
|              |  | 2006                         |        | 2005 
|              |  | Broder                       |        | Alpha |   | NES     |  | Consolidated |        | Broder |   | Alpha   |  | NES |        | Consolidated
|              |  | (dollars in thousands)      
|Net sales     |  | $                            | 79,416 |       | $ | 105,039 |  | $            | 25,163 |        | $ | 209,618 |  | $   | 73,897 |              | $ | 99,391 |  | $ | 24,451 |  | $ | 197,739
|Cost of sales |  |                              | 65,641 |       |   | 84,808  |  |              | 21,169 |        |   | 171,618 |  |     | 61,772 |              |   | 80,512 |  |   | 19,726 |  |   | 162,010
|              |  |                              |        |       |   |         |  |              |        |        |   |         |  |     |        |              |   |        |  |   |        |  |   |        
|Gross profit  |  | $                            | 13,775 |       | $ | 20,231  |  | $            | 3,994  |        | $ | 38,000  |  | $   | 12,125 |              | $ | 18,879 |  | $ | 4,725  |  | $ | 35,729 
|              |  |                              |        |       |   |         |  |              |        |        |   |         |  |     |        |              |   |        |  |   |        |  |   |        



|                                                        |  |                        |        |       |   |         |  |              |        |  |   |        
|------------------------------------------------------- |  | ---------------------- | ------ | ----- | - | ------- |  | ------------ | ------ |  | - | -------
|Balance Sheet Information                               |  | Broder                 |        | Alpha |   | NES     |  | Consolidated
|                                                        |  | (dollars in thousands)
|As of March 31, 2006                                    |  |                        |        |       |   |         |  |              |        |  |   |        
|Accounts receivable, net                                |  | $                      | 30,985 |       | $ | 45,411  |  | $            | 13,056 |  | $ | 89,452 
|Inventory                                               |  |                        | 81,942 |       |   | 114,330 |  |              | 26,299 |  |   | 222,571
|Fixed assets, net                                       |  |                        | 9,097  |       |   | 7,571   |  |              | 689    |  |   | 17,357 
|Goodwill, intangible assets and deferred financing fees |  |                        | 24,499 |       |   | 185,944 |  |              | 7,270  |  |   | 217,713
|Accounts payable                                        |  |                        | 40,463 |       |   | 67,106  |  |              | 15,832 |  |   | 123,401



11



---

##### Table of Contents

|                                                        |  |   |        |  |   |         |  |   |        |  |   |        
|------------------------------------------------------- |  | - | ------ |  | - | ------- |  | - | ------ |  | - | -------
|As of December 31, 2005                                 |  |   |        |  |   |         |  |   |        |  |   |        
|Accounts receivable, net                                |  | $ | 29,481 |  | $ | 42,079  |  | $ | 12,067 |  | $ | 83,627 
|Inventory                                               |  |   | 74,487 |  |   | 118,296 |  |   | 23,768 |  |   | 216,551
|Fixed assets, net                                       |  |   | 8,933  |  |   | 7,870   |  |   | 768    |  |   | 17,571 
|Goodwill, intangible assets and deferred financing fees |  |   | 25,446 |  |   | 188,097 |  |   | 7,915  |  |   | 221,458
|Accounts payable                                        |  |   | 36,041 |  |   | 52,633  |  |   | 11,513 |  |   | 100,187

7. Restructuring and Asset Impairment Charges

Following the acquisitions of Alpha in September 2003 and NES in August 2004, the Company executed restructuring activities designed to reduce its cost
structure by closing distribution centers, disposing of the related fixed assets and reducing its corporate workforce. During the fourth quarter of 2003, the Companys Broder division recorded approximately $7.0 million in distribution center
closure costs related to the closure of its Wadesboro distribution center. The charge included the fair value of the future lease obligations as of the cease-use date, net of expected sub-lease rentals. The future lease obligation is expected to be
paid over the remaining lease term, which expires in March 2014. During the year ended December 31, 2004, the Companys Broder division also recorded approximately $0.8 million in lease termination and other costs for the fair value of
future lease obligations related to the closure of its Cleveland, Ohio distribution center. The future lease obligation is expected to be paid over the remaining lease term, which expires in May 2007.

The Companys NES division recorded approximately $0.8 million in aggregate restructuring charges during fiscal 2004 and fiscal 2005 related to cash
severance and related benefit payments for NES corporate staff reductions resulting from the continuing integration of NES into the Company. The remaining severance payments will be paid within the next twelve months due to NES corporate staff
termination dates.

During fiscal 2005, the Company initiated a strategy to create multi-division distribution centers, which provides the
Company with several key advantages, including reduction of operating expenses, reduction of inventory levels and improvement of inventory availability. During fiscal 2005, the Company recorded approximately $1.0 million in Atlanta distribution
center closure costs due to the opening of another distribution center in the Atlanta market. The Atlanta charge consisted of the fair value of the future lease obligations, net of expected sublease rentals, of approximately $0.7 million, and
approximately $0.3 million in non-cash fixed asset impairment charges related to the disposal of distribution center fixed assets. The future lease obligation is expected to be paid over the remaining lease term, which expires in December 2009.

During the first quarter of 2006, the Companys Broder division committed to a plan to consolidate its Houston, TX distribution
center into the Alpha divisions Stafford, TX distribution center. As a result, the Companys Broder division recorded a restructuring and asset impairment charge of $0.8 million, consisting of $0.6 million in distribution center closure
costs for the fair value of the future lease obligations and approximately $0.1 million in severance and related benefits, and $0.1 million in non-cash fixed asset impairment charges related to the disposal of distribution center fixed assets. The
future lease obligation is expected to be paid over the remaining lease term, which expires in December 2007.

Restructuring activity is
summarized as follows:



|                                   |  |                            |       |                     |   |              |  |   |                                  |   |  |                         |      |   |  |   |      
|---------------------------------- |  | -------------------------- | ----- | ------------------- | - | ------------ |  | - | -------------------------------- | - |  | ----------------------- | ---- | - |  | - | -----
|                                   |  | Balance atDecember 31,2005 |       | RestructuringCharge |   | CashPayments |  |   | Non-CashItemsExpensedImmediately |   |  | Balance atMarch 31,2006
|                                   |  | (dollars in thousands)    
|Distribution center closure costs  |  |                            |       |                     |   |              |  |   |                                  |   |  |                         |      |   |  |   |      
|Lease termination and other costs  |  | $                          | 6,344 |                     | $ | 596          |  | $ | (277                             | ) |  | $                       |     |   |  | $ | 6,663
|Severance and related benefits     |  |                            |      |                     |   | 128          |  |   | (128                             | ) |  |                         |     |   |  |   |     
|Non-cash asset write-offs          |  |                            |      |                     |   | 107          |  |   |                                 |   |  |                         | (107 | ) |  |   |     
|Corporate workforce reduction      |  |                            |       |                     |   |              |  |   |                                  |   |  |                         |      |   |  |   |      
|NES severance and related benefits |  |                            | 303   |                     |   |             |  |   | (62                              | ) |  |                         |     |   |  |   | 241  
|                                   |  |                            |       |                     |   |              |  |   |                                  |   |  |                         |      |   |  |   |      
|                                   |  | $                          | 6,647 |                     | $ | 831          |  | $ | (467                             | ) |  | $                       | (107 | ) |  | $ | 6,904
|                                   |  |                            |       |                     |   |              |  |   |                                  |   |  |                         |      |   |  |   |      

The total of $6.9 million in accrued restructuring is recorded as $1.9 million in current
liabilities and $5.0 million in long-term liabilities at March 31, 2006.

8. Condensed and Consolidating Financial Statements

The Companys subsidiaries guarantee the outstanding indebtedness of the Company relating to its senior subordinated notes that are guaranteed on an
unsecured basis. The guarantor subsidiaries are 100% owned and the guarantees are made on



12



---

##### Table of Contents

a joint and several basis and are full and unconditional. TSM Acquisition Co. is a non-active subsidiary with no assets
or operations. The remaining subsidiary, ASHI, Inc. was acquired in connection with the September 2003 acquisition of Alpha Shirt Holdings, Inc., and was merged with and into Broder Bros., Co. on March 28, 2005 and ceased to be a guarantor. The
following condensed and consolidating financial statements are presented in accordance with Regulation S-X Rule 3-10 for Broder Bros., Co. and ASHI, Inc., for the period since the acquisition and through the dissolution of ASHI, Inc.

BRODER BROS., CO. AND SUBSIDIARY

CONDENSED AND CONSOLIDATING FINANCIAL STATEMENTS



|                                           |  |                  |         |           |   |              |  |   |              |   |  |   |        
|------------------------------------------ |  | ---------------- | ------- | --------- | - | ------------ |  | - | ------------ | - |  | - | -------
|                                           |  | March 26, 2005  
|Balance Sheet                              |  | BroderBros., Co. |         | ASHI,Inc. |   | Eliminations |  |   | Consolidated
|                                           |  | (in thousands)  
|Cash                                       |  | $                | 7,675   |           | $ | 8            |  | $ |             |   |  | $ | 7,683  
|Intercompany receivable                    |  |                  | 17,253  |           |   |             |  |   | (17,253      | ) |  |   |       
|All other current assets                   |  |                  | 326,431 |           |   |             |  |   |             |   |  |   | 326,431
|                                           |  |                  |         |           |   |              |  |   |              |   |  |   |        
|Total current assets                       |  |                  | 351,359 |           |   | 8            |  |   | (17,253      | ) |  |   | 334,114
|Goodwill and intangibles, net              |  |                  | 185,835 |           |   | 31,227       |  |   |             |   |  |   | 217,062
|Investment in subsidiary                   |  |                  | 13,982  |           |   |             |  |   | (13,982      | ) |  |   |       
|All other non-current assets               |  |                  | 40,109  |           |   |             |  |   |             |   |  |   | 40,109 
|                                           |  |                  |         |           |   |              |  |   |              |   |  |   |        
|Total assets                               |  | $                | 591,285 |           | $ | 31,235       |  | $ | (31,235      | ) |  | $ | 591,285
|                                           |  |                  |         |           |   |              |  |   |              |   |  |   |        
|Intercompany payable                       |  | $                |        |           | $ | 17,253       |  | $ | (17,253      | ) |  | $ |       
|All other current liabilities              |  |                  | 167,262 |           |   |             |  |   |             |   |  |   | 167,262
|                                           |  |                  |         |           |   |              |  |   |              |   |  |   |        
|Total current liabilities                  |  |                  | 167,262 |           |   | 17,253       |  |   | (17,253      | ) |  |   | 167,262
|Non-current liabilities                    |  |                  | 353,052 |           |   |             |  |   |             |   |  |   | 353,052
|                                           |  |                  |         |           |   |              |  |   |              |   |  |   |        
|Total liabilities                          |  |                  | 520,314 |           |   | 17,253       |  |   | (17,253      | ) |  |   | 520,314
|Shareholders equity                       |  |                  | 70,971  |           |   | 13,982       |  |   | (13,982      | ) |  |   | 70,971 
|                                           |  |                  |         |           |   |              |  |   |              |   |  |   |        
|Total liabilities and shareholders equity |  | $                | 591,285 |           | $ | 31,235       |  | $ | (31,235      | ) |  | $ | 591,285
|                                           |  |                  |         |           |   |              |  |   |              |   |  |   |        



|                                  |  |                                           |         |   |           |   |        |              |  |   |              |   |  |   |         |  
|--------------------------------- |  | ----------------------------------------- | ------- | - | --------- | - | ------ | ------------ |  | - | ------------ | - |  | - | ------- | -
|                                  |  | For the Three Months Ended March 26, 2005 |        
|Statement of Operations           |  | BroderBros., Co.                          |         |   | ASHI,Inc. |   |        | Eliminations |  |   | Consolidated |  
|Net sales                         |  | $                                         | 197,739 |   |           | $ |       |              |  | $ |             |   |  | $ | 197,739 |  
|Cost of sales                     |  |                                           | 162,010 |   |           |   |       |              |  |   |             |   |  |   | 162,010 |  
|                                  |  |                                           |         |   |           |   |        |              |  |   |              |   |  |   |         |  
|Gross profit                      |  |                                           | 35,729  |   |           |   |       |              |  |   |             |   |  |   | 35,729  |  
|Operating expenses                |  |                                           | 36,841  |   |           |   |       |              |  |   |             |   |  |   | 36,841  |  
|                                  |  |                                           |         |   |           |   |        |              |  |   |              |   |  |   |         |  
|Loss from operations              |  |                                           | (1,112  | ) |           |   |       |              |  |   |             |   |  |   | (1,112  | )
|Interest (income) expense         |  |                                           | 9,321   |   |           |   | (1,037 | )            |  |   |             |   |  |   | 8,284   |  
|All other (income) expense        |  |                                           | 1,519   |   |           |   | (1,491 | )            |  |   |             |   |  |   | 28      |  
|Equity in earnings of subsidiary  |  |                                           | (2,528  | ) |           |   |       |              |  |   | 2,528        |   |  |   |        |  
|                                  |  |                                           |         |   |           |   |        |              |  |   |              |   |  |   |         |  
|Total other (income) expense      |  |                                           | 8,312   |   |           |   | (2,528 | )            |  |   | 2,528        |   |  |   | 8,312   |  
|                                  |  |                                           |         |   |           |   |        |              |  |   |              |   |  |   |         |  
|Income (loss) before income taxes |  |                                           | (9,424  | ) |           |   | 2,528  |              |  |   | (2,528       | ) |  |   | (9,424  | )
|Income tax (benefit) provision    |  |                                           | (3,977  | ) |           |   |       |              |  |   |             |   |  |   | (3,977  | )
|                                  |  |                                           |         |   |           |   |        |              |  |   |              |   |  |   |         |  
|Net income (loss)                 |  | $                                         | (5,447  | ) |           | $ | 2,528  |              |  | $ | (2,528       | ) |  | $ | (5,447  | )
|                                  |  |                                           |         |   |           |   |        |              |  |   |              |   |  |   |         |  



|                                                    |  |                                           |         |   |           |   |        |              |  |   |              |   |  |   |         |  
|--------------------------------------------------- |  | ----------------------------------------- | ------- | - | --------- | - | ------ | ------------ |  | - | ------------ | - |  | - | ------- | -
|                                                    |  | For the Three Months Ended March 26, 2005 |        
|Statement of Cash Flows                             |  | BroderBros., Co.                          |         |   | ASHI,Inc. |   |        | Eliminations |  |   | Consolidated |  
|Net income (loss)                                   |  | $                                         | (5,447  | ) |           | $ | 2,528  |              |  | $ | (2,528       | ) |  | $ | (5,447  | )
|Equity in earnings of subsidiary                    |  |                                           | (2,528  | ) |           |   |       |              |  |   | 2,528        |   |  |   |        |  
|Other operating cash flows                          |  |                                           | (7,678  | ) |           |   | (2,528 | )            |  |   |             |   |  |   | (10,206 | )
|                                                    |  |                                           |         |   |           |   |        |              |  |   |              |   |  |   |         |  
|Net cash provided by (used in) operating activities |  |                                           | (15,653 | ) |           |   |       |              |  |   |             |   |  |   | (15,653 | )
|Net cash used in investing activities               |  |                                           | (1,680  | ) |           |   |       |              |  |   |             |   |  |   | (1,680  | )
|Net cash provided by financing activities           |  |                                           | 22,695  |   |           |   |       |              |  |   |             |   |  |   | 22,695  |  
|                                                    |  |                                           |         |   |           |   |        |              |  |   |              |   |  |   |         |  
|Net increase (decrease) in cash                     |  |                                           | 5,362   |   |           |   |       |              |  |   |             |   |  |   | 5,362   |  
|Cash at beginning of year                           |  |                                           | 2,313   |   |           |   | 8      |              |  |   |             |   |  |   | 2,321   |  
|                                                    |  |                                           |         |   |           |   |        |              |  |   |              |   |  |   |         |  
|Cash at end of year                                 |  | $                                         | 7,675   |   |           | $ | 8      |              |  | $ |             |   |  | $ | 7,683   |  
|                                                    |  |                                           |         |   |           |   |        |              |  |   |              |   |  |   |         |  



13



---

##### Table of Contents

9. Subsequent Event

During the second quarter of 2006, the Company committed to a plan to reduce the number of call centers it operates from seven to three. As a result, the Company expects to record restructuring charges of
approximately $1.0 million, consisting of $0.5 million of cash severance and related benefit payments and $0.5 million in call center closure costs representing the fair value of the future lease obligations. The future lease obligations are
expected to be paid over the remaining lease terms, which expire at various dates through March 2015. The Company will record the call center closure costs during the second quarter of fiscal 2006 and the severance and related benefits will be
recorded during the second and third quarters of fiscal 2006 during the period from date of notification until the employee termination dates.



14



---

##### Table of Contents

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

We are a leading distributor of imprintable sportswear and accessories in the United States. Imprintable
sportswear and accessories is an estimated $8 billion U.S. market in wholesale revenues and includes undecorated or blank T-shirts, sweatshirts, polo shirts, fleece, outerwear, caps, bags and other imprintable accessories that are
decorated primarily for advertising and promotional purposes. We source product from more than 50 suppliers, including Hanes, Russell, Fruit of the Loom, Anvil and Gildan. Other exclusive or near-exclusive suppliers include retail
brands such as Adidas Golf, Columbia Sportswearand Champion. We consider the term near-exclusive to represent those arrangements where, although not contractually entitled to exclusivity, we believe we are the only
distributor to offer these products in an annual catalog to the imprintable sportswear industry. In addition to our distribution suppliers, we develop and source products from over 16 countries to support our private label brand initiatives, which
include the brandsDevon & Jones, HYP, Authentic Pigment, Desert Wash, Harvard Square, Chestnut Hill, Great Republic and Harriton. Our products are sold to over 70,000 customers, primarily advertising specialty
companies, screen printers, embroiderers and specialty retailers who decorate our blank product with corporate logos, brands and other promotional images. Our decorator customers then sell imprinted sportswear and accessories to a highly diversified
range of end-consumers, including Fortune 1000 companies, sporting venues, concert promoters, athletic leagues, educational institutions and travel resorts. We believe our end-consumers are increasingly recognizing imprintable sportswear and
accessories as highly differentiated, cost-effective advertising and promotional tools that help them grow their respective businesses and brand images. As a result, imprintable sportswear unit volume has grown significantly over the last ten years,
increasing at a compound annual growth rate of approximately 7%.

Acquisitions and Related Cost Savings

In September 2003, we acquired all of the outstanding capital stock of Alpha pursuant to a stock purchase agreement entered into in July 2003. Immediately
after consummation of the acquisition, Alpha and its subsidiaries were merged with and into Broder Bros., Co., except for ASHI, Inc., which became a direct, wholly owned subsidiary of the Company until it also was subsequently merged with and into
Broder Bros., Co. The total cash consideration in the acquisition was $246.5 million. The aggregate cash costs of the acquisition, together with the funds necessary to refinance certain existing indebtedness and pay the related fees and expenses,
were financed by $76.0 million of new equity contributed by Bain Capital, management and other investors; borrowings of $92.0 million under a $175.0 million revolving credit facility; and net proceeds from the issuance and sale of $175.0 million of
11 1/4% senior notes due 2010.

In August 2004, we acquired all the shares of beneficial interest of NES Clothing Company Holdings Trust (NES), a leading distributor of
imprintable sportswear in New England. The purchase price was approximately $31.7 million, subject to adjustment, which included payment of consideration to NES shareholders, retirement of all NES indebtedness and payment of transaction fees. We
funded the acquisition with $12.4 million of new equity invested by Bain Capital and $19.3 million of borrowings using available capacity under our revolving credit facility. NES and its subsidiary were merged with and into Broder Bros., Co. As a
result of such merger, NESs and its subsidiarys corporate existences were terminated.

We believe that the primary benefits
from the acquisitions of Alpha and NES include greater scale, broader product offering, extended national presence, regional market share strength and differentiated customer selling support. In addition, in connection with the Alpha and NES
acquisitions, we identified cost reduction opportunities in redundant selling, general and administrative functions and overlapping distribution points. The Alpha integration was completed as of the end of fiscal 2004. We realized total annualized
savings of $10.8 million for the Alpha integration, consisting of redundant selling, general and administrative positions of $4.5 million and rationalization of distribution facilities of $6.3 million. The NES integration was substantially completed
as of September 30, 2005. We realized total annualized savings of $1.2 million for the NES integration, consisting of redundant selling, general and administrative positions of $0.8 million and the rationalization of a distribution facility of
$0.4 million.

All cost savings related to the Alpha and NES integrations are gross amounts and do not reflect unrelated increases in
operating expenses related to private label initiatives, organic growth, volume and other activities as discussed throughout this document.



15



---

##### Table of Contents

Industry Conditions

Certain of our key suppliers experienced capacity constraints during fiscal 2005 and our trade brand business was adversely impacted by the capacity constraints. These capacity constraints eased by the end of the
third quarter of 2005. Volume levels and our revenues decreased as a result of the supply constraints and a corresponding reduction in supplier promotions, which caused us to recognize lower volume-related vendor rebates during the nine months ended
September 30, 2005. We believe that we have now aligned our business with suppliers that have added significant capacity in modern, efficient manufacturing facilities during 2005.

On January 1, 2005 quotas on textile and apparel imports from China and other countries were eliminated. Safeguard quotas were put into place in the
latter part of 2005 and for calendar year 2006 for key high volume quota categories from China due to export volume from China in excess of the agreed upon growth rates contained in the treaty. The safeguard quotas have had minimal impact on our
business. Overall, the elimination of these quotas, as well as the potential for additional quota safeguards in China, was anticipated and our trade brand suppliers and our internal private label sourcing team have been proactive in developing
efficient and competitive cost models. The commodity products we purchase from our trade brand suppliers have a relatively low labor component, which minimizes the low cost labor advantage of Chinese manufacturers. Additionally, our trade brand
suppliers have efficiently located manufacturing facilities in Central America and the Caribbean basin which create advantages in the form of shorter lead times and lower freight costs. We source certain of our lower volume, higher margin private
label products from manufacturers in China and expect to continue to take advantage of Chinese imports when it is efficient to do so. Outerwear quota in China has not had safeguard quota restrictions imposed which has resulted in increased price
compression in this category for our trade, exclusive and private label products.

Results of Operations

The following table sets forth the amounts and the percentages of net sales that items in the consolidated statement of operations constitute for the
periods indicated:



|                                                 |  |                              |       |   |      |       |    |  |   |       |   |  |       |   
|------------------------------------------------ |  | ---------------------------- | ----- | - | ---- | ----- | -- |  | - | ----- | - |  | ----- | --
|                                                 |  | Three Months Ended March 31, |      
|                                                 |  | 2006                         |       |   | 2005 |      
|                                                 |  | (dollars in millions)        |      
|Net sales                                        |  | $                            | 209.6 |   |      | 100.0 | %  |  | $ | 197.7 |   |  | 100.0 | % 
|Cost of sales                                    |  |                              | 171.6 |   |      | 81.9  |    |  |   | 162.0 |   |  | 81.9  |   
|                                                 |  |                              |       |   |      |       |    |  |   |       |   |  |       |   
|Gross profit                                     |  |                              | 38.0  |   |      | 18.1  |    |  |   | 35.7  |   |  | 18.1  |   
|Warehousing, selling and administrative expenses |  |                              | 33.0  |   |      | 15.7  |    |  |   | 30.8  |   |  | 15.6  |   
|Depreciation and amortization                    |  |                              | 4.6   |   |      | 2.2   |    |  |   | 5.1   |   |  | 2.6   |   
|Restructuring and asset impairment charges       |  |                              | 0.8   |   |      | 0.4   |    |  |   | 0.9   |   |  | 0.5   |   
|                                                 |  |                              |       |   |      |       |    |  |   |       |   |  |       |   
|Loss from operations                             |  |                              | (0.4  | ) |      | (0.2  | )  |  |   | (1.1  | ) |  | (0.6  | ) 
|Interest expense, net                            |  |                              | 9.2   |   |      | 4.4   |    |  |   | 8.3   |   |  | 4.2   |   
|Income tax benefit                               |  |                              | (4.3  | ) |      | (2.1  | )  |  |   | (4.0  | ) |  | (2.0  | ) 
|                                                 |  |                              |       |   |      |       |    |  |   |       |   |  |       |   
|Net loss                                         |  | $                            | (5.3  | ) |      | (2.5  | )% |  | $ | (5.4  | ) |  | (2.7  | )%
|                                                 |  |                              |       |   |      |       |    |  |   |       |   |  |       |   

Three months ended March 31, 2006 compared to the three months ended March 31, 2005

Net Sales. Net sales increased by approximately $11.9 million, or 6.0%, from $197.7 million for the three months ended March 31, 2005 to
$209.6 million for the three months ended March 31, 2006. This increase resulted from the net impact of improved average selling prices and product mix (estimated impact of $6.4 million) and a 2.8% increase in unit volume (estimated impact of
$5.5 million). The product mix shift was attributable to an increase of approximately 26.1% in private label brand revenues and a 2.3% increase in trade brand revenues. The growth in private label revenues resulted from the continued market
acceptance of four new private label brands launched during 2005, as well as expansion of styles within brands. The increase in trade brand revenues was due to an approximate 1.7% increase in units sold and stable average selling prices. While we
expect to see continued growth of private label brand revenues during the remainder of 2006 and beyond, such future growth is expected to be less than that of 2005 (approximately 45%) and the first quarter of 2006, due to fewer product introductions
and phase out of underperforming private label styles.

Gross Profit. Gross profit increased by $2.3 million, or 6.4%, from $35.7
million for the three months ended March 31, 2005 to $38.0 million for the three months ended March 31, 2006. Gross margin was 18.1% for both periods. The increase in gross profit was attributable to the combined effect of higher unit
volumes in trade and private label brand products and the higher mix of private label brand revenues which generally have average gross margins which are 15 to 20 points higher than trade brand products.



16



---

##### Table of Contents

Warehousing, Selling and Administrative Expenses (Including Depreciation and Amortization).
Warehousing, selling and administrative expenses, including depreciation and amortization, increased $1.7 million from $35.9 million for the three months ended March 31, 2005 to $37.6 million for the three months ended March 31, 2006. The
increase was primarily the result of: (i) increased consulting costs of $1.1 million attributable to our ongoing inventory and supply chain improvement initiative; (ii) incremental expenses for expanded space and higher real estate taxes
and utilities in certain distribution centers of approximately $1.6 million; and (iii) increased amortization of prepaid catalog costs of $0.4 million due to an anticipated accelerated mailing date for our 2007 catalogs, partially offset by
(iv) estimated savings of approximately $0.3 million from the elimination of duplicative head count positions and the closure of a facility during 2005 in connection with the NES integration; (v) less depreciation and amortization expense;
and (vi) continued efficiency improvement in variable costs of operating our distribution centers and call centers. We expect to have continued efficiency improvement in variable costs of operating our distribution centers and call centers
during the remainder of 2006. In addition, in accordance with the Advisory Services Agreement, we expect to incur $1.5 million in higher management fees during fiscal 2006 relative to fees paid in fiscal 2005.

Restructuring and Asset Impairment Charges. We recorded restructuring charges of $0.8 million and $0.9 million during the three
months ended March 31, 2006 and 2005, respectively. During the first quarter of 2006, we consolidated our Broder Houston facility into the existing Alpha Houston facility, which now operates as a dual-branded Alpha-Broder facility, and we
recorded a $0.8 million restructuring charge, consisting of $0.6 million in lease termination and other costs, approximately $0.1 million in severance and related benefits and $0.1 million in non-cash fixed asset write-offs. During the three months
ended March 31, 2005, we recorded a $0.9 million restructuring charge, consisting of $0.4 million in severance and benefits related to integration of NES and $0.5 million in connection with the closure of one of our duplicative Charlotte, NC
distribution facilities. We intend to consolidate two additional regions during 2006, which could result in corresponding restructuring charges. As disclosed in Note 9 to our consolidated financial statements, we initiated a plan to consolidate the
number of our call centers from seven to three and expect to record approximately $1.0 million in restructuring charges in connection with this initiative.

Loss from Operations. As a result of the factors described above, loss from operations decreased by approximately $0.7 million, from a loss of $(1.1) million for the three months ended March 31, 2005 to a
loss of $(0.4) million for the three months ended March 31, 2006.

Interest Expense. Interest expense, net increased by $0.9
million from $8.3 million for the three months ended March 31, 2005 to $9.2 million for the three months ended March 31, 2006. The net increase was due to higher average outstanding balances on variable rate debt and an increase of
approximately 140 basis points in the average interest rate on our revolving debt (combined impact of approximately $0.5 million) and a $0.4 million net negative effect of changes in the fair value of interest rate swaps ($0.2 million and $0.6
million net positive effect of a favorable change for the three months ended March 31, 2006 and 2005, respectively). We expect debt levels to improve moderately throughout fiscal 2006 relative to fiscal 2005, which will have a favorable impact
on resulting interest expense. The favorable impact could be offset by higher interest rates on variable rate debt.

Income Taxes.
The income tax benefit was approximately $4.3 million and $4.0 million for the three months ended March 31, 2006 and 2005, respectively. The difference between the U.S. federal statutory rate and the effective benefit rate relates primarily to
the state and local taxes and meals and entertainment.

Net Loss. As a result of the factors described above, net loss decreased by
$0.1 million, from a net loss of $(5.4) million for the three months ended March 31, 2005 to a net loss of $(5.3) million for the three months ended March 31, 2006.

Liquidity and Capital Resources

Cash Flows

Three months ended March 31, 2006 compared to the three months ended March 31, 2005

Net cash provided by operating activities was $5.3 million for the three months ended March 31, 2006 compared to cash used in operating activities of
$15.7 million for the three months ended March 31, 2005. The increase in cash flows from operating activities was due principally to fewer inventory purchases during the three months ended March 31, 2006 relative to the three months ended
March 31, 2005, offset by smaller increases in accounts payable balances for the current quarter compared to the same quarter of the prior year.

Net cash used in investing activities was $1.6 million and $1.7 million for the three months ended March 31, 2006 and 2005, respectively, and represented capital expenditures.



17



---

##### Table of Contents

Net cash used in financing activities was approximately $4.0 million for the three months ended
March 31, 2006 compared to net cash provided by financing activities of $22.7 million for the three months ended March 31, 2005. The change in financing cash flows is primarily attributable to the incrementally higher net repayments on our
revolving credit facility during the first quarter of 2006 compared to net borrowings in the first quarter of 2005. Borrowings against the revolving credit facility support our inventory purchases, which were lower in the first quarter of 2006
compared to the first quarter of 2005. Offsetting this was the increase in our book overdraft position in the first quarter of 2006 compared to a decrease in the same quarter of the prior year.

Liquidity Position

We entered into a revolving
credit agreement on September 22, 2003, which provided for aggregate borrowings of up to $175.0 million, including provision for up to $25.0 million of letters of credit. In September 2005, we exercised our option to increase the revolving
credit facility by $50.0 million for aggregate borrowings up to $225.0 million. As of March 31, 2006, outstanding borrowings on the revolving credit facility were $81.4 million, and outstanding letters of credit were $12.0 million, which left
$88.9 million of available borrowing capacity as determined by borrowing base availability. We have never utilized the incremental $50.0 million of revolver capacity and presently have no plans to utilize this capacity.

The revolving credit facility is secured by first priority pledges of all the equity interests owned by us in our domestic subsidiaries and 66% of all
equity interests in any future foreign subsidiaries. The revolving credit facility is also secured by first priority interests in, and mortgages on, substantially all tangible and intangible assets and each of our direct and indirect domestic
subsidiaries and 66% of the equity interests of any future foreign subsidiaries. Availability under the revolving credit facility is based on a borrowing base calculated using advance rates applied to eligible accounts receivable and eligible
inventory. The revolving credit facility is available until September 2008.

In September 2003, we completed a private offering of $175.0
million 111/4% senior notes due 2010. The proceeds of the private offering were used to finance the Alpha
acquisition, repay existing indebtedness and to pay related fees and expenses. In November 2004, we completed a private offering of an additional $50.0 million 111/4% senior notes due 2010. The proceeds of the private placement were used to repay borrowings under the revolving credit facility. All senior notes were
issued under the same indenture. The senior notes are guaranteed on a senior unsecured basis by all existing and future material domestic subsidiaries, and pay interest semi-annually in arrears on April 15 and October 15 of each year.

The indenture governing the senior notes and the revolving credit facility, among other things, (i) restrict the ability of us and
our subsidiaries, including the guarantors of the senior notes, to incur additional indebtedness, issue shares of preferred stock, incur liens, pay dividends or make certain other restricted payments and enter into certain transactions with
affiliates, (ii) prohibit certain restrictions on the ability of certain of our subsidiaries, including the guarantors of the senior notes, to pay dividends or make certain payments to us and (iii) place restrictions on the ability of us
and our subsidiaries, including the guarantors of the senior notes, to merge or consolidate with any other person or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of our assets. The indenture related to the
senior notes and the revolving credit facility also contain various covenants which limit our discretion in the operation of our businesses. As of March 31, 2006, we were in compliance with all covenants under the indenture and the credit
facility.

We rely primarily upon cash flow from operations and borrowings under our revolving credit facility to finance operations,
capital expenditures and fluctuations in debt service requirements. Availability under the revolving credit facility fluctuates due to seasonal flows of the business, which impacts our borrowing base and our decisions around investment in inventory
and overall growth of the business. Historically, the low point of our availability arises during the first and second quarters of each fiscal year as revenues reach seasonal lows during December, January and February, compounded by the simultaneous
consumption of availability to bolster inventory levels for the ensuing season.

The increase in outstanding borrowings under the revolving
credit facility during fiscal 2005 was primarily attributable to increased inventory levels associated with the 2005 introduction of four new private label brands and additional style introductions within existing brands. While we expect to
experience continued growth of private label brand revenues in 2006 and beyond, we do not expect to experience continued increases in inventory levels during fiscal 2006 due to fewer product introductions and phase out of underperforming private
label styles. Furthermore, we expect our ongoing inventory and supply chain improvement initiatives to lead to lower inventory levels as we progress through fiscal 2006 due to fewer product introductions and phase out of underperforming private
label styles. We believe that our ability to manage cash flow and working capital levels, particularly inventory and accounts payable, will allow us to meet our current and future obligations during the seasonal low period, pay scheduled principal
and interest payments, and provide funds for working capital, capital expenditures and other needs of the business for at least the next twelve months. However, no assurance can be given that this will be the case, and we may require additional debt
or equity financing to meet our working capital requirements.



18



---

##### Table of Contents

As a part of our business strategy, we will continue to look for acquisitions of distributors with high
local market share in regions that are not well served by our existing facilities. We have historically engaged in discussions with several potential acquisition candidates. Most of these discussions were preliminary in nature, with limited due
diligence conducted. We cannot guarantee that any acquisitions will be consummated. If we do consummate any acquisition, it could be material to our business and require us to incur additional debt under our revolving credit facility or otherwise.
There can be no assurance that additional financing will be available when required or, if available, that it will be on terms satisfactory to us.

Off
Balance Sheet Arrangements

Our revolving credit facility contains provision for up to $25.0 million of letters of credit, subject to
borrowing base availability and total amounts outstanding under the revolving credit agreement of $225.0 million. As of March 31, 2006, we had approximately $12.0 million of outstanding letters of credit related to commitments for the purchase
of inventory.

We purchase product in the normal course through the use of short term purchase orders representing quantities for normal
business needs at current market prices. In addition, we are party to two supply agreements whereby we have committed to purchase a minimum of: (i) $4.0 million of product in 2006 and $2.5 million per year in 2007 and 2008; and (ii) a
total of $15.0 million at a minimum of $5.0 million of product per year in 2006 and 2007. These supply agreements are more fully described in the following section Contractual Cash Obligations.

Contractual Cash Obligations

The following table
presents the aggregate amount of future cash outflows under our contractual cash obligations and commercial commitments as of March 31, 2006:



|                                   |  |                        |       |                 |   |             |  |             |       |              |   |       |  |   |     
|---------------------------------- |  | ---------------------- | ----- | --------------- | - | ----------- |  | ----------- | ----- | ------------ | - | ----- |  | - | ----
|                                   |  | Payments Due by Period
|                                   |  | Total                  |       | Less than1 year |   | 1 to 3years |  | 4 to 5years |       | After 5years
|                                   |  | (dollars in millions) 
|Revolving credit facility          |  | $                      | 81.4  |                 | $ |            |  | $           | 81.4  |              | $ |      |  | $ |    
|Senior notes(1)                    |  |                        | 225.0 |                 |   |            |  |             |      |              |   | 225.0 |  |   |    
|Operating lease obligations        |  |                        | 76.1  |                 |   | 12.9        |  |             | 22.3  |              |   | 16.9  |  |   | 24.0
|Capital lease obligations          |  |                        | 2.6   |                 |   | 1.2         |  |             | 1.3   |              |   | 0.1   |  |   |    
|Supply agreements(2)               |  |                        | 16.2  |                 |   | 8.1         |  |             | 8.1   |              |   |      |  |   |    
|Expected interest payments(3)      |  |                        | 117.1 |                 |   | 26.1        |  |             | 51.9  |              |   | 39.1  |  |   |    
|                                   |  |                        |       |                 |   |             |  |             |       |              |   |       |  |   |     
|Total contractual cash obligations |  | $                      | 518.4 |                 | $ | 48.3        |  | $           | 165.0 |              | $ | 281.1 |  | $ | 24.0
|                                   |  |                        |       |                 |   |             |  |             |       |              |   |       |  |   |     

---

|(1) | Amounts shown do not include $1.2 million of unamortized premium that will be amortized over the term of the senior notes.
|--- | --------------------------------------------------------------------------------------------------------------------------

|(2) | We are party to two separate supply agreements. In one supply agreement we are committed to purchase a minimum of $4.0 million of product per year in 2006 and
another $2.5 million per year in 2007 and 2008. Any shortfall in committed purchases for a given year may be carried forward or backward one year, subject to certain limits. If after carry forward or backward, actual purchases still fall short of
committed levels, a penalty of 7.5% of the shortfall will be incurred. In the other supply agreement we have committed to purchase a total of $15.0 million at a minimum of $5.0 million of product per year through 2007. We do not believe these
purchase commitments exceed our future consumption requirements.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Represents expected interest payments for the life of the senior notes.
|--- | -----------------------------------------------------------------------

Litigation

We are party to various lawsuits arising out of the normal conduct of our business, none
of which, individually or in the aggregate, are expected to have a material adverse effect on our results of operations or financial position.

Inflation

Prices of imprintable sportswear and accessories have experienced deflation as suppliers have moved manufacturing
to lower cost offshore locations. Price deflation has not historically had a material effect on operating results during the periods presented, since falling input costs for individual products have generally been passed on to customers on a
constant gross profit per unit basis. However, we cannot assure that this trend will continue in the future.



19



---

##### Table of Contents

Seasonality

Historically, the first quarter of our fiscal year generates the lowest levels of net sales, gross profit and operating profit. During 2005, first and second quarter net sales were approximately 20.2% and 26.8%, respectively, of the total
for the year and first and second quarter gross profit was approximately 19.8% and 27.3%, respectively, of the total for the year. Due to the level of fixed operating expenses, operating profit is normally significantly lower in the first quarter of
our fiscal year. During fiscal year 2005, 100% of our operating profit was earned in the second, third and fourth quarters.

We have
historically realized, and expect to continue to realize, slightly higher gross profit in the second half of the fiscal year. On a combined basis for Broder, Alpha and NES for 2005, approximately 52% of the Companys net sales and gross profit
occurred in the second half of the year. This seasonality is primarily a result of the sale of higher priced products during the second half of the year, such as fleece and jackets.

Critical Accounting Policies

Our significant accounting policies are described in Note 1 to our
consolidated financial statements included elsewhere in this report and in Note 1 to our consolidated financial statements included in our Form 10-K filed with the Securities and Exchange Commission (SEC) on March 31, 2006. While
all significant accounting policies are important to our consolidated financial statements, some of these policies may be viewed as being critical. Such policies are those that are both most important to the portrayal of our financial condition and
require our most difficult, subjective and complex estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. These estimates are based upon our
historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Our actual results may differ from these estimates under different assumptions or conditions. We believe our most critical accounting
policies are as follows:

Revenue Recognition. Revenue is recognized when title and risk of loss is transferred to the
customer, which, for the majority of our customers who have FOB shipping point terms, is upon shipment of the product to the customer. Revenue includes selling price of the product and all shipping and handling costs paid by the customer. Under
certain circumstances, customers may submit a claim for damaged or shorted shipments. Based on historical experience, we establish a reserve for potential returns at the time of sale. Revenue is further reduced at the time of sale for estimated
customer-related incentives. These incentives primarily consist of volume and growth rebates.

Accounts Receivable. We
maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments, which is included in bad debt expense. We determine the adequacy of this allowance by regularly reviewing our
accounts receivable aging and evaluating individual customer receivables, considering customers financial condition, credit history and current economic conditions. If the financial condition of our customers were to deteriorate, resulting in
an impairment of their ability to make payments, additional allowances may be required.

Inventory. We maintain an allowance
for potential losses on the disposal of our discontinued and slow moving inventory. Estimates for the allowance are based on past and estimated future sales of the product, historical realization of similar discontinued product, and potential return
of slow moving and discontinued product back to the mill. Cost of sales includes (i) the cost of product, (ii) inbound and outbound freight costs, (iii) the costs of purchasing, receiving, inspecting and handling, and
(iv) adjustments for various incentive programs offered to us by our vendors.

Derivative Financial Instruments. We do
not use derivatives for speculative purposes. However, we have entered into interest rate protection agreements whereby we have contracted to pay a fixed interest rate in exchange for receipt of a variable rate. We have elected not to apply hedge
accounting for the currently outstanding interest rate protection agreements. Accordingly, we record current interest rate swaps at fair value and record gains and losses on these contracts through our statement of operations. We will evaluate any
future interest rate swaps and for those which qualify and for which we choose to designate as hedges of future cash flows, the effective portion of changes in fair value will be recorded temporarily in equity, then recognized in earnings along with
the related effects of the hedged items.

Goodwill and Intangible Assets. We perform a goodwill impairment evaluation as of
each fiscal year end using discounted expected future cash flows. We perform impairment evaluations for goodwill and indefinite-lived intangible assets at least annually in the fourth quarter, or upon a triggering event, using discounted expected
future cash flows. In addition, we have recorded other indefinite-lived intangible assets (the tradenames Alpha and Alpha Shirt Company) as well as certain finite-lived intangible assets (primarily the tradenames NES
Clothing and Harvard Square) and customer relationship intangibles. These finite-lived intangible assets are being amortized on a straight-line basis over their average useful lives ranging from 2 to 8 years.



20



---

##### Table of Contents

Recent Accounting Pronouncements

In November 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 151, Inventory Costs  An amendment of ARB
No. 43, Chapter 4 (SFAS No. 151). SFAS No. 151 amends the guidance in ARB No. 43, Chapter 4, Inventory Pricing, to clarify the accounting for abnormal amounts of idle facility expense, freight,
handling costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated that under some circumstances, items such as idle facility expense, excessive spoilage, double freight, and rehandling costs may be so abnormal
as to require treatment as current period charges. SFAS No. 151 requires that those items be recognized as current-period charges regardless of whether they meet the criterion of so abnormal. In addition, SFAS No. 151
requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The provisions of SFAS No. 151 shall be applied prospectively and became effective for inventory
costs incurred during fiscal years beginning after June 15, 2005. We adopted SFAS No. 151 effective January 1, 2006 and the adoption had no material impact on our financial condition, results of operations or cash flows.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets  An amendment of APB Opinion No. 29
(SFAS No. 153). SFAS No. 153 addresses the measurement of exchanges of nonmonetary assets. It eliminates the exception from fair value measurement for nonmonetary exchanges of similar productive assets in paragraph 21(b) of APB
Opinion No. 29, Accounting for Nonmonetary Transactions, and replaces it with an exception for exchanges that do not have commercial substance. SFAS No. 153 specifies that a nonmonetary exchange has commercial substance if the
future cash flows of the entity are expected to change significantly as a result of the exchange. The provisions of SFAS No. 153 shall be applied prospectively, effective for nonmonetary asset exchanges occurring in fiscal periods beginning
after June 15, 2005. We have not entered into nonmonetary exchanges; accordingly, our adoption of SFAS No. 153 effective January 1, 2006 did not have an effect on our financial condition, results of operations or cash flows.

In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments  An Amendment of SFAS
Nos. 133 and 140 (SFAS No. 155). SFAS No. 155 is effective for all financial instruments acquired or issued after the beginning of an entitys first fiscal year that begins after September 15, 2006. One of the
primary objectives of SFAS No. 155 is to simplify the accounting for certain hybrid financial instruments by permitting fair value accounting for any hybrid financial instrument that contains an embedded derivative that otherwise would require
bifurcation. We anticipate that SFAS No. 155 will not have a material effect on our financial condition, results of operations or cash flows.

Sarbanes-Oxley Section 404 Compliance

We incur certain costs associated with being an SEC
registrant because we registered debt securities in April 2004. We are currently a non-accelerated filer because we do not have common equity securities registered with the SEC. For the year ending December 31, 2007, pursuant to
Section 404 of the Sarbanes-Oxley Act, management will be required to deliver a report that assesses the effectiveness of our internal controls over financial reporting and our auditors will be required to deliver an attestation report on
managements assessment of, and operating effectiveness of, internal controls over financial reporting. We have a substantial effort ahead of us to implement appropriate processes, document the system of internal control over key processes,
assess their design, remediate any deficiencies identified and test their functionality. We are currently evaluating the timing of documenting and/or implementing the additional processes and procedures necessary for Sarbanes-Oxley Section 404
compliance.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Information contained in this Quarterly Report on Form 10-Q, other than historical information, may be considered forward-looking within the meaning of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of forward-looking words such as believes, expects, may, will, should,
seeks, approximately, intends, plans, estimates or anticipates or the negative of these terms or other comparable words, or by discussions of strategy, plans or intentions.
Examples of forward-looking statements are statements that concern future revenues, future costs, future capital expenditures, business strategy, competitive strengths, competitive weaknesses, goals, plans, references to future success or
difficulties relating to acquisitions or similar strategic transactions and other similar information.

As used in this Form 10-Q, unless
the context indicates otherwise: (i) the Company refers collectively to Broder Bros., Co. and its consolidated subsidiary; (ii) Alpha refers to the Companys Alpha Shirt Company division for periods after its
acquisition by the Company; (iii) Broder division refers to the Companys Broder division; and (iv) NES refers to the Companys NES Clothing Company division for periods after its acquisition by the
Company. See Note 6 to our consolidated financial statements for segment information.



21



---

##### Table of Contents

The forward-looking statements in this document are based on our expectations and are necessarily
dependent upon assumptions, estimates and data that we believe are reasonable and accurate but may be incorrect, incomplete or imprecise.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future
financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed in this document. Risk factors that could cause our actual results,
performance and achievements, or industry results to differ materially from estimates or projections contained in forward-looking statements include, but are not limited to, the following:



| |  |  | the competitiveness of our industry, including competition based on price, product quality, breadth of product selection, quality of service and delivery times;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | general economic conditions;
| | - |  | ----------------------------



| |  |  | disruptions in our distribution centers;
| | - |  | ----------------------------------------



| |  |  | ability to execute on our acquisition strategy and the related integration of acquired companies, including the realization of anticipated operating synergies and cost savings;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | dependence of a significant portion of our products from a limited group of suppliers;
| | - |  | --------------------------------------------------------------------------------------



| |  |  | ability to predict customer demand for our private label products to succeed and the ability to manage the additional complexity in our operations, including increases to our
working capital investment and increased level of inventory risk;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | significant reliance on one shipper to distribute our products to our customers; and
| | - |  | ------------------------------------------------------------------------------------



| |  |  | our substantial level of indebtedness.
| | - |  | --------------------------------------

These and other
applicable risks are described under the caption Item 1A. Risk Factors in our Form 10-K for the fiscal year ended December 31, 2005 filed with the SEC. We assume no obligation to publicly update or revise any forward-looking
statement made in this report, whether as a result of new information, future events, changes in assumptions or otherwise, after the date of this report. All written or oral forward-looking statements attributable to us are expressly qualified in
their entirety by these cautionary statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As of March 31, 2006, we had $81.4
million of debt outstanding under our revolving credit facility. Our revolving credit facility is subject to variable interest rates. Accordingly, our earnings and cash flow are affected by changes in interest rates. Assuming the March 31, 2006
level of borrowings, and further considering the interest rate protection agreements currently in place (see following paragraph), we estimate that a one percentage point increase in interest on our variable rate debt agreements would have increased
interest expense for the three months ended March 31, 2006 by approximately $0.2 million.

We have entered into interest rate
protection agreements whereby we have contracted to pay a fixed interest rate in exchange for receipt of a variable rate. The $10.0 million notional principal amount under an interest rate protection agreement terminates in October 2008. We have
elected not to apply hedge accounting for the currently outstanding interest rate protection agreement. Accordingly, we record our interest rate swaps at fair value on the balance sheet and record gains and losses on this contract as well as the
periodic settlements of this contract through our statement of operations. We recorded other income of approximately $0.2 million and $0.6 million during the three months ended March 31, 2006 and 2005, respectively.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as defined in the
Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, they have concluded that, as of the end of the period covered by this report, our
disclosure controls and procedures are effective.



22



---

##### Table of Contents

Changes in Internal Control Over Financial Reporting

There were no changes during the first quarter of fiscal 2006 that have materially affected, or are reasonably likely to materially affect, our internal
controls over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are involved from time to time in routine legal matters and other claims
incidental to our business. When it appears probable in managements judgment that we will incur monetary damages or other costs in connection with such claims and proceedings, and such costs can be reasonably estimated, liabilities are
recorded in the financial statements and charges are recorded against earnings. We believe the resolution of such routine matters and other incidental claims, taking into account reserves and insurance, will not have a material adverse effect on our
financial condition or results of operations.

Item 1A. Risk Factors

Our business, financial condition, operating results and cash flows can be impacted
by a number of factors, any one of which could cause our actual results to vary materially from recent months or from those anticipated. See the discussion in Item 1A. Risk Factors in our 2005 Annual Report. There have been no material changes
in our risk factors from those disclosed in our 2005 Annual Report.

Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

None.

Item 6. Exhibits



|           |  |                                                                                                                                                                                                                                                                       
|---------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNo. |  | Description                                                                                                                                                                                                                                                           
|10.1       |  | Severance and First Amendment to Amended and Restated Employment Agreement, dated as of March 10, 2006, by and between Vincent Tyra and Broder Bros., Co. Incorporated herein by reference to
Exhibit 10.1 of our Current Report on Form 8-K, filed on March 16, 2006.
|           | 
|31.1       |  | Certification Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                    
|           | 
|31.2       |  | Certification Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                    
|           | 
|32.1       |  | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 9.06 of the Sarbanes-Oxley Act of 2002 (furnished pursuant to Item 601(b)(32) of Regulation
S-K).                                                                                    
|           | 
|32.2       |  | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 9.06 of the Sarbanes-Oxley Act of 2002 (furnished pursuant to Item 601(b)(32) of Regulation
S-K).                                                                                    



23



---

##### Table of Contents

SIGNATURES

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.



|             |  |                   |  |                                                                                        
|------------ |  | ----------------- |  | ---------------------------------------------------------------------------------------
|May 15, 2006 |  | BRODER BROS., CO.
|             |  |                  
|             |  | By:               |  | /S/ THOMAS MYERS                                                                       
|             |  |                   |  | Thomas Myers Interim Chief Executive Officer and Director (Principal Executive Officer)



|             |  |     |  |                                                                                                                
|------------ |  | --- |  | ---------------------------------------------------------------------------------------------------------------
|May 15, 2006 |  |     |  |                                                                                                                
|             |  |    
|             |  | By: |  | /S/ DAVID J. HOLLISTER                                                                                         
|             |  |     |  | David J. Hollister Chief Financial Officer, Secretary and Director (Principal Financial and Accounting
Officer)



24