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SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC 20549

FORM 10-K

Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the Fiscal Year Ended February 1, 2003

Commission File Number 333-26999

ANVIL HOLDINGS, INC.(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of
incorporation or organization)         |  | 13-3801705(I.R.S. Employer
Identification No.)
|------------------------------------------------------------------------------ |  | ----------------------------------------------
|228 East 45th Street
New York, New York(address of principal
executive office) |  | 10017(Zip Code)                               
|Registrant's telephone number
(including area code)                            |  | (212) 476-0300                                

Securities Registered Pursuant to Section 12(b) or 12(g) of the Act:None

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.



Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the
registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K ý

Indicate
by check mark whether the registrant is an accelerated
filer o Yes        ý No

At
April 24, 2003 there were 390,000 of the registrant's Class B Common Stock, $0.01 per share par value (the "Class B Common") held by non-affiliates.
At such date, there was no established trading market for these shares.

At
April 24, 2003, there were 290,000 shares of the registrant's Class A Common Stock, $0.01 per share par value (the "Class A Common") and 3,605,000 shares of
Class B Common outstanding.

Documents Incorporated by Reference:



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PART I

Item 1. Business

Corporate Structure

As used herein, the "Company" refers to Anvil Holdings, Inc. ("Holdings"), including, in some instances, its wholly-owned subsidiary, Anvil
Knitwear, Inc., a Delaware corporation ("Anvil"), and its other subsidiaries, as appropriate to the context.

The
Company's current capital structure is the result of a 1997 recapitalization (the "Recapitalization") pursuant to which: (i) the Company redeemed or repurchased a substantial
portion of its outstanding shares of capital stock; (ii) Bruckmann, Rosser, Sherrill & Co., L.P. and certain of its employees and affiliates (collectively, "BRS") purchased new common
stock; (iii) 399 Venture Partners, Inc. and certain of its employees and affiliates (collectively, "399 Venture") and certain members of Management of the Company (the "Management
Investors") reinvested a portion of their shares of capital stock of the Company in exchange for newly issued common stock; and (iv) 399 Venture exchanged a portion of its capital stock for
Senior Exchangeable Preferred Stock and new common stock.

Concurrently
with the Recapitalization, the Company sold 30,000 Units consisting of (i) $30,000,000, 13% Senior Exchangeable Preferred Stock, due 2009 and (ii) 390,000
shares of Class B common stock (the "Units Offering"). Additionally, Anvil sold $130,000,000 of 107/8% Senior Notes due 2007 ("Senior Notes") in connection with the
Recapitalization.

The
Company's fiscal years end on the Saturday closest to January 31. Accordingly, when referring to the Company's fiscal years in this report, "fiscal 2002" refers to the year
ended February 1, 2003, "fiscal 2001" refers to the year ended February 2, 2002, etc.

General

The Company is a leading designer, manufacturer and marketer of high quality activewear for sale principally into the "imprinted" or "decorated" segment of the
U.S. apparel industry. The Company offers an extensive line of activewear products designed for men, women and children, including short and long sleeve T-shirts, classic button and collar
knit sport shirts (known as "plackets"), collarless short and long sleeve knit shirts (known as "henleys"), fleeced sweatshirts and athletic shorts, supplemented with caps, towels, robes and bags. The
Company markets and sells its products primarily to distributors and screen printers under theAnvil, Cotton
DeluxeandTowelsPlusbrand names, theAnvillogo, as well as private labels.
Prior to their ultimate resale to the consumer, the Company's products typically are printed or embroidered with logos, designs or characters. The Company believes that its operating performance is
favorably affected by: (i) its broad range of high quality products; (ii) its strong relationships with customers and suppliers; (iii) its flexible, vertically integrated
manufacturing operations; (iv) its commitment to controlling costs and improving manufacturing processes; and (v) the continuing growth of the activewear market.

The
Company offers high quality activewear in a variety of styles, colors, fabric weights and blends, enabling it to serve a number of market niches effectively as well as to serve the
traditional T-shirt market segment. The Company works closely with its distributor and screen printer customers to meet their needs for style and color innovation. The Company continues to
compete successfully by: (i) targeting niche products on which its competitors have not traditionally focused; (ii) responding quickly to market developments; (iii) regularly
introducing new products; and (iv) providing a broad range of products, thereby permitting distributors to increase efficiency by reducing the number of vendors and deliveries. In addition, the
Company continues to make significant investments to maintain and modernize its manufacturing and distribution facilities and to seek methods to improve quality, increase efficiency, reduce costs,
manage inventories and shorten production cycles.

1

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Business Strategy

The Company's objective is to increase net sales and improve results of operations by implementing the following key elements of its business strategy:

Offer a Broad Range of High Quality Products.The Company will continue to offer high quality activewear in a wide variety of
styles, colors, fabric weights and blends, enabling it to serve a number of
market niches effectively. The Company expects to continue to expand its product offerings under itsAnvil,Cotton
DeluxeandTowelsPlusbrands and theAnvillogo, capitalizing on the growth in
the activewear market. In addition, the Company seeks to strengthen its position in the activewear market by introducing products to supplement its traditional activewear business.

Enhance and Expand Customer Relationships.The Company continually seeks to strengthen and expand its customer relationships
by promoting the Company's: (i) broad product offerings; (ii) ability to design customized products; (iii) quick, reliable delivery; and (iv) ability to accommodate
modifications to customer orders. The Company's direct salesforce focuses on developing strong relationships with distributors, and enhancing "pull through" by the distributors' customers. In fiscal
2002, sales to domestic distributors accounted for approximately 76% of the Company's net sales. In the Company's experience, distributors typically place larger orders, purchase a broader product
mix, maintain higher inventory levels and develop more predictable order and re-order patterns than certain of its other customers. The Company estimates that distributors resell products
to more than 30,000 smaller screen printers, embroiderers and other customers. The Company's broad product offerings have enabled it to more effectively service distributors and satisfy the disparate
preferences of consumers.

Maintain Flexible, Vertically Integrated Manufacturing Operations.The Company is a vertically integrated manufacturer (i.e.,
performing substantially all of the manufacturing processes required to produce most of its products) which knits (exclusively from purchased yarn), bleaches, dyes, finishes, cuts and sews its
activewear products at its manufacturing facilities. The Company believes that being vertically integrated allows it to maintain a competitive cost structure, minimize delivery time and provide
consistent, high quality products. The Company's manufacturing efficiency enables it to provide its customers with low cost, quality products.

Continue to Control Costs and Improve Manufacturing.The Company continues to make capital expenditures to maintain and
modernize its manufacturing and distribution facilities and explore methods to improve quality, increase efficiency, reduce costs, manage inventories and shorten production cycles. The Company
believes it can continue to improve its operating results by: (i) maximizing the use of offshore manufacturing operations; and (ii) continually improving its textile manufacturing
processes. As further discussed below, the Company is currently implementing the consolidation of its textile operations into a single expanded facility.

Capitalize on the Growth of the Activewear Market.The Company believes that sales of activewear products have been, and will
continue to be driven by: (i) the increased consumer preference for comfortable apparel selections; (ii) more flexible dress codes, including the greater acceptance of casual wear in the
workplace; and (iii) the heightened emphasis on physical fitness.

Products

The Company's activewear products, which are designed for men, women and children, include short and long sleeve T-shirts, tank tops, classic button
and collar knit sport shirts (known as "plackets") and
collarless short and long sleeve knit shirts (known as "henleys") as well as a variety of other niche activewear products, such as fleeced sweatshirts and athletic shorts, supplemented with caps,
towels, robes and bags. This broad array of casual knitwear and athletic wear is marketed and sold by the Company under itsAnvil,Cotton DeluxeandTowelsPlusbrand names and theAnvillogo, as

2

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well as under private labels. The Company manufactures its products in a variety of fabrics and fabric blends. Prior to their ultimate resale to the consumer, the Company's products typically are
imprinted or embroidered with logos, designs or characters.

Basic T-shirts and Specialty Products.Basic T-shirts and specialty products comprise the Company's
principal source of revenues. The basic T-shirt was the first product introduced by the Company in the early 1970s. In addition to basic T-shirts, the Company also manufactures
a variety of specialty T-shirts and other specialty products such as fleeced sweatshirts and knit shorts. This category accounted for approximately 76% of the Company's net sales in fiscal
2002.

Plackets and Henleys.The Company introduced its first line of plackets in the early 1980s and its first line of henleys in
the early 1990s. Plackets include classic button and collar knit sport shirts which are produced in both short and long sleeve versions. Henleys are collarless knit shirts, which are produced in both
short and long sleeve versions. This category accounted for approximately 20% of the Company's net sales in fiscal 2002.

Other Products.The Company's other products include, caps, towels, robes and bags. In addition to products which it
manufactures in-house, this category includes those products which the Company sources as finished products. This category accounted for approximately 4% of the Company's net sales in
fiscal 2002.

Sales and Marketing

The Company markets its products primarily through a direct salesforce complemented by a sales support staff and the Company's marketing department.

The
Company seeks to differentiate itself from other activewear manufacturers by marketing niche products to its customers and encouraging its customers to purchase a broader product
mix. Recent market trends have necessitated increased emphasis on low-priced basic T-shirts, and this category has grown as a percentage of the Company's sales. However,
Management believes that offering higher priced products with more style elements to its customers, has helped the Company to compete more effectively and to service the large and
middle-tier wholesale T-shirt distributor market.

Customers

The Company markets its products primarily to distributors, a wide range of screen printers and private label customers. The Company also sells a small percentage
of its products directly to retailers. The Company currently services over 200 customers, of which 20 account for approximately 79% of the Company's net sales. One such customers, Alpha Shirt Company,
accounted for approximately 20% of the Company's net sales in fiscal 2002. No other individual customer accounted for more than 10% of the Company's net sales during fiscal 2002.

Raw Materials

The Company's primary raw material is cotton yarn. The Company does not spin its own yarn. Instead, the Company purchases substantially all of its yarn pursuant
to purchase orders from a number of domestic spinners. One individual spinner accounted for approximately 54%of the Company's purchased yarn in fiscal
2002. The vast majority of the yarn used by the Company is readily available and can be purchased from a number of sources. Accordingly, the Company does not have to rely on its orders with or
deliveries from any single supplier. With the ability to substitute its supply of yarn, the Company believes that the inability to obtain yarn from any one supplier would not have a long term material
adverse effect on the Company's ability to manufacture. Other raw materials purchased by the Company include dyes and chemicals used in the dyeing and bleaching of fabrics.

3

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The
Company believes that it is one of the larger purchasers of yarn in its industry segment and that sound relationships with each of its suppliers allow the Company to order quantities
of yarn at competitive prices. The Company's relationships with its suppliers help the Company's continued access to supplies of raw materials during periods when yarn is in peak demand. As a result,
the Company has not experienced any significant shortages of raw materials.

The
Company determines the size of its purchase orders for yarn based on its estimate of future yarn prices and levels of supply and periodically places large purchase orders as a means
of fixing its raw materials costs. The Company's purchase orders typically are for quantities of yarn ranging from 30 days' to a year's supply.

Certain
of the Company's primary competitors spin their own yarn. The Company estimates that in-house yarn production could reduce overall yarn costs. The Company has
concluded, however, that the benefits achieved by acquiring in-house spinning capacity would not justify the investment required to achieve that capacity. In addition, the Company believes
that the quality of its purchased yarn is at least equal to the quality of yarn produced by fully integrated manufacturers in its industry market segment.

Competition

The imprinted activewear segment of the apparel market includes a number of significant competitors and the activewear segment of the industry overall is
extremely competitive. Competition in this segment of the apparel industry is generally based upon price, quality, service and breadth of product offerings. In response to market conditions and
industry-wide adjustments in price, the Company reviews and adjusts its product offerings and pricing structure from time to time.

The
Company's principal competitors include several domestic and foreign manufacturers of activewear, some of which are larger and have greater financial and other resources than the
Company. Increased competition has caused many domestic apparel manufacturers to move their manufacturing operations offshore to lower costs. The Company currently performs substantially all of its
cutting and sewing activities offshore.

The
Company provides its customers with a broad array of branded and private label niche products at competitive prices on a timely basis. The Company believes that its overall
turnaround time is well-regarded in the industry and provides a competitive advantage. The Company also believes that its strategy of offering a broader product mix including higher
quality, niche products, and use of lower-cost offshore manufacturing operations, should enable it to continue to compete effectively in its industry market segment.

Historically,
the Company has benefited from quotas and tariffs imposed by the United States on the importation of apparel. The Uruguay Round of GATT, which became effective on
January 1, 1995, requires a complete phase-out of all existing quotas over a ten-year period. To date, only a small amount of products manufactured by the Company have
been subject to quota reductions under GATT. In addition to the phasing-out of the use of quotas, GATT also requires that the United States reduce tariffs on textile/apparel imports over
the same ten-year period. To date, there have been only relatively small reductions in such tariffs.

Under
the United States-Caribbean Basin Trade Partnership Act (the "Act"), effective October 1, 2000, quotas and duties were eliminated on apparel imported from certain Caribbean
basin countries, provided such apparel is made from U.S. fabric (made from U.S. yarn) formed and cut in the United States. The same exemption from quotas and duties applies to apparel made from U.S.
fabric cut in a Caribbean basin country if U.S. thread is used. This Act also exempts a limited amount of knit apparel (other than outerwear T-shirts) made from regional fabric (made from
U.S. yarn), and T-shirts (other than underwear T-shirts) using fabric (made from U.S. yarns) formed in a Caribbean basin country.

4

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Employees

At February 1, 2003, the Company, including its offshore subsidiaries, employed a total of 5,169 people (157 full-time salaried employees and
5,012 full-time and part-time hourly employees) in the following areas: manufacturing and distribution: 5,045; finance and administration: 85; and sales and marketing: 39. Of
the Company's 5,169 employees, 1,324 are employed in the United States and 3,845 at offshore locations.

None
of the Company's employees is covered by a collective bargaining agreement. The Company has not experienced any work stoppages and considers its relations with its employees to be
good.

Intellectual Property

The Company attempts to register its material trademarks and trade names. The Company believes that it has developed strong brand awareness among its targeted
customer base and as a result regards its brand names as valuable assets. The Company has registered or applied for trademark registrations forAnvil, Cotton
Deluxe,Towels Plusand theAnvillogo as well as
other labels in the United States and certain foreign countries.

Environmental Matters

The Company, like other apparel manufacturers, is subject to federal, state and local environmental and occupational health and safety laws and regulations. While
there can be no assurance that the Company is at all times in complete compliance with all such requirements, the Company believes that any noncompliance is unlikely to have a material adverse effect
on the financial condition or results of operations of the Company. The Company has made, and will continue to make, expenditures to comply with environmental and occupational health and safety
requirements. The Company currently does not anticipate material capital expenditures for environmental control equipment in fiscal 2003 or beyond. As is the case with manufacturers in general, if a
release of hazardous substances occurs on or from the Company's properties or any associated offsite disposal location, or if contamination from prior activities is discovered at any of the Company's
properties, the Company may be held liable.
While the amount of such liability could be material, the Company endeavors to conduct its operations in a manner that reduces such risks.

In
1990, Winston Mills, Inc., a subsidiary of McGregor Corporation ("McGregor") and a predecessor of the Company, entered into an Administrative Order on Consent ("AOC") with the
North Carolina Department of Environment, Health and Natural Resources ("DEHNR") concerning certain groundwater contamination discovered at its Asheville, North Carolina facility. Since that time,
McGregor, through Culligan International Company ("Culligan"), a former affiliate, has been conducting investigative and corrective action under DEHNR oversight and has remained responsible to DEHNR
with respect to contamination that is subject to the AOC. While the total cost of the cleanup at the facility will depend upon the extent of contamination and the corrective action approved by the
DEHNR, preliminary cleanup cost estimates range from $1.0 to $4.0 million. McGregor continues to be a party to the Asheville, North Carolina facility's hazardous waste permit and Culligan has
guaranteed McGregor's obligations under the AOC. McGregor also contractually agreed to fully indemnify the Company with respect to the contamination as part of the terms of the acquisition of the
Anvil business (the "Acquisition"). This indemnity is guaranteed by Culligan and by Astrum International Corp. (now known as Samsonite Corporation), an affiliate of McGregor, in the event Culligan is
unable to perform its guarantor obligations. The Company could be held responsible for the cleanup of this contamination if McGregor, Culligan and Samsonite were all to become unable to fulfill their
obligations to DEHNR. McGregor also agreed to fully indemnify the Company for any costs associated with certain other environmental matters identified at the time of the Acquisition. The Company
believes that, even if McGregor were unable to fulfill its indemnification obligations, these

5

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other matters would not have a material adverse effect on the financial condition or results of operations of the Company. McGregor also agreed to indemnify the Company, subject to certain
limitations, with respect to environmental liabilities that arise from events that occurred or conditions in existence prior to the Acquisition. Culligan and Samsonite have also guaranteed McGregor's
obligations under these indemnities.

Item 2. Properties

The Company conducts its operations principally through eight manufacturing facilities and a centralized distribution center. The Company utilizes a vertically
integrated manufacturing process (i.e., performing substantially all of the manufacturing processes required to produce its products) with fabric being knit, bleached or dyed, from purchased yarn, at
its domestic textile facilities, and then cutting and sewing such fabric at its offshore facilities. Cottontops operates a small dyehouse and a small screen printing facility, both in Farmville, North
Carolina. The Company utilizes offshore and domestic contractors as it deems necessary.

Textile Facility Operations.The Company conducts textile operations at two owned facilities located in Kings Mountain and
Asheville, North Carolina. Yarn is received at the textile facilities, where circular knitting machines knit the yarn into tubes of basic fabric constructions such as jersey and fleece and circular
rib and flat knitting machines knit collars. The tubes of fabric correspond in weight and diameter to the various styles and sizes required to make the Company's activewear products. The
knitted fabric is then batched for bleaching or dyeing. Substantially all of the Company's activewear products are either bleached to remove the color of natural cotton or dyed for colored products.
The Company's textile facilities contain computerized controls, dye simulators and spectrometers and modern jet vessels to assist the Company in maintaining an efficient and quality controlled
environment for the dyeing and bleaching process. The Company's textile facilities each operated near capacity during fiscal 2002.

Management
has recognized the need for more efficient textile facilities. Accordingly, the Company is in the process of consolidating its textile operations into a single expanded
facility located in Asheville, North Carolina. Such consolidation and expansion is expected to be completed during fiscal 2003. With newer and more sophisticated equipment in one facility, Management
believes that its current textile capacity will be maintained and may be increased. The Company's long range plans include the possibility of establishing offshore textile operations, which may be
required depending upon future demand, world economic conditions and government policies affecting the Company's operations.

Cutting and Sewing Facilities.The Company's sewing operations are conducted at three leased facilities located in Honduras
and El Salvador and at offshore contractors. Cutting is also conducted at leased facilities located in Honduras and El Salvador. Fabric produced at the Company's textile operations is shipped to
cutting facilities where it is cut and then transferred to the sewing facilities for assembly. During fiscal 2002, the Company's cutting and sewing facilities operated generally at capacity.

Distribution Operations.The Company performs substantially all of its distribution functions at its owned centralized
distribution facility located in Dillon, South Carolina. This centralized distribution facility enables the Company to provide efficient and responsive customer service and to efficiently manage
inventory.

6

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The
following table sets forth certain information regarding the Company's facilities:

|Location           |  | Principal Use                       |  | Approx. Sq.
Ft.      |  | Owned/Leased         |          
|------------------ |  | ----------------------------------- |  | -------------------- |  | -------------------- | ---------
|New York, NY       |  | Executive Offices                   |  | 19,000               |  | Leased               | (1)      
|Kings Mountain, NC |  | Textile Facility                    |  | 225,000              |  | Owned                |          
|Asheville, NC      |  | Textile Facility                    |  | 225,000              |  | Owned                |          
|Mullins, SC        |  | Warehouse                           |  | 149,000              |  | Leased               | (2)      
|Farmville, NC      |  | Office, Warehouse & Screen Printing |  | 80,000               |  | Leased               | (3)      
|Farmville, NC      |  | Dye House                           |  | 43,000               |  | Leased               | (3)      
|Dillon, SC         |  | Distribution                        |  | 660,000              |  | Owned                |          
|Honduras           |  | Sewing
Sewing
Cutting & Sewing      |  | 64,000
63,000
82,000 |  | Leased
Leased
Leased | (4)(5)(6)
|El Salvador        |  | Cutting & Sewing                    |  | 143,000              |  | Leased               | (6)      
|Germany            |  | Office & Distribution               |  | 14,000               |  | Leased               | (7)      

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Management
estimates that capital expenditures in fiscal 2003 and thereafter will aggregate approximately $6 million annually. This amount includes expenditures relating to the
aforementioned consolidation of the Company's textile facilities, as well as routine capital expenditures in the ordinary course of business.

The
Company considers its owned and leased facilities and equipment to be in good condition and suitable and adequate for the Company's current operations. Management of the Company
believes that its ongoing maintenance and improvement program for its existing manufacturing facilities, including its plans for the consolidation of its textile facilities, will enable it to
accommodate anticipated sales growth.

Periodically,
as necessary, the Company contracts certain manufacturing operations to outsiders. Management considers this ordinary industry practice and foresees no material risks in
continuing this policy as necessary.

Information Technology.The Company continues its commitment to the growth and modernization of its information technology
systems through the upgrading of both its purchased and in-house developed systems and equipment. This year's activities include major upgrades to the Company's purchased systems using
internet technology. Using such technology, customers, vendors, contractors and the Company's salesforce with internet capability will be able to access selected parts of Anvil's database. Next under
consideration are state of the art "high availability" backup systems for both equipment and software, to ensure constant data and processing access for all Company operations. Anvil's advance order
entry, allocation and customer service systems tie into its warehouse management system using radio frequency and also tie into its customers' automatic replenishment and

7

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EDI systems. The Company's planning and scheduling system has allowed it to optimize available manufacturing resources (textile and garment) which has helped reduce lead times and inventories and
improve the timeliness of deliveries. The system is driven by the Company's in-house forecasting system as well as by customer orders. The Company has installed hardware and contracted for
satellite communications service between its offshore and domestic locations.

Item 3. Legal Proceedings

The Company is a party to various litigation matters incidental to the conduct of its business. The Company does not believe that the outcome of any of the
matters in which it is currently involved will have a material adverse effect on the financial condition, liquidity, business or results of operations of the Company. SeeItem
1. "BusinessEnvironmental Matters,"above.

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

None.

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

There is no established public trading market for any of the Company's common equity securities. At April 24, 2003 there were 34 record holders of the
Class A Common and 37 record holders of the Class B Common. All of Anvil's issued and outstanding capital stock is owned by Holdings.

Recent Sales of Unregistered Securities.

As required by the Certificate of Designations relating to the Redeemable Preferred Stock, the Company has paid stock dividends aggregating 1,075,782 shares
($26,895,000 liquidation value) through the year ended February 1, 2003.

8

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Item 6. Selected Financial Data

SELECTED HISTORICAL FINANCIAL DATA
(In Thousands, Except Per Share Data)

Set forth below are the selected historical financial data of the Company as of the dates and for the periods shown. The selected historical statement of
operations data of the Company for fiscal years 2000 through 2002 and the balance sheet data for fiscal years 2001 and 2002 have been derived from the consolidated financial statements of the Company
which have been audited by Deloitte & Touche LLP, whose report thereon appears under "Item 8. Financial Statements and Supplementary Data." The selected historical statement of
operations data of the Company for fiscal years 1998 and 1999 and the balance sheet data for fiscal years 1998 through 2000 have been derived from audited consolidated financial statements which are
not included herein. Holdings has no independent operations apart from its wholly owned subsidiary, Anvil, and its sole asset is the capital stock of Anvil. The selected consolidated financial data
should be read in conjunction with "Management's Discussion and Analysis

9

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of Financial Condition and Results of Operations" and with the consolidated financial statements and related notes thereto included elsewhere herein.

Fiscal Year EndedJanuary 30,
1999

January 29,
2000

February 3,
2001

February 2,
2002

February 1,
2003[Fiscal 1998]

[Fiscal 1999]

[Fiscal 2000]

[Fiscal 2001]

[Fiscal 2002](53 Weeks)Statement Of Operations Data:Net sales

$
217,302

$
198,930

$
216,537

$
199,661

$
224,329Cost of goods sold


179,092


146,931


153,805


152,557


168,168Gross profit


38,210


51,999


62,732


47,104


56,161Selling, general and administrative expenses


24,626


22,692


23,939


23,520


24,117Amortization of intangible assets


958


958


1,306


1,338


619Operating income


12,626


28,349


37,487


22,246


31,425Other expense:Interest expense


17,279


15,793


14,903


14,636


14,165Other expensenet, principally amortization of debt expense


1,006


895


1,189


759


534(Loss) income before provision for income taxes and extraordinary item


(5,659
)

11,661


21,395


6,851


16,726(Benefit) provision for income taxes


(2,264
)

5,213


9,050


2,404


6,089(Loss) income before extraordinary item


(3,395
)

6,448


12,345


4,447


10,637Extraordinary itemloss on extinguishment of debt, net of tax benefit of $417(1)





627








Net (loss) income

$
(3,395
)
$
5,821

$
12,345

$
4,447

$
10,637EBITDA(2)

$
19,847

$
35,727

$
45,340

$
30,652

$
41,663Balance Sheet Data (at end of period):Cash and cash equivalents

$
3,397

$
3,413

$
6,838

$
11,931

$
9,933Total assets


148,869


137,108


153,324


145,725


148,850Total debt


158,335


137,775


135,236


133,281


131,326Preferred stock (liquidation value)


37,541


42,664


48,486


51,436


43,033Total stockholders' deficiency


(74,397
)

(73,908
)

(67,739
)

(68,402
)

(61,236
)


Fiscal Year EndedJanuary 30,
1999

January 29,
2000

February 3,
2001

February 2,
2002

February 1,
2003Earnings (loss) per share data:Basic and Diluted Income (Loss) Per Common Share:(3)Class A Common Stock:Income before extraordinary item

$
11.46

$
15.50

$
19.14

$
19.34

$
23.90Extraordinary item





(0.16
)







Net income

$
11.46

$
15.34

$
19.14

$
19.34

$
23.90Class B Common Stock:Income (loss) before extraordinary item

$
(3.15
)
$
(0.90
)
$
0.17

$
(1.75
)
$
0.06Extraordinary item





(0.16
)







Net income (loss)

$
(3.15
)
$
(1.06
)
$
0.17

$
(1.75
)
$
0.06Weighted average shares used in computation of basic and diluted income (loss) per share:Class A Common


290


290


290


290


290Class B Common


3,590


3,590


3,590


3,590


3,592


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10

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Fiscal 1998

Fiscal 1999

Fiscal 2000

Fiscal 2001

Fiscal 2002Operating income

$
12,626

$
28,349

$
37,487

$
22,246

$
31,425Add: Depreciation of fixed assets


6,263


6,420


6,547


7,068


9,619Amortization of intangible assets


958


958


1,306


1,338


619EBITDA

$
19,847

$
35,727

$
45,340

$
30,652

$
41,663


---

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

General

The following discussion provides information with respect to the results of operations of the Company for each of the three fiscal years in the period ended
February 1, 2003. The following information should be read in conjunction withItem 6. "Selected Financial Data"and the consolidated
financial statements and the notes thereto included elsewhere herein. It should also be noted that the year ended February 3, 2001 contains 53 weeks, whereas all the other fiscal years
presented herein contain 52 weeks. Accordingly, if all other factors were equal, revenue and expense items in that year would be representative of approximately 2% more volume than other fiscal years.

Critical Accounting Policies And Estimates

The Company's significant accounting policies are more fully described in Note 3 to the consolidated financial statements, included elsewhere herein. The
application of accounting policies require judgement by Management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgements are subject to an
inherent degree of uncertainty and are based upon historical experience, trends in the industry, and information available from outside sources. The preparation of financial statements in conformity
with GAAP requires Management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company's significant accounting policies
include:



11

---



Results of Operations

The Company's results of operations are affected by numerous factors, including competition, general economic conditions, raw material costs, mix of products sold
and plant utilization. Certain activewear products of the type manufactured by the Company are generally available from multiple sources and the Company's customers often purchase products from more
than one source. To remain competitive, the Company reviews and adjusts its pricing structure from time to time in response to price changes. In the basic T-shirt market the Company
generally does not lead its competitors in setting the current pricing structure and modifies its prices to the extent necessary to remain competitive with prices set by its competitors in this
market.

The
gross profit margins of the Company's products vary significantly. Accordingly, the Company's overall gross profit margin is affected by its product mix. In addition, plant
utilization levels are important to profitability due to the substantial fixed costs of the Company's textile operations. The largest component of the Company's cost of goods sold is the cost of yarn.
The Company obtains substantially all of its yarn from a number of domestic yarn suppliers, generally placing orders based upon Management's expectations regarding future yarn prices and levels of
supply. Yarn prices fluctuate from time to time principally as a result of competitive conditions in the yarn market and supply and demand for raw cotton. The Company adjusts the timing and size of
its purchase orders for yarn in an effort to minimize fluctuations in its raw material costs resulting from changes in yarn prices. Historically, Management has been successful in mitigating the
impact of fluctuating yarn prices and is continually reviewing and adjusting the Company's purchase commitments to take maximum advantage of price changes.

As
announced during the fourth quarter of fiscal 2001, the Company is in the process of consolidating its textile operations into a single expanded facility located in Asheville, North
Carolina. Such consolidation and expansion is expected to be completed during fiscal 2003. As a result, the useful life of certain production equipment was adjusted, and certain other assets were
written off.    The necessary adjustments were recorded in the fourth quarter of the fiscal year ended February 2, 2002, and resulted in additional depreciation of $336,000 and a
direct write-off of assets of $433,000, both of which were charged to cost of goods sold. The additional depreciation charge in the current fiscal year amounted to $1,295,000.

12

---

The
following table sets forth, for each of the periods indicated, certain statement of operations data, expressed as a percentage of net sales, for the Company for each of the three
years in the period ended February 1, 2003:

Year EndedFebruary 3,
2001

February 2,
2002

February 1,
2003[Fiscal 2000]

[Fiscal 2001]

[Fiscal 2002](53 weeks)Statement of Operations Data:Net sales


100.0
%

100.0
%

100.0
%Cost of goods sold


71.0


76.4


75.0Gross profit


29.0


23.6


25.0Selling, general and administrative expenses


11.1


11.8


10.8Interest expense


6.9


7.3


6.3Other Data:EBITDA(1)

$
45,340,000

$
30,652,000

$
41,663,000Percentage of net sales


20.9
%

15.4
%

18.6
%


---

13

---



Fiscal Year Ended February 1, 2003 Compared to Year Ended February 2, 2002

Net salesfor the fiscal year ended February 1, 2003 amounted to $224,329,000 as compared to $199,661,000
for the prior fiscal year, an increase of approximately 12.4%. Total units sold increased more than 27%. However, industry-wide declining selling prices for basic goods and an unfavorable
change in product mix towards goods having lower selling prices and gross margins partially offset the favorable effect of increased unit sales. The industry-wide decline in selling prices
has been continuing over the last several years. Overall, the Company's average selling prices were approximately 12% less than the prior fiscal year, and have declined nearly 30% over the last three
fiscal years.

Gross profitfor the fiscal year ended February 1, 2003 increased $9,057,000 (19.2%). Gross margins have improved to 25.0% in the
current fiscal year as compared to 23.6% in the prior period. This increase is largely the result of lower yarn prices and improved production efficiencies, partially offset by the adverse effect of
lower selling prices and less favorable product mix. As discussed above, gross profit in the current fiscal year was adversely affected by additional depreciation charges aggregating approximately
$1,295,000 relating to the planned consolidation of the Company's textile facilities. Comparable charges in the prior fiscal year ended February 2, 2002 amounted to $769,000.

Selling, general and administrative expenses(including distribution expense) for the fiscal year ended February 1, 2003 increased
$597,000 (2.5%) as compared to the prior fiscal year. As a percentage of sales, these expenses declined from 11.8% to 10.8%. Higher expenditures incurred in improving product support in the areas of
distribution and information technology were partially offset by lower selling expenses. Distribution expense for the year was approximately the same as the prior year despite an increase of more than
27% in units sold.

Interest expensedeclined $471,000 (3.2%) in the current fiscal year compared to the same period of the prior year. Interest rates have
declined slightly, and the level of borrowings during the current fiscal year were lower than the prior year. At the end of each of the last two fiscal years, the Company was able to reduce its
revolving credit borrowings to zero.

Fiscal Year Ended February 2, 2002 Compared to Year Ended February 3, 2001

Net salesfor the fiscal year ended February 2, 2002 amounted to $199,661,000 as compared to $216,537,000
for the prior fiscal year. While total units sold increased more than 4%, the decrease in revenues of $16,876,000 (7.8%) was the result of two factors: (i) industry-wide declining
selling prices for basic goods; and (ii) an unfavorable change in product mix towards goods having lower selling prices and gross margins. Overall, the Company's average selling prices were
approximately 12% less in the year ended February 2, 2002 as compared to the prior fiscal year.

Gross profitfor the fiscal year ended February 2, 2002 decreased $15,628,000 (24.9%). Gross margins declined from 29.0% in the
fiscal year ended February 3, 2001 to 23.6% in the fiscal year ended February 2, 2002. This decline was caused by: (i) the aforementioned lower selling prices and less favorable
product mix; (ii) higher per unit textile production costs; and (iii) higher yarn prices. The unfavorable changes were partially offset by significant savings realized by the relocation
of cutting and sewing operations offshore.

Selling, general and administrative expenses(including distribution expense) for the fiscal year ended February 2, 2002 declined
$419,000 as compared to the prior fiscal year. Reflective of the lower operating results, the Company reduced its incentive-related selling and administrative compensation for the year. The savings
achieved in these areas were partially offset by higher advertising expenditures and higher distribution costs.

Interest expensedeclined $267,000 (1.8%) in the fiscal year ended February 2, 2002 compared to the same period of the prior year.
Interest rates declined slightly, and the level of borrowings during

14

---

the fiscal year ended February 2, 2002 were lower than the prior year. At the end of each of the two fiscal years, the Company was able to reduce its revolving credit borrowings to zero.

Liquidity and Capital Resources

The Company has historically utilized funds generated from operations and borrowings under its credit agreements to meet working capital and capital expenditure
requirements. The Company made capital expenditures of $17,435,000 in the year ended February 1, 2003. This amount includes expenditures relating to the aforementioned consolidation and
expansion of the Company's textile facilities. Capital expenditures were $6,592,000 in the year ended February 2, 2002, and $6,165,000 in the year ended February 3, 2001. Historically,
the Company's major capital expenditures have related to the acquisition of machinery and equipment and management information systems hardware and software.

The
Company's principal working capital requirements are financing accounts receivable and inventories. The Company has also expended $13,201,000 to acquire its Redeemable Preferred
Stock having a carrying value at the time of acquisition of $17,707,000. Management estimates that capital expenditures in the fiscal year ending January 31, 2004 and thereafter will aggregate
approximately $6,000,000 annually.

At
February 1, 2003 the Company had net working capital of $54,192,000 comprised of $9,933,000 in cash and cash equivalents, $28,315,000 of accounts receivable, $42,938,000 of
inventories, $5,414,000 of other current assets, and $32,408,000 in accounts payable and other current liabilities.

Anvil's
Loan and Security Agreement, as amended (the "Loan Agreement"), provides for a maximum credit facility of $50,000,000 consisting of a term loan (the "Term Loan") and a revolving
credit facility (the "Revolving Credit Facility"). The Loan Agreement was for an original term of three years with automatic one year renewals unless contrary notice is given by either party at least
60 days prior to the expiration date. The Loan Agreement (as currently extended) expires March 11, 2004. The Term Loan was in the original principal amount of $11,725,000, repayable in
quarterly principal installments of $586,000 through April 2004, subject to extension of the Loan Agreement. Amounts due under the Loan Agreement are secured by substantially all the inventory,
receivables and property, plant and equipment of Anvil. Holdings and Cottontops guaranty amounts due under the Loan Agreement. Interest on the Term Loan and the Revolving Credit Facility are at prime
plus one-quarter percent or LIBOR plus 21/4%, at the Company's option. At February 1, 2003 there were no amounts outstanding under the Revolving Credit Facility.

Holdings
has no independent operations with its sole asset being the capital stock of Anvil, which stock is pledged to secure the obligations under the Loan Agreement. As a holding
company, Holdings' ability to pay cash dividends on the Senior Preferred Stock or, if issued, principal and interest on the debentures into which the Senior Preferred Stock is convertible (the
"Exchange Debentures") is dependent upon the earnings of Anvil and its subsidiaries and their ability to declare dividends or make other intercompany transfers to Holdings. Under the terms of the
Senior Indenture, Anvil may incur certain indebtedness pursuant to agreements that may restrict its ability to pay such dividends or other intercompany transfers necessary to service Holdings'
obligations, including its obligations under the terms of the Senior Preferred Stock and, if issued, the Exchange Debentures. The Senior Note Indenture restricts, among other things, Anvil's and
certain of its subsidiaries' ability to pay dividends or make certain other "restricted" payments (except to the extent, among other things, the restricted payments are less than 50% of the
Consolidated Net Income of Anvil [as defined therein]), to incur additional indebtedness, to encumber or sell assets, to enter into transactions with affiliates, to enter into
certain guarantees of indebtedness, to make certain investments, to merge or consolidate with any other entity and to transfer or lease all or substantially all of their assets. Neither the Senior
Note

15

---

Indenture nor the Loan Agreement restricts Anvil's subsidiaries from declaring dividends or making other intercompany transfers to Anvil.

The
Company's ability to satisfy its debt obligations, including, in the case of Anvil, to pay principal and interest on the Senior Notes and, in the case of Holdings, to pay principal
and interest on the
Exchange Debentures, if issued, to perform its obligations under its guarantees and to pay cash dividends on the Senior Preferred Stock, will depend upon the Company's future operating performance,
which will be affected by prevailing economic conditions and financial, business and other factors, certain of which are beyond its control, as well as the availability of revolving credit borrowings
under the Loan Agreement. However, the Company may be required to refinance a portion of the principal of the Senior Notes and, if issued, the Exchange Debentures prior to their maturity and, if the
Company is unable to service its indebtedness, it will be forced to take actions such as reducing or delaying capital expenditures, selling assets, restructuring or refinancing its indebtedness, or
seeking additional equity capital. There can be no assurance that if any of these remedies are necessary, they could be effected on satisfactory terms, if at all.

Contractual Obligations and Commitments

A summary of the Company's contractual obligations and commitments as of February 1, 2003 is as follows:

Contractual Obligations

Less Than
1 Year

1-3 Years

4-5 Years

After
5 Years

TotalLong-term debt

$
2,345,000

$
586,000

$
130,000,000




$
132,931,000Operating leases


2,515,000


4,733,000


1,932,000


239,000


9,419,000Redeemable Preferred Stock











96,197,000


96,197,000Total

$
4,860,000

$
5,319,000

$
131,932,000

$
96,436,000

$
238,547,000


The
Company believes that, based upon current and anticipated levels of operations, funds generated from operations, together with other available sources of liquidity, including
borrowings under the Loan Agreement, will be sufficient over the next twelve months for the Company to fund its normal working capital requirements and satisfy its debt service requirements.

Seasonality

The Company's business is not significantly seasonal as it manufactures and sells a wide variety of activewear products that may be worn throughout the year.

Effect of Inflation

Inflation generally affects the Company by increasing the interest expense of floating rate indebtedness and by increasing the cost of labor, equipment and raw
materials. The Company does not believe that inflation has had any material effect on the Company's business during the periods discussed herein.

Recent Accounting Pronouncements

Effective at the beginning of the current fiscal year, the Company adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible Assets.The adoption of SFAS No. 142 did not require any adjustments to the carrying value of goodwill or other
intangible assets, but did result in the Company's ceasing to amortize existing goodwill.

In
June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 143,Accounting for Asset Retirement
Obligations. The standard requires entities to record the fair value of a

16

---

liability for an asset retirement obligation in the period in which it is incurred. When the liability is initially recorded, the entity capitalizes a cost by increasing the carrying amount of the
related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. Upon
settlement of the liability, an entity either settles the obligation for its recorded amount or incurs a gain or loss upon settlement. The standard is effective for the Company beginning
February 2, 2003. The adoption of SFAS No.143 is not expected to have a material impact on the Company's results of operations or financial position.

In
August 2001, the FASB issued SFAS No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets,
which is effective for all fiscal years beginning after December 15, 2001. SFAS No. 144 supersedes SFAS No. 121,Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The primary objectives of SFAS No. 144 are to develop one accounting model based
on the framework established in SFAS No. 121 for long-lived assets to be disposed of by sale, and to address significant implementation issues. The Company adopted SFAS
No. 144 effective February 1, 2003. The adoption of SFAS No. 144 did not have a significant impact on the financial position or results of operations of the Company.

In
April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and
Technical Corrections. SFAS No. 145 rescinds and amends certain previous standards related primarily to debt and leases. The most substantive amendment requires
sale-leaseback accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. The provisions of SFAS No. 145
related to the rescission of SFAS No. 4,Reporting Gains and Losses from Extinguishment of Debt, an Amendment of APB Opinion No. 30are
effective for financial statements issued for fiscal years beginning after May 15, 2002 and will become effective for the Company commencing February 2, 2003. The provisions of SFAS
No. 145 related to the amendment of SFAS No. 13 became effective for transactions occurring after May 15, 2002. All other provisions of SFAS No. 145 are effective for
financial statements issued on or after May 15, 2002. The adoption of SFAS No. 145 is not expected to have a material impact on the Company's results of operations or financial position.

In
June 2002, the FASB issued SFAS No. 146,Accounting for Costs Associated with Exit or Disposal Activitieswhich will
supersede Emerging Issues Task Force Consensus No. 94-3,Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring).SFAS No. 146 will affect the timing of the recognition of costs associated with an exit or disposal plan by
requiring them to be recognized when incurred rather than at the date of a commitment to an exit or disposal plan. SFAS No. 146 is to be applied prospectively to exit or disposal activities
initiated after December 31, 2002. The adoption of SFAS No. 146 is not expected to have a material impact on the Company's results of operations or financial position.

In
December 2002, the FASB issued SFAS No. 148,Accounting for Stock-Based CompensationTransition and Disclosurean
amendment of FASB Statement No. 123, Accounting for Stock-Based Compensation. This Statement amends SFAS No. 123 to provide alternative methods of transition for
a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to
require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported
results. SFAS No. 148 is effective for annual periods ending after December 15, 2002 and interim periods beginning after December 15, 2002. The adoption of SFAS No. 148 is
not expected to have a material impact on the Company's results of operations or financial position.

In
November 2002, the FASB approved FASB Interpretation No. 45 ("FIN 45") "Guarantor's Accounting and Disclosure Requirements for Guarantees,
including Indirect Guarantees of Indebtedness of Others," an Interpretation of FASB Statement No. 5, 57 and 107 and Rescission of FASB Interpretation

17

---

No. 34. FIN 45 clarifies the requirements of SFAS No. 5, "Accounting for Contingencies", relating to a guarantor's accounting for, and
disclosure of, the issuance of certain types of guarantees. Specifically, FIN 45 requires a guarantor to recognize, at the inception of a guarantee, a liability for the fair value of the obligation
undertaken in issuing the guarantee. The provisions for initial recognition and measurement are effective on a prospective basis for guarantees that are issued or modified after December 31,
2002, irrespective of a guarantor's fiscal year-end. However, the disclosure provisions of FIN 45 are effective for financial statements of interim or annual periods ending after
December 15, 2002. The adoption of FIN 45 is not expected to have a material impact on the Company's results of operations or financial position.

FASB
Interpretation No. 46 ("FIN 46"), Consolidation of Variable Interest Entities, an Interpretation of APB No. 50was
issued in January 2003. FIN 46 requires certain variable interest entities to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the
characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other
parties. FIN 46 is effective for all new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1,
2003, the provisions of FIN 46 must be applied for the first interim or annual period beginning after June 15, 2003. The adoption of FIN 46 is not expected to have a material impact on the
Company's results of operations or financial position.

Forward-Looking Information

The Company's results of operations have been significantly affected by an industry-wide decline in selling prices of nearly 30% over the last three
years. If the industry-wide decline in selling prices for basic T-shirts were to continue or intensify, it would become increasingly more difficult for the Company to maintain
historical profit margins. However, the Company has been able to mitigate the effects of this decline by various cost reductions and manufacturing efficiencies, the most significant of which has been
the full integration of its cutting and sewing operations offshore. Furthermore, the consolidation of the Company's textile operations is expected to result in additional cost savings, and
Management's future operating plans include additional initiatives to reduce costs and increase efficiency, such as increasing emphasis on sourcing and importation of finished core and related
products.

The
Company is including the following cautionary statement in this Form 10-K to make applicable and take advantage of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of, the Company. Forward-looking statements include statements concerning plans, objectives, goals,
strategies, future events or performance, and underlying assumptions and other statements which are other than statements of historical facts. From time to time, the Company may publish or otherwise
make available forward-looking statements of this nature. All such subsequent forward-looking statements, whether written or oral and whether made by
or on behalf of the Company, are also expressly qualified by these cautionary statements. Certain statements contained herein are forward-looking statements and accordingly involve risks and
uncertainties which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The forward-looking statements contained herein are based on
various assumptions, many of which are based, in turn, upon further assumptions. The Company's expectations, beliefs and projections are expressed in good faith and are believed by the Company to have
a reasonable basis, including without limitation, Management's examination of historical operating trends, data contained in the Company's records and other data available from third parties, but
there can be no assurance that Management's expectation, beliefs or projections will result or be achieved or accomplished. In addition to the other factors and matters discussed elsewhere herein, the
following factors are important factors that, in the view of the

18

---

Company, could cause actual results to differ materially from those discussed in the forward-looking statements:



The
foregoing factors could affect the Company's actual results and could cause the Company's actual results during fiscal 2002 and beyond to be materially different from any anticipated
results expressed in any forward-looking statement made by or on behalf of the Company.

The
Company disclaims any obligation to update any forward-looking statements to reflect events or other circumstances after the date hereof.

Item 7a. Quantitative and Qualitative Disclosures About Market Risk

The Company believes that its potential exposure to market risk is not material. The Company eliminated its interest rate swap agreements in fiscal 2000.

Item 8. Financial Statements and Supplementary Data

See page F-1, Index to Financial Statements, included elsewhere herein.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

19

---



PART III

Item 10. Directors and Executive Officers of the Registrant

With respect to the directors of the Company, the information required by Item 10 of Form 10-K appears on pages 1 through 4 of the Information
Statement, and is incorporated herein by reference.

Pursuant
to General Instruction G to Form 10-K, the following information is furnished concerning the executive officers and key employees of the Company.

EXECUTIVE OFFICERS AND
CERTAIN KEY EMPLOYEES OF ANVIL

The following sets forth certain information with respect to the executive officers and certain key employees of Anvil.

|Name                |  | Age(1) |  | Position                                                                                       
|------------------- |  | ------ |  | -----------------------------------------------------------------------------------------------
|Bernard Geller      |  | 69     |  | Chief Executive Officer, Chairman of the Board                                                 
|Anthony Corsano     |  | 43     |  | President and Chief Operating Officer                                                          
|Jacob Hollander     |  | 61     |  | Executive Vice President, Chief Administrative Officer, Secretary, General Counsel and Director
|William H. Turner   |  | 55     |  | Executive Vice President of Manufacturing                                                      
|Pasquale Branchizio |  | 64     |  | Vice President of Finance                                                                      

---

Bernard Gellerhas served as the Chief Executive Officer of Anvil, President of Holdings, and has been a Director of Anvil and Holdings
since February 1995. Since March 1997, Mr. Geller has served as Chairman of the Board of Anvil and Holdings and from July 1997 to February 28, 2001, as President of
Anvil. From 1989 to 1995, Mr. Geller served as Chairman of Anvil's predecessor. From 1986 to 1989, Mr. Geller served as President of Anvil's predecessor and from 1975 to 1986, as
Controller. Before joining Anvil's predecessor, Mr. Geller was with Union Underwear Co., Inc., a subsidiary of Fruit of the Loom, Inc., where he worked for 14 years,
principally as that company's controller.

Anthony Corsanohas served as President and Chief Operating Officer Anvil since February 28, 2001. Prior thereto, he served as
Executive Vice President of Sales and Marketing of Anvil for more than five years. From 1993 to 1995, Mr. Corsano served as Vice President of Sales and Marketing of Anvil's predecessor. From
1988 to 1993, Mr. Corsano served as Vice PresidentSales of Anvil's predecessor and from 1985 to 1988 Mr. Corsano served as National Sales Manager of Anvil's predecessor.

Jacob Hollanderhas served as Executive Vice President, Chief Administrative Officer, Secretary and General Counsel of Anvil and Vice
President, Secretary and General Counsel of Holdings since February, 1995. Since March, 1997, Mr. Hollander has served as a Director of Anvil and Holdings. From 1991 to 1995,
Mr. Hollander served as Vice President and General Counsel of Astrum International
Corp. From 1985 to 1990, Mr. Hollander served as Vice President and General Counsel of McGregor Corporation and Faberge, Incorporated, and from 1987 to 1989, Mr. Hollander also served as
Vice President and General Counsel of Elizabeth Arden, Inc. During 1990, Mr. Hollander provided legal consulting services to the Unilever group of companies and to McGregor. Prior to its
acquisition by McGregor, Mr. Hollander was Vice President of Faberge, Incorporated.

William H. Turnerhas served as Executive Vice President of Manufacturing of Anvil since February, 1995. From 1992 to 1995,
Mr. Turner served as Executive Vice President of Manufacturing of Anvil's predecessor. From 1985 to 1992, Mr. Turner held the position of Vice President of

20

---

Manufacturing (Cut and Sew) of Anvil's predecessor and from 1982 to 1985 he was Plant Manager for Anvil's predecessor.

Pasquale Branchiziohas served as Vice President of Finance of Anvil and Holdings since 1995. From 1986 until 1995, Mr. Branchizio
served as Vice President of Finance of Anvil's predecessor. From 1981 to 1986, Mr. Branchizio served as the Controller of Anvil's predecessor. Prior thereto, Mr. Branchizio served as
Senior Accountant for Anvil's predecessor.

Item 11. Executive Compensation

The information required by Item 11 of Form 10-K appears on pages 5 through 8 of the Information Statement, and is incorporated herein by
reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by Item 12 of Form 10-K appears on pages 8 through 11 of the Information Statement, and is incorporated herein
by reference.

Item 13. Certain Relationships and Related Transactions

The information required by Item 13 of Form 10-K appears on page 11 of the Information Statement and is incorporated herein by
reference.

Item 14. Controls and Procedures

The Company's Chief Executive Officer (who is also the Chief Financial Officer) has evaluated the Company's disclosure controls and procedures as of
April 18, 2003 and concluded that these controls and procedures are effective.

There
have been no significant changes in internal controls or in other factors that could significantly affect these controls subsequent to April 18, 2003.

21

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PART IV

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

All
other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions, are
inapplicable or not material, or the information called for thereby is otherwise included in the financial statements and therefore has been omitted.

None.

|No. |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1 |  | Recapitalization Agreement, dated as of February 12, 1997, by and among Citicorp Venture Capital, Ltd., BRS,, Holdings, Anvil VT, Inc. and the stockholders and voting trust certificate holders named on the signature pages
thereto, as amended by the certain Amendment and Consent to Assignment dated as of February 21, 1997 and that Waiver and Second Amendment to the Recapitalization Agreement dated as of March 13, 1997.(1)
|3.1 |  | Certificate of Incorporation of Anvil.(1)                                                                                                                                                                                                                                                                                                                                                                                               
|3.2 |  | Restated Certificate of Incorporation of Holdings.(4)                                                                                                                                                                                                                                                                                                                                                                                   
|3.3 |  | Certificate of Incorporation of Cottontops.(1)                                                                                                                                                                                                                                                                                                                                                                                          
|3.4 |  | By-Laws of Anvil.(1)                                                                                                                                                                                                                                                                                                                                                                                                                    
|3.5 |  | By-Laws of Holdings.(1)                                                                                                                                                                                                                                                                                                                                                                                                                 
|3.6 |  | By-Laws of Cottontops.(1)                                                                                                                                                                                                                                                                                                                                                                                                               
|4.1 |  | Certificate of Designation of Holdings.(1)                                                                                                                                                                                                                                                                                                                                                                                              
|4.2 |  | Certificate of Designation of Holdings relating to Series B 13% Senior Exchangeable Preferred Stock due 2009.(2)                                                                                                                                                                                                                                                                                                                        
|4.3 |  | Purchase Agreement, dated as of March 14, 1997, by and among Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), Wasserstein Perella securities, Inc. ("Wasserstein"), NationsBanc Capital Markets, Inc. ("NationsBanc"), Anvil and
Holdings.(1)                                                                                                                                                                               
|4.4 |  | Senior Indenture, dated as of March 14, 1997, by and among the Anvil, Holdings, Cottontops and the other Subsidiary Guarantors and United States Trust Company of New York, as trustee.(1)                                                                                                                                                                                                                                              
|4.5 |  | 107/8% Senior Notes and Guarantees.(1)                                                                                                                                                                                                                                                                                                                                                                                                  
|4.6 |  | Series B 107/8% Senior Notes and Guarantees.(2)                                                                                                                                                                                                                                                                                                                                                                                         
|4.7 |  | Registration Rights Agreement, dated as of March 14, 1997, by and among Anvil, Holdings, Cottontops and DLJ, Wasserstein and NationsBanc, as Initial Purchasers.(1)                                                                                                                                                                                                                                                                     
|4.8 |  | Loan and Security Agreement dated March 11, 1999 by and among Congress Financial Corporation, Anvil, Holdings and Cottontops.(5)                                                                                                                                                                                                                                                                                                        
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                         

22

---

|4.9   |  | Term Promissory Note of Anvil dated March 11, 1999 payable to Congress Financial Corporation.(5)                                                                                                                                                                                                                                                                                                  
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.10  |  | Pledge and Security Agreement dated March 11, 1999 between Congress Financial Corporation and Holdings.(5)                                                                                                                                                                                                                                                                                        
|4.11  |  | Pledge and Security Agreement dated March 11, 1999 between Congress Financial Corporation and Anvil.(5)                                                                                                                                                                                                                                                                                           
|10.1  |  | Employment Agreement, dated as of January 30, 2001, by and between Anvil and Bernard Geller.(6)                                                                                                                                                                                                                                                                                                   
|10.2  |  | Employment Agreement, dated as of January 30, 2001 by and between Anvil and Anthony Corsano.(6)                                                                                                                                                                                                                                                                                                   
|10.3  |  | Employment Agreement, dated as of January 30, 2001, by and between Anvil and Jacob Hollander.(6)                                                                                                                                                                                                                                                                                                  
|10.4  |  | Employment Agreement, dated as of January 30, 2001 by and between Anvil and William H. Turner.(6)                                                                                                                                                                                                                                                                                                 
|10.5  |  | Exchange Debenture Indenture, dated as of March 14, 1997, by and between Holdings and United States Trust Company of New York, as trustee.(1)                                                                                                                                                                                                                                                     
|10.6  |  | Registration Rights Agreement, dated as of March 14, 1997, by and between Holdings and DLJ, as the Initial Purchaser.(1)                                                                                                                                                                                                                                                                          
|10.7  |  | Registration Rights and Securityholders Agreement, dated as of March 14, 1997, by and among Holdings, BRS, 399 Venture CCT II Partners, L.P. "CCT") and DLJ.(1)                                                                                                                                                                                                                                   
|10.8  |  | Registration Rights Agreement, dated as of March 14, 1997, by and among Holdings, BRS, 399 Venture, CCT, Bernard Geller, Anthony Corsano, William Turner, Jacob Hollander and each other executive of Holdings or its subsidiaries who acquires common
stock from Holdings after the date thereof and executes a joinder thereto, the persons set forth on the signature pages thereto and DLJ.(1)
|10.9  |  | Stockholders Agreement, dated as of March 14, 1997, by and among Holdings, BRS, 399 Venture, CCT, Bernard Geller, Anthony Corsano, William Turner, Jacob Hollander and each other person who acquires common stock of Holdings after the date thereof and
executes a joinder thereto.(1)                                                                                                          
|10.10 |  | 2002 Stock Option Plan(7)                                                                                                                                                                                                                                                                                                                                                                         
|10.11 |  | Amendment No. 1 dated as of December 27, 1997 to Stockholders Agreement by and among Holdings, BRS, 399 Venture, CCT, Bernard Geller, Anthony Corsano, William Turner, Jacob Hollander and each other person who acquires common stock of Holdings after
the date thereof and executes a joinder thereto.(3)                                                                                      
|10.12 |  | Management Agreement dated November 3, 1998 among Anvil, Holdings, Cottontops and BRS.(5)                                                                                                                                                                                                                                                                                                         
|10.13 |  | Management Agreement dated September 15, 2002 among Anvil, Holdings, Cottontops and CVC.                                                                                                                                                                                                                                                                                                          
|21    |  | Subsidiaries of Holdings.                                                                                                                                                                                                                                                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                   

23

---

|99.1 |  | Certification pursuant to section 240.13a-14 of general rules and regulations of the Securities Exchange act of 1934.
|---- |  | ---------------------------------------------------------------------------------------------------------------------

---

24

---



SIGNATURES

Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, Anvil Holdings, Inc. has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

| |  | ANVIL HOLDINGS, INC.
| |  | --------------------
| |  | By:                 

Pursuant
to the requirements of the Securities Act of 1934, this report has been signed by the following persons in the capacities and on the dates indicated:

|Signature                                 |  | Capacity                                                                        |  | Date          
|----------------------------------------- |  | ------------------------------------------------------------------------------- |  | --------------
|                                          |  |                                                                                 |  |               
|/s/BERNARD GELLERBernard Geller           |  | Chairman of the Board, and Director (Principal Executive and Financial Officer) |  | April 24, 2003
|/s/JACOB HOLLANDERJacob Hollander         |  | Vice President, Secretary and Director                                          |  | April 24, 2003
|/s/PASQUALE BRANCHIZIOPasquale Branchizio |  | Vice President of Finance (Principal Accounting Officer)                        |  | April 24, 2003
|/s/BRUCE C. BRUCKMANNBruce C. Bruckmann   |  | Director                                                                        |  | April 24, 2003
|/s/RICHARD R. LEONARDRichard R. Leonard   |  | Director                                                                        |  | April 24, 2003
|/s/DAVID WAGSTAFF IIIDavid Wagstaff III   |  | Director                                                                        |  | April 24, 2003
|/s/JOHN D. WEBERJohn D. Weber             |  | Director                                                                        |  | April 24, 2003

SUPPLEMENTAL
INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT:

The
Registrant has not sent an annual report or proxy material to its security holders during the period covered by this report.

25

---

ANVIL HOLDINGS, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
CONSOLIDATED FINANCIAL STATEMENT SCHEDULES

PageIndependent Auditors' Report

F-2Consolidated Balance Sheets at February 2, 2002 and February 1, 2003

F-3Consolidated Statements of Operations for the years ended February 3, 2001, February 2, 2002 and February 1, 2003

F-4Consolidated Statements of Stockholders' Deficiency for the years ended February 3, 2001, February 2, 2002 and February 1, 2003

F-5Consolidated Statements of Cash Flows for the years ended February 3, 2001, February 2, 2002 and February 1, 2003

F-6Notes to Consolidated Financial Statements

F-7Schedule II Valuation and Qualifying Accounts

S-1


F-1

---

INDEPENDENT AUDITORS' REPORT

To
the Board of Directors and Stockholders of
Anvil Holdings, Inc.
New York, New York

We
have audited the accompanying consolidated balance sheets of Anvil Holdings, Inc. and subsidiaries as of February 1, 2003 and February 2, 2002, and the related
consolidated statements of operations, stockholders' deficiency, and cash flows for each of the three fiscal years in the period ended February 1, 2003. Our audits also included the financial
statement schedule listed in the index at Item 15(a)(2). These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and financial statement schedule based on our audits.

We
conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, such financial statements present fairly, in all material respects, the financial position of Anvil Holdings, Inc. and subsidiaries as of February 1, 2003
and February 2, 2002, and the results of their operations and their cash flows for each of the three fiscal years in the period ended February 1, 2003 in conformity with accounting
principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly in all material respects the information set forth therein.

As
discussed in Note 6 to the consolidated financial statements, the Company changed its method of accounting for goodwill and other intangible assets in 2002 to conform to
Statement of Financial Accounting Standards No. 142.

/S/
Deloitte & Touche LLP
New York, New York
April 9, 2003

F-2

---

ANVIL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)

February 2,
2002

February 1,
2003ASSETSCURRENT ASSETS:Cash and cash equivalents

$
11,931

$
9,933Accounts receivable, less allowances for doubtful accounts of
$1,110 and $1,152


28,827


28,315Inventories


45,339


42,938Prepaid and refundable income taxes


1,046


1,210Deferred income taxes-current portion


1,696


1,751Prepaid expenses and other current assets


1,021


2,453Total current assets


89,860


86,600PROPERTY, PLANT AND EQUIPMENTNet


30,655


38,099GOODWILL


19,416


19,416INTANGIBLE ASSETSNet


3,216


2,597OTHER ASSETS


2,578


2,138$
145,725

$
148,850LIABILITIES AND STOCKHOLDERS' DEFICIENCYCURRENT LIABILITIES:Accounts payable

$
7,577

$
14,494Accrued expenses and other current liabilities


15,206


15,569Current portion of term loan


2,345


2,345Total current liabilities


25,128


32,408LONG-TERM PORTION OF TERM LOAN


2,931


586107/8% SENIOR NOTES


128,005


128,395DEFERRED INCOME TAXES


5,759


4,950OTHER LONG-TERM OBLIGATIONS


1,397


714REDEEMABLE PREFERRED STOCK(Liquidation value $55,104 and $62,624)


54,527


62,321LESSREDEEMABLE PREFERRED STOCK IN TREASURY(Liquidation value $3,668 and $19,382)


(3,620
)

(19,288
)REDEEMABLE PREFERRED STOCKNet


50,907


43,033STOCKHOLDERS' DEFICIENCY:Common stockClass A, $.01 par value, 12.5% cumulative; authorized 500,000 shares, issued and outstanding: 290,000 shares (aggregate liquidation value, $52,758 and $59,671)


3


3Class B, $.01 par value, authorized 7,500,000 shares; issued and outstanding: 3,590,000 and 3,592,500 shares


36


36Class C, $.01 par value; authorized 1,400,000 shares; none issued





Additional paid-in capital


12,803


12,806Accumulated deficit


(81,244
)

(74,081
)Total stockholders' deficiency


(68,402
)

(61,236
)$
145,725

$
148,850


See notes to consolidated financial statements.

F-3

---

ANVIL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Share Data)

Fiscal Year EndedFebruary 3,
2001

February 2,
2002

February 1,
2003(53 Weeks)NET SALES

$
216,537

$
199,661

$
224,329COST OF GOODS SOLD


153,805


152,557


168,168Gross profit


62,732


47,104


56,161SELLING, GENERAL AND ADMINISTRATIVE EXPENSES


23,939


23,520


24,117AMORTIZATION OF INTANGIBLE ASSETS


1,306


1,338


619Operating income


37,487


22,246


31,425OTHER EXPENSES:Interest expense


14,903


14,636


14,165Other expense-net, principally amortization of debt expense


1,189


759


534INCOME BEFORE PROVISION FOR INCOME TAXES


21,395


6,851


16,726PROVISION FOR INCOME TAXES


9,050


2,404


6,089NET INCOME


12,345


4,447


10,637Less preferred stock dividends and accretion


(6,176
)

(6,836
)

(6,254
)Less Common A preference


(5,501
)

(6,115
)

(6,913
)Add gain on purchase of preferred stock





1,726


2,780Net Income (Loss) Attributable To Common Stockholders

$
668

$
(6,778
)
$
250BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE:Class A Common Stock

$
19.14

$
19.34

$
23.90Class B Common Stock

$
0 .17

$
(1.75
)
$
0.06Weighted average shares used in computation of basic and diluted net income (loss) per share:Class A Common


290


290


290Class B Common


3,590


3,590


3,592


See
notes to consolidated financial statements.

F-4

---

ANVIL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
(In Thousands)

Common StockAdditional
Paid-in Capital

Accumulated
DeficitClass A

Class B

Class C

TotalBalance at January 30, 2000

$
3

$
36



$
12,803

$
(86,750
)
$
(73,908
)Preferred stock dividends













(6,013
)

(6,013
)Accretion of preferred stock













(163
)

(163
)Net income













12,345


12,345Balance at February 3, 2001


3


36




12,803


(80,581
)

(67,739
)Preferred stock dividends













(6,673
)

(6,673
)Accretion of preferred stock













(163
)

(163
)Gain on Purchase of Preferred Stock













1,726


1,726Net income













4,447


4,447Balance at February 2, 2002


3


36




12,803


(81,244
)

(68,402
)Preferred stock dividends













(6,125
)

(6,125
)Accretion of preferred stock













(129
)

(129
)Gain on Purchase of Preferred Stock













2,780


2,780Issuance of Class B Common Stock










3





3Net income













10,637


10,637Balance at February 1, 2003

$
3

$
36



$
12,806

$
(74,081
)
$
(61,236
)


See notes to consolidated financial statements.

F-5

---

ANVIL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

Fiscal Year EndedFebruary 3,
2001

February 2,
2002

February 1,
2003(53 weeks)CASH FLOWS FROM OPERATING ACTIVITIES:Net income

$
12,345

$
4,447

$
10,637Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization of fixed assets


6,547


7,068


9,619Amortization of other assets


2,378


2,410


1,455Deferred income taxes


1,215


(236
)

(864
)Changes in operating assets and liabilities, net of acquisition:Accounts receivable


2,169


(1,217
)

512Inventories


(15,952
)

10,519


2,401Prepaid and refundable income taxes


117


(1,046
)

(164
)Prepaid expenses and other current assets


(34
)




(1,432
)Accounts payable


3,989


(4,935
)

6,917Accrued expenses and other current liabilities


829


(1,472
)

363Income taxes payable


23


(363
)

Othernet


(696
)

(117
)

(685
)Net cash provided by operating activities


12,930


15,058


28,759CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment


(6,165
)

(6,592
)

(17,435
)Acquisition, net of working capital effect


(1,705
)




Proceeds from sale of property and equipment


1,294


824


372Net cash used in investing activities


(6,576
)

(5,768
)

(17,063
)CASH FLOWS FROM FINANCING ACTIVITIES:Repayments under revolving credit agreements


(584
)




Repayments of long-term debt


(2,345
)

(2,345
)

(2,345
)Purchase of preferred stock





(1,852
)

(11,349
)Net cash used in financing activities


(2,929
)

(4,197
)

(13,694
)INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS


3,425


5,093


(1,998
)CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR


3,413


6,838


11,931CASH AND CASH EQUIVALENTS, END OF YEAR

$
6,838

$
11,931

$
9,933SUPPLEMENTAL CASH FLOW INFORMATION:Cash paid for interest

$
14,762

$
14,654

$
14,182Net payments of income taxes

$
7,358

$
4,049

$
7,097SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:Redeemable Preferred Stock Issued in Lieu of Dividends

$
6,013

$
6,673

$
1,591Preferred Stock Dividends Payable in Cash







$
4,534Gain on purchase of preferred stock




$
1,726

$
2,780Details of Acquisition:Fair Value of Net Assets Acquired

$
235Cash Paid


(1,940
)Net Cash Paid

$
(1,705
)


See notes to consolidated financial statements.

F-6

---

ANVIL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, Except Share Data)

1.    THE COMPANY

As used herein, the "Company" refers to Anvil Holdings, Inc. ("Holdings"), including, in some instances, its wholly owned subsidiary, Anvil
Knitwear, Inc., a Delaware corporation ("Anvil"), and its other subsidiaries, as appropriate to the context. The Company is engaged in the business of designing, manufacturing and marketing
high quality activewear for men, women and children, supplemented with caps, towels, robes and bags. The Company markets and distributes its products, under its brand names and private labels,
primarily to wholesalers and screen printers, principally in the United States. The Company reports its operations in one segment in accordance with Statement of Financial Accounting Standards
No. 131,Disclosures About Segments of an Enterprise and Related Information.

2.    RECAPITALIZATION AND REFINANCING

The Company's current capital structure is the result of a 1997 recapitalization (the "Recapitalization") pursuant to which: (i) the Company redeemed or
repurchased a substantial portion of its outstanding shares of capital stock; (ii) Bruckmann, Rosser, Sherrill & Co., L.P. and certain of its employees and affiliates (collectively,
"BRS") contributed $13,063 for the purchase of new common stock; (iii) 399 Venture Partners, Inc. and certain of its employees and affiliates (collectively, "399 Venture") and certain
management investors reinvested a portion of their shares of capital stock of the Company in exchange for newly issued common stock; and (iv) 399 Venture exchanged a portion of its capital
stock for Senior Exchangeable Preferred Stock and new common stock.

Concurrently
with the Recapitalization, the Company sold 30,000 Units consisting of (i) $30,000, 13% Senior Exchangeable Preferred Stock due 2009 and (ii) 390,000 shares of
Class B common stock (the "Units Offering"). The Senior Exchangeable Preferred Stock was recorded at $27,656 representing the proceeds of $30,000, less $390 allocated to the Class B
common stock and $1,954 of expenses
attributable to the Units Offering. Additionally, on March 14, 1997, Anvil sold $130,000 of 107/8% Senior Notes due 2007 ("Senior Notes") in connection with the Recapitalization.

3.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of PresentationThe accompanying consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of America ("Generally Accepted Accounting Principles" or "GAAP"). Such financial statements include the accounts of the
Company and its wholly-owned subsidiaries, after elimination of significant intercompany accounts and transactions.

Fiscal YearThe Company's operations are on a "52/53-week" fiscal year ending on the Saturday closest to
January 31. The fiscal year ended February 3, 2001 contains 53 weeks.

Use of EstimatesThe preparation of financial statements in conformity with GAAP requires Management to make certain estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ from those estimates. The accounts requiring the use of significant estimates include accounts receivable, inventories,
income taxes, intangible assets and certain reserves.

Cash and Cash EquivalentsCash and cash equivalents include all highly liquid investments with an original maturity of
90 days or less.

F-7

---

Fair Value of Financial InstrumentsThe carrying amounts of financial instruments reported in the accompanying consolidated
balance sheets approximate their fair value. Considerable judgment is required in interpreting certain market data to develop estimated fair values for certain financial instruments. Accordingly, the
estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange.

Property, Plant and EquipmentProperty, plant and equipment is being depreciated for financial reporting purposes using the
straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the lesser of the estimated useful life or the term of the lease. Depreciable
lives are generally as follows:

Buildings and Improvements

20-25 yearsMachinery, Equipment, Furniture And Fixtures

4-10 years


InventoriesInventories are stated at the lower of cost or market, with cost being determined by the first-in,
first-out (FIFO) method.

Intangible AssetsIntangible assets of the Company consist of trademarks, goodwill and a covenant not to compete. Trademarks
are being amortized over their estimated useful life of 17 years and the covenant not to compete is being amortized over its three year term. Goodwill (which is no longer being
amortizedsee Note 6) was being amortized over periods ranging from 10 to 35 years.

Evaluation of Long-Lived AssetsLong-lived assets are assessed for recoverability whenever events or
changes in circumstances indicate that an asset may have been impaired. In evaluating an asset for recoverability, the Company estimates the future cash flows expected to result from the use of the
asset and eventual disposition. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount of the asset, an impairment loss, equal to the
excess of the carrying amount over the fair value of the asset, is recognized. Pursuant to Statement of Financial Accounting Standards ("SFAS") No. 144, through February 1, 2003, there
were no adjustments to the carrying amount of long-lived assets resulting from the Company's evaluation for any periods presented in the accompanying financial statements.

Deferred Financing FeesIncluded in other assets are deferred financing fees ($2,100 and $1,657 at February 2, 2002 and
February 1, 2003, respectively) which are being amortized over the term of the applicable obligations.

Revenue RecognitionRevenue is recognized at the time merchandise is shipped and title has passed. Allowances for sales
returns and discounts are provided when sales are recorded.

Income TaxesIncome taxes have been accounted for in accordance with Statement of Financial Accounting Standards ("SFAS")
No. 109,Accounting for Income Taxes, which requires the use of an asset and liability approach for financial accounting and reporting of income
taxes.

Earnings Per ShareBasic and diluted income (loss) per share is computed based upon the average outstanding shares of
Class A and Class B common stock.

Significant CustomersThe Company has one customer that accounted for approximately 20% of the Company's net sales for the
fiscal year ended February 1, 2003.

Recent Accounting Pronouncements

Effective at the beginning of the current fiscal year, the Company adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible Assets.The adoption of SFAS No. 142 did not require any adjustments to the carrying value of goodwill or other
intangible assets, but did result in the Company's ceasing to amortize existing goodwill.

F-8

---

In
June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 143,Accounting for Asset Retirement
Obligations. The standard requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. When the liability
is initially recorded, the entity capitalizes a cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each
period, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, an entity either settles the obligation for its recorded amount or incurs a
gain or loss upon settlement. The standard is effective for the Company beginning February 2, 2003. The adoption of SFAS No.143 is not expected to have a material impact on the Company's
results of operations or financial position.

In
August 2001, the FASB issued SFAS No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets,
which is effective for all fiscal years beginning after December 15, 2001. SFAS No. 144 supersedes SFAS No. 121,Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The primary objectives of SFAS No. 144 are to develop one accounting model based
on the framework established in SFAS No. 121 for long-lived assets to be disposed of by sale, and to address significant implementation issues. The Company adopted SFAS
No. 144 effective February 1, 2003. The adoption of SFAS No. 144 did not have a significant impact on the financial position or results of operations of the Company.

In
April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and
Technical Corrections. SFAS No. 145 rescinds and amends certain previous standards related primarily to debt and leases. The most substantive amendment requires
sale-leaseback accounting for certain lease modifications that have economic effects that are
similar to sale-leaseback transactions. The provisions of SFAS No. 145 related to the rescission of SFAS No. 4,Reporting Gains and Losses from
Extinguishment of Debt, an Amendment of APB Opinion No. 30are effective for financial statements issued for fiscal years beginning after May 15, 2002 and will
become effective for the Company commencing February 2, 2003. The provisions of SFAS No. 145 related to the amendment of SFAS No. 13 became effective for transactions occurring
after May 15, 2002. All other provisions of SFAS No. 145 are effective for financial statements issued on or after May 15, 2002. The adoption of SFAS No. 145 is not
expected to have a material impact on the Company's results of operations or financial position.

In
June 2002, the FASB issued SFAS No. 146,Accounting for Costs Associated with Exit or Disposal Activitieswhich will
supersede Emerging Issues Task Force Consensus No. 94-3,Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring).SFAS No. 146 will affect the timing of the recognition of costs associated with an exit or disposal plan by
requiring them to be recognized when incurred rather than at the date of a commitment to an exit or disposal plan. SFAS No. 146 is to be applied prospectively to exit or disposal activities
initiated after December 31, 2002. The adoption of SFAS No. 146 is not expected to have a material impact on the Company's results of operations or financial position.

In
December 2002, the FASB issued SFAS No. 148,Accounting for Stock-Based CompensationTransition and Disclosurean
amendment of FASB Statement No. 123, Accounting for Stock-Based Compensation. This Statement amends SFAS No. 123 to provide alternative methods of transition for
a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to
require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported
results. SFAS No. 148 is effective for annual periods ending after December 15, 2002 and interim periods beginning after December 15, 2002. The adoption of SFAS No. 148 is
not expected to have a material impact on the Company's results of operations or financial position.

F-9

---

In
November 2002, the FASB approved FASB Interpretation No. 45 ("FIN 45") "Guarantor's Accounting and Disclosure Requirements for Guarantees,
including Indirect Guarantees of Indebtedness of Others," an Interpretation of FASB Statement No. 5, 57 and 107 and Rescission of FASB Interpretation No. 34. FIN
45 clarifies the requirements of SFAS No. 5, "Accounting for Contingencies", relating to a guarantor's accounting for, and disclosure of, the
issuance of certain types of guarantees. Specifically, FIN 45 requires a guarantor to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing
the guarantee. The provisions for initial recognition and measurement are effective on a prospective basis for guarantees that are issued or modified after December 31, 2002, irrespective of a
guarantor's fiscal year-end. However, the disclosure provisions of FIN 45 are effective for financial statements of interim or annual periods ending after December 15, 2002. The
adoption of FIN 45 is not expected to have a material impact on the Company's results of operations or financial position.

FASB
Interpretation No. 46 ("FIN 46"), Consolidation of Variable Interest Entities, an Interpretation of APB No. 50was
issued in January 2003. FIN 46 requires certain variable interest entities to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the
characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other
parties. FIN 46 is effective for all new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1,
2003, the provisions of FIN 46 must be applied for the first interim or annual period beginning after June 15, 2003. The adoption of FIN 46 is not expected to have a material impact on the
Company's results of operations or financial position.

4.    INVENTORIES

Inventories consist of the following:

February 2,
2002

February 1,
2003Finished goods

$
33,772

$
29,141Work-in-process


4,493


2,551Raw materials and supplies


7,074


11,246$
45,339

$
42,938


5.    PROPERTY, PLANT AND EQUIPMENTNET

Property plant and equipment consists of the following:

February 2,
2002

February 1,
2003Land

$
589

$
1,430Buildings and improvements


13,769


18,696Machinery, equipment, furniture and fixtures


55,759


66,40370,117


86,529Less accumulated depreciation and amortization


(39,462
)

(48,430
)$
30,655

$
38,099


During
the fourth quarter of fiscal year 2001, the Company announced its intention to consolidate its textile operations into a single expanded facility located in Asheville, North
Carolina. Such consolidation and expansion is expected to be completed during fiscal 2003. As a result, the useful life of certain production equipment was adjusted as of the beginning of the fourth
quarter of fiscal year

F-10

---

2001, and certain other assets were written off. The necessary adjustments were recorded in the fourth quarter of the fiscal year 2001, and resulted in additional depreciation of $336 and a direct
write-off of assets of $433, both of which were charged to cost of goods sold. An additional depreciation charge of approximately $1,295 was recorded during the fiscal year ended
February 1, 2003.

Depreciation
expense for the fiscal years ended February 3, 2001, February 2, 2002, and February 1, 2003 was $6,547, $7,068, and $9,619, respectively.

6.    GOODWILL AND INTANGIBLE ASSETSNET

Effective at the beginning of the current fiscal year, the Company adopted the provisions of SFAS No. 142,"Goodwill and Other
Intangible Assets." The adoption of SFAS No. 142 did not require any adjustments to the carrying value of goodwill or other intangible assets, but did result in the
Company's
ceasing to amortize existing goodwill. Previously recorded amortization had amounted to $719 annually. Goodwill at February 1, 2003 (net of amortization recorded through the fiscal year ended
February 2, 2002) amounted to $19,416.

Intangible
assets being amortized consist of the following:

February 2,
2002

February 1,
2003Trademarksnet of accumulated amortization of $2,002 and $2,288

$
2,856

$
2,570Covenant not to competenet of accumulated amortization of $640 and $973


360


27$
3,216

$
2,597


Amortization
expense relating to the above intangible assets will be as follows for each of the next five fiscal years, beginning with the year ending January 31, 2004: $313,
$286, $286, $286 and $286, respectively.

F-11

---

The
following table presents the adjusted amounts for the fiscal years ended February 3, 2001 and February 2, 2002 had the Company applied the nonamortization provisions of
SFAS 142 during those fiscal years.

Fiscal Year EndedFebruary 3,
2001

February 2,
2002

February 1,
2003(53 weeks)Reported net income (loss)

$
12,345

$
4,447

$
10,637Add- goodwill amortization (net of tax effect)


439


439


Adjusted net income (loss)

$
12,784

$
4,886

$
10,637Reported basic and diluted income per share,
Class A Common Stock

$
19.14

$
19.34

$
23.90Add- goodwill amortization (net of tax effect)


0.12


0.12


Adjusted basic and diluted income per share,
Class A Common Stock

$
19.26

$
19.46

$
23.90Reported basic and diluted income (loss) per share,
Class B Common Stock

$
0.17

$
(1.75
)
$
0.06Add- goodwill amortization (net of tax effect)


0.12


0.12


Adjusted basic and diluted income (loss) per share,
Class B Common Stock

$
0.29

$
(1.63
)
$
0.06


7.    ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following:

February 2,
2002

February 1,
2003Accrued wages, fringe benefits and bonuses

$
5,841

$
7,085Accrued interest payable


5,520


5,503Other


3,845


2,981$
15,206

$
15,569


F-12

---

8.    CREDIT AGREEMENT

Anvil's Loan and Security Agreement, as amended (the "Loan Agreement"), provides for a maximum credit facility of $50,000 consisting of a term loan (the "Term
Loan") and a revolving credit facility (the "Revolving Credit Facility"). The Loan Agreement was for an original term of three years with automatic one year renewals unless contrary notice is given by
either party at least 60 days prior to the expiration date. The Loan Agreement (as currently extended) expires March 11, 2004. The Term Loan was in the original principal amount of
$11,725, repayable in quarterly principal installments of $586 through April 2004, subject to extension of the Loan Agreement. Amounts due under the Loan Agreement are secured by substantially
all the inventory, receivables and property, plant and equipment of Anvil. Holdings and Cottontops guaranty amounts due under the Loan Agreement. Interest on the Term Loan and the Revolving Credit
Facility are at prime plus one-quarter percent or LIBOR plus 2-1/4%, at the Company's option. At February 1, 2003 there were no amounts outstanding under the
Revolving Credit Facility. The weighted average interest rate on borrowings under the Loan Agreement during the years ended February 3, 2001, February 2, 2002 and February 1, 2003
was 9.5%, 7.3% and 4.9%, respectively. Interest on the Term Loan borrowings at February 1, 2003 was payable at the rate of 4.5%

9.    10-7/8% SENIOR NOTES

On March 14, 1997, Anvil issued $130,000 of 10-7/8% Senior Notes (the "Senior Notes") due March 15, 2007 and received proceeds of
$126,100 net of debt discount of $3,900. Interest on the notes is payable semiannually on March 15 and September 15. The Company may redeem the Senior Notes at a redemption price of
105.438%, 103.625%, and 101.813% at any time during the 12-month period beginning on March 15, 2002, 2003 and 2004, respectively, and at 100% thereafter.

The
Senior Notes are guaranteed by the Company and Cottontops, are senior unsecured obligations of the Company and rank senior in right of payment to all subordinated indebtedness of the
Company andpari passuin right of payment with all existing and future senior indebtedness, including borrowings under the Loan Agreement. The
indenture relating to the Senior Notes contains certain covenants, including restrictions on additional indebtedness, certain asset sales, and the payment of dividends.

10.  INCOME TAXES

The provision for income taxes consists of the following:

Year EndedFebruary 3,
2001

February 2,
2002

February 1,
2003Current:Federal

$
7,135

$
2,412

$
6,095State and local


700


228


858Total current provision


7,835


2,640


6,953Deferred:Federal


659


(213
)

(492
)State and local


556


(23
)

(372
)Total deferred (benefit) provision


1,215


(236
)

(864
)Total tax (benefit) provision

$
9,050

$
2,404

$
6,089


F-13

---

The
Company's consolidated pre-tax income for the years ended February 2, 2002 and February 1, 2003 includes pre-tax losses of $454 and
pre-tax income $1,742 attributable to foreign sources, respectively.

A
reconciliation of the statutory Federal tax rate and the effective rate is as follows:

Year EndedFebruary 3,
2001

February 2,
2002

February 1,
2003Federal statutory tax rate

35
%
35
%
35
%State and local taxesnet of Federal income tax benefit

4

3

2Foreign taxes-net

2

3

(1
)Write off of deferred debt issuance costs

1

(6
)
42
%
35
%
36
%


The
tax effects of temporary differences that give rise to deferred tax assets and liabilities are presented below:

February 2,
2002

February 1,
2003Deferred tax assets relating to:Inventories

$
994

$
974Reserves not currently deductible


928


777Total deferred tax assets


1,922


1,751Deferred tax liabilities relating to:Property, plant and equipment


(2,500
)

(1,022
)Goodwill and trademarks


(2,931
)

(3,332
)Unremitted foreign earnings


(554
)

(884
)Tax credit carryforward and other





288Total deferred tax liabilities


(5,985
)

(4,950
)Net deferred tax (liability)

$
(4,063
)
$
(3,199
)


11.  INCOME (LOSS) PER SHARE

Net income (loss) per share as presented in the accompanying statements of operations is computed by dividing net income (loss) applicable to each class of Common
Stock by the average number of shares of such stock outstanding, excluding anti-dilutive options (See note 14). Dividends and accretion on the Company's redeemable preferred stock
(net of treasury shares) are deducted, and gains on repurchase of preferred stock (credited directly to the stockholders' deficiency) are added in arriving at income (loss) attributable to the
Company's two classes of common stock. The 12.5% liquidation preference relating to the Company's Class A Common Stock is considered as per share

F-14

---

earnings of that class only. Following is the computation of the per share amounts as presented in the Statement of Operations:

Year EndedFebruary 3,
2001

February 2,
2002

February 1,
2003(53 weeks)Net income (loss) income attributable to common stockholders

$
668

$
(6,778
)
$
250Net income (loss) per common share

$
0.17

$
(1.75
)
$
0.06Preference per Class A common share


18.97


21.09


23.84Net income per Class A common share

$
19.14

$
19.34

$
23.90Net income (loss) per Class B common share

$
0.17

$
(1.75
)
$
0.06


12.  EMPLOYEE SAVINGS AND INVESTMENT PLAN

The Company has a savings and investment plan under which eligible employees may contribute up to 16% of their compensation, subject to certain limitations. The
Company matches 100% of pre-tax contributions up to the first 3% and 50% of the next 3%. During the years ended February 3, 2001, February 2, 2002 and February 1,
2003, the Company made cash contributions to the plan aggregating $806, $783 and $779, respectively.

13.  CAPITAL STRUCTURE

Redeemable Preferred Stock

In connection with the Units Offering, in March 1997, the Company issued 1,200,000 shares of 13% Senior Exchangeable Preferred Stock ("Redeemable Preferred
Stock") due 2009. Total shares authorized are 2,300,000. Dividends accrue quarterly at 13% on the sum of the liquidation value ($25 per share) plus accumulated and unpaid dividends thereon.

On
any scheduled dividend payment date, the Company may, at its option, but subject to certain conditions, exchange all but not less than all of the shares of Redeemable Preferred Stock
then outstanding for the Company's 13% Subordinated Exchange Debentures due 2009 ("Exchange Debentures"). The Redeemable Preferred Stock or the Exchange Debentures, if issued, will be redeemable at
the option of the Company, in whole or in part, at any time on or after March 15, 2002, at the redemption price of 101% of the liquidation preference or aggregate principal amount thereof (as
the case may be), plus, in the case of the Redeemable Preferred Stock, an amount equal to all accumulated and unpaid dividends per share to the date of redemption, or in the case of the Exchange
Debentures, an amount equal to all accumulated and unpaid interest thereon to the date of redemption. On March 15, 2009, the Company is required to redeem all outstanding shares of the
Redeemable Preferred Stock at an amount equal to the liquidation preference and all accumulated and unpaid dividends. The Redeemable Preferred Stock was recorded at an amount equal to the proceeds
(net of discounts) less an amount attributable to the Class B Common Stock issued in Connection with the Units Offering.

As
required by the Company's Certificate of Designations relating to the 13% Senior Exchangeable Preferred Stock (the "Preferred Stock"), the Company has paid stock dividends aggregating
1,075,782 shares ($26,895 liquidation value). This amount includes all dividends declared and paid through the March 15, 2002 quarterly dividend payment date. Dividends subsequent to that date
are required to be paid in cash. The Board of Directors of Holdings has not declared any quarterly dividends since the March 15, 2002 dividend, and such dividends have not been paid. To date,

F-15

---

the accrued dividends amount to $5,362, excluding dividends on preferred shares held by the Company. The Certificate of Designations relating to the Preferred Stock provides that if the Company fails
to make cash dividend payments for four consecutive quarters, the holders of the Preferred Stock may call for a special meeting of stockholders at which they, voting together as a class, are entitled
to elect two additional directors to the Company's Board of Directors.

At
February 1, 2003, the Company holds 704,334 shares of Preferred Stock which it acquired at an aggregate cost of $13,201.

Common Stock

The Class A Common Stock accretes liquidation preference at the rate of 12.5% per annum, compounded quarterly, which is payable prior to distribution of
dividends on Common Stock.

Holders
of Class B Common Stock are entitled to one vote per share on all matters to be voted on by stockholders, while holders of Class A Common Stock and Class C
Common Stock (authorized, but unissued) have no right to vote on any matters except in special circumstances, such as a merger, consolidation, recapitalization or reorganization of the Company.

14.  STOCK OPTION PLAN

Effective January 1, 2002, the Company adopted a stock option plan (the "2002 Stock Option Plan") which authorizes the granting of options for
approximately 5.0% of the outstanding Class B Common Stock on a fully diluted basis. The 2002 Stock Option Plan may be terminated by the Company at any time. The options may be granted to
certain members of management and key employees and are subject to time vesting as well as vesting provisions relating to the sale or recapitalization of the Company, as defined. The exercise price of
such options is the fair market value of the Common Stock as of the date of grant. Options to purchase 90,000 shares with an exercise period of ten years were granted to certain members of management
and key employees on January 1, 2002 at an exercise price of $1 per share, the fair value at date of grant. All such options were outstanding at February 2, 2002. During the year ended
February 1, 2003, options to purchase 10,000 shares were cancelled and options to purchase 2,500 shares were exercised. At February 1, 2003, options to purchase 77,500 shares (37,500 of
which were exercisable) were outstanding with an average life of approximately nine years. At April 25, 2003 options to purchase 65,000 shares (25,000 of which were exercisable) were
outstanding. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in
fiscal 2002: risk-free interest rate of 5.75%; expected dividend yield of 0%; expected life of 10 years; and expected volatility of 0%.

The
Company accounts for its stock option plans in accordance with Accounting Principles Board Opinion No. 25, under which no compensation cost is recognized for stock option
awards. Had compensation cost been determined consistent with Statement of Financial Accounting Standards No. 123,Accounting for Stock-Based
Compensation("SFAS 123"), the effect on the Company's results of operations would have been immaterial.

F-16

---

15.  COMMITMENTS AND CONTINGENCIES

LeasesThe Company is obligated under various leases for equipment, office space and distribution
facilities which expire at various dates through 2009. Future minimum rental commitments under noncancelable operating leases, with terms in excess of one year, are as follows:

Fiscal Year Ending In:2004

$
2,5152005


2,4342006


2,2992007


1,3202008


612Thereafter


239Total

$
9,419


Rental
expense for the years ended February 3, 2001, February 2, 2002 and February 1, 2003 was $1,834, $2,441 and $2,818, respectively.

LitigationThe Company is party to various litigation matters incidental to the conduct of its business. The Company does not
believe that the outcome of any of the matters in which it is currently involved will have a material adverse effect on the financial condition, liquidity, business or results of operations of the
Company.

Letters of CreditAt February 1, 2003, the Company was party to open letters of credit in the amount of $2,057,
expiring through December 2003.

Environmental MattersPrior to the Acquisition, groundwater contamination was discovered at the Asheville, North Carolina
facility. In 1990, Winston Mills, Inc., a subsidiary of McGregor Corporation ("McGregor"), entered into an Administrative Order on Consent ("AOC") with the North Carolina Department of
Environment, Health and Natural Resources ("DEHNR") concerning such contamination. Since that time, McGregor, through Culligan International Company ("Culligan"), a former affiliate, has been
conducting investigative and corrective action under DEHNR oversight and has remained responsible to DEHNR with respect to contamination that is subject to the AOC. While the total cost of the cleanup
at the facility will depend upon the extent of contamination and the corrective action approved by the DEHNR, preliminary cleanup cost estimates range from $1.0 to $4.0 million. McGregor
continues to be a party to the Asheville, North Carolina facility's hazardous waste permit and Culligan has guaranteed McGregor's obligations under the AOC. McGregor also contractually agreed to fully
indemnify the Company with respect to the contamination as part of the terms of the acquisition of the Anvil business (the "Acquisition"). This indemnity is guaranteed by Culligan and by Astrum
International Corp. (now known as Samsonite Corporation), an affiliate of McGregor, in the event Culligan is unable to perform its guarantor obligations. The Company could be held responsible for the
cleanup of this contamination if McGregor, Culligan and Samsonite were all to become unable to fulfill their obligations to DEHNR. McGregor also agreed to fully indemnify the Company for any costs
associated with certain other environmental matters identified at the time of the Acquisition. The Company believes that, even if McGregor were unable to fulfill its indemnification obligations, these
other matters would not have a material adverse effect on the financial condition or results of operations of the Company. McGregor also agreed to indemnify the Company, subject to certain
limitations, with respect to environmental liabilities that arise from events that occurred or conditions in existence prior to the Acquisition. Culligan and Samsonite have also guaranteed McGregor's
obligations under these indemnities.

F-17

---

16.  SUMMARIZED FINANCIAL DATA OF CERTAIN SUBSIDIARIES

Holdings has no independent operations apart from its wholly-owned subsidiary, Anvil, and its sole asset is the capital stock of Anvil. Anvil is Holdings' only
direct subsidiary. Holdings and Cottontops guarantee the Senior Notes of Anvil. In addition to Cottontops, Anvil has five other direct subsidiaries (the "Non-U.S. Subsidiaries") which do
not guarantee the Senior Notes: A.K.H., S.A., Estrella Mfg. Ltda. and Star, S.A., organized in Honduras; Livna, Limitada, organized in El Salvador; and CDC GmbH, organized in Germany. There are
no other direct or indirect subsidiaries of the Company. The following information presents certain condensed consolidating financial data for Holdings, Anvil, Cottontops and the Non-U.S.
Subsidiaries. Complete financial statements and other disclosures concerning Anvil, Cottontops and the Non-U.S. Subsidiaries are not presented because Management has determined they are
not material to investors.

|FISCAL 2002                                            |                                                       | Holdings             |         | Anvil |   | Cottontops |         | Non-U.S.
Subsidiaries |        | Eliminations |       | Holdings and
Subsidiaries
Consolidated |       
|------------------------------------------------------ | ----------------------------------------------------- | -------------------- | ------- | ----- | - | ---------- | ------- | --------------------- | ------ | ------------ | ----- | -------------------------------------- | ------
|Balance Sheet Data                                     |                                                       |                      |         |       |   |            |         |                       |        |              |       |                                        |       
|Cash and cash equivalents                              |                                                       |                      |         |       | $ | 9,101      |         | $                     | 2      |              | $     | 830                                    |       
|Accounts receivable-net                                |                                                       |                      |         |       |   | 25,397     |         |                       | 2,412  |              |       | 506                                    |       
|Inventories                                            |                                                       |                      |         |       |   | 40,150     |         |                       | 1,850  |              |       | 938                                    |       
|Other current assets                                   |                                                       |                      |         |       |   | 4,653      |         |                       | 279    |              |       | 482                                    |       
|                                                       |                                                       |                      |         |       |   |            |         |                       |        |              |       |                                        |       
|                                                       |                                                       | Total current assets |         |       |   |            |         | 79,301                |        |              | 4,543 |                                        |       
|Property, plant & equipment-net                        |                                                       |                      |         |       |   | 28,889     |         |                       | 742    |              |       | 8,468                                  |       
|Goodwill, intangibles and other non-current assets-net |                                                       |                      |         |       |   | 23,828     |         |                       |        |              |       | 323                                    |       
|Investment in Anvil                                    |                                                       | $                    | (18,203 | )     |   |            |         |                       |        |              |       |                                        |       
|Investment in Cottontops                               |                                                       |                      |         |       |   | 4,690      |         |                       |        |              |       |                                        |       
|Investment in Non-U.S. Subsidiaries                    |                                                       |                      |         |       |   | 9,039      |         |                       |        |              |       |                                        |       
|                                                       |                                                       |                      |         |       |   |            |         |                       |        |              |       |                                        |       
|                                                       |                                                       | $                    | (18,203 | )     | $ | 145,747    |         | $                     | 5,285  |              | $     | 11,547                                 |       
|                                                       |                                                       |                      |         |       |   |            |         |                       |        |              |       |                                        |       
|Accounts payable                                       |                                                       |                      |         |       | $ | 13,264     |         | $                     | 419    |              | $     | 811                                    |       
|Accrued liabilities and other current liabilities      |                                                       |                      |         |       |   | 16,041     |         |                       | 176    |              |       | 1,697                                  |       
|Long-term debt and other non-current liabilities       |                                                       |                      |         |       |   | 134,645    |         |                       |        |              |       |                                        |       
|Redeemable preferred stock                             |                                                       | $                    | 43,033  |       |   |            |         |                       |        |              |       |                                        |       
|Stockholders' deficiency/ equity                       |                                                       |                      | (61,236 | )     |   | (18,203    | )       |                       | 4,690  |              |       | 9,039                                  |       
|                                                       |                                                       |                      |         |       |   |            |         |                       |        |              |       |                                        |       
|                                                       |                                                       | $                    | (18,203 | )     | $ | 145,747    |         | $                     | 5,285  |              | $     | 11,547                                 |       
|                                                       |                                                       |                      |         |       |   |            |         |                       |        |              |       |                                        |       
|Statement of Operations Data                           |                                                       |                      |         |       |   |            |         |                       |        |              |       |                                        |       
|Net sales                                              |                                                       |                      |         |       | $ | 209,068    |         | $                     | 21,016 |              | $     | 24,638                                 |       
|Cost of goods sold                                     |                                                       |                      |         |       |   | 157,370    |         |                       | 18,890 |              |       | 21,957                                 |       
|                                                       |                                                       |                      |         |       |   |            |         |                       |        |              |       |                                        |       
|Gross profit                                           |                                                       |                      |         |       |   | 51,698     |         |                       | 2,126  |              |       | 2,681                                  |       
|Operating expenses                                     |                                                       |                      |         |       |   | 23,164     |         |                       | 979    |              |       | 593                                    |       
|Interest expense and other                             |                                                       |                      |         |       |   | 14,872     |         |                       | (175   | )            |       | 346                                    |       
|                                                       |                                                       |                      |         |       |   |            |         |                       |        |              |       |                                        |       
|Income before taxes                                    |                                                       |                      |         |       |   | 13,662     |         |                       | 1,322  |              |       | 1,742                                  |       
|Provision for income taxes                             |                                                       |                      |         |       |   | 5,017      |         |                       | 463    |              |       | 609                                    |       
|                                                       |                                                       |                      |         |       |   |            |         |                       |        |              |       |                                        |       
|Net income                                             |                                                       |                      |         |       | $ | 8,645      |         | $                     | 859    |              | $     | 1,133                                  |       
|                                                       |                                                       |                      |         |       |   |            |         |                       |        |              |       |                                        |       
|Cash Flow Data                                         |                                                       |                      |         |       |   |            |         |                       |        |              |       |                                        |       
|Cash provided (used) by operations                     |                                                       |                      |         |       | $ | 27,485     |         | $                     | (1,868 | )            | $     | 3,142                                  |       
|Investing Activities                                   |                                                       |                      |         |       |   |            |         |                       |        |              |       |                                        |       
|                                                       | Purchase of property, plant & equipment and other-net |                      |         |       |   |            | (14,133 | )                     |        | (599         | )     |                                        | (2,331
|Financing Activities                                   |                                                       |                      |         |       |   |            |         |                       |        |              |       |                                        |       
|                                                       | Purchase of Preferred Stock and other-net             |                      |         |       |   |            | (13,694 | )                     |        |              |       |                                        |       
|                                                       | Intercompany financing activities                     |                      |         |       |   |            | (2,105  | )                     |        | 2,466        |       |                                        | (361  
|                                                       |                                                       |                      |         |       |   |            |         |                       |        |              |       |                                        |       
|Increase (decrease) in cash                            |                                                       |                      |         |       |   | (2,447     | )       |                       | (1     | )            |       | 450                                    |       
|Cash at beginning of period                            |                                                       |                      |         |       |   | 11,548     |         |                       | 3      |              |       | 380                                    |       
|                                                       |                                                       |                      |         |       |   |            |         |                       |        |              |       |                                        |       
|Cash at end of period                                  |                                                       |                      |         |       | $ | 9,101      |         | $                     | 2      |              | $     | 830                                    |       
|                                                       |                                                       |                      |         |       |   |            |         |                       |        |              |       |                                        |       

F-18

---

|FISCAL 2001                                            |                                                       | Holdings             |         | Anvil |   | Cottontops |        | Non-U.S.
Subsidiaries |        | Eliminations |       | Holdings and
Subsidiaries
Consolidated |       
|------------------------------------------------------ | ----------------------------------------------------- | -------------------- | ------- | ----- | - | ---------- | ------ | --------------------- | ------ | ------------ | ----- | -------------------------------------- | ------
|Balance Sheet Data                                     |                                                       |                      |         |       |   |            |        |                       |        |              |       |                                        |       
|Cash and cash equivalents                              |                                                       |                      |         |       | $ | 11,548     |        | $                     | 3      |              | $     | 380                                    |       
|Accounts receivable-net                                |                                                       |                      |         |       |   | 27,598     |        |                       | 886    |              |       | 343                                    |       
|Inventories                                            |                                                       |                      |         |       |   | 43,805     |        |                       | 600    |              |       | 934                                    |       
|Other current assets                                   |                                                       |                      |         |       |   | 3,457      |        |                       | 81     |              |       | 225                                    |       
|                                                       |                                                       |                      |         |       |   |            |        |                       |        |              |       |                                        |       
|                                                       |                                                       | Total current assets |         |       |   |            |        | 86,408                |        |              | 1,570 |                                        |       
|Property, plant & equipment-net                        |                                                       |                      |         |       |   | 22,106     |        |                       | 289    |              |       | 8,260                                  |       
|Goodwill, intangibles and other non-current assets-net |                                                       |                      |         |       |   | 24,863     |        |                       | 8      |              |       | 339                                    |       
|Investment in Anvil                                    |                                                       | $                    | (17,495 | )     |   |            |        |                       |        |              |       |                                        |       
|Investment in Cottontops                               |                                                       |                      |         |       |   | 1,365      |        |                       |        |              |       |                                        |       
|Investment in Non-U.S. Subsidiaries                    |                                                       |                      |         |       |   | 8,043      |        |                       |        |              |       |                                        |       
|                                                       |                                                       |                      |         |       |   |            |        |                       |        |              |       |                                        |       
|                                                       |                                                       | $                    | (17,495 | )     | $ | 142,785    |        | $                     | 1,867  |              | $     | 10,481                                 |       
|                                                       |                                                       |                      |         |       |   |            |        |                       |        |              |       |                                        |       
|Accounts payable                                       |                                                       |                      |         |       | $ | 6,705      |        | $                     | 360    |              | $     | 512                                    |       
|Accrued liabilities and other current liabilities      |                                                       |                      |         |       |   | 15,483     |        |                       | 142    |              |       | 1,926                                  |       
|Long-term debt and other non-current liabilities       |                                                       |                      |         |       |   | 138,092    |        |                       |        |              |       |                                        |       
|Redeemable preferred stock                             |                                                       | $                    | 50,907  |       |   |            |        |                       |        |              |       |                                        |       
|Stockholders' deficiency/ equity                       |                                                       |                      | (68,402 | )     |   | (17,495    | )      |                       | 1,365  |              |       | 8,043                                  |       
|                                                       |                                                       |                      |         |       |   |            |        |                       |        |              |       |                                        |       
|                                                       |                                                       | $                    | (17,495 | )     | $ | 142,785    |        | $                     | 1,867  |              | $     | 10,481                                 |       
|                                                       |                                                       |                      |         |       |   |            |        |                       |        |              |       |                                        |       
|Statement of Operations Data                           |                                                       |                      |         |       |   |            |        |                       |        |              |       |                                        |       
|Net sales                                              |                                                       |                      |         |       | $ | 191,085    |        | $                     | 14,424 |              | $     | 18,433                                 |       
|Cost of goods sold                                     |                                                       |                      |         |       |   | 145,223    |        |                       | 13,347 |              |       | 17,770                                 |       
|                                                       |                                                       |                      |         |       |   |            |        |                       |        |              |       |                                        |       
|Gross profit                                           |                                                       |                      |         |       |   | 45,862     |        |                       | 1,077  |              |       | 663                                    |       
|Operating expenses                                     |                                                       |                      |         |       |   | 23,289     |        |                       | 1,055  |              |       | 514                                    |       
|Interest expense and other                             |                                                       |                      |         |       |   | 15,323     |        |                       | (33    | )            |       | 603                                    |       
|                                                       |                                                       |                      |         |       |   |            |        |                       |        |              |       |                                        |       
|Income (loss) before taxes                             |                                                       |                      |         |       |   | 7,250      |        |                       | 55     |              |       | (454                                   | )     
|Provision for income taxes                             |                                                       |                      |         |       |   | 2,385      |        |                       | 19     |              |       |                                       |       
|                                                       |                                                       |                      |         |       |   |            |        |                       |        |              |       |                                        |       
|Net income                                             |                                                       |                      |         |       | $ | 4,865      |        | $                     | 36     |              | $     | (454                                   | )     
|                                                       |                                                       |                      |         |       |   |            |        |                       |        |              |       |                                        |       
|Cash Flow Data                                         |                                                       |                      |         |       |   |            |        |                       |        |              |       |                                        |       
|Cash provided by operations                            |                                                       |                      |         |       | $ | 11,597     |        | $                     | 1,093  |              | $     | 2,368                                  |       
|Investing Activities                                   |                                                       |                      |         |       |   |            |        |                       |        |              |       |                                        |       
|                                                       | Purchase of property, plant & equipment and other-net |                      |         |       |   |            | (2,366 | )                     |        | (171         | )     |                                        | (3,231
|Financing Activities                                   |                                                       |                      |         |       |   |            |        |                       |        |              |       |                                        |       
|                                                       | Repayment of Long-term debt and other-net             |                      |         |       |   |            | (4,197 | )                     |        |              |       |                                        |       
|                                                       | Intercompany financing activities                     |                      |         |       |   |            | 58     |                       |        | (921         | )     |                                        | 863   
|                                                       |                                                       |                      |         |       |   |            |        |                       |        |              |       |                                        |       
|Increase (decrease) in cash                            |                                                       |                      |         |       |   | 5,092      |        |                       | 1      |              |       | 0                                      |       
|Cash at beginning of period                            |                                                       |                      |         |       |   | 6,456      |        |                       | 2      |              |       | 380                                    |       
|                                                       |                                                       |                      |         |       |   |            |        |                       |        |              |       |                                        |       
|Cash at end of period                                  |                                                       |                      |         |       | $ | 11,548     |        | $                     | 3      |              | $     | 380                                    |       
|                                                       |                                                       |                      |         |       |   |            |        |                       |        |              |       |                                        |       

F-19

---

|FISCAL 2000                        |                                                       | Holdings |  | Anvil |         | Cottontops |   | Non-U.S.
Subsidiaries |     | Eliminations |        | Holdings and
Subsidiaries
Consolidated |  
|---------------------------------- | ----------------------------------------------------- | -------- |  | ----- | ------- | ---------- | - | --------------------- | --- | ------------ | ------ | -------------------------------------- | -
|Statement of Operations Data       |                                                       |          |  |       |         |            |   |                       |     |              |        |                                        |  
|Net sales                          |                                                       |          |  | $     | 208,575 |            | $ | 14,715                |     | $            | 11,777 |                                        | $
|Cost of goods sold                 |                                                       |          |  |       | 147,049 |            |   | 13,237                |     |              | 11,858 |                                        |  
|                                   |                                                       |          |  |       |         |            |   |                       |     |              |        |                                        |  
|Gross profit                       |                                                       |          |  |       | 61,526  |            |   | 1,478                 |     |              | (81    | )                                      |  
|Operating expenses                 |                                                       |          |  |       | 23,364  |            |   | 1,436                 |     |              | 445    |                                        |  
|Interest expense and other         |                                                       |          |  |       | 15,957  |            |   | (28                   | )   |              | 354    |                                        |  
|                                   |                                                       |          |  |       |         |            |   |                       |     |              |        |                                        |  
|Income (loss) before taxes         |                                                       |          |  |       | 22,205  |            |   | 70                    |     |              | (880   | )                                      |  
|Provision for income taxes         |                                                       |          |  |       | 9,022   |            |   | 28                    |     |              |       |                                        |  
|                                   |                                                       |          |  |       |         |            |   |                       |     |              |        |                                        |  
|Net income                         |                                                       |          |  | $     | 13,183  |            | $ | 42                    |     | $            | (880   | )                                      |  
|                                   |                                                       |          |  |       |         |            |   |                       |     |              |        |                                        |  
|Cash Flow Data                     |                                                       |          |  |       |         |            |   |                       |     |              |        |                                        |  
|Cash provided (used) by operations |                                                       |          |  | $     | 14,511  |            | $ | (87                   | )   | $            | (1,494 | )                                      |  
|Investing Activities               |                                                       |          |  |       |         |            |   |                       |     |              |        |                                        |  
|                                   | Purchase of property, plant & equipment and other-net |          |  |       |         | (3,009     | ) |                       | (89 | )            |        | (3,478                                 | )
|Financing Activities               |                                                       |          |  |       |         |            |   |                       |     |              |        |                                        |  
|                                   | Repayment of Long-term debt and other-net             |          |  |       |         | (2,929     | ) |                       |     |              |        |                                        |  
|                                   | Intercompany financing activities                     |          |  |       |         | (5,421     | ) |                       | 171 |              |        | 5,250                                  |  
|                                   |                                                       |          |  |       |         |            |   |                       |     |              |        |                                        |  
|Increase (decrease) in cash        |                                                       |          |  |       | 3,152   |            |   | (5                    | )   |              | 278    |                                        |  
|Cash at beginning of period        |                                                       |          |  |       | 3,304   |            |   | 7                     |     |              | 102    |                                        |  
|                                   |                                                       |          |  |       |         |            |   |                       |     |              |        |                                        |  
|Cash at end of period              |                                                       |          |  | $     | 6,456   |            | $ | 2                     |     | $            | 380    |                                        |  
|                                   |                                                       |          |  |       |         |            |   |                       |     |              |        |                                        |  

17.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Anvil, Holdings and Cottontops have entered into a management agreement with BRS, effective as of the Recapitalization, whereby BRS is to provide certain advisory
and consulting services in relation to the affairs of Anvil, Holdings and Cottontops, including services in connection with strategic financial planning, and the selection, retention and supervision
of investment bankers or other financial advisors or consultants. Annual fees under this management agreement are $250.

Anvil,
Holdings and Cottontops have entered into a management agreement with CVC Management LLC, and affiliate of 399 Venture ("CVC") effective September 15, 2002, whereby CVC is
to provide certain advisory and consulting services in relation to the affairs of Anvil, Holdings and Cottontops, including services in connection with strategic financial planning, and the selection,
retention and supervision of investment bankers or other financial advisors or consultants. Annual fees under this management agreement are $250.

Holdings'
Articles of Incorporation provide for a special dividend in the annual amount of $250 on its Series 1-Class A Common Stock, all of which is held by
399 Venture and its affiliates. Such special dividend has been paid through September 14, 2002. A majority of the holders of the Series 1-Class A Common Stock have
waived the payment of the special dividend on and after September 15, 2002 and have agreed to vote their shares of the Company's voting stock in favor of amending and restating the Company's
Certificate of Incorporation to effectuate the elimination of the special dividend.

BRS
and 399 Venture are significant stockholders of the Company and each have two designees on the Company's Board of Directors.

F-20

---

18.  QUARTERLY FINANCIAL INFORMATION (Unaudited)

|                                               |  | Fiscal 2001 |        | Fiscal 2002 |  
|---------------------------------------------- |  | ----------- | ------ | ----------- | -
|
|
|Net sales                                      |  | $           | 57,760 |             | $
|Gross profit                                   |  |             | 14,457 |             |  
|Operating profit (loss)                        |  |             | 7,553  |             |  
|Net income (loss)                              |  |             | 1,996  |             |  
|Basic and diluted net income (loss) per share: |  |             |        |             |  
|Class A Common Stock                           |  | $           | 4.47   |             | $
|                                               |  |             |        |             |  
|Class B Common Stock                           |  | $           | (0.23  | )           | $
|                                               |  |             |        |             |  

F-21

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SCHEDULE II

ANVIL HOLDINGS, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS

Description

Balance at
beginning
of year

Charged to
costs and
expenses

Charged to
other
accounts

Deductions(a)

Balance at
end of
yearYear ended February 3, 2001
Allowance for doubtful accounts

$
1,211

$
3



$
(93
)
$
1,121Year ended February 2, 2002
Allowance for doubtful accounts

$
1,121

$
317



$
(328
)
$
1,110Year ended February 1, 2003
Allowance for doubtful accounts

$
1,110

$
77



$
(35
)
$
1,152


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S-1

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