<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, 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 3, 2001

                        Commission File Number 333-26999

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

   DELAWARE                                                      13-3801705
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

228 EAST 45TH STREET
NEW YORK, NEW YORK                                                       10017
(address of principal                                                 (Zip Code)
executive office)

Registrant's telephone number                                    (212) 476-0300
(including area code)

      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. [X]

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 [X]

The Company is not required to make filings under Section 16 of the Exchange Act
because it has no registered securities under Section 12 of the Securities
Exchange Act of 1934.

At April 20, 2001 there were 390,000 shares 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
20, 2001, there were 290,000 shares of the registrant's Class A Common Stock,
$0.01 per share par value (the "Class A Common") and 3,590,000 shares of Class B
Common outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE:

     Those portions of the Information Statement for the Company's 2001 Annual
     Meeting of Stockholders (the "Information Statement") are incorporated
     herein by reference in Part III, Items 10, 11, 12 and 13.


                                       1
<PAGE>

PART I
ITEM 1. BUSINESS

CORPORATE STRUCTURE AND RECENT ACQUISITIONS

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 March 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 $13,063,000 for the
purchase of 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, on
March 14, 1997, Anvil sold $130,000,000 of 10-7/8% Senior Notes due 2007
("Senior Notes") in connection with the Recapitalization.

During February 2000, Anvil purchased certain assets of the TOWELSPLUS Division
of Mid-America Wholesalers, Inc. for an aggregate amount of $1,940,000. This
business now operates as a division of Anvil and markets towels and robes
manufactured by outside contractors for sale by Anvil through its distribution
channels.

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 2000" refers to the year ended February 3, 2001, "fiscal 1999" refers to
the year ended January 29, 2000, 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 the ANVIL, COTTON DELUXE, COTTON DELUXE CASUALS and TOWELSPLUS
brand names as well as under 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.


                                       2
<PAGE>

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, permitting distributors to increase efficiency by reducing the number
of vendors and deliveries. In addition, the Company continues to make
significant investments to modernize and expand its manufacturing and
distribution facilities in order to improve quality, reduce costs, manage
inventories and shorten production cycles. To further reduce costs, the Company
is continually placing greater emphasis on lower cost, offshore manufacturing
alternatives.

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 its ANVIL, COTTON
DELUXE, COTTON DELUXE CASUALS and TOWELSPLUS brands, 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 T-shirt 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. Distributors have accounted for an increasing
percentage of the Company's activewear sales in recent years. In Fiscal 2000,
sales to domestic distributors accounted for approximately 83% 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 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.


                                       3
<PAGE>

CONTINUE TO CONTROL COSTS AND IMPROVE MANUFACTURING. The Company continues to
make capital expenditures to maintain, modernize and expand its manufacturing
and distribution facilities in order to improve quality, 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.

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 its ANVIL,
COTTON DELUXE, COTTON DELUXE CASUALS and TOWELSPLUS brand names as 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 AND SPECIALTY T-SHIRTS. Basic and specialty T-shirts are the Company's
principal products. 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. This category accounted for
approximately 62% of the Company's sales in fiscal 2000.

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
30% of the Company's sales in fiscal 2000.

OTHER PRODUCTS. The Company's other products include fleeced sweatshirts, knit
shorts, 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 8% of
the Company's sales in fiscal 2000.


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<PAGE>

SALES AND MARKETING

The Company markets its products primarily through a direct salesforce comprised
of nine salespersons and three sales managers. Each member of the salesforce
receives a base salary and is eligible to receive an incentive bonus payment.

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. The Company believes that by encouraging its
customers to expand their product mix towards higher priced products with more
style elements, it has been able to compete effectively against other companies
that concentrate primarily on basic, lower priced, T-shirts. The Company
believes that this strategy has enabled it to penetrate 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 twenty account for approximately 78% of the
Company's net sales. Two such customers, Alpha Shirt Company and Broder Bros.,
accounted for approximately 22% and 11%, respectively, of the Company's net
sales in fiscal 2000. No other individual customer accounted for more than 10%
of the Company's net sales in fiscal 2000.

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 39% of the Company's purchased yarn in Fiscal 2000.
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.

The Company believes that it is one of the larger purchasers of yarn in its
industry segment and has a sound relationship with each of its suppliers. The
Company believes these relationships 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.


                                       5
<PAGE>

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 activewear 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 believes that its overall turnaround
time provides a competitive advantage and enables it to continue to capitalize
on its timely responsiveness to its customers' requests. In addition, the
Company focuses on providing 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 strategy of emphasizing higher quality, niche
products, promoting a broader product mix, and use of lower-cost offshore
manufacturing operations, should enable it to continue to compete effectively in
its industry market segment.

The Company's principal competitors include several manufacturers of activewear,
some of which are larger and have greater financial and other resources than the
Company. The Company also faces competition from foreign manufacturers of
activewear who generally have lower costs than domestic manufacturers. 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 sewing activities offshore, and has announced the
relocation, to offshore facilities, of its U.S. cutting operations. To meet
anticipated capacity demands, the Company is preparing plans to build an
offshore textile facility to supplement its existing domestic facilities.

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, no 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, 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 would apply 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.


                                       6
<PAGE>

EMPLOYEES

At February 3, 2001, the Company, including its offshore subsidiaries, employed
a total of 164 full-time salaried employees and 3,802 full-time and part-time
hourly employees. Of the Company's 3,966 employees, 1,356 are employed in the
United States; 3,844 employees are involved in manufacturing, 74 in finance and
administration and 48 in marketing and sales. Of the Company's 3,844 employees
involved in manufacturing, 682 are employed at the Company's textile facilities
and 3,162 are employed at the Company's cutting and sewing facilities.

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 for ANVIL, COTTON
DELUXE, COTTON DELUXE CASUALS and TOWELS PLUS (and the ANVIL, COTTON DELUXE and
COTTON DELUXE CASUALS designs) and 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 2000 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


                                       7
<PAGE>

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.

ITEM 2. PROPERTIES

The Company conducts its operations principally through seven 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 and dyed from purchased yarn at its textile facilities,
cutting such fabric at its cutting facility, and sewing at its sewing
facilities. The Company utilizes offshore and domestic contractors as it deems
necessary.

TEXTILE FACILITY OPERATIONS. The Company conducts textile operations at two
facilities owned by the Company located in Kings Mountain and Asheville, North
Carolina. The Company operates approximately 270 knitting machines at its
textile facilities where circular knitting machines knit 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 and
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 2000.

As the Company nears capacity in its existing textile facilities, Management has
recognized the need to establish a plan for new facilities which will interface
more efficiently with offshore cutting and sewing. Accordingly, the Company is
preparing plans for a textile facility in Honduras, to be built in stages.
Implementation of the Company's plan would take approximately three years, and
capital expenditures to complete this plan could approach $25 million over the
next three fiscal years.

Cottontops operates a small dyehouse and a small screen printing facility, both
in Farmville, North Carolina.


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<PAGE>

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. During fiscal 2000, the Company's sewing facilities operated
generally at capacity. The Company began its offshore sewing operations in
January 1996, through A.K.H., S.A., a wholly-owned subsidiary of Anvil, at a
leased facility in Honduras. In October 1997, the Company opened a sewing
facility in El Salvador through Livna, Limitada, a wholly-owned subsidiary of
Anvil. This facility was expanded during fiscal 1998 and a new facility is under
construction. In November 1999, the Company committed to lease another sewing
facility in Honduras through a newly-formed subsidiary of Anvil, Star, S.A.
("Star"). This facility is now operating under an interim lease pending
completion of a larger facility. The larger facility is expected to be completed
by September 2001 and will operate under a five-year lease.

Most cutting is currently conducted at a leased facility located in Mullins,
South Carolina. The Company has announced the relocation to offshore facilities
of its U.S. cutting operations. The transfer is expected to be completed by the
end of 2001. Fabric produced at the Company's textile operations is shipped to a
cutting facility where it is marked by hand from design patterns, cut and then
shipped for sewing.

DISTRIBUTION OPERATIONS. The Company performs substantially all of its
distribution functions at its centralized distribution facility located in
Dillon, South Carolina. This centralized distribution facility, opened in fiscal
1996, enables the Company to provide efficient and responsive customer service
and to efficiently manage inventory. The Company anticipates that, if current
demand trends continue, this facility will require a significant expansion and
modernization by the end of the year 2002.

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

<TABLE>
<CAPTION>
                                               APPROX. SQ.
LOCATION                PRINCIPAL USE              FT.             OWNED/LEASED
--------                --------------             ---             ------------
<S>                    <C>                      <C>                  <C>
New York, NY           Executive Offices          22,100             Leased(1)
Kings Mountain, NC     Textile Facility          225,000             Owned
Asheville, NC          Textile Facility          175,000             Owned
Mullins, SC            Cut and Sew               149,000             Leased(2)
Farmville, NC          Office, Warehouse
                         & Screen Printing        80,000             Leased(3)
Farmville, NC          Dye House                  30,000             Leased(3)
Dillon, SC             Distribution              660,000             Owned
Honduras               Sew                        64,000             Leased(4)
                       Sew                        63,000             Leased(5)
El Salvador            Sew                        54,000             Leased(6)
Germany                Office & Distribution      13,000             Leased(7)
</TABLE>

----------
(1) The lease for the Company's executive office space expires in 2002.
(2) The lease for this facility can be extended to 2012.
(3) The leases for these facilities expire in 2003.
(4) The lease for this facility expires 2003 and can be extended  to 2007.
(5) A facility of 37,000 square feet is under interim lease pending completion
    of a facility of 82,000 square feet, which will be leased for five years.
(6) This facility is in two buildings with leases expiring in 2002 and 2003.
    These leases may be terminated upon relocation to a new facility of 140,00
    square feet expected to be completed by June 2001. The new facility will be
    covered by a five year lease.
(7) The lease for this facility expires in 2004.


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<PAGE>

Management estimates that capital expenditures in the next three fiscal years
will be as follows: fiscal 2001 - $16 million; fiscal 2002 - $26 million; fiscal
2003 - $13 million. These amounts include expenditures relating to new offshore
manufacturing operations and expansion of the Company's distribution facility,
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, along with its long range
expansion programs, 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.

MANAGEMENT INFORMATION SYSTEMS. 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.
Its advanced order entry, allocation and customer service systems tie into its
in-house radio frequency centralized warehouse systems and its customers'
automatic replenishment and EDI systems. The Company's new 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. This enables all offshore facilities to
communicate directly with the Company's data center.

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. See ITEM 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 20, 2001 there were 25 record holders of the Class A
Common and 26 record holders of the Class B Common. All of Anvil's issued and
outstanding capital stock is owned by Holdings.


                                       10
<PAGE>

RECENT SALES OF UNREGISTERED SECURITIES.

As required by the Certificate of Designations relating to its 13% Senior
Exchangeable Preferred Stock, the Company has paid stock dividends aggregating
739,440 shares ($18,486,000 at liquidation value) through the year ended
February 3, 2001.

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 financial data of
the Company for fiscal years 1998 through 2000 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 consolidated financial data for
fiscal years 1996 and 1997 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 of Financial Condition
and Results of Operations" and with the consolidated financial statements and
related notes thereto included elsewhere herein.

<TABLE>
<CAPTION>
                                                                 FISCAL YEAR ENDED
                                         -----------------------------------------------------------------
                                        FEBRUARY 1,   JANUARY 31,   JANUARY 30,   JANUARY 29,   FEBRUARY 3,
                                           1997          1998          1999          2000          2001
                                         ---------     ---------     ---------     ---------     ---------
                                       [Fiscal 1996] [Fiscal 1997] [Fiscal 1998] [Fiscal 1999] [Fiscal 2000]
                                                                                                (53 Weeks)
<S>                                      <C>           <C>           <C>           <C>           <C>
STATEMENT OF OPERATIONS DATA:

Net sales ............................   $ 204,154     $ 214,867     $ 217,302     $ 198,930     $ 216,537
Cost of goods sold ...................     156,813       167,491       179,092       146,931       153,805
                                         ---------     ---------     ---------     ---------     ---------

Gross profit .........................      47,341        47,376        38,210        51,999        62,732
Selling, general and
    administrative expenses ..........      21,678        22,771        24,626        22,692        23,939
Special compensation (1) .............        --          10,915          --            --            --
Amortization of intangible assets ....         958           958           958           958         1,306
                                         ---------     ---------     ---------     ---------     ---------
Operating income (loss) ..............      24,705        12,732        12,626        28,349        37,487
Other income (expense):
  Interest expense ...................      (7,912)      (15,392)      (17,279)      (15,793)      (14,903)
  Amortization of debt expense and
       other--net ....................         415          (897)       (1,006)         (895)       (1,189)
                                         ---------     ---------     ---------     ---------     ---------
Income (loss) before
    provision for income
    taxes and extraordinary item .....      17,208        (3,557)       (5,659)       11,661        21,395
 Provision (benefit) for
       income taxes ..................       6,883        (1,423)       (2,264)        5,213         9,050
                                         ---------     ---------     ---------     ---------     ---------
Income (loss) before
       extraordinary item ............      10,325        (2,134)       (3,395)        6,448        12,345
  Extraordinary item--loss on
    extinguishment of debt, net of tax
    benefit of $1,838 and $417 (2) ...        --          (2,757)         --            (627)         --
                                         ---------     ---------     ---------     ---------     ---------

Net income (loss) ....................   $  10,325     $  (4,891)    $  (3,395)    $   5,821     $  12,345
                                         =========     =========     =========     =========     =========

EBITDA(3) ............................   $  32,592     $  30,864     $  19,847     $  35,727     $  45,340
                                         =========     =========     =========     =========     =========
</TABLE>


                                       11
<PAGE>

<TABLE>
<CAPTION>
                                                                FISCAL YEAR ENDED
                                                       -----------------------------------
                                                      JANUARY 30,  JANUARY 29,  FEBRUARY 2,
                                                         1999         2000         2001
                                                       ---------    ---------    ---------
<S>                                                    <C>          <C>          <C>
Basic Income (Loss) Per Common Share: (4)
  Class A Common Stock:
       Income before extraordinary item ............   $   11.46    $   15.50    $   19.14
       Extraordinary item ..........................        --           (.16)        --
                                                       ---------    ---------    ---------
       Net income ..................................   $   11.46    $   15.34    $   19.14
                                                       =========    =========    =========
  Class B Common Stock:
       Income (loss) before extraordinary item .....   $   (3.15)   $    (.90)   $    0.17
       Extraordinary item ..........................        --           (.16)        --
                                                       ---------    ---------    ---------
       Net income ..................................   $   (3.15)   $   (1.06)   $    0.17
                                                       =========    =========    =========
Weighted average shares used in computation of basic
   income (loss) per share:
      Class A Common ...............................         290          290          290
                                                       =========    =========    =========
      Class B Common ...............................       3,590        3,590        3,590
                                                       =========    =========    =========
</TABLE>

<TABLE>
<CAPTION>
                                           FEB 1,     JAN 31,      JAN 30,      JAN 29,      FEB 3,
BALANCE SHEET DATA (AT END OF PERIOD):     1997        1998         1999         2000         2001
                                         ---------   ---------    ---------    ---------    ---------
<S>                                      <C>         <C>          <C>          <C>          <C>
Cash and cash equivalents ............   $   1,863   $     959    $   3,397    $   3,413    $   6,838
Total assets .........................     135,977     146,352      148,869      137,108      153,324
Total debt ...........................      68,594     148,145      158,335      137,775      135,236
Preferred stock  (liquidation value) .      25,582      33,033       37,541       42,664       48,486
Total stockholders' equity (deficit) .      43,386     (66,255)     (74,397)     (73,908)     (67,739)
</TABLE>

----------
  (1) In connection with the Recapitalization, the Company recorded a special
      charge for compensation related to the exercise of options by members of
      management, payment of a special transaction bonus to members of
      management and payments under a then existing equity buy-out plan to
      members of management. These charges aggregated $10,915, and are
      considered by management to be nonrecurring in nature.

  (2) In connection with the Recapitalization, the Company recorded an
      extraordinary charge of $2,757, net of an income tax benefit, in the year
      ended January 31, 1998, as a result of losses incurred in connection with
      the early extinguishment of debt. The Company also recorded an
      extraordinary charge of $627 (net of taxes) during the year ended January
      29, 2000, in connection with the Loan Agreement and concurrent repayment
      of a prior credit facility. Such amount represents the write off of
      deferred financing fees and other costs related to that refinancing.

  (3) EBITDA is defined as operating income plus depreciation and amortization.
      EBITDA is not a measure of performance under accounting principles
      generally accepted in the United States ("GAAP"). EBITDA should not be
      considered in isolation or as a substitute for net income, cash flows from
      operating activities and other income or cash flow statement data prepared
      in accordance with GAAP, or as a measure of profitability or liquidity.
      Management believes, however, that EBITDA represents a useful measure of
      assessing the performance of the Company's ongoing operating activities as
      it reflects earnings trends of the Company without the impact of purchase
      accounting applied in connection with the Acquisition. In addition,
      management believes EBITDA is a widely accepted financial indicator of a
      company's ability to service and/or incur indebtedness. EBITDA should not
      be construed as an indication of the Company's operating performance or as
      a measure of liquidity. EBITDA does not take into account the Company's
      debt service requirements and other commitments and, accordingly, is not
      necessarily indicative of amounts that may be available for discretionary
      uses. The EBITDA measure presented herein may not be comparable to other
      similarly titled measures of other companies.

  (4) See Note 12 to Financial Statements, included elsewhere herein.


                                       12
<PAGE>

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 3, 2001. The following information should be read in conjunction with
ITEM 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 the current fiscal year would be
representative of approximately 2% more volume than other fiscal years.

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 for quantities ranging from 30 days' to a
one year's supply, depending 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, the Company
has been successful in mitigating the impact of fluctuating yarn prices.
Although yarn prices have recently increased, they are currently at relatively
low levels, and management is continually reviewing and adjusting the Company's
purchase commitments to take advantage of these lower prices.


                                       13
<PAGE>

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 3, 2001:

<TABLE>
<CAPTION>
                                                                             YEAR ENDED
                                                         ------------------------------------------------
                                                         JANUARY 30,       JANUARY 29,        FEBRUARY 3,
                                                           1999               2000               2001
                                                           -----              -----              -----
                                                        [Fiscal 1998]     [Fiscal 1999]      [Fiscal 2000]
                                                                                               (53 weeks)
<S>                                                <C>                <C>                <C>
STATEMENT OF OPERATIONS DATA:
  Net sales ..................................             100.0%             100.0%             100.0%
  Cost of goods sold .........................              82.4               73.9               71.0
  Gross profit ...............................              17.6               26.1               29.0
  Selling, general and administrative expenses              11.3               11.4               11.1
  Interest expense ...........................               8.0                7.9                6.9

OTHER DATA:
  EBITDA (1) .................................     $19.8 million      $35.7 million      $45.3 million
          Percentage of net sales ............               9.1%              18.0%              20.9%
</TABLE>

(1)   EBITDA is defined as operating income plus depreciation and amortization.
      EBITDA is not a measure of performance under GAAP. EBITDA should not be
      considered in isolation or as a substitute for net income, cash flows from
      operating activities and other income or cash flow statement data prepared
      in accordance with GAAP, or as a measure of profitability or liquidity.
      Management believes, however, that EBITDA represents a useful measure of
      assessing the performance of the Company's ongoing operating activities as
      it reflects earnings trends of the Company without the impact of purchase
      accounting applied in connection with the Acquisition. In addition,
      management believes EBITDA is a widely accepted financial indicator of a
      company's ability to service and/or incur indebtedness. EBITDA should not
      be construed as an indication of the Company's operating performance or as
      a measure of liquidity. EBITDA does not take into account the Company's
      debt service requirements and other commitments and, accordingly, is not
      necessarily indicative of amounts that may be available for discretionary
      uses. The EBITDA measure presented herein may not be comparable to other
      similarly titled measures of other companies.

YEAR ENDED FEBRUARY 3, 2001 COMPARED TO YEAR ENDED JANUARY 29, 2000

NET SALES for the year ended February 2, 2001 increased $17.6 million, or 8.9%,
to $216.5 million from $198.9 million for the year ended January 29, 2000. The
overall increase in net sales is comprised of an increase in units sold of
approximately 20%, partially offset by a decrease of 9% in the average selling
price of all goods sold in the current year. The decline in average selling
prices has been a continuing, industry-wide trend for the last few years. In
addition, in recent fiscal quarters, the percentage of sales of goods having
lower selling prices has increased.

GROSS PROFIT for the year ended February 2, 2001 increased by $10.7 million
(20.6%) over the prior year. This improvement is the result of the
aforementioned higher sales as well an improvement in gross profit margin from
26.1% in the prior year to 29.0% in the current year. The improved gross profit
margins are the result of significantly lower production costs, partially offset
by unfavorable changes in product mix. See "Forward Looking Information," below
for a discussion of recent changes in the Company's production capabilities.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (including distribution expense)
for the year ended February 3, 2001 increased by $1.2 million, or 5.5%, to $23.9
million from $22.7 million from the prior year. Increases in salaries and fringe
benefits relating to general and administrative, and distribution amounted to
approximately $0.9 million, and were offset by a decrease of $0.4 million due to
sales staff reductions. Additional costs of $0.6 million were


                                       14
<PAGE>

incurred due to the establishment of the Company's German subsidiary, and an
increase in Cottontops' expenses due to higher volume. Additional warehouse
supplies and repairs accounted for the remaining increase of approximately $0.1
million in the current year.

INTEREST EXPENSE for the year ended February 3, 2001 decreased by $0.9 million,
or 5.6%, to $14.9 million from $15.8 million for the prior year. Interest rates
were slightly higher in the current period, but there were significantly lower
levels of borrowings made possible by improved operating results.

Amortization of intangible assets increased by $0.3 million in the year ended
February 3, 2001, compared to the prior year, as a result of the amortization of
goodwill and a covenant not to compete relating to the acquisition of
TOWELSPLUS.

YEAR ENDED JANUARY 29, 2000 COMPARED TO YEAR ENDED JANUARY 30, 1999

NET SALES for the year ended January 29, 2000 decreased $18.4 million (8.5%) to
$198.9 million from $217.3 million for the year ended January 30, 1999. The
decrease in net sales is the result of a decline in the average selling price
for all goods sold of approximately 10%, slightly offset by an increase of 2% in
total units sold.

GROSS PROFIT for the year ended January 29, 2000 increased approximately $13.8
million (36.1%) compared to the prior fiscal year despite the $18.4 million
decline in sales. This improvement is the result of a substantial increase in
gross margin percentages from 17.6% to 26.1%. This improvement in gross margin
was the result of lower yarn prices and the moving of substantially all of the
Company's sewing activities offshore to take advantage of lower offshore wage
rates.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (including distribution expense)
for the year ended January 29, 2000 decreased by $1.9 million (7.9%) to $22.7
million from $24.6 million for the prior year. As a percentage of net sales,
selling, general and administrative expenses were 11.4% and 11.3% for the fiscal
years ended January 29, 2000 and January 30, 1999, respectively. The dollar
decrease is composed of a reduction in selling expense of approximately $1.4
million resulting from sales staff reductions and reduced advertising, a decline
of $0.4 million general and administrative expenses effected by staff and other
expense reductions, and a reduction of $0.1 million in distribution expense due
primarily to inclusion in the prior year of unusually high first quarter
expenditures to meet delivery commitments.

INTEREST EXPENSE for the year ended January 29, 2000 declined approximately $1.5
million (8.6%) as compared to the prior year. While interest rates were
approximately the same in both periods, the decrease occurred due to lower
levels of borrowings made possible by improved operating results.

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 approximately
$6.2 million in the year ended February 3, 2001 and $3.4 million in the year
ended January 29, 2000. Historically, the


                                       15
<PAGE>

Company's major capital expenditures have related to the acquisition of
machinery and equipment and management information systems hardware and
software. Management estimates that capital expenditures in the next three
fiscal years will be as follows: fiscal 2001 - $16 million; fiscal 2002 - $26
million; fiscal 2003 - $13 million. These amounts include expenditures relating
to new offshore manufacturing operations and expansion of the Company's
distribution facility, as well as routine capital expenditures in the ordinary
course of business.

The Company's principal working capital requirements are financing accounts
receivable and inventories. At February 3, 2001, the Company had net working
capital of approximately $61.7, including $6.8 million in cash and cash
equivalents, $27.6 million of accounts receivable, $55.9 million of inventories,
$3.3 million of other current assets; and $31.9 million in accounts payable and
other current liabilities.

On March 11, 1999, Anvil entered into a Loan and Security Agreement (the "Loan
Agreement") providing for a maximum credit facility of $60.0 million, consisting
of a term loan (the "Term Loan") and a revolving credit facility (the "Revolving
Credit Facility"). The Term Loan was in the principal amount of $11.7 million,
repayable in quarterly principal installments of $0.6 million, which commenced
on July 1, 1999. Anvil also borrowed $19.6 million under the Revolving Credit
Facility. The Loan Agreement expires March 11, 2002, and amounts due under it
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-half percent or LIBOR plus 2-1/2%, at the Company's option. At
February 3, 2001, 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 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


                                       16
<PAGE>

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.

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. While no
definitive arrangements have been made, Management of the Company is confident
that, if required, it will be able to secure, on a timely basis and on favorable
terms, adequate financing for the planned expansion of its production and
distribution facilities.

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.

NEW ACCOUNTING STANDARDS

In June 2000, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities." This statement addresses
a limited number of issues causing implementation difficulties for entities
applying SFAS No. 133. SFAS No. 133 requires that an entity recognizes all
derivative instruments as either assets or liabilities in the balance sheet and
measure those instruments at fair value. The Company was required to adopt SFAS
No. 133 effective February 4, 2001. Adoption of SFAS No. 133 did not have
significant impact on the Company's results of operations, equity or financial
position, as it does not engage in derivative or hedging transactions.

In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements." This SAB summarizes certain of the SEC staff's views in applying
GAAP to revenue recognition in financial statements. The SAB, through its
subsequent revised releases, SAB's No. 101A and No. 101B, is effective for
registrants no later than the fourth fiscal quarter of fiscal years beginning
after December 15, 1999. The implementation of this SAB


                                       17
<PAGE>

did not have a significant impact on the Company's consolidated financial
position, liquidity or results of operations.

FORWARD-LOOKING INFORMATION

Although the Company has been experiencing the adverse effects of an
industry-wide decline in selling prices, management has been able to partially
offset the effect of these pricing pressures by: (i) continuing to improve and
modernize its manufacturing processes in order to reduce production costs; (ii)
moving its sewing operations offshore; and (iii) planning for the relocation
offshore of its cutting operations, and the offshore addition of certain textile
operations.

The management initiatives already implemented have had a favorable effect on
the Company's results of operations, and management believes that its plans to
implement other efficiency-oriented strategies will enable it to improve
operating results and meet competition.

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

1.    Changes in economic conditions, in particular those which affect the
      activewear market.
2.    Changes in the availability and/or price of yarn, in particular, if
      increases in the price of yarn are not passed along to the Company's
      customers.
3.    Changes in senior management or control of the Company.
4.    Inability to obtain new customers or retain existing ones.
5.    Significant changes in competitive factors, including product pricing
      conditions, affecting the Company.
6.    Governmental/regulatory actions and initiatives, including, those
      affecting financings.


                                       18
<PAGE>

7.    Significant changes from expectations in actual capital expenditures and
      operating expenses.
8.    Occurrences affecting the Company's ability to obtain funds from
      operations, debt or equity to finance needed capital expenditures and
      other investments.
9.    Significant changes in rates of interest, inflation or taxes.
10.   Significant changes in the Company's relationship with its employees and
      the potential adverse effects if labor disputes or grievances were to
      occur.
11.   Changes in accounting principles and/or the application of such principles
      to the Company.

The foregoing factors could affect the Company's actual results and could cause
the Company's actual results during fiscal 2001 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 June 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.

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.


                                       19
<PAGE>

                             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.................67      Chief Executive Officer,
                                         Chairman of the Board

Anthony Corsano(2).............41      President and Chief Operating Officer

Jacob Hollander................59      Executive Vice President, Chief
                                         Administrative Officer, Secretary,
                                         General Counsel and Director

William H. Turner..............53      Executive Vice President of Manufacturing

Pasquale Branchizio............62      Vice President of Finance

----------
(1) All ages are as of December 31, 2000.
(2) During fiscal 2000, Mr. Corsano held the position of Executive Vice
    President of Sales and Marketing.

BERNARD GELLER has 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 CORSANO has 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 HOLLANDER has 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


                                       20
<PAGE>

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

PASQUALE BRANCHIZIO has 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 4 through 7 of
the Information Statement, and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by Item 12 of Form 10-K appears on pages 7 through 10
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 10 of the
Information Statement and is incorporated herein by reference.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

 (a)  1.    Financial Statements - See Page F-1 for index to Financial
            Statements

      2.    Financial Statement Schedules - Schedule II--Valuation and
            Qualifying Accounts

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.

 (b)  Reports on Form 8-K

      None.


                                       21
<PAGE>

 (c)  Exhibits

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   10-7/8% Senior Notes and Guarantees.(1)

4.6   Series B 10-7/8% 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)

4.9   Term Promissory Note of Anvil dated March 11, 1999 payable to Congress
      Financial Corporation. (5)


                                       22
<PAGE>

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.

10.2  Employment Agreement, dated as of January 30, 2001 by and between Anvil
      and Anthony Corsano.

10.3  Employment Agreement, dated as of January 30, 2001, by and between Anvil
      and Jacob Hollander.

10.4  Employment Agreement, dated as of January 30, 2001 by and between Anvil
      and William H. Turner.

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 1997 Stock Option Plan.(1)

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)


                                       23
<PAGE>

10.12 Management Agreement dated November 3, 1998 among Anvil, Holdings, and
      BRS. (5)

21    Subsidiaries of Holdings.

(1)   Previously filed with the Company's Registration Statement and Amendments
      thereto on Form S-4 (SEC file No. 333-26999) and is incorporated herein by
      reference.

(2)   Previously filed with the Company's Form 10-Q for the Quarter ended August
      2, 1997, and is incorporated herein by reference.

(3)   Previously filed with the Company's Form 10-K for the Year ended January
      31, 1998, and is incorporated herein by reference.

(4)   Previously filed with the Company's Form 10-Q for the Quarter ended
      October 31, 1998, and is incorporated herein by reference.

(5)   Previously filed with the Company's Form 10-K for the Year ended January
      30, 1999, and is incorporated herein by reference.


                                       24
<PAGE>

                                   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:      /s/ JACOB HOLLANDER
                                              ----------------------------------
                                                        Jacob Hollander
                                                 Vice President and Secretary

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

         SIGNATURE                   CAPACITY                        DATE
         ---------                   --------                        ----

/s/ BERNARD GELLER             Chairman of the Board ,           APRIL 26, 2001
----------------------------   and Director
      Bernard Geller           (Principal Executive
                               And Financial Officer)


/s/ JACOB HOLLANDER            Vice President, Secretary         APRIL 26, 2001
----------------------------   and Director
     Jacob Hollander


/s/  PASQUALE BRANCHIZIO       Vice President of Finance         APRIL 26, 2001
----------------------------   (Principal Accounting Officer)
    Pasquale Branchizio


 /s/ BRUCE C. BRUCKMANN        Director                          APRIL 26, 2001
----------------------------
    Bruce C. Bruckmann


 /s/  STEPHEN F. EDWARDS       Director                          APRIL 26, 2001
----------------------------
    Stephen F. Edwards


 /s/  DAVID F. THOMAS          Director                          APRIL 26, 2001
----------------------------
    David F. Thomas


/s/  JOHN D. WEBER             Director                          APRIL 26, 2001
----------------------------
    John D. Weber

     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
<PAGE>

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

                                                                            PAGE
                                                                            ----

Independent Auditors' Report ................................................F-2

Consolidated Balance Sheets at January 29, 2000 and February 3, 2001.........F-3

Consolidated Statements of Operations for the years ended January 30, 1999,
      January 29, 2000 and February 3, 2001..................................F-4

Consolidated Statements of Stockholders' Equity (Deficiency)  for the
    years ended January 30, 1999, January 29, 2000 and February 3, 2001......F-5

Consolidated Statements of Cash Flows for the years ended January 30, 1999,
     January 29, 2000 and February 3, 2001...................................F-6

Notes to Consolidated Financial Statements...................................F-8

Schedule II --Valuation and Qualifying Accounts..............................S-1


                                      F-1
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

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


We have audited the accompanying consolidated balance sheets of Anvil Holdings,
Inc. and subsidiaries of February 3, 2001 and January 29, 2000, and the related
consolidated statements of operations, stockholders' equity (deficiency), and
cash flows for the years ended February 3, 2001, January 29, 2000 and January
30, 1999. Our audits also included the financial statement schedule listed in
the index at Item 14(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 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, the financial statements referred to above present fairly, in
all material respects, the financial position of Anvil Holdings, Inc. and
subsidiaries as of February 3, 2001 and January 29, 2000, and the results of its
operations and its cash flows for the years ended February 3, 2001, January 29,
2000 and January 30, 1999 in conformity with accounting principles generally
accepted in the United States of America. Also, in our opinion, the 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.

/s/ Deloitte & Touche LLP
New York, New York
April 4, 2001


                                      F-2
<PAGE>

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

<TABLE>
<CAPTION>
                                                                          JANUARY 29,  FEBRUARY 3,
                                                                             2000         2001
                                                                           ---------    ---------
<S>                                                                        <C>          <C>
                           ASSETS

CURRENT ASSETS:
  Cash and cash equivalents ............................................   $   3,413    $   6,838
  Accounts receivable, less allowances for doubtful accounts of
    $1,211 and $1,121 ..................................................      29,779       27,610
  Inventories ..........................................................      39,906       55,858
  Prepaid and refundable income taxes ..................................         117         --
  Deferred income taxes-current portion ................................       2,003        2,255
  Prepaid expenses and other current assets ............................         987        1,021
                                                                           ---------    ---------
            Total current assets .......................................      76,205       93,582

PROPERTY, PLANT AND EQUIPMENT--Net .....................................      33,631       31,955

INTANGIBLE ASSETS--Net .................................................      23,571       23,970

OTHER ASSETS ...........................................................       3,701        3,817
                                                                           ---------    ---------
                                                                           $ 137,108    $ 153,324
                                                                           =========    =========

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
  Accounts payable .....................................................   $   8,523    $  12,512
  Accrued expenses and other current liabilities .......................      15,849       16,678
  Current portion of term loan .........................................       2,345        2,345
  Revolving credit loan ................................................         584         --
  Income taxes payable .................................................         340          363
                                                                           ---------    ---------
                  Total current liabilities ............................      27,641       31,898
                                                                           ---------    ---------
 LONG-TERM PORTION OF TERM LOAN ........................................       7,621        5,276
                                                                           ---------    ---------
10-7/8% SENIOR NOTES ...................................................     127,225      127,615
                                                                           ---------    ---------
DEFERRED INCOME TAXES ..................................................       5,087        6,554
                                                                           ---------    ---------
OTHER LONG-TERM OBLIGATIONS ............................................       1,969        2,071
                                                                           ---------    ---------
REDEEMABLE PREFERRED STOCK
     (Liquidation value $42,664 and $48,486) ...........................      41,473       47,649
                                                                           ---------    ---------
STOCKHOLDERS' DEFICIENCY:
Common stock
      Class A, $.01 par value, 12.5% cumulative; authorized 500,000
        shares, issued and outstanding: 290,000  (aggregate liquidation
        value, $41,139 and $46,643) ....................................           3            3
      Class B, $.01 par value, authorized 7,500,000 shares; issued and
        outstanding: 3,590,000 shares ..................................          36           36
      Class C, $.01 par value; authorized 1,400,000 shares; none  issued
    Additional paid-in capital .........................................      12,803       12,803
    Deficit ............................................................     (86,750)     (80,581)
                                                                           ---------    ---------
           Total stockholders' deficiency ..............................     (73,908)     (67,739)
                                                                           ---------    ---------
                                                                           $ 137,108    $ 153,324
                                                                           =========    =========
</TABLE>

                See notes to consolidated financial statements.


                                      F-3
<PAGE>

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

<TABLE>
<CAPTION>
                                                                   FISCAL YEAR ENDED
                                                         -------------------------------------
                                                                                    FEBRUARY 3,
                                                         JANUARY 30,  JANUARY 29,      2001
                                                            1999         2000       (53 WEEKS)
                                                          ---------    ---------    ---------
<S>                                                       <C>          <C>          <C>
NET SALES .............................................   $ 217,302    $ 198,930    $ 216,537
COST OF GOODS SOLD ....................................     179,092      146,931      153,805
                                                          ---------    ---------    ---------
       Gross profit ...................................      38,210       51,999       62,732
SELLING, GENERAL AND ADMINISTRATIVE
   EXPENSES ...........................................      24,626       22,692       23,939
AMORTIZATION OF INTANGIBLE ASSETS .....................         958          958        1,306
                                                          ---------    ---------    ---------
        Operating income ..............................      12,626       28,349       37,487
OTHER INCOME (EXPENSE):
    Interest expense ..................................     (17,279)     (15,793)     (14,903)
    Amortization of debt expense and other --net ......      (1,006)        (895)      (1,189)
                                                          ---------    ---------    ---------
(LOSS) INCOME BEFORE (BENEFIT) PROVISION
    FOR INCOME TAXES AND EXTRAORDINARY ITEM ...........      (5,659)      11,661       21,395
(BENEFIT) PROVISION FOR INCOME TAXES ..................      (2,264)       5,213        9,050
                                                          ---------    ---------    ---------
(LOSS) INCOME BEFORE EXTRAORDINARY ITEM ...............      (3,395)       6,448       12,345
EXTRAORDINARY ITEM - Loss on extinguishment
    of  debt (net of tax benefit of  $417) ............        --           (627)        --
                                                          ---------    ---------    ---------
NET (LOSS) INCOME .....................................      (3,395)       5,821       12,345
  Less preferred stock  dividends .....................      (4,585)      (5,171)      (6,176)
  Less Common A preference ............................      (4,235)      (4,754)      (5,501)
                                                          ---------    ---------    ---------
  Net (loss) income attributable to common stockholders   $ (12,215)   $  (4,104)   $     668
                                                          =========    =========    =========

BASIC INCOME (LOSS) PER COMMON SHARE:
Class A Common Stock:
   Income before extraordinary item ...................   $   11.46    $   15.50    $   19.14
   Extraordinary item .................................        --          (0.16)        --
                                                          ---------    ---------    ---------
   Net income .........................................   $   11.46    $   15.34    $   19.14
                                                          =========    =========    =========
Class B Common Stock:
    Income (loss) before extraordinary item ...........   $   (3.15)   $   (0.90)      $0 .17
   Extraordinary item .................................        --          (0.16)        --
                                                          ---------    ---------    ---------
   Net (loss) .........................................   $   (3.15)   $   (1.06)      $0 .17
                                                          =========    =========    =========
Weighted average shares used in computation of
 basic income (loss) per share:
  Class A Common ......................................         290          290          290
                                                          =========    =========    =========
  Class B Common ......................................       3,590        3,590        3,590
                                                          =========    =========    =========
</TABLE>

                See notes to consolidated financial statements.


                                      F-4
<PAGE>

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

                                 (In Thousands)

<TABLE>
<CAPTION>
                                               Common Stock                                   Retained
                                      ------------------------------       Additional         Earnings
                                      Class A     Class B    Class C     Paid-in Capital      (Deficit)          Total
                                      -------     -------    -------     ---------------      ---------          -----
<S>                                       <C>       <C>       <C>               <C>           <C>             <C>
Balance at February 1, 1998.........      $ 3       $ 36       --               $ 12,803      $ (79,097)      $ (66,255)
Preferred stock dividends...........                                                             (4,585)         (4,585)
Accretion of preferred stock........                                                               (162)           (162)
Net loss............................                                                             (3,395)         (3,395)
                                    ------------------------------------------------------------------------------------
Balance at January 30,1999..........        3         36       --                 12,803        (87,239)        (74,397)
Preferred stock dividends...........                                                             (5,171)         (5,171)
Accretion of preferred stock........                                                               (161)           (161)
Net income..........................                                                              5,821           5,821
                                    ------------------------------------------------------------------------------------
Balance at January 29,2000..........        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          12,345
                                    ------------------------------------------------------------------------------------
Balance at February 3, 2001.........       $3        $36       --                $12,803       $(80,581)       $(67,739)
                                    ====================================================================================
</TABLE>

                See notes to consolidated financial statements.


                                      F-5
<PAGE>

                      ANVIL HOLDINGS, INC. AND SUBSIDIARIES
                      STATEMENTS OF CONSOLIDATED CASH FLOWS

                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                            FISCAL YEAR ENDED
                                                                   ----------------------------------
                                                                                           FEBRUARY 3,
                                                                   JANUARY 30, JANUARY 29,    2001
                                                                      1999        2000     (53 WEEKS)
                                                                    --------    --------    --------
<S>                                                                 <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss) ...........................................   $ (3,395)   $  5,821    $ 12,345
    Adjustments to reconcile net income (loss) to net
       cash provided (used) by operating activities:
    Depreciation and amortization of fixed assets ...............      6,263       6,420       6,547
    Amortization of other assets ................................      2,023       2,029       2,378
    Loss on extinguishment of debt ..............................       --           627        --
    Provision (recovery) of bad debts ...........................       (187)        576         (90)
    Deferred income taxes .......................................     (1,584)      3,984       1,215
 Changes in operating assets and liabilities, net of acquisition:
    Accounts receivable .........................................     (2,599)     (1,184)      2,259
    Inventories .................................................        733       1,450     (15,952)
    Prepaid and refundable income taxes .........................      2,936       1,587         117
    Accounts payable ............................................     (4,805)      1,342       3,989
    Accrued expenses and other current liabilities ..............          3       1,483         829
    Income taxes payable ........................................       --           340          23
Other--net ......................................................     (1,121)       (994)       (730)
                                                                    --------    --------    --------

           Net cash provided (used) by operating activities .....     (1,733)     23,481      12,930
                                                                    --------    --------    --------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of property and equipment ........................     (5,633)     (3,402)     (6,165)
     Acquisition,  net of working capital effect ................       --          --        (1,705)
     Proceeds from sale of property and equipment ...............          4         887       1,294
                                                                    --------    --------    --------

           Net cash provided (used) by financing activities .....     (5,629)     (2,515)     (6,576)
                                                                    --------    --------    --------
</TABLE>

                                   (Continued)


                See notes to consolidated financial statements.


                                      F-6
<PAGE>

                      ANVIL HOLDINGS, INC. AND SUBSIDIARIES
                      STATEMENTS OF CONSOLIDATED CASH FLOWS

                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                      FISCAL YEAR ENDED
                                                             ----------------------------------
                                                                                     FEBRUARY 3,
                                                             JANUARY 30, JANUARY 29,    2001
                                                                1999        2000     (53 WEEKS)
                                                              --------    --------    --------
<S>                                                           <C>         <C>         <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings (repayments) under revolving credit agreements      9,800     (30,916)       (584)
  Proceeds of Term Loan ...................................       --        11,725        --
  Repayments of long-term debt ............................       --        (1,759)     (2,345)
                                                              --------    --------    --------
      Net cash (used in) provided by financing activities .      9,800     (20,950)     (2,929)
                                                              --------    --------    --------

INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS ...................................      2,438          16       3,425

CASH AND CASH EQUIVALENTS,
   BEGINNING OF YEAR ......................................        959       3,397       3,413
                                                              --------    --------    --------

CASH AND CASH EQUIVALENTS,
   END OF YEAR ............................................   $  3,397    $  3,413    $  6,838
                                                              ========    ========    ========

SUPPLEMENTAL CASH FLOW INFORMATION:
  Cash paid for interest ..................................   $ 17,206    $ 16,184    $ 14,762
                                                              ========    ========    ========
  Net  (refunds) payments of income taxes .................   $ (2,198)   $ (1,115)   $  7,358
                                                              ========    ========    ========

SUPPLEMENTAL SCHEDULE OF NONCASH
   INVESTING AND FINANCING ACTIVITIES:
Redeemable Preferred Stock Issued in Lieu of Dividends ....   $  4,585    $  5,171    $  6,013
                                                              ========    ========    ========
Details of Acquisition:
  Fair Value of Net Assets Acquired .......................                           $    235
  Cash Paid ...............................................                             (1,940)
                                                                                      --------
                                                                                      $ (1,705)
                                                                                      ========
</TABLE>

                See notes to consolidated financial statements.


                                      F-7
<PAGE>

                      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.

During February 2000, Anvil purchased certain assets of the TOWELSPLUS Division
of Mid-America Wholesalers, Inc. for an aggregate amount of $1,940. Goodwill of
$705 was recorded in connection with this acquisition and is being amortized
over a period of 15 years. This business now operates as a division of Anvil and
markets towels and robes manufactured by outside contractors for sale by Anvil
through its distribution channels. The pro forma net sales and results of
operations had this acquisition occurred at the beginning of fiscal 2000 are not
significant, and, accordingly, are not presented.

2. RECAPITALIZATION AND REFINANCING

The Company's current capital structure is the result of a March 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 10-7/8% Senior Notes due 2007 ("Senior Notes") in
connection with the Recapitalization, repaid its borrowings under an existing
credit agreement and entered into an Amended and Restated Credit Agreement (the
"Credit Agreement") which was replaced in March


                                      F-8
<PAGE>

1999 (See Note 8 to Financial Statements).

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION-- The accompanying consolidated financial statements have
been prepared in accordance with accounting principles which are 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.

CASH AND CASH EQUIVALENTS--Cash and cash equivalents include all highly liquid
investments with an original maturity of 90 days or less.

PROPERTY, PLANT AND EQUIPMENT--Property, plant and equipment is being
depreciated for financial reporting purposes principally using the straight-line
method over the estimated useful lives of the assets, ranging from 4 to 25
years. Leasehold improvements are amortized over the lesser of the estimated
useful life or the term of the lease.

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; goodwill is being amortized over the
periods of expected benefit ranging from 10 to 35 years; and the covenant not to
compete is being amortized over its three year term.

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. 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.


                                      F-9
<PAGE>

DEFERRED FINANCING FEES--Included in other assets are deferred financing fees
(approximately $3,500 and $2,800 at January 29, 2000 and February 3, 2001,
respectively) which are being amortized over the term of the applicable
obligations.

INTEREST RATE SWAPS--Gains and losses related to interest rate swaps that
qualify as hedges of existing liabilities are included in the carrying amount of
those liabilities and are ultimately recognized in income as adjustments to the
recorded interest expense. The Company had an interest rate swap agreement in
place to hedge its exposure to interest rate risk, which expired June 8, 2000
and was not renewed. The Company does not hold or issue financial instruments
for trading or speculative purposes.

REVENUE RECOGNITION--Revenue is recognized at the time merchandise is shipped.
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 income (loss) per share is computed based upon the
average outstanding shares of Class A and Class B common stock.

RECLASSIFICATIONS--To facilitate comparison with the current fiscal year,
certain reclassifications have been made to prior years' financial statements.

NEW ACCOUNTING STANDARDS

In June 2000, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities." This statement addresses
a limited number of issues causing implementation difficulties for entities
applying SFAS No. 133. SFAS No. 133 requires that an entity recognizes all
derivative instruments as either assets or liabilities in the balance sheet and
measure those instruments at fair value. The Company was required to adopt SFAS
No. 133 effective February 4, 2001. Adoption of SFAS No. 133 did not have
significant impact on the Company's results of operations, equity or financial
position, as it does not engage in derivative or hedging transactions.

In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements." This SAB summarizes certain of the SEC staff's views in applying
GAAP to revenue recognition in financial statements. The SAB, through its
subsequent revised releases, SAB's No. 101A and No. 101B, is effective for
registrants no later than the fourth fiscal quarter of fiscal years beginning
after December 15, 1999. The implementation of this SAB did not have a
significant impact on the Company's consolidated financial position, liquidity
or results of operations.


                                      F-10
<PAGE>

4. INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>
                                                             JANUARY 29,  FEBRUARY 3,
                                                                2000         2001
                                                              --------     --------
<S>                                                           <C>          <C>
         Finished goods ..................................    $ 22,026     $ 35,263
         Work-in-process .................................      11,777       12,620
         Raw materials and supplies ......................       6,103        7,975
                                                              --------     --------
                                                              $ 39,906     $ 55,858
                                                              ========     ========
</TABLE>

5. PROPERTY, PLANT AND EQUIPMENT

Property plant and equipment consists of the following:

<TABLE>
<CAPTION>
                                                             JANUARY 29,  FEBRUARY 3,
                                                                2000         2001
                                                              --------     --------
<S>                                                           <C>          <C>
         Land ............................................    $    769     $    589
         Buildings and improvements ......................      14,297       13,012
         Machinery, equipment, furniture and fixtures ....      47,900       51,866
                                                              --------     --------
                                                                62,966       65,467
         Less accumulated depreciation and amortization ..     (29,335)     (33,512)
                                                              --------     --------
                                                              $ 33,631     $ 31,955
                                                              ========     ========
</TABLE>

6. INTANGIBLE ASSETS

Intangible assets consist of the following:

<TABLE>
<CAPTION>
                                                             JANUARY 29,  FEBRUARY 3,
                                                                2000         2001
                                                              --------     --------
<S>                                                           <C>          <C>
         Trademarks--net of accumulated
            amortization of $1,430 and $1,716 ............    $  3,428     $  3,142
         Goodwill--net of accumulated
            amortization of $3,138 and $3,864 ............      20,143       20,122
         Covenant not to compete--net of accumulated
            amortization of $294 .........................        --            706
                                                              --------     --------
                                                              $ 23,571     $ 23,970
                                                              ========     ========
</TABLE>

7. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following:

<TABLE>
<CAPTION>
                                                             JANUARY 29,  FEBRUARY 3,
                                                                2000         2001
                                                              --------     --------
<S>                                                           <C>          <C>
         Accrued wages, fringe benefits and bonuses ......    $  6,079     $  6,753
         Accrued interest payable ........................       5,397        5,538
         Other ...........................................       4,373        4,387
                                                              --------     --------
                                                              $ 15,849     $ 16,678
                                                              ========     ========
</TABLE>


                                      F-11
<PAGE>

8. CREDIT AGREEMENTS

LOAN AGREEMENT

On March 11, 1999, Anvil entered into a Loan and Security Agreement (the "Loan
Agreement") providing for a maximum credit facility of $60,000 consisting of a
term loan (the "Term Loan") and a revolving credit facility (the "Revolving
Credit Facility"). The Term Loan was in the principal amount of $11,725,
repayable in quarterly principal installments of $586, which commenced on July
1, 1999. Anvil also borrowed $19,566 under the Revolving Credit Facility. The
Loan Agreement expires March 11, 2002, and amounts due under it are secured by
substantially all the inventory, receivables and property, plant and equipment
of Anvil. Holdings and Cottontops, Inc., a Delaware corporation ("Cottontops")
guarantee amounts due under the Loan Agreement. Interest on the Term Loan and
the Revolving Credit Facility are at prime plus one-half percent or LIBOR plus
2-1/2%, at the Company's option. At February 3, 2001 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 January 29,
2000 and February 3, 2001 was 8.3% and 9.5%. Interest on the Term Loan
borrowings at February 3, 2001 was payable at the rate of 9.5%

THE CREDIT AGREEMENT

In March 1997, Anvil entered into the Credit Agreement which provided a $55,000
revolving credit facility, scheduled to expire March 14, 2002. Effective March
11, 1999, all amounts due under the Credit Agreement were repaid from the
proceeds of the Loan Agreement. The weighted average interest rate for
borrowings under the Credit Agreement during each of the years ended January 30,
1999 and January 29, 2000 was approximately 7.88%.

9. 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 and PARI PASSU in 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.


                                      F-12
<PAGE>

10. EXTRAORDINARY ITEM

The Company recorded an extraordinary charge of $627 (net of taxes) during the
year ended January 29, 2000, in connection with the Loan Agreement and
concurrent repayment of the Credit Agreement. Such amount represents the write
off of deferred financing fees and other costs related thereto.

11. INCOME TAXES

The provision (benefit) for income taxes consists of the following:

<TABLE>
<CAPTION>
                                                      YEAR ENDED
                                          ----------------------------------
                                          JANUARY 30, JANUARY 29, FEBRUARY 3,
                                             1999        2000       2001
                                            -------     -------    -------
<S>                                         <C>         <C>        <C>
Current:
  Federal ..............................    $  (680)    $ 1,046    $ 7,135
  State and local ......................       --           183        700
                                            -------     -------    -------
      Total current (benefit) ..........       (680)      1,229      7,835
                                            -------     -------    -------
Deferred:
  Federal ..............................     (1,283)      3,228        659
  State and local ......................       (301)        756        547
                                            -------     -------    -------
      Total deferred (benefit) provision     (1,584)      3,984      1,215
                                            -------     -------    -------

Total tax (benefit) provision ..........    $(2,264)    $ 5,213    $ 9,050
                                            =======     =======    =======
</TABLE>

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

<TABLE>
<CAPTION>
                                                        YEAR ENDED
                                           -------------------------------------
                                           JANUARY 30,  JANUARY 29,  FEBRUARY 3,
                                              1999         2000         2001
                                              ----         ----         ----
<S>                                           <C>          <C>          <C>
Federal statutory tax rate ..............      35%          35%          35%
State and local taxes--net of
    Federal income tax benefit ..........       5            5            4
Foreign  losses with no tax benefit .....      --           --            2
Other ...................................      --           --            1
                                              ----         ----         ----
                                               40%          40%          42%
                                              ====         ====         ====
</TABLE>


                                      F-13
<PAGE>

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

<TABLE>
<CAPTION>
                                                             JANUARY 29,  FEBRUARY 3,
                                                                2000         2001
                                                              --------     --------
<S>                                                           <C>          <C>
         Deferred tax assets relating to:
            Inventories ..................................    $    802     $  1,259
            Net operating loss carryforward ..............         950         --
            Reserves not currently deductible ............       1,442        1,172
            Tax credit carryforward ......................         190         --
                                                              --------     --------
                 Total deferred tax assets ...............       3,384        2,431
                                                              --------     --------
         Deferred tax liabilities relating to:
            Property, plant and equipment ................      (3,819)      (3,709)
            Goodwill and trademarks ......................      (2,320)      (2,558)
            Unremitted foreign earnings ..................        (329)        (463)
                                                              --------     --------
                  Total deferred tax liabilities .........      (6,468)      (6,730)
                                                              --------     --------

                  Net deferred tax (liability) ...........    $ (3,084)    $ (4,299)
                                                              ========     ========
</TABLE>

12. 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.
Following is the computation of the per share amounts as presented in the
Statement of Operations:

<TABLE>
<CAPTION>
                                                                            YEAR ENDED
                                                             ----------------------------------------
                                                             JANUARY 30,    JANUARY 29,    FEBRUARY 3,
                                                                1999           2000           2001
                                                             ----------     ----------     ----------
                                                                                           (53 weeks)
<S>                                                          <C>            <C>            <C>
Net (loss) income attributable to common stockholders ...    $  (12,215)    $   (4,104)    $      668
                                                             ==========     ==========     ==========

Preference per Class A common share .....................    $    14.61     $    16.40     $    18.97
Net (loss) income per common share ......................         (3.15)         (1.06)          0.17
                                                             ----------     ----------     ----------
Net income per Class A common share .....................    $    11.46     $    15.34     $    19.14
                                                             ==========     ==========     ==========

Net (loss) per Class B common share .....................    $    (3.15)    $    (1.06)    $      .17
                                                             ==========     ==========     ==========
</TABLE>

13. FAIR VALUE OF FINANCIAL INSTRUMENTS

Under an interest rate swap agreement aggregating $10,000 which expired June 8,
2000 and was not renewed, Anvil received interest at LIBOR, reset quarterly, and
paid interest at the weighted average fixed rate of 7.3%. The fair value of
interest rate swaps at January 29, 2000 was approximately $60 and reflects the
estimated amount, obtained from dealer quotations, that the Company would have
paid to terminate the contracts at such date.

The carrying amounts of all other 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.


                                      F-14
<PAGE>

14. 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 January 31, 1999, January 29, 2000 and February
3, 2001, the Company made contributions to the plan aggregating $1,022, $689 and
$806, respectively.

15. CAPITAL STRUCTURE

The capital structure at January 29, 2000 and February 3, 2001 was as follows:

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. Through March 15,
2002 the Company may, at its option, pay dividends in cash or in additional
fully paid and non-assessable shares of Redeemable Preferred Stock having an
aggregate liquidation preference equal to the amount of such dividends. 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 purchase, or in the case of the Exchange Debentures, an
amount equal to all accumulated and unpaid interest thereon to the date of
purchase. 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.

The Class A Common Stock accretes liquidation value at the rate of 12.5% per
annum, compounded quarterly.

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 have no right to vote on any matters except in special
circumstances, such as a merger, consolidation, recapitalization or
reorganization of the Company.

As required by the Certificate of Designations relating to the 13% Senior
Exchangeable Preferred Stock, the Company has paid stock dividends aggregating
739,458 shares ($18,486 liquidation value) through the year ended February 3,
2001.


                                      F-15
<PAGE>

16. STOCK OPTION PLAN

During fiscal 1997, the Company adopted a 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 "Stock Option Plan"). The Stock Option Plan
may be terminated by the Company at any time. The options under the Stock Option
Plan may be granted to certain members of management and key employees and are
subject to time and performance vesting provisions. 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 were granted to certain officers and key
employees on May 29, 1997 at an exercise price of $1 per share, the fair value
at date of grant. During the years ended January 29, 2000 and February 3, 2001,
options to purchase 20,000 shares and 10,000 shares, respectively (none of which
were exercisable) expired. At February 3, 2001, 60,000 options (none of which
are exercisable) were outstanding. The weighted average fair value of options
granted in fiscal 1997 was $1.00. 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 1997:
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 plan 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 less than $10 in each of the years in the three year period
ended February 3, 2001, which is immaterial to the financial statements.

17. COMMITMENTS AND CONTINGENCIES

LEASES--The Company is obligated under various leases for equipment, office
space and distribution facilities which expire at various dates through 2005.
Future minimum rental commitments under noncancelable operating leases, with
terms in excess of one year, are as follows:

<TABLE>
<CAPTION>
Fiscal Year Ending:
<S>                                                              <C>
         2002 .....................................              $2,040
         2003 .....................................               1,509
         2004 .....................................                 817
         2005 .....................................                 514
         2006 .....................................                 166
                                                                 ------
              Total ...............................              $5,046
                                                                 ======
</TABLE>

Rental expense for the years ended January 30, 1999 and January 29, 2000 and
February 3, 2001 was $1,218, $1,143 and $1,834, 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.


                                      F-16
<PAGE>

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.

18. SUMMARIZED FINANCIAL DATA OF CERTAIN WHOLLY-OWNED SUBSIDIARIES

Following is the summarized balance sheet data of Anvil and Cottontops.
Cottontops is a wholly-owned subsidiary of Anvil, which is a wholly-owned
subsidiary of Holdings.

<TABLE>
<CAPTION>
                                        ANVIL KNITWEAR, INC.         COTTONTOPS, INC.
                                      -----------------------     ----------------------
                                      JANUARY 29,   FEBRUARY 3,   JANUARY 29,  FEBRUARY 3,
                                        2000          2001          2000         2001
                                      ---------     ---------     ---------    ---------
<S>                                   <C>           <C>           <C>          <C>
Current assets ...................    $  76,205     $  93,582     $   2,267    $   2,584
                                      =========     =========     =========    =========
Total assets .....................    $ 137,108     $ 153,324     $   2,467    $   2,751
                                      =========     =========     =========    =========

Current liabilities ..............    $  27,641     $  31,898     $     430    $     501
                                      =========     =========     =========    =========
Long-term liabilities ............    $ 141,902     $ 141,516          --           --
                                      =========     =========
Total liabilities ................    $ 169,543     $ 173,414     $     430    $     501
                                      =========     =========     =========    =========
Stockholders' equity  (deficiency)    $ (32,435)    $ (20,090)    $   2,037    $   2,250
                                      =========     =========     =========    =========
</TABLE>


                                      F-17
<PAGE>

Following is the summarized statement of operations data of Anvil and Cottontops
for the periods indicated:

<TABLE>
<CAPTION>
                                    ANVIL KNITWEAR, INC.                       COTTONTOPS, INC.
                                        YEAR ENDED                               YEAR ENDED
                           ------------------------------------    ------------------------------------
                           JANUARY 30,   JANUARY 29,  FEBRUARY 3,  JANUARY 30,  JANUARY 29,   FEBRUARY 3,
                             1999          2000         2001         1999         2000          2001
                           ---------     ---------    ---------    ---------    ---------     ---------
                                                      (53 weeks)                              (53 Weeks)
<S>                        <C>           <C>          <C>          <C>          <C>           <C>
Net sales .............    $ 217,302     $ 198,930    $ 216,537    $   3,583    $   4,133     $   6,815
                           =========     =========    =========    =========    =========     =========
Operating income (loss)    $  12,626     $  28,349    $  37,487    $      85    $    (934)    $      42
                           =========     =========    =========    =========    =========     =========
Interest expense ......    $  17,279     $  15,793    $  14.903
                           =========     =========    =========
Net income (loss) .....    $  (3,395)    $   5,821    $  12,345    $      62    $    (545)    $      42
                           =========     =========    =========    =========    =========     =========
</TABLE>

Holdings and Cottontops have fully and unconditionally, jointly and severally
guaranteed the Series A Senior Notes and the Series B Senior Notes. Complete
financial statements and other disclosures concerning Anvil and Cottontops are
not presented because management has determined they are not material to
investors. Holdings has no independent operations apart from its wholly-owned
subsidiary, Anvil, and its sole asset is the capital stock of Anvil. Anvil is
Holding's only direct subsidiary. In addition to Cottontops, Anvil has four
other non-guarantor direct subsidiaries: A.K.H., S.A. and Star, S.A., both
organized in Honduras; Livna, Limitada, organized in El Salvador; and CDC GmbH,
organized in Germany. Other than as stated herein, there are no other direct or
indirect subsidiaries of the Company. Management believes the Non-Guarantor
Subsidiaries are inconsequential both individually and in the aggregate.

19. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
                                                      FISCAL 1999                                 FISCAL 2000 (53 WEEKS)
                                    -----------------------------------------------    --------------------------------------------
                                                        QUARTER                                           QUARTER
                                    -----------------------------------------------    --------------------------------------------
                                     FIRST        SECOND       THIRD        FOURTH      FIRST       SECOND      THIRD       FOURTH
                                    --------     --------     --------     --------    --------    --------    --------    --------
<S>                                 <C>          <C>          <C>          <C>         <C>         <C>         <C>         <C>
Net sales ......................    $ 52,411     $ 51,770     $ 42,856     $ 51,893    $ 59,124    $ 56,840    $ 49,724    $ 50,849
Gross profit ...................      11,078       12,921       12,326       15,674      17,180      16,588      15,217      13,747
Operating profit (loss) ........       4,760        7,303        6,234       10,052      10,597      10,727       8,675       7,488
Income (loss) before extra-
  ordinary item ................         133        1,836        1,252        3,227       3,884       4,028       2,877       1,556
Net income (loss) ..............        (494)       1,836        1,252        3,227       3,884       4,028       2,877       1,556

Basic Income (loss) per share:
Class A Common Stock:
     Income (loss) before extra-
       ordinary item ...........    $   3.40     $   3.87     $   3.82     $   4.41    $   4.73    $   4.86    $   4.70    $   4.85
                                    ========     ========     ========     ========    ========    ========    ========    ========
      Net income ...............    $   3.24     $   3.87     $   3.82     $   4.41    $   4.73    $   4.86    $   4.70    $   4.85
                                    ========     ========     ========     ========    ========    ========    ========    ========
Class B Common Stock:
     Income (loss) before extra-
       ordinary item ...........    $   (.59)    $  (0.15)    $  (0.32)    $   0.16    $   0.30    $   0.32    $   (0.1)   $  (0.44)
                                    ========     ========     ========     ========    ========    ========    ========    ========
     Net income (loss) .........    $   (.75)    $  (0.15)    $  (0.32)    $   0.16    $   0.30    $   0.32    $   (0.1)   $  (0.44)
                                    ========     ========     ========     ========    ========    ========    ========    ========
</TABLE>


                                      F-18
<PAGE>

                                   SCHEDULE II

                      ANVIL HOLDINGS, INC. AND SUSIDIARIES
                        VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
                                        Balance at     Charged to    Charged to                 Balance at
                                         Beginning      costs and       other                     end of
                 Description              of Year       Expenses      Accounts    Deductions(a)    Year
                 -----------              -------       --------      --------    -------------    ----
<S>                                       <C>            <C>          <C>            <C>          <C>
Year ended January 30, 1999
  Allowance for doubtful accounts......   $  822         $  498                      $  685       $  635
                                          ======         ======                      ======       ======

Year ended January 29, 2000
  Allowance for doubtful accounts......    $ 635         $  568                      $  (8)       $1,211
                                           =====         ======                      ======       ======

Year ended February 3, 2001
  Allowance for doubtful accounts......   $1,211         $    3                      $ (93)       $1,121
                                          ======         ======                      ======       ======
</TABLE>

----------
(a) Accounts written off or collected - net


                                      S-1