<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 January 29, 2000

                        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 17, 2000 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
17, 2000, 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 2000 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 was formed for purposes of acquiring, in 1995, the
assets of the Anvil Knitwear Division (the "Predecessor") from McGregor
Corporation ("McGregor") (the "Acquisition").

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, repaid its borrowings
under an existing credit agreement (the "Old Credit Agreement") and entered into
an Amended and Restated Credit Agreement (the "Credit Agreement"). The Credit
Agreement was replaced in March 1999 (See Note 8 to Financial Statements).

On January 31, 1997, Anvil completed the acquisition of the assets of a marketer
and distributor of activewear products which, prior to the acquisition, supplied
finished activewear products to Anvil, for redistribution by Anvil, as well as
supplying directly into the retail market. This business operates through a
Delaware corporation, Cottontops, Inc. ("Cottontops").

In fiscal 1999, the Company caused the formation of CDC GmbH in Germany.
Operating as a wholly-owned subsidiary of Anvil, CDC GmbH distributes the
Company's products in Germany and other parts of Europe.

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 1999" refers to the year ended January 29, 2000, "fiscal 1998" refers to
the year ended January 30, 1999, etc.


                                       2
<PAGE>

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, athletic shorts and caps, and supplemented with towels and robes.
The Company markets and sells its products primarily to distributors and screen
printers under the ANVIL, COTTON DELUXE and COTTON DELUXE CASUALS 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.

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; and (iii)
regularly introducing new products. 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 textile production cycles. To further reduce costs, the
Company has moved virtually all of its sewing operations offshore.

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 and COTTON DELUXE CASUALS 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 1999,
sales to distributors accounted for approximately 82% of the Company's net
sales. In the Company's experience,


                                       3
<PAGE>

distributors typically place larger purchase 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 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.

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 textile production cycles. The Company believes it can
continue to improve its operating results by: (i) maximizing the use of offshore
sewing operations; (ii) utilizing its centralized distribution facility to
deliver its products in a more cost efficient manner; and (iii)
opportunistically redesigning textile manufacturing processes to shorten
production cycles and improve inventory management.

CAPITALIZE ON THE GROWTH OF THE ACTIVEWEAR MARKET. The Company believes that
sales of activewear products have been driven primarily 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, athletic shorts and caps, and
supplemented with towels and robes. This broad array of casual knitwear and
athletic wear is marketed and sold by the Company under its ANVIL, COTTON DELUXE
and COTTON DELUXE CASUALS 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 57% of the Company's sales in fiscal 1999.


                                       4
<PAGE>

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
37% of the Company's sales in fiscal 1999.

OTHER PRODUCTS. The Company's other products include fleeced sweatshirts, knit
shorts, caps, towels and robes, most of which are produced in a variety of
colors and designs. 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 6% of the Company's sales in fiscal
1999.

SALES AND MARKETING

The Company markets its products primarily through a direct salesforce comprised
of eleven 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 77% of the
Company's net sales. Two such customers, Alpha Shirt Company and San Mar,
accounted for approximately 19% and 12%, respectively, of the Company's net
sales in fiscal 1999. No other individual customer accounted for more than 10%
of the Company's net sales in fiscal 1999.

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 five domestic spinners. One individual spinner accounted
for approximately 48% of the Company's purchased yarn in fiscal 1999. 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 other chemicals used in the dyeing and bleaching of
fabrics.


                                       5
<PAGE>

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.

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'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 substantially lower costs than domestic
manufacturers.

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.

Increased competition has caused many domestic apparel manufacturers to move
their sewing operations offshore to lower costs. The Company currently performs
substantially all of its sewing activities offshore to take advantage of lower
offshore wage rates.


                                       6
<PAGE>

The Company believes that its current strategy of emphasizing higher quality,
niche products, promoting a broader product mix, and use of lower-cost offshore
sewing operations, should enable it to continue to compete effectively in its
industry market segment.

EMPLOYEES

At January 29, 2000, the Company, including its offshore subsidiaries, employed
a total of 164 full-time salaried employees and 2,557 full-time and part-time
hourly employees. Of the Company's employees, 2,598 are involved in
manufacturing, 75 in finance, administration and distribution and 48 in
marketing and sales. Of the Company's 2,598 employees involved in manufacturing,
609 are employed at the Company's textile facilities and 1,989 are employed at
the Company's 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 and
COTTON DELUXE (and the 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.

Prior to the Acquisition, groundwater contamination was discovered at the
Asheville, North Carolina facility. In 1990, Winston Mills, Inc., a subsidiary
of 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


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contamination and the corrective action approved by the DEHNR, preliminary
cleanup cost estimates ranged 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. This indemnity is
guaranteed by Culligan and by Astrum International Corp. ("Astrum"), an
affiliate of McGregor (now known as Samsonite Corporation) 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 over 150 knitting machines at its textile
facilities where circular knit machines knit yarn into tubes of basic fabric
constructions such as jersey and fleece and circular rib and flat knit 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 at approximately 85% of capacity during fiscal 1999.
The Company believes it has the capability to increase the operating capacity of
its textile facilities with only relatively modest capital expenditures.
Cottontops operates a dyehouse and a screen printing facility, both in
Farmville, North Carolina.

SEWING FACILITY OPERATIONS. The greater part of the Company's sewing operations
are conducted at three leased facilities located in Honduras and El Salvador and
at offshore contractors. All cutting and some minor sewing operations are
conducted at a leased facility located in Mullins, South Carolina. Fabric
produced at the Company's textile operations is shipped to the cutting facility
where it is marked by hand from design patterns, cut and then shipped for
sewing.


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<PAGE>

During fiscal 1999, 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. 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 operating under an
interim lease pending completion of a larger facility. The larger facility is
expected to be completed by August 2000 and will operate under a five-year
lease. During fiscal 1999, approximately 92% of the Company's production (sewing
hours) was sewn offshore (including in-house production and outside sources),
and the Company expects its percentage of offshore sewing labor hours to
continue to increase. Because of this increasing shift to offshore production,
during fiscal 1998 and 1999, the Company eliminated all but minor domestic
sewing.

DISTRIBUTION OPERATIONS. The Company performs all of its distribution functions
at its centralized distribution facility located in Dillon, South Carolina. The
Company believes that this centralized distribution facility, opened in fiscal
1996, has enhanced its ability to provide efficient and responsive customer
service and to more efficiently manage inventory.

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                           65,000             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 2001.
(4) The lease for this facility can be extended to 2004.
(5) A facility of 19,000 square feet is under interim lease pending
    completion of a  larger facility, which will be leased for five years.
(6) This facility is in two buildings with leases expiring in 2002 and 2003.
(7) This lease is terminable by notice given  prior to the end of any year.

The Company anticipates the level of capital expenditures for the next few years
to be at an annual rate of $5.0 to $7.0 million, including those relating to new
offshore sewing operations. The Company has no other material capital
commitments for the next twelve months outside of the ordinary course of
business.


                                       9
<PAGE>

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.
The Company's ongoing maintenance and improvement of its manufacturing
facilities 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's management has a strong commitment
to the continued growth and modernization of its strategic information
technology systems. The Company has continued to upgrade its management
information systems with both in- house and purchased systems and has advanced
order entry, allocation and customer service systems along with a complete
in-house radio frequency system in its centralized warehouse. These systems tie
in directly with customers' automatic replenishment and EDI systems. The
implementation of a sophisticated planning and scheduling system is nearing
completion. This system will optimize available manufacturing resources (textile
and garment) to help reduce inventories and lead time and improve the timeliness
of deliveries. The system is driven by the Company's new in-house forecast
system as well as by customer orders. The Company has also implemented a new
offshore tracking system which monitors all garment production. Currently, the
Company is installing, offshore, a real-time payroll system and satellite
communications between offshore and domestic locations.

ITEM 3.  LEGAL PROCEEDINGS

The Company is a party to various litigation matters incidental to the conduct
of its business. The Company does not believe that the outcome of any of the
matters in which it is currently involved will have a material adverse effect on
the financial condition 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 17, 2000 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.

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
506,559 shares ($12,664,000 at liquidation value) through the year ended January
29, 2000.


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<PAGE>

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 1997 through 1999 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 1995 and 1996 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
                                      ----------------------------------------------------------------------
                                       JANUARY 27,   FEBRUARY 1,  JANUARY  31,   JANUARY 30,    JANUARY 29,
                                          1996          1997          1998          1999           2000
                                          ----          ----          ----          ----           ----
                                      [Fiscal 1995] [Fiscal 1996] [Fiscal 1997] [Fiscal 1998]  [Fiscal 1999]

STATEMENT OF OPERATIONS DATA:

<S>                                      <C>          <C>          <C>            <C>            <C>
Net sales............................    $ 193,389    $ 204,154    $  214,867     $217,302       $198,930
Cost of goods sold...................      149,723      156,813       167,491      179,092        146,931
                                           -------      -------       -------      -------        -------

Gross profit.........................       43,666       47,341        47,376       38,210         51,999
Selling, general and
    administrative expenses..........       17,778       21,678        22,771       24,626         22,692
Special compensation (1).............          -            -          10,915          -             -
Amortization of intangible assets....          736          958           958          958            958
                                           -------     --------       -------      -------       --------
Operating income (loss)..............       25,152       24,705        12,732       12,626         28,349
Other income (expense):
  Interest expense...................       (8,844)      (7,912)      (15,392)     (17,279)       (15,793)
  Amortization of debt expense and
       other--net....................          616          415          (897)      (1,006)          (895)
                                           -------      -------     ----------    ---------    ----------
Income (loss) before
    provision for income
    taxes and extraordinary item.....       16,924       17,208        (3,557)      (5,659)        11,661
 Provision (benefit) for
      income taxes...................        6,770        6,883        (1,423)      (2,264)         5,213
                                           --------    --------        -------      -------      --------
Income (loss) before
    extraordinary item...............       10,154       10,325        (2,134)      (3,395)         6,448
  Extraordinary item--loss on
    extinguishment of debt, net of tax
    benefit of $1,838 and $417 (2)              -           -          (2,757)        -              (627)
                                           -------      -------        -------   ---------    -----------

Net income (loss)....................     $ 10,154      $10,325       $(4,891)     $(3,395)        $5,821
                                          ========      =======       ========     ========        ======

EBITDA (3)...........................     $ 31,615     $ 32,592      $ 30,864      $19,847        $35,727
                                          ========     ========      ========      =======        =======
</TABLE>


                                       11
<PAGE>

<TABLE>
<CAPTION>

                                                                                 FISCAL YEAR ENDED
                                                                      ---------------------------------------
                                                                      JANUARY 31,   JANUARY 30,   JANUARY 29,
                                                                         1998          1999          2000
                                                                         ----          ----          ----
<S>                                                                    <C>           <C>           <C>
Basic Income (Loss) Per Common Share: (4)
  Class A Common Stock:
       Income before extraordinary item..............................   $10.51        $11.46        $15.50
       Extraordinary item............................................     (.71)          -            (.16)
                                                                        ------        ------        ------
       Net income....................................................   $ 9.80        $11.46        $15.34
                                                                        ======        ======        ======
  Class B Common Stock:
       (Loss) before extraordinary item..............................   $(2.58)       $(3.15)       $ (.90)
       Extraordinary item............................................     (.71)          -            (.16)
                                                                        ------        ------        ------
       Net income....................................................   $(3.29)       $(3.15)       $(1.06)
                                                                        ======        ======        ======
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>

                                                      JAN 27,      FEB 1,      JAN 31,      JAN 30,     JAN 29,
BALANCE SHEET DATA (AT END OF PERIOD):                1996         1997        1998         1999        2000
                                                      ----         ----        ----         ----        ----

<S>                                              <C>           <C>        <C>             <C>        <C>
Cash and cash equivalents......................  $    1,568    $    1,863 $      959      $   3,397  $    3,413
Total assets...................................     136,527       136,832    147,113        150,930     139,852
Total debt.....................................      84,457        68,594    148,145        158,335     137,775
Preferred stock  (liquidation value)...........      22,620        25,582     33,033         37,541      42,664
Total stockholders' equity (deficit)...........      33,008        43,386    (66,255)       (74,397)    (73,908)
</TABLE>
--------------------------------------------
  (1) In connection with the Recapitalization, the Company recorded a special
      charge in the three months ended May 3, 1997 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 the Credit Agreement. 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.
      Fiscal 1996 EBITDA excludes a non-cash charge of $0.6 million for the
      estimated loss on disposal of certain fixed assets and fiscal 1997
      excludes non-recurring items of $10.9 million for charges to special
      compensation. EBITDA is not a measure of performance under Generally
      Accepted Accounting Principles ("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 14 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
January 29, 2000. 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.

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 five yarn suppliers,
generally placing orders for quantities ranging from 30 days' to a one year's
supply, and occasionally even longer periods, 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. Yarn prices currently continue at lower levels and
management has taken steps to adjust 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 January 29, 2000:

<TABLE>
<CAPTION>
                                                                            YEAR ENDED
                                                           ---------------------------------------------
                                                            JANUARY 31,     JANUARY 30,     JANUARY 29,
                                                               1998            1999            2000
                                                               ----            ----            ----
                                                           [Fiscal 1997]   [Fiscal 1998]   [Fiscal 1999]
<S>                                                            <C>             <C>            <C>
STATEMENT  OF OPERATIONS DATA:
  Net sales............................................        100.0%          100.0%         100.0%
  Cost of goods sold...................................         78.0            82.4           73.9
  Gross profit.........................................         22.0            17.6           26.1
  Selling, general and administrative expenses.........         10.6            11.3           11.4
  Interest expense.....................................          7.2             8.0            7.9

OTHER DATA:
  EBITDA (1)...........................................   $30.9 million   $19.8 million   $35.7 million
          Percentage of net sales......................         14.4%            9.1%           18.0%
</TABLE>

  (1) EBITDA is defined as operating income plus depreciation and amortization.
      Fiscal 1997 excludes non-recurring charges of $10.9 million for special
      compensation. 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 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
has been the result of the following factors:

    -  The Company has negotiated what it considers advantageous yarn purchase
       commitments to take advantage of the lower price of yarn.

    -  The Company has moved substantially all of its sewing activities offshore
       to take advantage of lower offshore wage rates and will further increase
       its in-house offshore sewing operations to the extent necessary to
       increase production and reduce reliance on offshore contractors. Because
       of this increasing shift to offshore production, the Company closed
       several of its domestic sewing facilities during fiscal 1997 and 1998.
       During the quarter ended July 31, 1999, the Company


                                       14
<PAGE>

       substantially eliminated its remaining domestic sewing operations,
       retaining only minimal domestic sewing capability. While the initial
       impact of moving offshore resulted in some inefficiencies in production
       and more irregulars, these inefficiencies have abated during recent
       fiscal quarters.

The Company has experienced a substantial improvement in unit production costs
and gross profit as a result of the management initiatives discussed above, and,
while no assurances can be given, management believes that some of these
initiatives will continue to contribute to lower unit costs in the future. See
"Forward Looking Information," below.

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
distribution 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.

INCOME BEFORE TAXES AND EXTRAORDINARY ITEMS improved by more than $17 million,
from a loss of $5.7 million in the year ended January 30, 1999, to a profit of
$11.7 in the current year. This was the result of the increase in gross profit
of $13.8 million combined with lower selling, general and administrative
expenses and interest expense ($1.9 million and $1.5 million, respectively).
Income taxes of $5.2 million were provided in the year ended January 29, 2000,
compared to a tax benefit of $2.3 million in the prior year. In addition, an
extraordinary charge of $0.6 million (net of taxes) for loss on extinguishment
of debt was recorded in the year ended January 29, 2000.

YEAR ENDED JANUARY 30, 1999 COMPARED TO YEAR ENDED JANUARY 31, 1998

NET SALES for the year ended January 30, 1999 increased $2.4 million, or 1.1%,
to $217.3 million from $214.9 million for the year ended January 31, 1998. The
overall increase in net sales is comprised of an increase in units sold of
approximately 2%, partially offset by a small decrease in the average selling
price of all goods sold for the year. The Company's revenues and gross margins
had been unfavorably impacted by ongoing lower prices for basic T-shirts. While
the average selling price for all goods sold declined slightly, the price was
maintained by increasing the percentage of higher priced products in the
Company's product mix.

GROSS PROFIT for the year ended January 30, 1999 declined by $9.2 million
(19.4%) from the prior year despite the $2.4 million increase in sales, as gross
profit margin on sales declined to 17.6% from 22.0% in the prior year. Any
favorable impact achieved by emphasizing the


                                       15
<PAGE>

sale of products with traditionally higher profit margins, was offset by
industry-wide pricing pressures affecting the Company's basic T-shirt business.
In addition, production costs per unit for all products increased due to lower
utilization of textile capacity, wage increases and the inefficiencies created
by the transition of a substantial majority of sewing operations to offshore
locations. A significant increase in the Company's contribution for employee
medical benefits also unfavorably impacted the Company's results of operations.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (including distribution expense)
for the year ended January 30, 1999 increased by $1.9 million, or 8.2%, to $24.6
million from $22.7 million for the prior year. Expenditures for advertising,
travel and entertainment, and other selling expenses increased $1.1 million and
administrative expenses (primarily data processing and related costs) increased
approximately $0.5 million. The remaining increase is primarily composed of
increased distribution expense due to greater volume, and unusually high first
quarter expenditures for freight to meet delivery commitments.

INTEREST EXPENSE for the year ended January 31, 1999 increased by $1.8 million,
or 12.3%, to $17.2 million from $15.4 million for the prior year. This increase
in interest expense was the result of higher borrowings in connection with the
Recapitalization and to fund additional working capital requirements. Interest
rates were also slightly higher during the year ended January 30, 1999 compared
to the prior year.

NET LOSS for the year ended January 31, 1999 was $3.4 million compared to a net
loss of $4.9 million for the prior year. A decrease in gross profit of $9.2
million was further impacted by higher selling, general and administrative
expenses ($1.9 million) and higher interest expense ($1.9 million). In the
earlier year there was a charge of $10.9 million for "special compensation" and
an extraordinary charge of $2.8 million (after applicable income tax benefit) on
extinguishment of debt. A tax benefit of $2.3 million was recognized in the year
ended January 31, 1999 compared to $1.4 million in the prior year.


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
$5.6 million in the year ended January 30, 1999 and $3.4 million in the year
ended January 29, 2000. Historically, the Company's major capital expenditures
have related to: (i) improvements to its distribution center in Dillon, South
Carolina; (ii) the acquisition of machinery and equipment; and (iii) the
acquisition of management information systems hardware and software. Beginning
with the fiscal year ending February 3, 2001, the Company anticipates the level
of capital expenditures for the next few years to be at an annual rate of $5.0
to $7.0 million, including those relating to new offshore sewing operations. The
Company has no other material capital commitments for the next twelve months
outside of the ordinary course of business.

The Company's principal working capital requirements are financing accounts
receivable and inventories. At January 29, 2000, the Company had net working
capital of approximately $48.5 million, including approximately $3.4 million of
cash and cash equivalents, $31.1 million of accounts receivable, $39.9 million
of inventories, $3.1 million of other current assets; and $29.0 million in
accounts payable and other current liabilities.


                                       16
<PAGE>

On March 14, 1997, Anvil entered into a Credit Agreement (the "Credit
Agreement") providing a $55.0 million revolving credit facility, subject to
certain maximum levels of borrowings based upon asset levels. At January 30,
1999, the amount outstanding under the Credit Agreement was $31.5 million,
bearing interest at 7.94%. All amounts due under the Credit Agreement were
repaid from the proceeds of a new loan agreement, more fully described below.

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
January 29, 2000, the Company had reduced the amount due under the Revolving
Credit Facility to $0.6 million bearing interest at 8.4%.

At January 30, 1999, the Company classified $25.0 million of its then revolving
credit loan as a long-term liability, which represents the amount which the
Company then anticipated it would continually refinance.

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

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


                                       17
<PAGE>

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 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 make anticipated
capital expenditures, fund working capital requirements and satisfy its debt
service requirements.

SEASONALITY

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

EFFECT OF INFLATION

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

NEW ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." The statement establishes accounting and
reporting standards requiring that derivative instruments be recorded in the
balance sheet as either an asset or liability measured at fair value. The
statement requires that changes in a derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. As
extended by SFAS No. 137 issued in June 1999, SFAS No. 133 is effective for
fiscal years beginning after June 15, 2000. The Company has not yet quantified
the impact on its financial statements nor determined the timing or method of
adopting SFAS No. 133.

YEAR 2000 ISSUES

The Company's comprehensive Year 2000 Plan has been implemented successfully.
The Company has upgraded its major software systems over the past few years and
installed new accounts payable and general ledger systems which are Year 2000
compliant. The Company has also upgraded its major computer hardware components
which are all Year 2000 compliant. There were no material hardware or software
conflicts encountered in the Year 2000 transition, and costs associated with
this completed project were in line with the budgeted costs needed for normal
business requirements.


                                       18
<PAGE>

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; and
(ii) moving virtually all of its sewing operations offshore to take advantage of
lower wage rates.

As discussed above, these management initiatives have begun to have a favorable
effect on the Company's results of operations, particularly during the latter
half of the fiscal year just ended. Management intends to continue these and
other efficiency-oriented strategies to the extent it deems necessary 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.
  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.


                                       19
<PAGE>

  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 2000 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 has an interest rate swap agreement in place to hedge its exposure
to interest rate risk.

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 3 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.


                                       20
<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.

<TABLE>
<CAPTION>

NAME                         AGE(1)     POSITION

<S>                                     <C>
Bernard Geller.................66       President, Chief Executive Officer,
                                        Chairman of the Board

Jacob Hollander................58       Executive Vice President, Chief Administrative Officer,
                                        Secretary, General Counsel and Director

Anthony Corsano................40       Executive Vice President of Sales and Marketing

William H. Turner..............52       Executive Vice President of Manufacturing

Pasquale Branchizio............61       Vice President of Finance
</TABLE>

--------------------
(1) All ages are as of December 31, 1999

BERNARD GELLER has served as the Chief Executive Officer of Anvil, President of
Holdings and has been a Director of Anvil and Holdings since the Acquisition.
Since the Recapitalization, Mr. Geller has served as Chairman of the Board of
Anvil and Holdings and since July 1997 as President of Anvil. From 1989 to 1995,
Mr. Geller served as Chairman of the Predecessor. From 1986 to 1989, Mr. Geller
served as President of the Predecessor and from 1975 to 1986, as Controller and
then President of the Predecessor. Before joining the 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.

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 the Acquisition. Since the
Recapitalization, 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. From 1985 to 1990, Mr. Hollander served as Vice President and General
Counsel of McGregor and Faberge, Incorporated, and from 1987 to 1989, Mr.
Hollander also served as Vice President and General Counsel of Elizabeth Arden,
Inc. During 1990, Mr. Hollander provided legal consulting services to the
Unilever group of companies and to McGregor. Prior to its acquisition by
McGregor, Mr. Hollander was Vice President of Faberge, Incorporated.

ANTHONY CORSANO has served as Executive Vice President of Sales and Marketing of
Anvil since the Acquisition. From 1993 to 1995, Mr. Corsano served as Vice
President of Sales and Marketing of the Predecessor. From 1988 to 1993, Mr.
Corsano served as Vice President--Sales of the Predecessor and from 1985 to 1988
Mr. Corsano served as National Sales Manager of the Predecessor.


                                       21
<PAGE>

WILLIAM H. TURNER has served as Executive Vice President of Manufacturing of
Anvil since the Acquisition. From 1992 to 1995, Mr. Turner served as Executive
Vice President of Manufacturing of the Predecessor. From 1985 to 1992, Mr.
Turner held the position of Vice President of Manufacturing (Cut and Sew) of the
Predecessor and from 1982 to 1985 he was the Predecessor's Plant Manager.

PASQUALE BRANCHIZIO has served as Vice President of Finance of Anvil and
Holdings since the Acquisition. From 1986 until 1995, Mr. Branchizio served as
Vice President of Finance of the Predecessor. From 1981 to 1986, Mr. Branchizio
served as the Controller of the Predecessor. Prior thereto, Mr. Branchizio
served as the Predecessor's Senior Accountant.

ITEM 11.  EXECUTIVE COMPENSATION

The information required by Item 11 of Form 10-K appears on pages 4 through 8 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 8 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 pages 11 and 12 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.


                                       22
<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)


                                       23
<PAGE>

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

  4.10 Pledge and Security Agreement dated March 11, 1999 between Congress
       Financial Corporation and Holdings.(5)

  4.11 Pledge and Security Agreement dated March 11, 1999 between Congress
       Financial Corporation and Anvil.(5)

  10.1 Employment Agreement, dated as of January 31, 1995, by and between Anvil
       and Bernard Geller.(1)

  10.2 Employment Agreement, dated as of January 31, 1995, by and between Anvil
       and Jacob Hollander.(1)

  10.3 Employment Agreement, dated as of January 31, 1995, by and between Anvil
       and William H. Turner.(1)

  10.4 Employment Agreement, dated as of January 31, 1995, by and between Anvil
       and Anthony Corsano.(1)

  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)


                                       24
<PAGE>


 10.11 Amendment No. 1 dated as of December 27, 1997 to Stockholders Agreement
       by and among Holdings, BRS, 399 Venture, CCT, Bernard Geller, Anthony
       Corsano, William Turner, Jacob Hollander and each other person who
       acquires common stock of Holdings after the date thereof and executes a
       joinder thereto.(3)

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

 21    Subsidiaries of Holdings.

 27.1  Financial Data Schedule.


(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.




                                       25
<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 been
signed by the following persons in the capacities and on the dates indicated:

<TABLE>
<CAPTION>

          SIGNATURE                      CAPACITY                          DATE

<S>                                 <C>                                    <C>
/S/ BERNARD GELLER                  Chairman of the Board ,                APRIL 27, 2000
----------------------------        President and Director                 -------------------
      Bernard Geller                (Principal Executive
                                    And Financial Officer)

/S/ JACOB HOLLANDER                 Vice President, Secretary              APRIL 27, 2000
----------------------------        and Director                           -------------------
     Jacob Hollander

/S/  PASQUALE BRANCHIZIO            Vice President of Finance              APRIL 27, 2000
----------------------------        (Principal Accounting Officer)         -------------------
    Pasquale Branchizio


 /S/ BRUCE C. BRUCKMANN             Director                               APRIL 27, 2000
----------------------------                                               -------------------
    Bruce C. Bruckmann

 /S/  STEPHEN F. EDWARDS            Director                               APRIL 27, 2000
----------------------------                                               -------------------
    Stephen F. Edwards

 /S/  DAVID F. THOMAS               Director                               APRIL 27, 2000
----------------------------                                               -------------------
    David F. Thomas

/S/  JOHN D. WEBER                  Director                               APRIL 27, 2000
-----------------------------                                              -------------------
    John D. Weber
</TABLE>


           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.



                                       26
<PAGE>

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

<TABLE>
<CAPTION>

                                                                                                   PAGE

<S>                                                                                                 <C>
Report of Independent Accountants....................................................................F-2

Consolidated Balance Sheets at January 30, 1999 and January 29, 2000.................................F-3

Consolidated Statements of Operations for the years ended January 31, 1998,
      January 30, 1999 and January 29, 2000..........................................................F-4

Consolidated Statements of Cash Flows for the years ended January 31, 1998,
     January 30, 1999 and January 29, 2000...........................................................F-7

Consolidated Statements of Changes in Stockholders' Equity (Deficiency)  for the
    years ended January 31, 1998, January 30, 1999 and January 29, 2000..............................F-6

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

Schedule II --Valuation and Qualifying Accounts......................................................S-1
</TABLE>


                                      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 as of January 30, 1999 and January 29, 2000, and the
related consolidated statements of operations, stockholders' equity
(deficiency), and cash flows for the years ended January 31, 1998, January 30,
1999 and January 29, 2000. 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 and
financial statement schedule based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in all
material respects, the consolidated financial position of Anvil Holdings, Inc.
and subsidiaries as of January 30, 1999 and January 29, 2000 and the results of
their operations and their cash flows for the years ended January 31, 1998,
January 30, 1999 and January 29, 2000, in conformity with generally accepted
accounting principles. 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/s Deloitte & Touche LLP
New York, New York
March 31, 2000




                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                                                ANVIL HOLDINGS, INC. AND SUBSIDIARIES
                                                     CONSOLIDATED BALANCE SHEETS
                                                  (In Thousands, Except Share Data)
                                                                         JANUARY 30,        JANUARY 29,
                                                                            1999               2000
                                                                            ----               ----
                           ASSETS
<S>                                                                       <C>               <C>
CURRENT ASSETS:
  Cash and cash equivalents.............................................  $  3,397          $  3,413
  Accounts receivable, less allowances for doubtful accounts of
    $635 and $1,211.....................................................    31,232            31,143
  Inventories...........................................................    41,356            39,906
  Prepaid and refundable income taxes...................................     1,704               117
  Deferred income taxes-short term portion..............................     2,353             2,003
  Prepaid expenses and other current assets.............................       706               987
                                                                           -------          --------

              Total current assets......................................    80,748            77,569

PROPERTY, PLANT AND EQUIPMENT--Net......................................    37,536            33,631

DEFERRED INCOME TAXES...................................................     3,823             1,380

INTANGIBLE ASSETS--Net .................................................    24,529            23,571

OTHER ASSETS............................................................     4,294             3,701
                                                                        ----------       -----------
                                                                         $ 150,930        $  139,852
                                                                         =========        ==========

                                        LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
  Accounts payable...................................................... $   7,181         $   8,523
  Accrued expenses and other current liabilities........................    16,652            17,213
  Current portion of term loan..........................................       -               2,345
  Revolving credit loan.................................................     6,500               584
  Income taxes payable..................................................       -                 340
                                                                         ---------            ------
                  Total current liabilities.............................    30,333            29,005
                                                                            ------            ------

LONG-TERM PORTION OF REVOLVING CREDIT LOAN..............................    25,000              -
                                                                            ------        ----------
LONG-TERM PORTION OF TERM LOAN..........................................       -               7,621
                                                                         ---------         ---------
10-7/8% SENIOR NOTES....................................................   126,835           127,225
                                                                           -------           -------
DEFERRED INCOME TAXES...................................................     5,276             6,467
                                                                         ---------         ---------
OTHER LONG-TERM OBLIGATIONS.............................................     1,744             1,969
                                                                         ---------         ---------
REDEEMABLE PREFERRED STOCK
     (Liquidation value $37,541 and $42,664)............................    36,139            41,473
                                                                            ------            ------
STOCKHOLDERS'  DEFICIENCY:
Common stock
      Class A, $.01 par value, 12.5% cumulative; authorized 500,000
        shares, issued and outstanding: 290,000  (aggregate liquidation
        value, $36,568 and $41,139).....................................         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.............................................................   (87,239)          (86,750)
                                                                         ---------       ------------
           Total stockholders' deficiency...............................   (74,397)          (73,908)
                                                                          ---------       -----------
                                                                          $150,930         $ 139,852
                                                                          ========         =========

                                           See notes to consolidated financial statements.
</TABLE>

                                                                F-3
<PAGE>

<TABLE>
<CAPTION>

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

                                                                                  FISCAL YEAR ENDED
                                                                    -----------------------------------------
                                                                    JANUARY 31,    JANUARY 30,    JANUARY 29,
                                                                       1998           1999            2000
                                                                       ----           ----            ----
<S>                                                                  <C>             <C>           <C>
NET SALES.......................................................     $214,867        $217,302      $198,930
COST OF GOODS SOLD..............................................      167,491         179,092       146,931
                                                                     --------        --------      --------
       Gross profit.............................................       47,376          38,210        51,999
SELLING, GENERAL AND ADMINISTRATIVE
   EXPENSES.....................................................       22,771          24,626        22,692
SPECIAL COMPENSATION............................................       10,915             -             -
AMORTIZATION OF INTANGIBLE ASSETS...............................          958             958           958
                                                                     --------        --------      --------
        Operating income........................................       12,732          12,626        28,349
OTHER INCOME (EXPENSE):
    Interest expense............................................      (15,392)        (17,279)      (15,793)
    Amortization of debt expense and other --net................         (897)         (1,006)         (895)
                                                                     --------        --------      --------
INCOME (LOSS) BEFORE PROVISION (BENEFIT)
    FOR INCOME TAXES AND EXTRAORDINARY ITEM.....................       (3,557)         (5,659)       11,661
(BENEFIT) PROVISION FOR INCOME TAXES............................       (1,423)         (2,264)        5,213
                                                                     --------        --------      --------
(LOSS) INCOME BEFORE EXTRAORDINARY ITEM.........................       (2,134)         (3,395)        6,448
EXTRAORDINARY ITEM - Loss on extinguishment
    of  debt (net of tax benefit of  $1,838 and $417)...........       (2,757)            -            (627)
                                                                     --------        --------      --------
NET (LOSS) INCOME...............................................       (4,891)         (3,395)        5,821
  Less Preferred Stock  dividends (pro forma in 1998)...........       (4,094)         (4,585)       (5,171)
  Less Common A preference (pro forma in 1998)..................       (3,798)         (4,235)       (4,754)
                                                                     --------        --------      --------
  Net (loss) attributable to common stockholders................     $(12,784)       $(12,215)     $ (4,104)
                                                                     ========        ========      ========

BASIC INCOME (LOSS) PER COMMON SHARE:
Class A Common Stock:
   Income before extraordinary item.............................     $  10.51        $  11.46      $  15.50
   Extraordinary item...........................................         (.71)            -            (.16)
                                                                     --------        --------      --------
   Net income...................................................     $   9.80        $  11.46      $  15.34
                                                                     ========        ========      ========
Class B Common Stock:
   (Loss) before extraordinary item.............................     $  (2.58)       $  (3.15)     $   (.90)
   Extraordinary item...........................................         (.71)            -            (.16)
                                                                     --------        --------      --------
   Net (loss)...................................................     $  (3.29)       $  (3.15)     $  (1.06)
                                                                     ========        ========      ========
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
                                                                     ========        ========      ========

                                           See notes to consolidated financial statements.
</TABLE>


                                                                F-4
<PAGE>

<TABLE>
<CAPTION>

                                                ANVIL HOLDINGS, INC. AND SUBSIDIARIES

                                                STATEMENTS OF CONSOLIDATED CASH FLOWS

                                                           (In Thousands)

                                                                                 FISCAL YEAR ENDED
                                                                     ------------------------------------------
                                                                     JANUARY 31,    JANUARY 30,     JANUARY 29,
                                                                        1998           1999            2000
                                                                        ----           ----            ----

<S>                                                                  <C>             <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss)...........................................      $(4,891)        $(3,395)       $ 5,821
    Adjustments to reconcile net income (loss) to net
       cash provided (used) by operating activities:
    Depreciation and amortization of fixed assets...............        6,259           6,263          6,420
    Amortization of other assets................................        1,981           2,023          2,029
    Loss on extinguishment of debt..............................        2,757            -               627
    Provision (recovery) of bad debts...........................          (52)           (187)           576
    Noncash interest expense....................................        1,706            -              -
    Noncash compensation........................................        5,177            -              -
    Deferred income taxes.......................................          551          (1,584)         3,984
 Changes in operating assets and liabilities, net of acquisition:
    Accounts receivable.........................................        1,194          (3,899)          (487)
    Inventories.................................................       (9,618)            733          1,450
    Prepaid and refundable income taxes.........................          700           2,936          1,587
    Accounts payable............................................        2,626          (4,805)         1,342
    Accrued expenses & other liabilities........................        3,437           1,303            786
    Income taxes payable........................................          -              -               340
    Other--net..................................................       (1,481)         (1,121)          (994)
                                                                      -------         -------        -------

           Net cash provided (used) by operating activities.....       10,346          (1,733)        23,481
                                                                      -------         -------        -------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of property and equipment........................       (6,102)         (5,633)        (3,402)
     Net fixed asset disposals..................................           23               4            887
                                                                      -------         -------        -------

           Net cash provided (used) by financing activities.....       (6,079)         (5,629)        (2,515)
                                                                      -------         -------        -------


                                           See notes to consolidated financial statements.
</TABLE>


                                                                F-5
<PAGE>

<TABLE>
<CAPTION>

                                                ANVIL HOLDINGS, INC. AND SUBSIDIARIES
                                          STATEMENTS OF CONSOLIDATED CASH FLOWS - CONTINUED
                                                           (IN THOUSANDS)

                                                                              FISCAL YEAR ENDED
                                                                  -------------------------------------------
                                                                  JANUARY 31,       JANUARY 30,   JANUARY 29,
                                                                     1998              1999          2000
                                                                     ----              ----          ----

<S>                                                                <C>                <C>         <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings (repayments) under revolving credit agreements.....     26,500             9,800       (30,916)
  Repayment of old revolving credit facility....................    (19,200)             -             -
  Proceeds of Term Loan.........................................        -                -           11,725
  Repayments of long-term debt..................................    (46,325)             -           (1,759)
  Proceeds from exercise of stock options.......................        336              -             -
  Repayment of Subordinated Promissory Note.....................     (9,575)             -             -
  Proceeds of Senior Notes......................................    130,000              -             -
  Redemption of Old Preferred Stock.............................    (22,736)             -             -
  Repurchase of Old Common Stock................................    (92,262)             -             -
  Proceeds from sale of Units...................................     26,667              -             -
  Issuance of New Common Stock..................................     13,063              -             -
  Repayment of stockholder loans................................        250              -             -
  Expenses related to the Recapitalization......................    (11,889)             -             -
                                                                   --------           -------      --------
         Net cash (used in) provided by
            financing activities................................     (5,171)            9,800       (20,950)
                                                                   --------           -------      --------

INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS.........................................       (904)            2,438            16

CASH AND CASH EQUIVALENTS,
   BEGINNING OF YEAR............................................      1,863               959         3,397
                                                                   --------           -------      --------

CASH AND CASH EQUIVALENTS,
   END OF YEAR..................................................   $    959           $ 3,397      $  3,413
                                                                   ========           =======      ========

SUPPLEMENTAL CASH FLOW INFORMATION:
  Cash paid for interest........................................   $ 10,533           $17,206      $ 16,184
                                                                   ========           =======      ========
  Net refunds received for income taxes.........................   $ (2,123)          $(2,198)     $ (1,115)
                                                                   =========          =======      ========

SUPPLEMENTAL SCHEDULE OF NONCASH
   INVESTING AND FINANCING ACTIVITIES:
Redeemable Preferred Stock Issued in Lieu of Dividends..........    $ 3,033           $ 4,585      $  5,171
                                                                    =======           =======      ========



                                           See notes to consolidated financial statements.
</TABLE>



                                                                F-6
<PAGE>

<TABLE>
<CAPTION>

                                                ANVIL HOLDINGS, INC. AND SUBSIDIARIES

                               STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY (DEFICIENCY)
                                                           (IN THOUSANDS)


                                                               Common Stock
                                                    ----------------------------------
                                                         (Old)             (New)
                                   Preferred Stock  ----------------- ---------------- Additional  Retained     Loans
                                 Class Class Class  Class Class Class Class Class Class  Paid-in   Earnings    Receivable-
                                    A    B     C      A     B     C     A     B     C    Capital  (Deficiency) Stockholders  Total
                                  ----------------------------------------------------- --------- -----------  ------------ --------
<S>                               <C>  <C>  <C>    <C>    <C>   <C>   <C>   <C>   <C>   <C>        <C>          <C>           <C>
Balance at February 2, 1997.....   $1   $1     -     $58   $26   $17    -      -    -    $23,054     $20,479       $(250)   $43,386
Exercise of stock options.......                             5                             5,507                              5,512
Repurchase and exchange of Old
  Common Stock..................                     (58)  (31)  (17)   2     19          (8,563)    (85,440)               (94,088)
Redemption and exchange of Old
  Preferred Stock...............   (1)  (1)                                              (19,998)     (6,025)               (26,025)
Common shares issued in
  Units Offering................                                               4             386                                390
Repayment of stockholder loans..                                                                                     250        250
Issuance of new common stock....                                        1     13          13,049                             13,063
Offering expenses attributable to
  the sale of common stock .....                                                            (632)                              (632)
Preferred stock dividends.......                                                                      (3,033)                (3,033)
Accretion of preferred stock....                                                                        (187)                  (187)
Net loss........................                                                                      (4,891)                (4,891)
                                   ------------------------------------------------------------------------------------------------
Balance at January 31, 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)
                                   ================================================================================================




                                           See notes to consolidated financial statements.
</TABLE>



                                                                F-7
<PAGE>

                      ANVIL HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

                        (IN THOUSANDS, EXCEPT SHARE DATA)

1.  THE COMPANY

On January 28, 1995, Anvil Holdings, Inc., a Delaware corporation ("Holdings"),
and its wholly-owned subsidiary, Anvil Knitwear, Inc., a Delaware corporation
("Anvil"), acquired the assets and assumed certain liabilities of the Anvil
Knitwear Division (the "Predecessor") from McGregor Corporation ("McGregor")
(the "Acquisition").

The Company is engaged in the business of designing, manufacturing and marketing
high quality activewear for men, women and children. The Company markets and
distributes its products, under private label and brand names, 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.

On January 31, 1997, Anvil, through its subsidiary, Cottontops, Inc.
("Cottontops") completed the acquisition of certain assets and assumption of
certain liabilities of a marketer and distributor of activewear products which,
prior to the acquisition, sold finished activewear products to the Company as
well as directly into the retail market. The acquisition has been accounted for
using the purchase method of accounting. The Company began consolidating the
results of operations of Cottontops effective February 2, 1997.

In fiscal 1999, the Company caused the formation of CDC GmbH in Germany.
Operating as a wholly-owned subsidiary of Anvil, CDC GmbH distributes the
Company's products in Germany and other parts of Europe.

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 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, 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


                                      F-8
<PAGE>

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 (the "Old Credit Agreement") and entered into an Amended and
Restated Credit Agreement (the "Credit Agreement"). The Credit Agreement was
replaced in March 1999 (See Note 8 to Financial Statements).

The net proceeds from the Units and Notes offerings and borrowings under the
Credit Agreement were used by the Company to: (i) redeem the outstanding common
stock and preferred stock; (ii) repay the balance outstanding under the Old
Credit Agreement; (iii) repay the subordinated debt; (iv) pay fees and expenses;
(v) pay a management bonus; and (vi) pay amounts due in accordance with the
Phantom Equity Plan (see Note 17).

During the year ended January 31, 1998, the Company recorded a special
compensation charge of $10,915, which consists of the compensation recorded upon
exercise of options by members of management, payment of a special transaction
bonus to management and payments under a then existing equity buy-out plan to
members of management.


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

FISCAL YEAR--The Company's operations are on a "52/53-week" fiscal year ending
on the Saturday closest to January 31.

BASIS OF PRESENTATION--The accompanying consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries, after
elimination of significant intercompany accounts and transactions.

USE OF ESTIMATES--The preparation of financial statements in conformity with
generally accepted accounting principles 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 and
goodwill. Trademarks are being amortized over their estimated useful life of 17
years. Goodwill is being amortized over the period of expected benefit of 35
years.


                                      F-9
<PAGE>

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.

DEFERRED FINANCING FEES--Included in other assets are deferred financing fees
(approximately $4,100 and $3,500 at January 30, 1999 and January 29, 2000,
respectively), which are being amortized over approximately six years to
coincide with the term of the applicable credit agreements.

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 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 attributable to the Class A and Class B Common shares
after the Recapitalization.

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

NEW ACCOUNTING STANDARDS--In June 1998, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standard ("SFAS") No. 133, "Accounting
for Derivative Instruments and Hedging Activities." The statement establishes
accounting and reporting standards requiring that derivative instruments be
recorded in the balance sheet as either an asset or liability measured at fair
value. The statement requires that changes in a derivative's fair value be
recognized currently in earnings unless specific hedge accounting criteria are
met. As extended by SFAS No. 137 issued in June 1999, SFAS No. 133 is effective
for fiscal years beginning after June 15, 2000. The Company has not yet
quantified the impact on its financial statements nor determined the timing or
method of adopting SFAS No. 133.



                                      F-10
<PAGE>

4.  INVENTORIES

Inventories, valued at lower of cost or market, consist of the following:

<TABLE>
<CAPTION>
                                                                       JANUARY 30,       JANUARY 29,
                                                                          1999              2000
                                                                          ----              ----
<S>                                                                     <C>              <C>
                    Finished goods.............................         $  26,313        $  22,026
                    Work-in-process............................             9,441           11,777
                    Raw materials and supplies.................             5,602            6,103
                                                                        ---------       ----------
                                                                        $  41,356        $  39,906
                                                                        =========        =========
</TABLE>

5.  PROPERTY, PLANT AND EQUIPMENT

 Property plant and equipment consists of the following:
<TABLE>
<CAPTION>

                                                                       JANUARY 30,       JANUARY 29,
                                                                          1999              2000
                                                                          ----              ----

<S>                                                                  <C>                 <C>
                Land...........................................      $        849        $     769
                Buildings and improvements.....................            15,271           14,297
                Machinery, equipment, furniture and fixtures...            45,391           47,900
                                                                           ------           ------
                                                                           61,511           62,966
                Less accumulated depreciation and amortization ..         (23,975)         (29,335)
                                                                         --------          --------
                                                                         $ 37,536         $ 33,631
                                                                         ========         ========
</TABLE>

6.  INTANGIBLE ASSETS

Intangible assets consist of the following:

<TABLE>
<CAPTION>
                                                                       JANUARY 30,       JANUARY 29,
                                                                          1999              2000
                                                                          ----              ----

<S>                                                                    <C>                <C>
                Trademarks--net of accumulated
                   amortization of $1,144 and $1,430...........         $   3,714         $  3,428
                Goodwill--net of accumulated
                   amortization of $2,466 and $3,138...........            20,815           20,143
                                                                           ------           ------
                                                                         $ 24,529         $ 23,571
                                                                         ========         ========
</TABLE>

7.  ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following:
<TABLE>
<CAPTION>

                                                                       JANUARY 30,       JANUARY 29,
                                                                          1999              2000
                                                                          ----              ----
<S>                                                                     <C>               <C>
                Accrued wages, fringe benefits and bonuses.....         $   5,250         $  6,079
                Accrued interest payable.......................             5,788            5,397
                Other..........................................             5,614            5,737
                                                                            -----            -----
                                                                         $ 16,652          $17,213
                                                                         ========          =======
</TABLE>

8.  CREDIT AGREEMENTS

THE CREDIT AGREEMENT

In March 1997, Anvil entered into the Credit Agreement providing a $55,000
revolving credit facility, with a sublimit of $5,000 for letters of credit
expiring March 14, 2002, subject to certain


                                      F-11
<PAGE>

maximum levels of borrowings based upon asset levels. Anvil used $33,250 of the
borrowings under the Credit Agreement to finance a portion of the
Recapitalization. Effective March 11, 1999, all amounts due under the Credit
Agreement were repaid from the proceeds of a new loan agreement (the "Loan
Agreement") more fully described below.

Interest on borrowings under the Credit Agreement was payable at a rate equal to
LIBOR or the Alternate Base Rate (defined as the higher of (i) the lender's
prime rate, and (ii) the Federal Funds rate plus 0.5%), each plus an applicable
margin ranging from 1.25% to 2.50% for LIBOR loans and 0.25% to 1.50% for
Alternate Base Rate loans, determined based upon attainment of certain financial
ratios. At January 31, 1999, the amount outstanding under the Credit Agreement
was $31,500, bearing interest at 7.94%. The weighted average interest rate on
such debt during each of the years ended January 31, 1998 January 30, 1999 and
January 29, 2000 was approximately 7.88%. The Company classified $25,000 of the
amount outstanding under the Credit Agreement as a long-term liability at
January 30, 1999 which represented the amount the Company then anticipated it
would continually refinance.

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 January 29, 2000 there was $584 outstanding
under the Revolving Credit Facility at an interest rate of 8.4%. The weighted
average interest rate on borrowings under the Loan Agreement during the year
ended January 29, 2000 was 8.3%.

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>

Anvil completed an exchange offer which expired August 22, 1997, pursuant to
which its 10-7/8% Series A Senior Notes were exchanged on a dollar-for-dollar
basis for its 10-7/8% Series B Senior Notes, due 2007. Pursuant to the exchange
offer, $129,000 principal amount were validly tendered and exchanged. The terms
and conditions of the aforementioned Series B securities are substantially
identical to the Series A securities for which they were exchanged, except that
the Series B securities have been registered under the Securities Act of 1933,
as amended.

10.  RELATED PARTY TRANSACTIONS

Concurrent with the Acquisition, the Company entered into a management agreement
with Vestar Equity Partners L.P. ("Vestar"), Citicorp Venture Capital, Ltd.
("CVC") and Culligan International Company ("Culligan") through January 2005,
whereby Vestar provided advisory and consulting services to the Company and its
subsidiaries, and CVC and Culligan, in turn, provided consulting services to
Vestar, when requested, in connection with the fulfillment by Vestar, of
Vestar's obligation to the Company. In exchange for these services, the Company
paid management fees aggregating $472 during the year ended February 1, 1997.
Pursuant to the terms and conditions of the Recapitalization and the Units and
Notes Offerings, the management agreement was terminated.

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

Holdings' Articles of Incorporation provide for dividends on its Series 1-Class
A Common Stock, all of which is held by 399 Venture and its affiliates. In lieu
of such dividends Holdings has agreed to pay 399 Venture financing fees in the
aggregate annual amount of $250 from the date of the Recapitalization.

11.  EXTRAORDINARY ITEMS

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 to that refinancing.

During the year ended January 31, 1998, as a result of the repayment of a
subordinated promissory note and the refinancing of the Old Credit Agreement
(see Note 8), the Company wrote off an aggregate of $4,595 of deferred financing
fees and unamortized debt discount. This amount (net of tax benefit of $1,838)
was recorded as an extraordinary charge in the accompanying statement of
consolidated operations.


                                      F-13
<PAGE>


12.  INCOME TAXES

The provision (benefit) for income taxes consists of the following:
<TABLE>
<CAPTION>

                                                                                 YEAR ENDED
                                                                   ----------------------------------------
                                                                   JANUARY 31,    JANUARY 30,   JANUARY 29,
                                                                      1998           1999          2000
                                                                      ----           ----          ----
<S>                                                               <C>             <C>              <C>
                Current:
                  Federal......................................   $ (1,846)       $  (680)       $ 1,046
                  State and local..............................       (128)            -             183
                                                                  ---------        -------       -------
                      Total current (benefit)..................     (1,974)          (680)         1,229
                                                                    -------          -----         -----
                Deferred:
                  Federal......................................        447         (1,283)         3,228
                  State and local..............................        104           (301)           756
                                                                   -------            ----        ------
                      Total deferred (benefit) provision.......        551         (1,584)         3,984
                                                                       ---         -------         -----

                Total tax (benefit) provision..................   $ (1,423)      $ (2,264)       $ 5,213
                                                                  =========      =========       =======
</TABLE>

 A reconciliation of the statutory Federal tax rate and the effective rate is as
follows:
<TABLE>
<CAPTION>

                                                                                 YEAR ENDED
                                                                   ---------------------------------------
                                                                   JANUARY 31,    JANUARY 30,   JANUARY 29,
                                                                      1998           1999          2000
                                                                      ----           ----          ----
<S>                                                                     <C>            <C>            <C>
                Federal statutory tax rate.....................         35%            35%            35%
                State and local taxes --net of
                    Federal income tax benefit.................         5              5               5
                Other..........................................         -              -               5
                                                                     ------          ----            ----
                                                                        40%           40%             45%
                                                                        ===          ====             ===
</TABLE>

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

                                                                       JANUARY 30,       JANUARY 29,
                                                                          1999              2000
                                                                          ----              ----
<S>                                                                       <C>             <C>
                  Deferred tax assets relating to:
                     Inventories...............................           $   662         $   802
                     Net operating loss carryforward...........             3,824             950
                     Reserves not currently deductible.........             1,690           1,442
                     Tax credit carryforward...................              -                190
                                                                          -------       ---------
                          Total deferred tax assets............             6,176           3,384
                                                                            -----           -----
                  Deferred tax liabilities relating to:
                     Property, plant and equipment.............            (3,389)         (3,819)
                     Goodwill and trademarks...................            (1,887)         (2,320)
                     Unremitted foreign earnings...............              -               (328)
                                                                         ---------         -------
                           Total deferred tax liabilities......            (5,276)         (6,467)
                                                                          --------         -------

                           Net deferred tax asset (liability)..            $  900        $ (3,083)
                                                                           ======        =========
</TABLE>

At January 29, 2000, the Company had an aggregate net operating loss
carryforward of approximately $1,264 with expirations beginning in the year
2020.


                                      F-14
<PAGE>

13.       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. For the
year ended January 31, 1998 the computation assumes that the Recapitalization
had occurred at the beginning of that fiscal year. Following is the computation
of the per share amounts as presented in the Statement of Operations:

<TABLE>
<CAPTION>
                                                                                 YEAR ENDED
                                                               --------------------------------------------
                                                               JANUARY 31,       JANUARY 30,    JANUARY 29,
                                                                   1998             1999             2000
                                                                   ----             ----             ----

<S>                                                           <C>               <C>               <C>
       Net (loss) attributable to common stockholders........  $  (12,784)       $(12,215)         $(4,104)
                                                               ===========       =========         ========

       Preference per Class A common share...................  $    13.10        $   4.61         $  16.40
       Net (loss) per common share...........................       (3.29)          (3.15)           (1.06)
                                                                   -------          ------           ------
       Net income per Class A common share...................  $     9.80        $  11.46          $ 15.34
                                                                =========          ======          =======

       Net  (loss) per Class B common share..................  $    (3.29)       $  (3.15)       $   (1.06)
                                                                ==========        ========       ==========
</TABLE>

   The following table presents basic net income (loss) per share for the year
   ended January 31, 1998 using the historical shares outstanding, and is
   computed by dividing net income (loss) applicable to each class of Common
   Stock by the actual average number of commons shares outstanding during that
   year. Such computation does not give retroactive effect to the
   Recapitalization.

<TABLE>
<CAPTION>

                                                                              FISCAL YEAR ENDED
                                                                                 JANUARY 31,
                                                                                    1998
                                                                                    ----

<S>                                                                            <C>
      Net (loss)..........................................................     $  (4,891)
      Less: preferred dividends...........................................        (2,805)
               Class A common preference..................................        (3,021)
                                                                                  -------
      Net (loss) applicable to common stockholders....                         $ (10,717)
                                                                               ==========

      Preference per Class A common share............................            $  9.67
      Net income (loss) per common share (all classes)                             (2.35)
                                                                                   ------
      Net income per Class A common share............................             $ 7.32
                                                                                  ======

       Net income (loss) per Class B common share..................              $ (2.35)
                                                                                 ========

Weighted average shares used in computation of basic income (loss) per share:
            Class A Common....................................                       928
                                                                                     ===
            Class B Common....................................                     3,633
                                                                                   =====
</TABLE>


14.    FAIR VALUE OF FINANCIAL INSTRUMENTS

Under an interest rate swap agreement aggregating $10,000 and expiring in June
2000, Anvil receives interest at LIBOR, reset quarterly, and pays interest at
the weighted average fixed rate of 7.3%. Interest payments and receipts
commenced September 1995 and occur quarterly. The Company does not hold or issue
financial instruments for trading purposes.


                                      F-15
<PAGE>

The Company is exposed to credit-related losses in the event of nonperformance
by counterparties to swap agreements, but it does not expect any counterparties
to fail to meet their obligations given their high credit ratings. The fair
value of interest rate swaps at January 30, 1999 and January 29, 2000 is
approximately $345 and $60, respectively and reflects the estimated amount that
the Company would pay to terminate the contracts at such dates. The fair value
information has been obtained from dealer quotations.

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.

15.  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 the contributions up to the first 3% and 50% of the next
3%. During the years ended January 31, 1998, January 30, 1999 and January 29,
2000, the Company made contributions to the plan aggregating $1,011, $1,022 and
$689, respectively.

16.  CAPITAL STRUCTURE

All shares of preferred and common stocks under the Company's old capital
structure were redeemed or exchanged in connection with the Recapitalization.
The capital structure at January 30, 1999 and January 29, 2000 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.


                                      F-16
<PAGE>

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
506,559 shares ($12,664 liquidation value) through the year ended January 29,
2000.

Holdings has completed an exchange offer which expired August 26, 1997 (as
extended), pursuant to which its 13% Series A Senior Exchangeable Preferred
Stock was exchanged on a share-for-share basis for its 13% Series B Senior
Exchangeable Preferred Stock, due 2009. Pursuant to the exchange offer,
1,198,566 shares ($29,964 liquidation value) were validly tendered and
exchanged. The terms and conditions of the aforementioned Series B securities
are substantially identical to the Series A securities for which they were
exchanged, except that the Series B securities have been registered under the
Securities Act of 1933, as amended.

17.  STOCK OPTION PLAN AND AGREEMENTS

NEW 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 year ended
January 29, 2000, options to purchase 20,000 shares (none of which were
exercisable) expired. At January 29, 2000, 70,000 options (none of which are
exercisable) are 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 January 29, 2000, which is immaterial to the financial statements.

PHANTOM EQUITY PLAN--As provided for in the "Phantom Equity Plan" upon sale of
the Company or under certain other circumstances, the Management Investors were
to be paid 5% of the excess of the aggregate sale price over $100,000. In
connection with the Recapitalization, the Management


                                      F-17
<PAGE>

Investors were paid $5,300 in accordance with the Phantom Equity Plan at which
time the Phantom Equity Plan was terminated. The $5,300 was charged to expense
as "special compensation" in the year ended January 31, 1998. See Note 2.

18.  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:

Fiscal Year Ending:
       2001.............................................             $ 1,113
       2002.............................................                 780
       2003.............................................                 481
       2004.............................................                 135
       2005.............................................                  33
                                                                      ------
            Total.......................................             $ 2,542
                                                                     =======

Rental expense for the years ended January 31, 1998 and January 30, 1999 and
January 29, 2000 was $956, $1,218 and $1,143, respectively.

LITIGATION--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 or results of operations of the
Company.

Prior to the Acquisition, groundwater contamination was discovered at the
Asheville, North Carolina facility. In 1990, Winston Mills, Inc., a subsidiary
of 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 ranged 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. This indemnity is
guaranteed by Culligan and by Astrum International Corp. ("Astrum"), an
affiliate of McGregor (now known as Samsonite Corporation) 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


                                      F-18
<PAGE>

conditions in existence prior to the Acquisition. Culligan and Samsonite have
also guaranteed McGregor's obligations under these indemnities.


EMPLOYMENT AGREEMENTS--The Company has entered into employment agreements, which
currently expire through January 31, 2002, with certain senior executives
providing for specified minimum annual compensation, plus bonuses equal to 4% of
the Company's annual profits, as defined. At January 29, 2000, the aggregate
minimum obligation under the remaining terms of these employment agreements is
approximately $2,320 If an executive is terminated without cause, or if the
executive terminates his employment under certain circumstances, as provided,
the Company is liable for termination payments through the end of the agreement.
Additionally, under certain circumstances, the Company may be liable for
additional termination benefits up to a period not exceeding two years. The
Company is currently negotiating new, longer-term agreements with certain of its
senior executives.

19.    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 30,    JANUARY 29,      JANUARY 30,     JANUARY 29,
                                                     1999           2000              1999         2000
                                                     ----           ----              ----         ----
<S>                                                 <C>           <C>                 <C>          <C>
   Current assets............................       $  80,748     $  77,569            $  882      $2,267
                                                    =========     =========            ======      ======
   Total assets..............................       $ 150,930     $ 139,852            $1,863      $2,467
                                                    =========      ========            ======      ======

   Current liabilities.......................       $  30,333     $  29,005            $  287      $  430
                                                    =========     =========            ======      ======
   Long-term liabilities.....................       $ 158,855     $ 143,282             -           -
                                                    =========     =========
   Total liabilities.........................       $ 189,188     $ 172,287            $  287      $  430
                                                    =========     =========            ======      ======
   Stockholders' equity  (deficiency)........       $ (38,258)    $( 32,435)           $1,576      $2,037
                                                    ==========    ==========           ======      ======
</TABLE>

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 31,     JANUARY 30,   JANUARY 29,      JANUARY 31,    JANUARY 30,   JANUARY 29,
                                  1998            1999          2000             1998           1999          2000
                                  ----            ----          ----             ----           ----          ----
<S>                             <C>            <C>            <C>            <C>            <C>          <C>
     Net sales .............     $ 214,867      $ 217,302      $ 198,930     $   3,731      $   3,583     $   4,133
                                 =========      =========      =========     =========      =========     =========
     Operating income (loss)     $  12,732      $  12,626      $  28,349     $    (222)     $      85     $    (934)
                                 =========      =========      =========     =========      =========     =========
     Interest expense ......     $  15,271      $  17,279      $  15,793
                                                                             =========      =========     =========
     Net income (loss) .....     $  (4,818)     $  (3,395)     $   5,821     $    (131)     $      62     $    (545)
                                 =========      =========      =========     =========      =========     =========
</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;


                                      F-19
<PAGE>

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.

22.      SUBSEQUENT EVENT

During February 2000, Anvil purchased certain assets of the TOWELSPLUS Division
of Mid-America Wholesalers, Inc. for an aggregate amount of $1,940. 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.


23.  QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>

                                              FISCAL 1998                                   FISCAL 1999
                                  --------------------------------------        -------------------------------------
                                                QUARTER                                       QUARTER
                                   -------------------------------------        -------------------------------------
                                   FIRST     SECOND      THIRD    FOURTH        FIRST    SECOND      THIRD     FOURTH
                                   -----     ------      -----    ------        -----    ------      -----     ------
<S>                              <C>         <C>        <C>        <C>        <C>        <C>        <C>        <C>
Net sales.....................   $64,892     $62,183    $43,400    $46,827    $52,411    $51,770    $42,856    $51,893
Gross profit..................    13,061      11,514      5,874      7,761     11,078     12,921     12,326     15,674
Operating profit (loss).......     5,919       5,232       (564)     2,039      4,760      7,303      6,234     10,052
Income (loss) before extra-
  ordinary item...............       822         454     (3,111)    (1,560)       133      1,836      1,252      3,227
Net income (loss).............       822         454     (3,111)    (1,560)      (494)     1,836      1,252      3,227

Basic Income (loss) per share:
Class A Common Stock:
     Income (loss) before extra-
       ordinary item..........     $3.15       $3.16      $2.34      $2.81      $3.40      $3.87      $3.82      $4.41
                                   =====       =====      =====      =====      =====      =====      =====      =====
      Net income..............     $3.15       $3.16      $2.34      $2.81      $3.24      $3.87      $3.82      $4.41
                                   =====       =====      =====      =====      =====      =====      =====      =====
Class B Common Stock:
     Income (loss) before extra-
       ordinary item..........    $(0.33)     $(0.44)    $(1.38)    $(1.01)   $  (.59)   $ (0.15)    $(0.32)     $ 0.16
                                  =======     =======    =======    =======   ========   ========    =======     ======
     Net income (loss)........    $(0.33)     $(0.44)    $(1.38)    $(1.01)   $  (.75)   $ (0.15)    $(0.32)     $ 0.16
                                  =======     =======    =======   ========   ========   ========    =======     ======
</TABLE>


                                      F-20
<PAGE>

<TABLE>
<CAPTION>

                                                             SCHEDULE II

                                                ANVIL HOLDINGS, INC. AND SUSIDIARIES
                                                  VALUATION AND QUALIFYING ACCOUNTS


                                        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>
Year ended January 31, 1998
  Allowance for doubtful accounts........    $  874       $  400                       $  452      $  822
                                             ======       ======                       ======      ======

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
                                             ======       ======                       ======      ======
</TABLE>

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



                                       S-1