<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

(Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE 
     ACT OF 1934
[Fee Required]
For the fiscal year ended              September 27, 1997
                         --------------------------------

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    ACT OF 1934 
[No Fee Required]
 For the transition period from _____________________ to ______________________

Commission File Number                      0-23161
                      --------------------------------------------------------
     
                      TROPICAL SPORTSWEAR INT'L CORPORATION
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

             FLORIDA                                    59-3424305
--------------------------------------                ------------------
   (State or other jurisdiction of                    I.R.S. Employer
   incorporation or organization)                     Identification No.

     4902 W. Waters Avenue  Tampa, FL                 33634-1302
--------------------------------------------------------------------------------
(Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including area code   (813) 249-4900
                                                   ----------------------------
   
Securities registered pursuant to Section 12(b) of the Act:
                                                              None
-------------------------------------------------------------------------------

Securities registered pursuant to Section 12 (g) of the Act:

                  Common Stock, par value $.01 per share
--------------------------------------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days                     [ ] Yes [X] No

Indicate by check mark 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 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]

As of December 1, 1997 there were 7,600,000 shares of Common Stock outstanding.
The aggregate market value of the Common Stock held by non-affiliates of the
registrant, based on the last sale price reported on the Nasdaq National Market
as of December 1, 1997, was approximately $53,038,000.

                       DOCUMENT INCORPORATED BY REFERENCE:
                       -----------------------------------    

Document                                                  Form 10-K Reference
--------                                                  ---------------------

Proxy Statement, dated January 2, 1998                    Part III, Items 10-13




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                      TROPICAL SPORTSWEAR INT'L CORPORATION

                             FORM 10-K ANNUAL REPORT
                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
PART I                                                                                  PAGE NO.
                                                                                        --------
<S>        <C>                                                                          <C>
Item 1     Business                                                                           3
Item 2     Properties                                                                        15
Item 3     Legal Proceedings                                                                 15
Item 4     Submission of Matters to a Vote of Security Holders                               15

PART II

Item 5     Market for Registrant's Common Equity and Related Stockholder Matters             16
Item 6     Selected Financial Data                                                           16
Item 7     Management's Discussion and Analysis of Financial Condition and Results           17
           of Operations
Item 8     Financial Statements and Supplementary Data                                       21
Item 9     Changes in and Disagreements with Accountants on Accounting and Financial         21
           Disclosure

PART III

Item 10    Directors and Executive Officers of the Registrant                                22
Item 11    Executive Compensation                                                            22
Item 12    Security Ownership of Certain Beneficial Owners and Management                    22
Item 13    Certain Relationships and Related Transactions                                    22

PART IV

Item 14    Exhibits, Financial Statement Schedules and Reports on Form 8-K                   23
</TABLE>



The statements contained in this report on Form 10-K that are not purely
historical are forward looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934, including statements regarding the Company's expectations, hopes, beliefs,
intentions, or strategies regarding the future. Forward looking statements
include statements regarding, among other things: (i) the Company's backlog and
sales; (ii) potential acquisitions by the Company; (iii) the Company's financing
plans; (iv) trends affecting the Company's financial condition or results of
operations; (v) the Company's growth strategy, operating strategy and financing
strategy; (vi) the declaration and payment of dividends; (vii) regulatory
matters affecting the Company; and (viii) the outcome of certain litigation
involving the Company. Prospective investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and that actual results may differ materially from
those projected in the forward looking statements as a result of various
factors. All forward looking statements included in this document are based on
information available to the Company on the date hereof, and the Company assumes
no obligation to update any such forward looking statement. Among the factors
that could cause actual results to differ materially are the factors detailed in
Items 1 through 3 and 7 of this report and the risks discussed in the "Risk
Factors" section included in the Company's registration Statement on Form S-1
(Reg. No. 333-33729). Prospective investors should also consult the risk factors
listed from time to time in the Company's Reports on Form 10-Q, 8-K, 10-K and
Annual Reports to Shareholders.


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<PAGE>   3


                                     PART I

ITEM 1.  BUSINESS

General

         The Company produces high quality casual and dress men's apparel and
provides major apparel retailers with comprehensive brand management programs.
The Company's programs currently feature pants, shorts and denim jeans that are
marketed under Company brands, private brands and licensed brand names. The
Company distinguishes itself from traditional private label manufacturers by
providing apparel retailers with customer, product and market analysis, apparel
design, production, merchandising, and inventory forecasting. The Company
markets its apparel through all major retail distribution channels, including
department and specialty stores, national chains, catalog retailers, discount
and mass merchants and wholesale clubs. The Company's mission is to provide
total customer satisfaction through a combination of quality, value and
technology. Management believes that the Company provides its customers with
high quality apparel and services supported by a commitment to advanced
information, design and production technologies, and unique merchandising and
operating strategies.

         The Company's apparel line focuses on basic, recurring styles that the
Company believes are less susceptible to fashion obsolescence and less seasonal
in nature than fashion styles. All of the Company's products are derived from
six production platforms, or "chassis," each of which incorporates basic
features requiring distinct manufacturing processes, such as inclusion of an
elastic waistband, a jeansband or button-flap pockets. The six basic chassis are
modified to produce separate styles through variations in cut, fabric and
finish. This process enables the Company to achieve both manufacturing
simplicity and efficiencies while producing a wide variety of products through
distinctions in color and style. All products receive customer-specific labeling
and packaging upon receipt of confirmation of a customer order. As a result, a
common SKU (i.e. style, color, and size), differentiated only by labeling and
packaging, can be sold by both a high-end department store and a mass merchant
at different retail price points. This merchandising strategy offers
quick-response execution of customer orders without the associated risk of
carrying customer-specific inventories. In Fiscal 1997, fifteen styles marketed
under approximately 80 labels accounted for over 90% of the Company's net sales.
These labels include Company brands such as Bay to Bay(R) and Banana Joe(TM),
private brands such as Flyers(TM) and Flying A(R) and licensed brand names such
as Bill Blass(R) and Generra(R).

         The Company manages the manufacture of substantially all of its
products utilizing its approximately 300,000 square foot state-of-the-art fabric
cutting, product labeling and distribution facilities located in Tampa, Florida,
and independent garment assembly contractors located primarily in the Dominican
Republic. The Company also sources certain finished garments from independent
manufacturers located in Mexico, the Pacific Rim and the Middle East. The
Company believes that its commitment to the use of independent contractors in
the Dominican Republic anticipated the trend in the industry toward the use of
the Caribbean and Mexico for production. The Company believes the establishment
of its name and reputation in this area gives it a distinct competitive
advantage.

         The Company utilizes advanced technology in all aspects of its
business, including apparel design, materials sourcing, production planning and
logistics, customer order entry and sales demand forecasting. The Company's
dedication to technology produces greater efficiencies throughout the production
process and results in high-quality products, low-cost production and enhanced
customer order execution. The Company typically designs its apparel lines and
customer programs by tracking its customers' store-level POS system data and
responding to retail demand and trends on a per SKU basis. Apparel products are
developed using a computer-aided-design ("CAD") system integrated with fabric
cutting to maximize product quality and materials yield. Management believes
that the Company's 92% average fabric utilization rate is among the highest in
the apparel industry. The Company employs stringent quality control procedures
throughout its operations, from raw materials production at supplier mills
through finished goods shipping. In Fiscal 1997, the return rate for quality
defects was less than one percent, evidencing the impact of the Company's
quality control procedures.


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<PAGE>   4

         Accurate and timely order execution is achieved through electronic data
interchange ("EDI") order entry and quick replenishment of core SKUs. In Fiscal
1997, substantially all orders were placed via EDI. Orders generally are shipped
to the retailer within three working days of receipt of shipping instructions.
The Company's systems enable it to further assist the retailer by tracking
point-of-sale activity by SKU and forecasting consumer demand and seasonal
inventory requirements on a daily basis.

Industry

         According to The NPD Group, Inc., a retail industry research firm, the
U.S. apparel industry totaled approximately $174.9 billion in retail sales in
1996. The industry grew approximately 2.3% and 5.8% in 1995 and 1996,
respectively. In 1996, the men's bottoms (i.e., pants and shorts) business
represented approximately 7.5% of the total apparel market. The men's bottoms
segment tends to be relatively less cyclical than the apparel industry at large.
In 1995 and 1996 retail sales of men's bottoms grew approximately 6.0% and 9.1%,
respectively. In Fiscal 1995, Fiscal 1996 and Fiscal 1997, the Company's net
sales grew 9.7%, 6.6% and 29.3% respectively, over comparable prior periods.

         Trend Toward High Quality Private Brand Apparel. The Company believes
that there is an increased trend toward high quality, private brand apparel.
Private brand apparel bears the retailer's own name or a proprietary brand name
exclusive to the retailer. Producers are able to sell these garments at lower
wholesale prices due to certain economies, including lower advertising and
promotional costs, lack of brand name license fees and royalties, and the
absence of "markdown" and other risks and expenses inherent in the brand-name
apparel industry. As a result of the lower wholesale prices, private brand
apparel generally provides higher margins for the retailer than brand name or
designer products. Sales of private brand apparel represented 41.0% of total
sales of men's apparel in 1996, up from 39.3% in 1995 and 37.0% in 1994. The
Company believes that this shift is due primarily to the education of consumers
and retailers as to the benefits of private brand products. The Company believes
consumers increasingly regard private brand products as less expensive than
brand name products, but of equal or better quality. This increase in consumer
demand for private brand garments, coupled with retailers' demands for higher
margins, has resulted in retailers allocating more space to private brand
products.

         Trend Toward Casual Dress. The Company believes that there is a growing
trend in the United States toward casual dress, as reflected in the
implementation of policies such as "casual Fridays." In addition, the Company
believes that the number of people who work at home is increasing substantially
and that outside of the workplace, people's social activities are focusing on a
more casual lifestyle.

         Expansion of Caribbean and Mexican Production. Until recently, apparel
was produced predominantly domestically or in the Pacific Rim countries. Since
the passage of Section 807 of the Harmonized Tariff Schedule of the United
States (now found under tariff subheading 9802.00.80, but herein referred to as
"Section 807"), American apparel companies have increasingly utilized production
facilities located in the Caribbean Basin, including the Dominican Republic. The
Company believes that the Dominican Republic offers certain competitive
advantages, including favorable pricing and better quality production, a
long-standing and relatively stable production network, and much shorter
transportation periods as compared to goods assembled in the Pacific Rim. Under
Section 807, customs duties on apparel products assembled in the Caribbean Basin
may be offset by the costs incurred in the production of components in the
United States (plus freight and insurance). More recently, the North American
Free Trade Agreement ("NAFTA"), effective 1994, has permitted Mexican
manufacturers to ship finished apparel products into the United States duty-free
or at reduced duties. According to Sandler & Travis Trade Advisory Services,
Inc., 1996 marked the first year in which apparel products exported to the
United States from Mexico exceeded products exported from any other country,
including China.



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<PAGE>   5

Business Strategy

         The Company seeks to become "The Leader in Private Brand"(TM) by being
the leading marketer of private brand sportswear in its product categories
across all retail channels. The key elements of the Company's business strategy
are as follows:

         Focus on Private Brand Programs for Major Retailers. The apparel market
is highly competitive, with a trend toward greater emphasis on private brand
programs to improve retail margins. See "Business--Industry." Retailers are
increasingly finding it advantageous to outsource many aspects of their private
brand programs. The Company believes it has positioned itself to take advantage
of these trends by offering retailers customized comprehensive private brand
programs encompassing: (i) merchandise planning and support; (ii) consistently
high quality products; (iii) value-added services, such as custom labeling and
packaging design, just-in-time electronic order execution, and retail
profitability analysis; and (iv) access to state-of-the-art sales forecasting
and inventory management systems. In addition, the Company will continue to
promote these capabilities to increase sales of Company brands and licensed
brand name apparel offered to multiple retail accounts.

         Commitment to Superior Quality Operations. The Company adheres to
strict quality standards in every aspect of its operations, from sourcing of raw
materials to providing continuing service following shipment to its customers.
Product content and construction specifications, including the generous use of
fabric to produce a fuller, more comfortable fit, are designed to minimize
costly customer returns. The Company believes that its use of advanced
technology and standard operating procedures results in the production of high
quality products for its customers.

         Application of Advanced Technology. The Company employs advanced
technology in every aspect of its operations. A CAD system is used to develop
products and program fabric cutting to ensure color consistency and maximize
material yield. The Company employs air table handling systems and the latest
generation Gerber cutters in the cutting process to improve efficiency and
significantly enhance output volumes. In addition, the Company's EDI system
significantly enhances customer order execution and point-of-sale merchandise
tracking. Sales forecasting, production planning and logistics and inventory
management are performed on a proprietary system. The Company's production
system is integrated with its customers' systems and enables the Company to
track store level retail sell-through trends by SKU. See "Business--Operations."

         Adherence to Standard Operating Procedures. Management has instituted
comprehensive operating procedures for each stage of operations, from customer
planning and marketing strategies through apparel design, materials costing,
production planning and logistics, manufacturing, customer order execution,
point of sale analysis and accounting and financial reporting. These procedures
integrate each operating function to eliminate inefficiencies and maximize
productivity. The Company's detailed operating procedures and extensive
information systems enable management to monitor the performance of most
operations on a daily basis, with daily exception reporting to identify and
resolve deviations from forecast results.

         Focus on Core Production Chassis. The Company designs a core line of
products suitable for marketing through virtually every apparel retail channel,
differentiated among channels and customers only through customer-specific
labeling, packaging and other brand identification techniques. The core line is
developed from six standardized production chassis that enable the Company to
maximize manufacturing productivity and product quality and minimize unit
production costs and inventory risk. In Fiscal 1997, products derived from each
of the Company's six production chassis were sold to customers in multiple
distribution channels under approximately 80 different labels and point-of-sale
packaging concepts.

         Maintain Low-Cost Production. The Company is committed to
cost-sensitive, cost-controlled operations. To minimize unit production costs
and mitigate inventory risks, the Company is organized to effect the shortest
possible production cycle from receipt of raw materials through shipping of a
customer order. The Company's unique chassis production strategy and focus on
core product lines enable it to 

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concentrate materials purchases, minimize materials inventories, dedicate
assembly operations to individual styles and execute cost-effective production
runs per style. The Company contracts for garment assembly on a standard
cost-per-unit-produced basis with independent manufacturers that adhere to the
Company's strict quality specifications and standard operating procedures. In
Fiscal 1997, the Company's production cycle averaged 38 days and average
inventory turnover was approximately five times.

         Commitment to Total Customer Satisfaction. The Company's key customer
service capabilities include designing the customer's product line composition
by SKU; developing brand, packaging and point-of-sale merchandising programs;
determining the per store sales plan by SKU; and automatically replenishing
store inventory and recommending changes to pricing and planned sales volumes
based on store-level retail trends. These capabilities, leveraging the
chassis-based product strategy, offer quick-response execution of customer
orders without the cost and risk of carrying customer-specific inventories.

         Minimize Inventory Risk. Management regards inventory as a liability
rather than an asset. The Company minimizes its inventory risks by (i) producing
a focused line of core products that can be labeled and packaged upon receipt of
a customer order confirmation, (ii) minimizing the production cycle and
maximizing production flexibility, and (iii) tracking consumer demand trends by
SKU on a per store basis. Management uses detailed cost specifications to
monitor unit production cost variances.


Growth Strategy

         Internal Growth. The Company intends to grow internally through
increased sales of core products to current customers, sales to new customers
and expansion into complementary apparel product lines. For Fiscal 1997, the
Company reported net sales of $151.7 million and operating income of $16.6
million, representing five-year compound annual growth rates of 17.8% and 36.8%,
respectively.

         Greater Penetration of Existing Accounts. The Company believes it has a
     significant opportunity to increase sales to existing customers. The
     Company believes that a majority of its customers are seeking to maintain a
     balance between brand name apparel items and private label items,
     recognizing that brand name items draw customer traffic and private label
     products provide a low-cost, high-quality alternative to brand name
     apparel. The Company believes that it can increase sales to existing
     customers by (i) offering a broader selection of men's casual, dress and
     denim pants, shorts and shirts, and (ii) increasing sales of specific
     proprietary or retailer-owned labels for customers seeking to build the
     breadth of their own private label lines. Management believes that its
     customers place a high degree of value on the Company's quality standards
     as well as the Company's commitment to its customer's inventory management
     and forecasting.

         New Account Growth. The Company currently sells to approximately 75
     national and regional retailers in North America, and believes that there
     is significant opportunity to selectively increase its customer base. The
     Company continually evaluates potential customers based on the customer's
     (i) commitment to retailing high quality apparel, (ii) utilization of
     electronic commerce that will allow the Company's technological advantages
     to be realized, and (iii) potential sales volume of core products. The
     Company believes that retailers increasingly are adding private-brand
     programs and seeking vendor-managed inventory programs. The Company
     believes that its primary overseas competitors are unable to match the
     Company's ability to provide and test samples, respond via EDI, track unit
     production and shipment and monitor SKU sell through.

         New Product Introductions. While the Company is committed to providing
     its customers with a stable "core" product line, management does invest
     significant resources to remain current with the latest colors, fabrics and
     finishes. Management is continuously developing test products based on its
     research, and believes that its efforts to remain current are extremely
     important to building trust between the retailer and the retailer's
     customers. All new product lines are produced using the Company's "chassis"
     production concept and are designed to be complementary to existing product
     lines. In Fiscal 1995, the Company introduced dress pants, which in Fiscal
     1997 represented

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     approximately 8.6% of the Company's total revenues and were sold to
     approximately 25.9% of the Company's active customer base. Product lines
     introduced in Fiscal 1997 include men's casual shirts, which the Company
     believes are an attractive complement to its men's pants and shorts lines.
     Similarly, the Company has introduced a line of coordinated men's shirts,
     pants and shorts under a Company owned label, "Banana Joe." The management
     team has significant previous experience running businesses in these
     complementary product lines.

         Growth Through Acquisitions. A key element of the Company's growth
strategy is to: (i) acquire established brands to expand the distribution of the
Company's core products to existing and new customers; (ii) acquire
complementary new product lines, such as men's shirts, suitable for the
Company's brands and/or customer base; or (iii) enter into newly targeted areas
of the apparel market, such as women's sportswear, through acquisition of
targeted companies. The Company expects to expand into categories of the apparel
market in which it can exploit its business strategies. The Company continually
monitors acquisition opportunities, but currently has no arrangements or
understandings with respect to any acquisitions.


Products

The Company produces a core line of high quality men's casual and dress pants,
shorts and denim jeans. Most of the Company's apparel line focuses on basic,
recurring styles that the Company believes are less susceptible to fashion
obsolescence and less seasonal in nature than fashion styles. Key fabrics
include 100% cotton and synthetic blends utilizing rayon, wool and polyester.
Key fabric constructions include twill, denim, corduroy and wrinkle-free
fabrication. The table below sets forth sales mix, expressed as a percentage of
net sales, and retail price points per product category:

<TABLE>
<CAPTION>

                                     Fiscal             Fiscal           Fiscal      Current Retail
                                      1997               1996             1995         Price Range
                                     ------             ------           ------      ----------------
         <S>                         <C>                <C>              <C>         <C>   
         Casual Pants                  53.9%             56.8%            48.5%       $17.99 - $39.99
         Dress Pants                    8.6               1.7              0.9         24.99 -  39.99
         Denim Jeans                    5.4               7.1              7.8         16.99 -  24.99
         Shorts (including denim)      32.1              34.4             42.8         11.99 -  24.99
                                      -----             -----            -----
                                      100.0%            100.0%           100.0%
</TABLE>

         The Company's design staff examines domestic and international trends
in the apparel industry as well as industries completely outside the sphere of
clothing manufacture, including the automobile, grocery and home furnishings
industries, to determine trends in styling, color, consumer preferences and
lifestyle. Virtually all of the Company's products are designed by its in-house
staff utilizing CAD technology, which enables the Company to produce computer
simulated samples that display how a particular style will look in a given color
and fabric. The Company can quickly generate samples and alter the simulated
samples in response to customer input. The use of CAD technology minimizes the
time and costs associated with producing actual sewn samples prior to customer
approval and allows the Company to create custom designed products meeting the
specific needs of a customer. The Company's product content and construction
specifications require the use of matched finish thread throughout the garment,
surge seaming of all pockets, rigorous attention to seam construction, color
matching of all components and the generous use of fabric to produce a fuller,
more comfortable fit and minimize costly customer returns.

Customers and Customer Service

         The Company markets its products across all major apparel retail
channels to approximately 75 finer department and specialty stores, catalog
retailers, discount merchants and wholesale clubs. The Company's products are
sold at over 6,000 outlets throughout the United States, Canada, Mexico and
Central America. Sales to the Company's five largest customers represented
approximately 71.6% and 72.6% of net sales during Fiscal 1997 and Fiscal 1996,


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respectively. Sales to Wal-Mart (including Sam's Club, the nation's largest
chain of wholesale clubs), Price/Costco and Phillips-Van Heusen accounted for
approximately 28.7%, 18.8%, and 11.0% respectively, of net sales during Fiscal
1997 and 26.0%, 16.6% and 13.8%, respectively, of net sales during of Fiscal
1996. The Company also sells its products to other major retailers, including
Dayton Hudson, Federated Department Stores, JC Penney, May Co. and Nordstrom.
Net sales to the Company's ten largest customers increased at a compound annual
rate of 18.1% from Fiscal 1994 to Fiscal 1997.


         Set forth below are comparative sales mix data, expressed as a
percentage of net sales, by marketing channel:



<TABLE>
<CAPTION>
                                                   Fiscal           Fiscal           Fiscal
Channel                                             1997             1996             1995
-----------------------------------------          ------          --------          ------
<S>                                                <C>             <C>              <C>  
Wholesale club                                      46.1%             42.3%            29.8%
Discount and mass merchant                          21.1              21.4             31.3
National chain                                      12.3              14.5             20.9
Department store                                    10.9              14.4              8.8
Specialty store                                      5.4               4.7              4.9
Catalog                                              0.2               1.1              2.5
Other                                                4.0               1.6              1.8
                                                   -----             -----            -----
                                                   100.0%            100.0%           100.0%
</TABLE>

         The Company offers its customers comprehensive brand management
programs, which provide: (i) merchandise planning and support; (ii) consistently
high quality products; (iii) value-added services, such as custom labeling and
packaging design, just-in-time electronic order execution, and retail
profitability analysis; and (iv) access to state-of-the-art sales forecasting
and inventory management systems. In addition, the Company will continue to
promote these capabilities to increase sales of Company brands and licensed
brand name apparel offered to multiple retail accounts. The Company believes
that close collaboration with its customers provides the Company's employees the
opportunity to better understand the fashion, fabric and pricing strategies of
the customer and leads to the generation of products that are more consistent
with each customer's expectations. At the same time, the customer is given the
opportunity, at minimal expense and risk, to benefit from the Company's
substantial expertise in designing, packaging and labeling high quality products
with a brand name look, but at a private label price.

Product Labeling and Packaging

         The Company differentiates its products through customized labeling,
point-of-sale packaging and other brand identification techniques. For most of
its customers, the Company manages the design and production of labeling and
packaging materials. Management regularly analyzes consumer product labeling and
packaging and consumer targeting trends evident in other retailing formats,
including the automobile, grocery and home furnishings industries. The Company
can ship products directly to its customers' retail stores in floor-ready form
and offers innovative packaging and display techniques, such as the "Big Pack."
A "Big Pack" is a specially designed cardboard carton used to ship pants and
shorts directly to Sam's Club stores. Upon delivery, it opens into a floor-ready
display.

         For Fiscal 1997, the Company sold products bearing approximately 80
different labels to over 75 different customers. Of the $151.7 million in net
sales for this period, 43.5% represented sales of private brands unique to a
single retail customer and 56.5% represented sales of Company brands and
licensed brand name apparel to multiple customers. Of the approximately 80
labels and brands active during this period, approximately 30 are controlled by
the Company and approximately 50 are controlled by retailers.


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<PAGE>   9

Marketing and Sales

         The Company's products are sold by eleven sales representatives located
in California, Florida, Illinois, Kansas, Massachusetts, Ohio, New York,
Pennsylvania and Texas, each of whom has over eight years of experience in the
apparel industry. One of such sales representatives is devoted exclusively to
the sale and marketing of the Company's recently introduced Banana Joe(R) line 
of men's sportswear coordinates. The Company also maintains a sales and 
marketing support staff of six in Tampa dedicated to analyzing sales and 
marketing data.

         The Company offers each of its existing and prospective customers a
marketing plan tailored to the customer's market niche. Using its marketing data
and industry experience, the Company is able to create for each existing and
prospective customer and each particular product a market plan that outlines
optimum volume, timing and pricing strategies, markdown and sell-through trends
and profit margins.

         The Company operates an EDI system, whereby the Company can accept EDI
orders 24 hours a day and typically ship orders within three working days. In
Fiscal 1997, substantially all orders were placed via EDI.

Operations

         The Company principally cuts its fabric at its Tampa facility for
offshore finishing and assembly. The Company also imports finished goods,
principally denim jeans and shorts from Mexico, the Pacific Rim and the Middle
East. The Company believes that the use of numerous independent international
suppliers to assemble components cut at the Company's facilities enables it to
provide customers with high quality goods at significantly lower prices than if
it operated its own assembly facilities. In Fiscal 1997, products originating
from the Company's Tampa cutting facility and imported finished goods
represented approximately 83.4% and 16.6%, respectively, of the products sourced
by the Company.

         Overview. The Company inventories, spreads, marks and cuts virtually
all of the fabric used in the manufacture of its products at its own facility in
Tampa, Florida. The components are then assembled outside the United States,
principally in the Dominican Republic, and shipped back to the Company's Tampa
facilities for labeling, packaging and distribution. In Fiscal 1997, the
production cycle from receipt of raw materials through the availability for
shipping of finished goods averaged 38 days, including raw materials inventory,
transit and assembly. The Company customarily prepares, packs and ships customer
orders within three working days of receipt of shipping instructions.

         Raw Materials Sourcing. The Company purchases raw materials, including
fabrics, thread, trim and labeling and packaging materials, from domestic
sources based on quality, pricing and availability. Prior to shipment, the
Company undertakes a quality audit at its major suppliers to assure that quality
standards are met. An additional quality audit is performed upon receipt of all
raw materials. The Company maintains a laboratory at its Tampa, Florida facility
in order to test the quality of raw materials. The Company has no long-term
agreements with any of its suppliers. The Company projects raw material
requirements through a series of planning sessions taking into account orders
received and future projections by style and color. This data is then translated
to the raw material components needed by production time frame in order to meet
customers' requirements.

         Cutting. The Company believes that its domestic cutting facility
provides it with substantial advantages over many of its competitors. Since
1989, the Company has invested in state-of-the-art computerized equipment for
spreading, marking and cutting fabric. The Company's CAD system positions all
component parts of a single garment in close proximity on the same bolt of
fabric to ensure color consistency. This process also enables the Company to
utilize approximately 92% of the fabric. The Company also has invested in
air-table fabric handling equipment that eases the movement of fabric on the
cutting table by the use of forced air through a grid of air ducts on the table
surface. The use of such air-table fabric handling equipment reduces by more
than one-half the number of workers required to handle a bolt of fabric in the
cutting process. In addition, the Company uses two Gerber-brand computerized
cutting systems, which include state-of-the-art submerged electrical and vacuum 

                                       9
<PAGE>   10


components. The use of such cutting systems significantly enhances the Company's
fabric cutting capacity. Quality audits in the cutting facility are performed
during various stages, from spreading of fabric through preparation for shipment
to independent manufacturers for assembly.

         Assembly. After the component parts are marked and cut, they are
shipped by common carrier to independent foreign manufacturers, principally in
the Dominican Republic, for assembly and finishing. The Company currently uses
approximately 15 manufacturers in the Dominican Republic that specialize in
assembling products on one or more chassis and adhere to the Company's specific
operating procedures. The Company has used these manufacturers for an average of
more than three years and enjoys, in effect, exclusive relations with 10 of
them. Several of the Company's independent manufacturers utilize various
equipment, including wrinkle-free processing ovens, owned by the Company. The
Company is among relatively few U.S. apparel companies to use the Dominican
Republic as its principal production base for assembling component parts. The
Company believes that the Dominican Republic offers the Company certain
competitive advantages, including favorable pricing and better quality
production, a long-standing and relatively stable production network, and much
shorter transportation periods than goods assembled in the Pacific Rim. In
addition, U.S. customs duties programs, such as Section 807, facilitate assembly
in the Caribbean Basin by completely eliminating or substantially reducing the
customs duties on the import of assembled U.S. components.

         There are no material formal arrangements between the Company and any
of its contractors, but the Company believes that its relations with its
contractors are generally good. The Company is able to shift its sources of
supply depending upon production and delivery requirements and cost, while at
the same time reducing the need for significant capital expenditures,
work-in-process inventory and a large production work force. The Company
arranges for the assembly or production of its products primarily based on
orders received. The Company has traditionally received a significant portion of
its customers' orders prior to placement of its initial manufacturing orders.
Many of these customer orders may change with respect to colors, sizes,
allotments or assortments prior to the delivery date. The Company utilizes such
orders and its experience to estimate production requirements in order to secure
necessary assembly or manufacturing capacity. The Company inspects prototypes of
each product before production runs are commenced. The Company also performs
random in-line quality control checks during and after assembly before the
garments leave the contractor. The Company currently has 14 full-time quality
control personnel on-site in the Dominican Republic.

         Labeling, Packaging and Shipping. Upon confirmation of a customer
order, the Company picks the appropriate items from its common inventory.
Thereafter, the appropriate tags and labels, such as pocket flashers, jokers,
woven labels, hang tags and leg tape, are sewn on or applied. The product is
then packaged (e.g., placed on hangers or put in plastic packaging) and prepared
for shipment in accordance with the customer's specifications. The Company
generally ships orders within three days of receipt. Orders are shipped F.O.B.
Tampa by customer or common carrier directly to the customer's individual stores
or to its centralized distribution center. The customer pays the applicable
freight charges. Final quality inspections occur when the finished garments are
returned to the Company's Tampa facilities for labeling and packaging. The
Company currently has 24 full-time quality control personnel employed in its
Tampa facilities. As a result of its extensive quality control program, less
than one percent of the products shipped by the Company during Fiscal 1997 were
returned by its customers due to defects.


Imports and Import Regulations

         The Company presently imports garments under three separate scenarios
having distinct customs and trade consequences: (i) imports of finished goods
(mostly from the Pacific Rim and the Middle East); (ii) imports from the
Caribbean Basin and Central America; and (iii) imports from Mexico.

         For direct importations (mostly from the Pacific Rim and the Middle
East), imported garments are normally taxed at most favored nation ("MFN")
tariffs and are subject to a series of bilateral quotas that regulate the number
of garments that may be imported annually into the United States. The tariffs
for most of the countries from which the Company currently imports or intends to
import have been set by 

                                       10
<PAGE>   11


international negotiations under the auspices of the World Trade Organization
("WTO"). These tariffs generally range between 17% and 35%, depending upon the
nature of the garment (e.g., shirt, pant), its construction and its chief weight
by fiber. The principal sourcing alternatives that do not enjoy MFN rates in the
Far East are Vietnam and Laos.

         In addition to these tariff rates, merchandise from virtually all the
countries from which the Company imports is also subject to bilateral quota
restraints, pursuant to U.S. domestic law or the multi-lateral Agreement on
Textile and Clothing, which is under the auspices of the WTO. Most bilateral
quotas are negotiated on a calendar year basis. After the United States and a
particular country agree to a particular level of exports in a particular quota
category (for instance, cotton men's bottoms (category 347)), the country that
receives the quota has the right to determine the method by which such quota is
assigned to its manufacturers. Some jurisdictions, such as Hong Kong, have a
free market under which quotas are bought and sold. Most countries, however,
assign it to the factories that actually produce the garments. Shipments which
are exported to the United States must, in addition to the usual commercial
documentation, have appropriate and official textile visas, in either an
electronic or paper format, which confirm their quota status. This documentation
must be filed prior to the admission and clearance of the merchandise into the
United States. Accordingly, the Company usually demands that this paperwork be
submitted prior to payment.

         The Company also imports garments from countries in the Caribbean Basin
and Central America, most notably the Dominican Republic. Although much
merchandise imported from these jurisdictions is subject to the identical tariff
and quota consequences described above for Far Eastern importations, there are
special circumstances which provide a unique tariff and quota preference for
some merchandise sourced from the Caribbean Basin or Central America. The
principal tariff advantage is the so-called "807" program. Under this program,
merchandise produced under tariff subheading 9802.00.80, HTS, is admitted into
the United States with a substantial tariff reduction. Specifically, this tariff
provision provides a reduction in duty based on the value of exported
U.S. components assembled into a product in a foreign jurisdiction which is
subsequently reimported into the United States. In essence, the duty reduction
is equal to the value of U.S. components incorporated into these assembled goods
plus southbound international freight and insurance. For apparel products, such
U.S. components normally consist of cut-to-shape U.S. fabric parts, finishing
and trim (buttons, thread, etc.). In addition, if the fabric which is cut to
create the cut component parts is also knitted, woven or formed in the United
States, there is a special quota provision which provides for more liberalized
access to the U.S. marketplace. This special quota provision is applicable only
to certain Caribbean Basin, Central American and northern Latin American
countries which have signed special agreements with the United States. Under the
terms of these agreements, such products, known in the trade as "807A" or
"Super 807" or "Guaranteed Access Level" products, are controlled through a much
more liberal quota system. Accordingly, a country such as the Dominican Republic
would have a regular quota for men's cotton bottoms produced through a normal
cut, make and trim operation or through the traditional 807 process; at the same
time, it would have a much bigger and, therefore, more liberal quota for
merchandise produced from U.S. cloth under this Super 807 or 807A program. The
Company produces significant garments under one or both of these particular
programs. In those circumstances where garments qualify for both preferences,
"807" and "807A," the merchandise is accorded both substantial and significant
quota and tariff advantage over Pacific Rim, Middle Eastern or non-qualifying
Western hemisphere goods.

         The Company also imports finished goods from Mexico under the North
American Free Trade Agreement, commonly known as NAFTA. Under NAFTA, merchandise
which qualifies is accorded reduced or duty-free access, depending upon the type
of merchandise selected. The key requirement for NAFTA qualification for such
garments is that the yarn, cloth, cut, sew and finish of the garments all take
place within North America. This is commonly known as the "yarn-forward rule."
Merchandise produced pursuant to these rules enters the United States at a
preferential or at a zero rate and is not subject to any quota.

         In addition to the regular NAFTA program, certain imports made by the
Company are also subject to a tariff preference which was created and enacted as
part of the NAFTA-enabling legislation. This tariff provision, subheading
9802.00.90, HTS, provides for immediate duty-free and quota-free entry 


                                       11
<PAGE>   12


into the United States from Mexico of garments made from components which are
cut to shape in the United States from U.S. knit, woven or formed cloth. This
duty-free, quota-free entry would be available for pant products sourced from
U.S. components cut from U.S. knitted/woven fabric. This merchandise, therefore,
has an even more favorable treatment than merchandise being imported from the
Caribbean Basin. The Company currently imports a limited amount of such
merchandise from Mexico.

         Finally, non-NAFTA qualifying goods may be imported from Mexico. Such
merchandise could be imported at reduced duty rates under the 807 (9802.00.80)
program (cut in the U.S.), or special tariff rate quotas called "TPLs."
Otherwise, it is subject to full duty. Such merchandise may also be subject to
Mexican quotas which are effective for some products until 2004.


Personnel

         At November 29, 1997, the Company had 634 employees, including 20 in
the Dominican Republic. Of the total, approximately 108 hold executive and
administrative positions, approximately 14 are engaged in design and
merchandising, approximately 328 are engaged in production (e.g., marking,
cutting and labeling), approximately 18 are engaged in sales, approximately 118
are engaged in distribution and approximately 48 are engaged in quality control.
None of the Company's employees is subject to a collective bargaining agreement,
and the Company considers its relations with its employees to be generally good.

         The Company is committed to developing and maintaining a well-trained
workforce. The Company provides or pays for in excess of 20,000 hours of
continuing education annually for its employees on subjects ranging from
computers to foreign languages. The Company is equally committed to the
well-being of its employees. The Company offers its full-time employees and
their families a comprehensive benefits package that includes a 401(k) plan, a
choice of group health insurance plans, term life insurance (with an option to
purchase additional coverage), a choice of dental plans, and a vision plan. The
Company also offers tuition reimbursement for business-related courses and pays
a retirement bonus to persons employed by the Company for twenty-five years or
more. The Company maintains a recreation area and health club facilities for the
use and enjoyment of its employees and their families. The Company also enjoys
long-standing relationships with certain of its independent assembly contractors
in the Dominican Republic and has contributed financial resources to improving
conditions for their employees.


Management Information Systems

         The Company believes that advanced information processing is important
to maintain its competitive position. Consequently, the Company continues to
upgrade its management information systems in order to maintain better control
of its inventory and to provide management with information that is both more
current and more accurate than was available previously. The Company's
management information systems provide, among other things, comprehensive order
processing, production, accounting and management information for the marketing,
manufacturing, importing and distribution functions of the Company's business.
The Company has purchased and implemented a software program that enables the
Company to track, among other things, orders, manufacturing schedules, inventory
and unit sales of its products. In addition, to support the Company's flexible
inventory replenishment program, the Company has an EDI system through which
customer inventories can be tracked and orders automatically placed by the
retailer with the Company. (See Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources)


Competition

         The apparel industry is highly competitive and the Company competes
with numerous apparel manufacturers, including brand name and private label
producers, and retailers which have established, or 

                                       12
<PAGE>   13

may establish, internal product development and sourcing capabilities. The
Company's products also compete with a substantial number of designer and
non-designer product lines. Many of the Company's competitors and potential
competitors have greater financial, manufacturing and distribution resources
than the Company. The Company believes that it competes favorably on the basis
of quality and value of its programs and products, price, the production
flexibility that it enjoys as a result of its cutting and labeling capabilities
and its sourcing network, and the long-term customer relationships it has
developed. Nevertheless, any increased competition from manufacturers or
retailers, or any increased success by existing competition, could result in
reductions in unit sales or prices, or both, which could have a material adverse
effect on the Company's business and results of operations.


Trademarks and Licenses

         The Company holds or has applied for over 75 U.S. trademark
registrations covering its various brand names. The Company believes that its
Flyers(TM), Flying A(R) and Bay to Bay(R) trademarks are material to its 
business. The word marks Flying A(R) and Bay to Bay(R) are registered with the
United States Patent and Trademark Office. These registrations expire in 2005
and 2001, respectively, and are subject to renewal. There are applications
pending with the United States Patent and Trademark Office for trademarks which
include the Flyers(TM) and Flying A(R) names. Two of these applications have
been opposed. Pursuant to separate license agreements, the Company has the
exclusive rights to use (i) the Bill Blass(R) trademark with respect to casual
pants and shorts, jeans and pre-hemmed dress pants distributed or sold in the
United States, Mexico and Canada and (ii) the Generra(R) trademark with respect
to the design, manufacture and wholesale in the United States and Canada of
men's casual pants, shorts and dress slacks (excluding open bottom construction)
and men's jean-constructed bottoms made of denim or heavy weight fabrics
(excluding open bottom construction). These licenses expire in 2000 and 1999,
respectively. The license agreement with respect to the Generra(R) trademark is
subject to two renewal options that expire September 30, 2002 and 2005,
respectively. The Company believes that it has the exclusive use of all of its
owned and licensed trademarks.


Credit Facilities

         The Company needs significant working capital to purchase inventory and
finance accounts receivable and, consistent with industry practice, is often
required to post letters of credit when placing an order with certain
international manufacturers. Currently, a substantial portion of the Company's
working capital requirements are met through a $48 million credit agreement with
a bank (the "Credit Agreement"), which expires on October 31, 1998. The Company
utilized the proceeds from its recent public offering to reduce the outstanding
indebtedness under the Credit Agreement.

Factoring of Accounts Receivable

           Historically, the Company has sold substantially all of its trade
accounts receivable to a factor which assumes virtually all of the credit risk
with respect to collection of such accounts. The factor pays the Company the
receivable amount upon the earlier of (i) receipt by the factor of payment from
the Company's customer or (ii) 120 days past the due date for such payment. The
factor approves the credit of the Company's customers prior to sale. If the
factor disapproves or limits a sale to a customer and the Company decides to
proceed with the sale, the Company bears some credit risk. The factoring
agreement expires on September 30, 1998, at which time the Company intends to
renew or replace it.

Seasonality

         Historically, the Company's business has been seasonal, with slightly
higher sales and income in the second and fourth fiscal quarters, just prior to
and during the two peak retail selling seasons for spring and fall merchandise.
In addition, certain of the Company's products, such as shorts and corduroy
pants, tend to be seasonal in nature. In the event such products represent a
greater percentage of the Company's sales in the future, the seasonality of the
Company's sales may be increased. 


                                       13
<PAGE>   14

Backlog

         At September 27, 1997, the Company had unfilled customer orders of
approximately $135.8 million. All of such orders are scheduled for shipment in
Fiscal 1998. At September 28, 1996, the Company had unfilled customer orders of
approximately $117.9 million. Fulfillment of orders is affected by a number of
factors, including revisions in the scheduling of manufacture and shipment of
the product which, in some instances, depends on the demands of the retail
consumer. Accordingly, a comparison of unfilled orders from period to period is
not necessarily meaningful, and the level of unfilled orders at any given time
may not be indicative of eventual actual shipments.


Reorganization

         The Company was founded in 1927 under the name Tropical Garment
Manufacturing Company. In 1989, the Company was acquired by William W. Compton,
Michael Kagan and a predecessor in interest to Accel, S.A. de C.V., a Mexican
Corporation ("Accel"), and Shakale Internacional, S.A., a corporation organized
under the laws of Costa Rica ("Shakale"), through the purchase of the Company's
outstanding capital stock by Tropical Acquisition Corporation, a Delaware
corporation and wholly-owned subsidiary of Apparel International Group, Inc., a
Delaware corporation. On August 22, 1997, Apparel International Group, Inc. was
merged into Tropical Sportswear Int'l Corporation, a Florida corporation
incorporated on January 27, 1997. On October 23, 1997, the Company and Tropical
Acquisition Corporation were merged into Tropical Sportswear Int'l Corporation,
which became the Company.


Executive Officers of the Registrant

         The following table provides the names and ages of the Company's
executive officers, and the positions and offices currently held by each of
them:


<TABLE>
<CAPTION>
Name                              Age                  Position(s)
----                              ---                  -----------
<S>                               <C>        <C>                                       
William W. Compton                53         Chairman of the Board, Chief Executive Officer and Director
Richard J. Domino                 48         President
Michael Kagan                     58         Executive Vice President, Chief Financial Officer,
                                              Treasurer, Secretary and Director
</TABLE>

         William W. Compton has served as Chairman of the Board, Chief Executive
Officer and a Director of the Company since November 1989. He also served as
President of the Company from November 1989 to November 1994. Mr. Compton has
over 28 years of experience in the apparel industry. Prior to joining the
Company, he served as President and Chief Operating Officer of Munsingwear,
Inc., an apparel manufacturer and marketer, President/Executive Vice President
of Corporate Marketing for five apparel divisions of McGregor/Faberge
Corporation and President, U.S.A. and a director of Farah Manufacturing
Corporation, a men's apparel manufacturer. Mr. Compton currently serves on the
Board of Directors of the Brigham Young University Marriott School of
Management.

         Richard J. Domino joined the Company in 1988 and has served as
President of the Company since November 1994. Mr. Domino served as Senior Vice
President of Sales and Marketing from January 1994 to October 1994 and Vice
President of Sales from December 1989 to December 1993. He has over 23 years
experience in apparel-related sales and marketing. Before joining the Company,
Mr. Domino was employed by Thompson Sportswear, Inc., a men's apparel
manufacturer and marketer, as its Sales Manager for the Northwest Territory, and
by Haggar Corp., a men's apparel manufacturer and marketer, as its New Jersey
Salesman.

         Michael Kagan has served as Executive Vice President, Chief Financial
Officer, Treasurer, Secretary and a Director of the Company since November 1989.
Mr. Kagan has more than 30 years experience in the apparel industry. Prior to
joining the Company, Mr. Kagan served as Senior Vice 


                                       14
<PAGE>   15

President of Finance for Munsingwear, Inc. and as Executive Vice President and
Chief Operating Officer of Flexnit Company, Inc., a manufacturer of women's
intimate apparel.


ITEM 2.  PROPERTIES

         The Company's corporate headquarters, cutting and warehouse facilities
are situated on over 18 acres in Tampa, Florida and are owned by the Company.
The Company has recently completed an approximately 110,000 square foot
state-of-the-art cutting facility to provide an environment that will increase
efficiencies and accommodate the Company's increasing volume. The new facility
is located adjacent to the Company's administration and distribution facility
(approximately 190,000 square feet). During Fiscal 1997, the Company's cutting,
and labeling, packaging and shipping facilities operated at approximately 65% of
capacity. During Fiscal 1998, the Company anticipates spending approximately
$410,000 to add a third Gerber cutter and up to $5.0 million to upgrade its
existing computer system. The Company's facilities are subject to a mortgage
securing the Loan Agreement, which had an outstanding balance of $9.8 million at
September 27, 1997. The Company also leases approximately 4,000 square feet of
showroom offices in New York City. This lease expires in April 2004. The Company
believes that its existing facilities are adequate to meet its current and
foreseeable needs. The Company also believes its existing facilities are well
maintained and in good operating condition. (See Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources)


ITEM 3.  LEGAL PROCEEDINGS

                  On March 21, 1997, Levi Strauss & Co. brought suit against the
Company in U.S. District Court for the Northern District of California. The
complaint alleges, among other things, that the Company's Flyers(TM) trademark
and certain trade dress used in the labeling and packaging of the Company's 
Flyers(TM) and Bay to Bay(R) products infringe upon certain of plaintiff's 
proprietary trademark and trade dress rights in violation of the federal 
Lanham Act and California law. The complaint seeks injunctive relief, as well
as treble damages and attorneys' fees. The Company has also received notice 
that plaintiff intends to seek to amend its complaint to allege that certain 
trade dress used in the labeling and packaging of the Company's licensed Bill 
Blass(R) brand dress slack also infringes upon certain of plaintiff's 
proprietary trade dress rights. Although the outcome of the litigation cannot 
be determined at this time and the Company would consider reasonable settlement 
opportunities, the Company currently intends to vigorously defend against such
allegations. Nevertheless, in an attempt to limit the Company's liability, if
any, with respect to such alleged infringement, the Company has unilaterally 
altered the trademark and trade dress which are currently the subject of this
litigation.

         On July 3, 1997, Out-of-Mexico Apparel, Ltd. brought suit against the
Company in California Superior Court for, among other things, breach of
contract, breach of an implied covenant of good faith and fair dealing, and
violation of the California Unfair Business Practices Act. The complaint alleges
that the Company entered into contracts for the manufacture of apparel with
certain manufacturers in contravention of a customer non-disclosure and
non-circumvention agreement between Out-of-Mexico Apparel, Ltd. and the Company.
The complaint seeks compensatory damages and prejudgment interest, punitive
damages and the costs of suit. Although the outcome of the litigation cannot be
determined at this time and the Company would consider reasonable settlement
opportunities, the Company intends to vigorously defend against such
allegations.

         The Company is not involved in any other legal proceedings which the
Company believes could reasonably be expected to have a material adverse effect
on the Company's business or results of operations.


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

         Not applicable.

                                       15
<PAGE>   16


                                     PART II


ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Company's Common Stock has been traded on The Nasdaq Stock Market's
National Market System under the symbol "TSIC" since its initial public offering
on October 28, 1997. The initial public offering price of the Common Stock was
$12.00 per share. Prior to such time, there was no established public trading
market for the Company's Common Stock. At December 8, 1997 there were
approximately 1,500 beneficial holders of the Company's Common Stock.

         The transfer agent for the Common Stock is Firstar Trust Company,
Milwaukee, Wisconsin

         The Company has not declared or paid any cash dividends on the Common
Stock since 1989. The Company currently anticipates that all of its earnings
will be retained for development and expansion of the Company's business and
does not anticipate declaring or paying any cash dividends in the foreseeable
future. Moreover, the Credit Agreement contains a covenant expressly prohibiting
the payment of any cash dividends.


ITEM 6.  SELECTED FINANCIAL DATA

         The following selected financial data (in thousands, except share and
per share data) are derived from the consolidated financial statements of the
Company for each of the five years in the period ended September 27, 1997. These
consolidated financial statements have been audited and reported upon by Ernst &
Young LLP, independent certified public accountants.

<TABLE>
<CAPTION>
                                                             FISCAL YEAR ENDED
                               ------------------------------------------------------------------------
                               SEPTEMBER 27,  SEPTEMBER 28,   SEPTEMBER 30,   OCTOBER 1,     OCTOBER 2,
                                  1997           1996            1995           1994           1993
                                  ----           ----            ----           ----           ----
<S>                          <C>            <C>             <C>            <C>           <C>   
STATEMENT OF INCOME DATA:

Net sales                    $  151,692     $  117,355      $  110,064     $  100,359    $   74,271
Gross profit                     36,055         26,223          22,206         24,682        16,545
Selling, general and
   administrative expenses       19,443         15,189          15,060         14,291        11,071
Operating income                 16,612         11,034           7,146         10,391         5,474
Interest expense                  2,899          2,498           3,160          2,115         1,644
Income before income taxes       13,176          7,916           2,985          8,591         2,314
Net income                        8,269          5,171           2,160          4,978         1,368
Net income per common share        1.37            .86             .36            .83           .23
Weighted average number of
   shares used in the 
   calculation(1)             6,015,000      6,015,000       6,015,000      6,015,000     6,015,000

<CAPTION>

                                                                    AT
                              --------------------------------------------------------------------------
                              SEPTEMBER 27,  SEPTEMBER 28,  SEPTEMBER 30,    OCTOBER 1,     OCTOBER 2,
                                  1997           1996            1995           1994          1993
                                  ----           ----            ----           ----          ----  
<S>                           <C>            <C>            <C>              <C>            <C>  
BALANCE SHEET DATA:

Working capital                 $30,234        $25,483         $31,655        $23,600       $ 4,714
Total assets                     69,658         63,415          55,237         52,023        41,522
Long-term debt, including        
 current maturities              24,055         24,162          27,175         20,973         1,677
Shareholders' equity             26,651         18,382          13,211         11,051         6,073

</TABLE>

(1) Computed on the basis described in Notes to Consolidated Financial
Statements




                                       16
<PAGE>   17



ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

GENERAL

         The Company manages the production of substantially all of its products
utilizing Company-owned facilities in Tampa, Florida and independent assembly
manufacturers located in the Dominican Republic and Mexico. The Company also
sources a limited volume of finished goods from independent suppliers. For goods
assembled by independent manufacturers, the Company purchases and inventories
all of its raw materials and cuts its fabric in the Tampa cutting facility based
on customer orders. The Company ships cut fabric parts and other product
components via common carrier to the independent manufacturers, who assemble
components into finished garments (except for labeling and packaging) and
perform certain finishing processes. The Company pays its independent
manufacturers based on a specified unit price for actual first-quality units
produced. Accordingly, a substantial portion of the Company's production labor
and overhead is variable. The Company has no material contractual arrangements
with its manufacturers. The Company ships assembled goods from the Dominican
Republic and Mexico to its Tampa distribution center via common carrier. Upon
receipt of a customer order confirmation, the Company attaches designated labels
and point-of-sale packaging and ships orders to customers.

         The apparel retail market experienced a down cycle during Fiscal 1995
and early Fiscal 1996, with a recovery beginning in the second quarter of Fiscal
1996. The Company observed this weakening apparel market and, as a result, began
to reduce its inventories. In Fiscal 1995 and the first quarter of Fiscal 1996,
the Company experienced significant order cancellations. In an effort to control
the cost of rising inventories and in anticipation of a continued weak retail
market, the Company offered products at amounts below normal selling prices and,
in some cases, below cost. In addition, the Company recorded markdown reserves
for remaining excess inventory. The weak retail market resulted in only small
sales increases from Fiscal 1995 to Fiscal 1996. In addition, the Company's
gross margin weakened in Fiscal 1995 but improved slightly in Fiscal 1996. The
Company believes that historical market conditions resumed in 1997.

         The following discussion of the Company's results of operations and
financial condition should be read in conjunction with the Company's
consolidated financial statements and notes thereto.

RESULTS OF OPERATION

         The following table sets forth, for the periods indicated, selected
items in the Company's consolidated statements of operations expressed as a
percentage of net sales:

<TABLE>
<CAPTION>

                                                                   YEAR  ENDED
                                                -------------------------------------------------
                                                SEPTEMBER 27,     SEPTEMBER 28,     SEPTEMBER 30,
                                                    1997              1996             1995
                                                -------------------------------------------------
<S>                                             <C>               <C>               <C> 
Net sales                                         100.0%            100.0%             100.0%
Cost of goods sold                                 76.2              77.7               79.8
                                                  -----             -----              -----
Gross profit                                       23.8              22.3               20.2
Selling, general and                                                                   
  administrative expenses                          12.8              12.9               13.7
                                                  -----             -----              -----
Operating income                                   11.0               9.4                6.5
Interest expense                                    1.9               2.1                2.9
Factoring expense                                   0.3               0.3                0.6
Other expense, net                                  0.1               0.3                0.3
                                                  -----             -----              -----
Income before income taxes                          8.7               6.7                2.7
Provision for income taxes                          3.2               2.3                 .7
                                                  -----             -----              -----
Net income                                          5.5%              4.4%               2.0%
                                                  =====             =====              =====

</TABLE>


                                       17
<PAGE>   18


FISCAL 1997 COMPARED TO FISCAL 1996

         Net Sales. Net sales for Fiscal 1997 were $151.7 million as compared to
$117.4 million for Fiscal 1996, an increase of $34.3 million, or 29.3%. This
increase was attributable to a 27% increase in the number of units shipped and a
2% increase in the average selling price per unit. These increases were
primarily the result of increased market penetration and brand acceptance.

         Gross Profit. Gross profit for Fiscal 1997 was $36.1 million, or 23.8%
of net sales, as compared with $26.2 million, or 22.3% of net sales, for Fiscal
1996. The increase in gross profit percentage resulted primarily from a
significant reduction in the level of markdowns. During the first several weeks
of Fiscal 1996, a significant number of orders were canceled due to the soft
retail market experienced by most major retailers. In an effort to control the
cost of rising inventories and in anticipation of a continued weak retail
market, the Company sold products below its normal selling prices and in some
cases below its cost. Also, the Company recorded additional markdown allowances
for any remaining excess inventory. During the latter part of Fiscal 1996, the
retail market strengthened and the level of markdowns decreased significantly.
This trend continued during Fiscal 1997 and the gross profit percentage returned
to historical levels.

         Selling, General and Administrative Expenses. Selling, general and
administrative expenses for Fiscal 1997 were $19.4 million, or 12.8% of net
sales, as compared to $15.2 million, or 12.9% of net sales, for Fiscal 1996. The
increase in selling, general and administrative expenses was principally due to
the overall increase in the level of operations of the Company. The principal
components of the increase included $590,000 in distribution center labor,
$370,000 in depreciation and occupancy costs related to the Company's new
distribution center, $520,000 in commissions and selling costs, $450,000 in
information technology costs, $515,000 in merchandising costs, $330,000 in
certain legal expenses, and $330,000 in bad debts related to a customer
bankruptcy.

         Interest Expense. Interest expense for Fiscal 1997 was $2.9 million as
compared to $2.5 million for Fiscal 1996. The increase in interest expense was
the result of higher average outstanding borrowings, offset in part by a lower
average interest rate due to a re-negotiation of the Credit Agreement in
November 1996.

         Factoring Expense. Factoring expense was $0.5 million for Fiscal 1997
and $0.4 million for Fiscal 1996, or .3% of sales for both years.

         Income Taxes. The Company's effective income tax rate for Fiscal 1997
was 37.2% as compared with 34.7% in the comparable period in Fiscal 1996. The
increase in the effective rate for Fiscal 1997 was primarily due to the Company
receiving in Fiscal 1996 a benefit for previously unrecognized losses of an
international subsidiary, which was closed in Fiscal 1995.

         Net Income. As a result of the above factors, net income for Fiscal
1997 was $8.3 million, or 5.5% of net sales, as compared to $5.2 million, or
4.4% of net sales, for Fiscal 1996.


FISCAL 1996 COMPARED TO FISCAL 1995

         Net Sales. Net sales for Fiscal 1996 were $117.4 million as compared to
net sales of $110.1 million for Fiscal 1995, an increase of $7.3 million, or
6.6%. The increase was primarily the result of a 5.8% increase in the average
selling price per unit. The provision for returns and allowances was $3.0
million in Fiscal 1996, which was consistent with the $3.1 million for Fiscal
1995. During the last three quarters of Fiscal 1996, the retail market
strengthened and the Company was able to significantly reduce the level of
markdown and close out sales experienced during Fiscal 1995 and the first
quarter of Fiscal 1996.


                                       18
<PAGE>   19

         Gross Profit. Gross profit for Fiscal 1996 was $26.2 million, or 22.3%
of net sales, as compared to $22.2 million, or 20.2% of net sales, during Fiscal
1995. The increase in gross profit percentage was primarily attributable to an
increase in the average selling price per unit without a corresponding increase
in the average cost per unit. As a result of a progressive weakening of the
retail market in 1995, the Company sold selected products at selling prices
below normal sales prices. These markdowns were concentrated in the first
quarter of Fiscal 1996 when a significant number of orders was canceled. In
limited cases, to control the costs of rising inventories, the Company sold
products at prices that were below its costs. Also, the Company recorded
additional markdown allowances for any remaining excess inventory. The provision
recorded by the Company for such losses increased from $468,000 in Fiscal 1995
to $798,000 in Fiscal 1996. In addition, during Fiscal 1995, the Company
incurred increased labor expense, including significant overtime, due to a shift
toward smaller individual orders from customers. During the latter part of
Fiscal 1996, order sizes returned to historical levels, which increased the
average order size and led to a favorable impact on gross profit.

         Selling, General and Administrative Expenses. Selling, general and
administrative expenses for Fiscal 1996 were $15.2 million, or 12.9% of net
sales, as compared to $15.1 million, or 13.7% of net sales, for Fiscal 1995.
Selling, general and administrative expenses as a percentage of net sales
decreased slightly due to the Company's ability to leverage certain fixed
overhead costs against the increased level of sales.

         Interest Expense. Interest expense for Fiscal 1996 was $2.5 million as
compared to $3.2 million for Fiscal 1995. The decrease was due principally to
lower average outstanding borrowings resulting from the reduction of working
capital requirements, caused primarily by the reduction in average inventory
levels throughout the year.

         Factoring Expense. Factoring expense for Fiscal 1996 was $0.4 million,
or 0.3% of net sales, as compared to $0.7 million, or 0.6% of net sales, for
Fiscal 1995. The decrease was primarily the result of a more favorable factoring
arrangement entered into in October 1995.

         Income Taxes. The Company's effective income tax rate for Fiscal 1996
was 34.7% as compared with 27.6% for Fiscal 1995. The lower effective rate
during Fiscal 1995 was primarily the result of the Company receiving the benefit
of previously unrecognized losses of an international subsidiary. The company
decided to cease the operation of this subsidiary in September 1995. Prior to
this decision, these losses were not deductible for U.S. income tax purposes.

         Net Income. As a result of the above factors, net income for Fiscal
1996 was $5.2 million, or 4.4% of net sales, as compared to $2.2 million, or
2.0% of net sales, for Fiscal 1995.


LIQUIDITY AND CAPITAL RESOURCES

         The Company's primary capital requirements have been the funding of the
growth in operations and capital expenditures. The Company has historically
financed its growth in sales and the resulting increase in inventory and
receivables through a combination of operating cash flow and borrowings under
its Credit Agreement.

         During Fiscal 1997, the Company generated $7.0 million of cash from
operations. This was primarily the result of net income of $8.3 million and a
decrease in inventories of $1.9 million, offset by an increase in accounts
receivable of $5.1 million and a decrease in accounts payable of $1.1 million.
The increase in accounts receivable was primarily the result of a 17% increase
in net sales in the fourth quarter of Fiscal 1997 as compared to the fourth
quarter of Fiscal 1996. The decreases in accounts payable and inventories were
primarily due to a seasonal reduction in production activity.

         The Company's Credit Agreement consists of a $40 million revolving
credit line (the "Facility"), a $3 million term note and a $5 million equipment
loan facility. The amount available for borrowing under the Facility is
determined pursuant to a formula based upon the levels of qualifying accounts


                                       19
<PAGE>   20

receivable and eligible inventory, subject to the $40 million maximum ($5.5
million of which can be utilized for the issuance of letters of credit). As of
September 27, 1997, $12.1 million and $2.4 million were outstanding under the
Facility and the equipment loan facility, respectively. The term note had no
outstanding balance. As of September 27, 1997, the Company had approximately
$17.1 million and $2.0 million available for additional borrowings under the
Facility and the equipment loan facility, respectively. No additional borrowings
are available under the term note. The Credit Agreement expires on October 31,
1998.

         The Company has historically financed its capital expenditures through
a combination of operating cash flow and long-term borrowings. Capital
expenditures were $5.2 million and $10.1 million for Fiscal 1997 and Fiscal
1996, respectively. During Fiscal 1996 the Company spent $6.2 million to acquire
the building and land in Tampa, Florida which houses the distribution and
administration functions as well as additional adjacent property for the purpose
of constructing an approximately 110,000 square foot cutting facility. During
Fiscal 1997, the cutting facility was completed at a cost of $5.4 million. The
resulting consolidated administration, distribution and cutting facilities are
expected to increase efficiencies and accommodate anticipated increases in
volume. The building and land acquisitions and construction of the new cutting
facility were financed primarily through a new construction loan (the "Loan
Agreement"). During Fiscal 1997, the Company converted borrowings under the Loan
Agreement to a ten-year term loan, having a 19-year amortization period. As of
September 27, 1997 and September 28, 1996 outstanding borrowings under the Loan
Agreement amounted to $9.8 million and $6.3 million, respectively.

         During Fiscal 1998, the Company anticipates spending approximately
$410,000 to add a third Gerber cutter and up to $5.0 million to upgrade or
replace certain of its existing computer systems, computer hardware and
software, and for consulting and training relating to the new systems. The new
or upgraded systems will, among other things, address problems associated with
the fact that certain of the Company's existing systems were designed and
developed without considering the impact of the upcoming change in the century
and, thus, use only two digits to identify the year in the date field (the
so-called "Year 2000 Problem"). Although the Company does not intend to cease
operations of its existing systems until the new or upgraded systems are
functional, if the Company were to encounter unforseen difficulties or delays
in implementing these new or upgraded computer systems, such difficulties or
delays could have a material adverse affect on the Company's business and
results of operations.

         The Company's credit agreements contain significant financial and
operating covenants, including requirements that the Company maintain minimum
net worth levels and certain financial ratios, prohibitions on the ability of
the Company to incur certain additional indebtedness or to pay dividends, and
restrictions on its ability to make capital expenditures. The Company is
currently in compliance with all covenants under its credit agreements.

         Pursuant to a factoring agreement (the "Factoring Agreement"), the
Company factors substantially all of its accounts receivable. The Factoring
Agreement provides that the factor will pay the Company an amount equal to the
gross amount of the Company's accounts receivable from customers reduced by
certain offsets, including among other things, discounts, returns and a
commission payable by the Company to the factor. The commission equals 0.30% of
the gross amount factored. For Fiscal 1997 and Fiscal 1996, the Company paid
commissions to the factor aggregating $505,000 and $373,000, respectively. The
factor subjects all sales to its credit review process and assumes 99.85% of the
credit risk for amounts factored pursuant to the Factoring Agreement. In Fiscal
1997, additional credit risk was assumed by the Company for a specific customer
under a separate letter agreement with the factor. This agreement expired during
Fiscal 1997. Funds are transferred to reduce outstanding borrowings under the
Credit Agreement once payment is received from the factor. The factor pays the
Company the receivable amount upon the earlier of (i) receipt by the factor of
payment from the Company's customer or (ii) 120 days past the due date for such
payment. The Factoring Agreement expires on September 30, 1998.

         At September 27, 1997 and at September 28, 1996, the Company had
working capital of $30.2 million and $25.5 million, respectively. The increase
in working capital was due primarily to a $5.1 million increase in accounts


                                      20

<PAGE>   21
receivable, a $1.1 million reduction in accounts payable and a $1.3 million
reduction in current installments of long-term debt and obligations under
capital lease, offset, in part, by a $1.9 million reduction in inventories. The
Company expects its working capital needs will continue to fluctuate based on
seasonal increases in sales and accounts receivable and seasonal decreases in
trade accounts payable.

         The Company received $17.9 million in proceeds from its initial public
offering in October 1997. Of the proceeds, $3.9 million was used to redeem the
Company's preferred stock, $10.6 million was used to reduce amounts outstanding
under the Facility and the remainder was invested for use in operations.

         The Company believes that the combination of existing working capital,
funds anticipated to be generated from operating activities and the borrowing
availability under the current and anticipated credit agreements will be
sufficient to fund both its short-term and long-term capital and liquidity
needs.

IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS

         In February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 128, Earnings Per Share.
The overall objective of Statement 128 is to simplify the calculation of
earnings per share ("EPS") and achieve comparability with the recently issued
International Accounting Standard No. 33, Earnings Per Share. Statement 128 is
effective for both interim and annual financial statements for periods ending
after December 15, 1997. Earlier application is not permitted. The new standard,
which will be implemented by the Company in the first thirteen weeks of Fiscal
1998, is not expected to have a significant impact on the Company's EPS.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The information called for by this Item is contained in pages 24
through 39 of this report.


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
         FINANCIAL DISCLOSURE

         None.






                                       21
<PAGE>   22




                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         The information called for by this Item, with respect to Directors,
will be contained in, and is incorporated by reference to, the proxy statement
for the Company's 1998 Annual Meeting of Shareholders, which will be filed with
the Securities and Exchange Commission pursuant to Regulation 14A on or about
December 29, 1997. The information called for by this Item, with respect to
Executive Officers, is set forth in Item 1 of this report under the caption
"Executive Officers of the Registrant."


ITEM 11.  EXECUTIVE COMPENSATION.

         The information called for by this Item will be contained in, and is
incorporated by reference to, the proxy statement for the Company's 1998 Annual
Meeting of Shareholders, which will be filed with the Securities and Exchange
Commission pursuant to Regulation 14A on or about December 29, 1997.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The information called for by this Item will be contained in, and is
incorporated by reference to, the proxy statement for the Company's 1998 Annual
Meeting of Shareholders, which will be filed with the Securities and Exchange
Commission pursuant to Regulation 14A on or about December 29, 1997.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         The information called for by this Item will be contained in, and is
incorporated by reference to, the proxy statement for the Company's 1998 Annual
Meeting of Shareholders, which will be filed with the Securities and Exchange
Commission pursuant to Regulation 14A on or about December 29, 1997.






                                       22
<PAGE>   23



                                     PART IV

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


(A) 1.   INDEX TO FINANCIAL STATEMENTS

         Report of Independent Certified Public Accountants
         Consolidated Balance Sheets
         Consolidated Statements of Income
         Consolidated Statements of Shareholders' Equity
         Consolidated Statements of Cash Flows
         Notes to Consolidated Financial Statements

(A) 2.   FINANCIAL STATEMENT SCHEDULES

         Schedule II - Valuation and Qualifying Accounts

(A) 3.   EXHIBITS

         The Index to Exhibits attached hereto lists the exhibits that are
         filed as part of this report.

(B)      REPORTS ON FORM 8-K

         No reports on Form 8-K were filed by the Registrant during the
         fourth quarter of the fiscal year covered by this report.

                                      23




<PAGE>   24



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

THE BOARD OF DIRECTORS
TROPICAL SPORTSWEAR INT'L CORPORATION

         We have audited the accompanying consolidated balance sheets of
Tropical Sportswear Int'l Corporation as of September 27, 1997 and September 28,
1996, and the related consolidated statements of income, shareholders' equity,
and cash flows for each of the three years in the period ended September 27,
1997. Our audits also included the financial statement schedule listed in the
Index at Item 14(a). These financial statements and schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and 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, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Tropical Sportswear Int'l Corporation at September 27, 1997 and September 28,
1996, and the consolidated results of its operations and its cash flows for each
of the three years in the period ended September 27, 1997, in conformity with
generally accepted accounting principles. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.


                                                         ERNST & YOUNG LLP


TAMPA, FLORIDA
November 5, 1997

                                      24
<PAGE>   25


                      TROPICAL SPORTSWEAR INT'L CORPORATION

                           CONSOLIDATED BALANCE SHEETS
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)


<TABLE>
<CAPTION>

                                                               SEPTEMBER 27,              SEPTEMBER 28,
                                                                   1997                       1996
                                                               ------------               -------------
<S>                                                            <C>                        <C>  
ASSETS

Current assets:
    Cash                                                           $   116                   $   261
    Accounts receivable                                             24,981                    20,197
    Inventories                                                     21,351                    23,282
    Deferred income taxes                                            1,495                     1,816
    Prepaid income taxes                                                --                       269
    Prepaid expenses                                                   812                       163
                                                                   -------                   -------
         Total current assets                                       48,755                    45,988
Property and equipment                                              25,245                    20,145
Less accumulated depreciation and amortization                       4,962                     3,475
                                                                   -------                   -------
                                                                    20,283                    16,670
Other assets                                                           227                       350
Excess of cost over fair value of net assets of acquired
    subsidiary less accumulated amortization of
    $82 at September 1997 and $68 at September 1996                    393                       407
                                                                   -------                   -------

Total assets                                                       $69,658                   $63,415
                                                                   =======                   =======

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
    Accounts payable                                               $12,828                   $13,949
    Accrued expenses                                                 2,322                     1,581
    Accrued incentive compensation                                   1,934                     2,365
    Income taxes payable                                               102                        --
    Current installments of long-term debt                             801                     2,155
    Current installments of obligations under capital leases           534                       455
                                                                   -------                   -------
             Total current liabilities                              18,521                    20,505
Long-term debt                                                      23,442                    23,676
    Obligations under capital leases                                   613                       486
    Deferred income taxes                                              431                       366
    Commitments and contingencies
Shareholders' equity:
    Preferred stock, $100 par value; 10,000,000 shares
      authorized; 38,630 shares issued and outstanding              3,863                     3,863
    Common stock, $.01 par value; 50,000,000 shares
      authorized; 6,000,000 shares issued and outstanding               60                        60
    Retained earnings                                               22,728                    14,459
                                                                   -------                   -------
             Total shareholders' equity                             26,651                    18,382
                                                                   -------                   -------
Total liabilities and shareholders' equity                         $69,658                   $63,415
                                                                   =======                   =======
</TABLE>

                             See accompanying notes.

                                      25
<PAGE>   26



                      TROPICAL SPORTSWEAR INT'L CORPORATION

                        CONSOLIDATED STATEMENTS OF INCOME
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)


<TABLE>
<CAPTION>
                                                                         YEAR  ENDED
                                                      --------------------------------------------------
                                                        SEPTEMBER 27,     SEPTEMBER 28,    SEPTEMBER 30,
                                                            1997               1996             1995
                                                      ---------------------------------------------------

<S>                                                     <C>               <C>              <C>   
Net sales                                               $  151,692        $   17,355       $  110,064
Cost of goods sold                                         115,637            91,132           87,858
                                                        ----------        ----------       ----------
Gross profit                                                36,055            26,223           22,206
Selling, general and administrative expenses                19,443            15,189           15,060
                                                        ----------        ----------       ----------
Operating income                                            16,612            11,034            7,146
Other expense:
    Interest                                                 2,899             2,498            3,160
    Factoring                                                  505               373              708
    Other, net                                                  32               247              293
                                                        ----------        ----------       ----------
                                                             3,436             3,118            4,161
                                                        ----------        ----------       ----------
Income before income taxes                                  13,176             7,916            2,985
Provision for income taxes                                   4,907             2,745              825
                                                        ----------        ----------       ----------
Net income                                              $    8,269        $    5,171       $    2,160
                                                        ==========        ==========       ==========


Net income per common share                             $     1.37        $     0.86            $0.36
                                                        ==========        ==========       ==========

Weighted average number of shares
    used in the calculation                              6,015,000         6,015,000        6,015,000

</TABLE>


                             See accompanying notes.


                                      26
<PAGE>   27



                      TROPICAL SPORTSWEAR INT'L CORPORATION

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                      PREFERRED STOCK               COMMON STOCK         
                                      ---------------               ------------         RETAINED
                                     SHARES      AMOUNT           SHARES     AMOUNT      EARNINGS      TOTAL
                                    -------      ------           ------     ------      --------      -----
<S>                                 <C>          <C>              <C>        <C>         <C>          <C> 

Balance at October 1, 1994                39     $ 3,863          6,000       $  60      $   7,128    $ 11,051

     Net income                           --          --             --          --          2,160       2,160
                                    --------     -------          -----       -----      ---------    --------

Balance at September 30, 1995             39       3,863          6,000          60          9,288      13,211

     Net income                           --          --             --          --          5,171       5,171
                                    --------     -------          -----       -----      ---------    --------
Balance at September 28, 1996             39       3,863          6,000          60         14,459      18,382

     Net income                           --          --             --          --          8,269       8,269
                                    --------     -------          -----       -----      ---------    --------

Balance at September 27, 1997             39     $ 3,863          6,000       $  60      $  22,728    $ 26,651
                                    ========     =======          =====       =====      =========    ========

</TABLE>


                             See accompanying notes.

                                      27
<PAGE>   28



                      TROPICAL SPORTSWEAR INT'L CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                       YEAR  ENDED
                                                --------------------------------------------------------      
                                                       SEPTEMBER 27,     SEPTEMBER 28,    SEPTEMBER 30,
                                                            1997             1996             1995
                                                --------------------------------------------------------
<S>                                                       <C>             <C>               <C>     
OPERATING ACTIVITIES
Net income                                                $ 8,269         $   5,171         $  2,160
Adjustments to reconcile net income to net
  cash provided (used) by operating activities:
  (Gain) loss on disposal of property and equipment            (6)              152              215
  Depreciation and amortization                             2,121             1,431            1,226
  Provision for doubtful accounts                             331                --               --
  Deferred income taxes                                       386              (204)             327
  Changes in operating assets and liabilities:
    (Increase) decrease in assets:
         Accounts receivable                               (5,115)              704           (3,396)
         Inventories                                        1,931              (848)           1,060
         Prepaid income taxes                                 269               898           (1,167)
         Prepaid expenses and other assets                   (526)             (119)              94
    Increase (decrease) in liabilities:
         Accounts payable                                  (1,121)            3,863           (4,476)
         Accrued expenses                                     741               (73)             689
         Accrued incentive compensation                      (431)            1,576             (758)
         Income taxes payable                                 102                --             (732)
                                                         --------         ---------         ---------
Net cash provided (used) by operating activities            6,951            12,551           (4,758)

INVESTING ACTIVITIES
Capital expenditures                                       (5,162)          (10,119)          (1,467)
Proceeds from sale of property and equipment                   78               234               39
                                                         --------         ---------         --------
Net cash used by investing activities                      (5,084)           (9,885)          (1,428)

FINANCING ACTIVITIES
Proceeds of long-term debt                                  4,676             7,330              803
Principal payments of long-term debt                       (3,253)           (1,628)          (1,750)
Principal payments of capital leases                         (424)             (500)            (540)
Net proceeds from (repayment of) long-
  term revolving credit line borrowings                    (3,011)           (7,675)           7,333
                                                         --------         ----------        --------
 Net cash provided (used) by financing activities          (2,012)           (2,473)           5,846
                                                         ---------        ----------        --------

Net increase (decrease) in cash                              (145)              193             (340)
Cash at beginning of year                                     261                68              408
                                                         --------         ---------         --------
Cash at end of year                                      $    116         $     261         $     68
                                                         ========         =========         ========
</TABLE>


                             See accompanying notes.

                                      28
<PAGE>   29


                      TROPICAL SPORTSWEAR INT'L CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      THREE YEARS ENDED SEPTEMBER 27, 1997
                                 (IN THOUSANDS)

1.  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Tropical
Sportswear Int'l Corporation (the Company) and its wholly-owned subsidiary,
Apparel Network Corporation (see Note 14). All significant intercompany balances
and transactions have been eliminated in consolidation.

NATURE OF OPERATIONS

The Company's principal line of business is the marketing, design, manufacture
and distribution of men's casual pants and shorts. The principal markets for the
Company include major retailers within the United States. The Company
subcontracts the assembly of substantially all of its products with independent
manufacturers in the Dominican Republic and Mexico and, at any point in time, a
majority of the Company's work-in-process inventory is located in those
countries.

ACCOUNTING PERIOD

The Company operates on a 52/53 week annual accounting period ending on the
Saturday nearest September 30th. Each of the years ended September 27, 1997,
September 28, 1996, and September 30, 1995 contains 52 weeks.

NET INCOME PER SHARE

Net income per common share is computed by dividing net income by the weighted
average number of common and common equivalent shares outstanding. In accordance
with Securities and Exchange Commission Staff Accounting Bulletin No. 83, common
equivalent shares issued by the Company at prices below the public offering
price during the period beginning one year prior to the filing date of the
initial public offering have been included in the calculation as if they were
outstanding for all periods prior to the offering.

In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, Earnings Per Share (Statement 128). The
overall objective of Statement 128 is to simplify the calculation of earnings
per share (EPS) and achieve comparability with the recently issued International
Accounting Standard No. 33, Earnings Per Share. Statement 128 is effective for
both interim and annual financial statements for periods ending after
December 15, 1997. Earlier application is not permitted. Adoption of the new
standard will have no material impact on the Company's EPS for the periods
presented herein.

REVENUE RECOGNITION

Based on its terms of F.O.B. shipping point, the Company records sales upon the
shipment of finished product to the customer.

INVENTORIES

Inventories are stated at the lower of cost or market. Cost is determined using
the first-in, first-out method. The Company records provisions for markdowns and
losses on excess and slow-moving inventory to the extent the cost of inventory
exceeds estimated net realizable value.


                                      29
<PAGE>   30



1.  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. The Company primarily uses
straight-line depreciation methods over periods that approximate the assets'
estimated useful lives.

EXCESS OF COST OVER FAIR VALUE OF NET ASSETS OF ACQUIRED SUBSIDIARY

The excess of cost over fair value of net assets of the acquired subsidiary is
amortized on the straight-line basis over a period of 40 years.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amount of revenues and expenses during the reporting period. Actual
results could differ from the estimates.

FINANCIAL INSTRUMENTS

The Company's financial instruments include cash, accounts receivable, accounts
payable, long-term debt and obligations under capital leases. The carrying
amount of these financial instruments approximate their fair value.

STATEMENT OF CASH FLOWS

Supplemental cash flow information:

<TABLE>
<CAPTION>

                                                                       YEAR  ENDED
                                                ---------------------------------------------------
                                                  SEPTEMBER 27,     SEPTEMBER 28,    SEPTEMBER 30,
                                                      1997               1996             1995
                                                ---------------------------------------------------
         <S>                                     <C>               <C>              <C>   

         Cash paid for:
         Interest                                    $2,937            $2,439           $3,160
         Income taxes                                 4,150             2,051            2,373
</TABLE>

Supplemental disclosure of non-cash investing and financing activities:

         Capital lease obligations of $630 and $349 were incurred when the
         Company entered into leases for new equipment in the years ended
         September 27, 1997 and September 30, 1995 respectively.

IMPAIRMENT OF LONG-LIVED ASSETS

In March 1995, the Financial Accounting Standards Board issued SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of (SFAS 121). This pronouncement requires impairment losses to be
recorded on long-lived assets used in operations when impairment indicators are
present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying amount. The Company adopted the
provisions of SFAS 121 during Fiscal 1996 with no impact on the financial
statements.



                                      30
<PAGE>   31


2.  ACCOUNTS RECEIVABLE

Accounts receivable consist of the following:                   

<TABLE>
<CAPTION>

                                                                 SEPTEMBER 27,     SEPTEMBER 28,
                                                                      1997              1996
                                                                 -------------------------------
       <S>                                                       <C>               <C>
       Receivable from factor                                       $24,631           $19,627
       Receivable from trade accounts                                   997             1,094
       Reserve for returns and allowances and bad debts                (647)             (524)
                                                                    -------           -------
                                                                    $24,981           $20,197
                                                                    =======           =======
</TABLE>

On October 1, 1995, the Company entered into a factoring agreement whereby
substantially all of the Company's trade receivables are assigned on an ongoing
basis, without recourse, except for credit losses on the first .15% of amounts
factored. The factoring agreement is with a national company which, in
management's opinion, is highly creditworthy. The purchase price of each
receivable is the net face amount, less a factoring discount of .30%. Prior to
October 1, 1995, the Company factored its trade receivables without recourse and
under this agreement, the purchase price of each receivable was the net face
amount less a factoring discount of .65%.


3.  INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>
                                                                 SEPTEMBER 27,     SEPTEMBER 28,
                                                                     1997               1996
                                                                 -------------------------------
 
         <S>                                                     <C>               <C>    
         Raw materials                                              $ 2,255           $ 2,399
         Work in process                                              5,617             5,946
         Finished goods                                              13,479            14,937
                                                                    -------           -------
                                                                    $21,351           $23,282
                                                                    =======           =======
</TABLE>

The Company has made provisions for inventory loss of approximately $2,200,
$2,200 and $1,780 at September 27, 1997, September 28, 1996 and September 30,
1995, respectively, to reflect a write down of excess and slow-moving inventory
to net realizable value.


4.  PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>

                                                        SEPTEMBER 27,     SEPTEMBER 28,       LIFE
                                                             1997             1996           (YEARS)
                                                        -------------------------------      -------

         <S>                                            <C>               <C>                <C>
         Land                                              $3,976           $ 3,976            --
         Land improvements                                  1,581                 6            15
         Building and improvements                          9,317             6,243           39.5
         Machinery and equipment                           10,313             7,824            3-7
         Leasehold improvement                                 58                64          15-39.5
         Construction in progress                              --             2,032            --
                                                          -------           -------
                                                          $25,245           $20,145
                                                          =======           =======

</TABLE>

During the years ended September 27, 1997 and September 28, 1996, the Company
capitalized $72 and $71 of interest expense, respectively.



                                      31
<PAGE>   32


5.  DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                 SEPTEMBER 27,    SEPTEMBER 28,
                                                                     1997              1996
                                                                 ---------------------------------
         <S>                                                     <C>              <C>   
         Note payable to former owners                              $    --           $ 1,827
         Revolving credit line                                       12,135            15,147
         Equipment loan facility                                      2,354             1,557
         Term note                                                       --             1,000
         Construction and term loan                                   9,754             6,292
         Other notes payable                                             --                 8
                                                                    -------           -------
                                                                     24,243            25,831
         Less current maturities                                        801             2,155
                                                                    -------           -------
                                                                    $23,442           $23,676
                                                                    =======           =======
</TABLE>

The note payable to former owners (the Acquisition Note) was issued on July 8,
1994 in conjunction with the settlement of the final purchase price to be paid
for the Company. The Acquisition Note bears no interest and is, therefore,
recorded at its net present value using a discount rate of 9%. The outstanding
face value amounted to $2,000 as of September 28, 1996. The Acquisition Note was
repaid on January 31, 1997.

On September 28, 1994, the Company entered into a secured revolving credit and
term loan agreement (the Credit Agreement). The Credit Agreement, as amended,
consists of a $40,000 revolving credit line ($5,500 of which can be utilized for
letters of credit), a $3,000 term note and a $5,000 equipment loan facility. The
Credit Agreement expires on October 31, 1998, at which time any outstanding
balances become due. Borrowings under the revolving credit line are limited to
the lesser of $40,000 or qualifying accounts receivable and eligible inventory.
Available borrowings under the revolving credit line were approximately $17,056
and $7,233 at September 27, 1997 and September 28, 1996, respectively. The
revolving credit line bears interest at a variable rate of prime or LIBOR plus
an applicable margin (8.70% and 8.75% at September 27, 1997 and September 28,
1996, respectively).

The equipment loan facility is payable in monthly installments of $31 and bears
interest at a variable rate of prime or LIBOR plus an applicable margin (8.46%
and 8.41% at September 27, 1997 and September 28, 1996, respectively). Available
borrowings under the equipment loan facility were approximately $1,990 and
$3,400 at September 27, 1997 and September 28, 1996, respectively.

The term note is payable in monthly installments of $83 and bears interest at
prime plus an applicable margin (10.25% and 11.0% at September 27, 1997 and
September 28, 1996, respectively). No additional borrowings are available under
the term note.

On May 7, 1996, the Company entered into a construction and term loan agreement
(the Loan Agreement). The Loan Agreement consists of a $9,600 construction loan,
which is secured by a mortgage. The construction loan was utilized to purchase
the Company's previously leased operating facility and to finance the
construction of a new adjacent cutting facility. Interest is payable monthly at
prime plus an applicable margin (8.75% at September 28, 1996). On July 18, 1997,
the construction loan was converted to a $9,800 term loan which will mature on
May 7, 2006. Principal and interest at 8.88% are due monthly based on a 19-year
amortization.

The Company's debt agreements contain certain covenants, the most restrictive of
which are as follows: (i) maintenance of consolidated net worth at specified
levels, (ii) achievement of specified adjusted net earnings from operations,
(iii) maintenance of debt service coverage ratio at specified levels, (iv)
limitations on annual capital expenditures, (v) limitations on liens, and
(vi) prohibition of the payment of dividends. The Company is in compliance with
all such covenants. The Credit Agreement is secured by substantially all of the
assets of the Company.


                                      32
<PAGE>   33
5.  DEBT, CONTINUED

The scheduled maturities of long-term debt as of September 27, 1997 are as
follows:

<TABLE>
<CAPTION>

               FISCAL YEAR                 AMOUNT
               -----------                 ------
               <S>                         <C>

               1998                          $801
               1999                        14,105
               2000                           236
               2001                           261
               2002                           286
               Thereafter                   8,554
</TABLE>

6.  LEASES

The Company leases administrative facilities and certain equipment under
non-cancelable leases. Future minimum lease payments under operating leases and
the present value of future minimum capital lease payments as of September 27,
1997 are:

<TABLE>
<CAPTION>

                                                          OPERATING             CAPITAL
         FISCAL YEAR                                       LEASES               LEASES
         -----------                                       ------               ------
         <S>                                               <C>                  <C> 
         1998                                              $  308               $  601
         1999                                                 239                  375
         2000                                                 231                  132
         2001                                                 192                  132
         2002                                                 144                   66
         Thereafter                                           207                   --
                                                           ------               ------
           Total minimum lease payments                    $1,321                1,306
                                                           ======
         Less amount representing interest                                         159
                                                                                ------
         Present value of minimum capital lease payments                         1,147
         Less current installments                                                 534
                                                                                ------
                                                                                $  613
                                                                                ======
</TABLE>

The following summarizes the Company's assets under capital leases:

<TABLE>
<CAPTION>
                                                                 SEPTEMBER 27,    SEPTEMBER 28,
                                                                     1997             1996
                                                                 -------------    -------------
         <S>                                                     <C>              <C>   
         Machinery and equipment                                    $2,893            $2,253
         Accumulated amortization                                    1,588             1,242
</TABLE>

Amortization of assets under capital leases has been included in depreciation.

Total rental expense for operating leases for the years ended September 27,
1997, September 28, 1996, and September 30, 1995 was approximately $465, $859,
and $982, respectively.


7.  CLOSURE OF INTERNATIONAL SUBSIDIARY

In September 1995, a decision was made to close the Company's international
subsidiary, Confecciones Siglo, S.A., and, at September 30, 1995, the Company
had accrued $500 for costs associated with the closing. These costs included
employee severance, relocation of certain equipment and estimated losses on
disposals of property and equipment. During Fiscal 1996, the assets of the
subsidiary were liquidated.



                                      33

<PAGE>   34



8.  INCOME TAXES

The provision for income taxes consists of the following:

<TABLE>
<CAPTION>

                                                                       YEAR ENDED
                                                     ---------------------------------------------------
                                                     SEPTEMBER 27,       SEPTEMBER 28,    SEPTEMBER 30,
                                                          1997                1996             1995
                                                     ---------------------------------------------------
         <S>                                         <C>                 <C>              <C>
         Current:
         Federal                                         $4,143             $2,713              $375
         State                                              378                236               123
                                                         ------             ------              ----
                                                          4,521              2,949               498
         Deferred expense (benefit):                      
         Federal                                            365               (188)              309
         State                                               21                (16)               18
                                                         ------             ------              ----
                                                            386               (204)              327
                                                         ------             ------              ----
                                                         $4,907             $2,745              $825
                                                         ======             ======              ====
</TABLE>

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.

A reconciliation of the difference between the effective income tax rate and the
statutory federal tax rate follows:

<TABLE>
<CAPTION>

                                                                          YEAR ENDED
                                                        --------------------------------------------------
                                                        SEPTEMBER 27,     SEPTEMBER 28,    SEPTEMBER 30,
                                                             1997             1996             1995
                                                        --------------------------------------------------
         <S>                                            <C>               <C>              <C> 
         Income tax expense at federal statutory
            rate (34.0%)                                    $4,480           $2,691           $1,015
         State income taxes, net of federal benefit            348              144               90
         Losses of international subsidiary                     --             (162)            (312)
         Amortization of goodwill                                4               48                4
         Other items                                            75               24               28
                                                            ------           ------           ------
                                                            $4,907           $2,745           $  825
                                                            ======           ======           ======

</TABLE>

In Fiscal 1996 and 1995, as a result of closing the Company's international
subsidiary, the Company recorded tax benefits for losses of the international
subsidiary which were previously not deductible for income tax purposes.

Significant components of the Company's deferred tax assets and liabilities are
as follows:

<TABLE>
<CAPTION>
                                                               SEPTEMBER 27,     SEPTEMBER 28,
                                                                     1997             1996
                                                               -------------------------------
         <S>                                                   <C>               <C>
         Deferred tax assets:
              Inventory related                                    $  962             $1,060
              Accounts receivable related                             233                185
              Various accrued expenses                                351                599
         Deferred tax liabilities:
              Depreciation                                           (431)              (366)
              Other items                                             (51)               (28)
                                                                   ------             ------
         Net deferred tax asset                                    $1,064             $1,450
                                                                   ======             ======

         Classified as follows:
              Current asset                                        $1,495             $1,816
              Non-current liability                                  (431)              (366)
                                                                   ------             ------
                                                                   $1,064             $1,450
                                                                   ======             ======

</TABLE>


                                      34

<PAGE>   35



9.  SIGNIFICANT CUSTOMERS

In Fiscal 1997, three customers accounted for 29%, 19% and 11% of sales. In
fiscal 1996, three customers accounted for approximately 26%, 17% and 14% of
sales. In Fiscal 1995, four customers accounted for approximately 18%, 15%, 15%
and 14% of sales.

10.  COMMITMENTS AND CONTINGENCIES

As of September 27, 1997 and September 28, 1996, the Company had approximately
$1,004 and $4,704, respectively, of outstanding letters of credit with various
expiration dates through January 1998.

On March 21, 1997, Levi Strauss & Co. brought suit against the Company in U.S.
District Court for the Northern District of California. The complaint alleges,
among other things, that the Company's Flyers(TM) trademark and certain trade
dress used in the labeling and packaging of the Company's Flyers(TM) and Bay to
Bay(R) products infringe upon certain of plaintiff's proprietary trademark and
trade dress rights in violation of the federal Lanham Act and California law.
The complaint seeks injunctive relief, as well as treble damages and attorneys'
fees. The Company has also received notice that the plaintiff intends to seek to
amend its complaint to allege that certain trade dress used in the labeling and
packaging of the Company's licensed Bill Blass(R) brand dress slack also
infringes upon certain of plaintiff's proprietary trade dress rights. Although
the outcome of the litigation cannot be determined at this time and the Company
would consider reasonable settlement opportunities, the Company currently
intends to vigorously defend against such allegations. Nevertheless, in an
attempt to limit the Company's liability, if any, with respect to such alleged
infringement, the Company has unilaterally altered the trademark and trade dress
which are currently the subject of this litigation.

On July 3, 1997, Out-of-Mexico Apparel, Ltd. brought suit against the Company in
California Superior Court for, among other things, breach of contract, breach of
an implied covenant of good faith and fair dealing, and violation of the
California Unfair Business Practices Act. The complaint alleges that the Company
entered into contracts for the manufacture of apparel with certain manufacturers
in contravention of a customer non-disclosure and non-circumvention agreement
between Out-of-Mexico Apparel, Ltd. and the Company. The complaint seeks
compensatory damages and prejudgment interest, punitive damages and the costs of
suit. Although the outcome of the litigation cannot be determined at this time,
the Company intends to vigorously defend against such allegations.

The Company has not recorded any amounts related to the above two matters. The
Company is not involved in any other legal proceedings which the Company
believes could reasonably be expected to have a material adverse effect on the
Company's business, financial position or results of operations.

11.  EMPLOYEE BENEFIT PLAN

The Company has established a 401(k) profit sharing plan under which all
employees are eligible to participate. Employee contributions are voluntary and
subject to Internal Revenue Service limitations. The Company matches, based on
annually determined factors, employee contributions provided the employee
completes 1,000 hours of service annually and is employed as of December 31 of
each plan year. For the years ended September 27, 1997, September 28, 1996, and
September 30, 1995, the Company charged to expense $114, $112, and $86,
respectively, related to this plan.



                                      35

<PAGE>   36


12.  STOCK OPTION PLANS

The Board of Directors has adopted two stock option plans, which became
effective on October 28, 1997. The Employee Stock Option Plan (the Employee
Plan) and the Non-Employee Director Stock Option Plan (the Director Plan)
reserve 700,000 shares of common stock for future issuance under the plans. The
per share exercise price of each stock option granted under the plans will be
equal to the quoted fair market value of the stock on the date of grant. Under
the Employee Plan, on October 28, 1997, the effective date of the initial public
offering, the Board granted options to purchase 300,000 shares of common stock
of the Company to key employees. Under the Director Plan, on October 28, 1997,
the Board also granted options to purchase 60,000 shares of common stock of the
Company to non-employee directors.

In December 1996 and January 1997, The Board of Directors granted to key members
of management, non-qualified options to purchase 60,000 shares of common stock
of the Company at an exercise price of $10.50 per share, its estimated fair
value at the date of grant.

All options granted have 10 year terms and vest and become fully exercisable at
the end of three years of continued employment.

The Company has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB 25) and related interpretations
in accounting for its employee stock options because, as discussed below, the
alternative fair value accounting provided for under FASB Statement No. 123
(Statement 123), "Accounting for Stock Based Compensation," requires use of
option valuation models that were not developed for use in valuing employee
stock options. Under APB 25, because the exercise price of the Company's
employee stock options equals the market price of the underlying stock on the
date of grant, no compensation expense is recognized.

Pro forma information regarding net income and earnings per share is required by
Statement 123, which also requires that the information be determined as if the
Company has accounted for its employee stock options granted subsequent to
December 31, 1994 under the fair value method of that Statement. The fair value
for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted-average assumptions for Fiscal
1997: risk-free interest rate of 5.7%; a dividend yield of 0%; volatility factor
of the expected market price of the Company's common stock of .31; and a
weighted-average expected life of the option of 5 years.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period. The Company's pro
forma information for Fiscal 1997 is (in thousands except for earnings per share
information):

<TABLE>
<S>                                    <C>
Pro forma net income                   $8,230
Pro forma earnings per share           $1.37
</TABLE>


                                      36
<PAGE>   37


12.  STOCK OPTION PLANS, CONTINUED

A summary of the Company's Stock Option activity, and related information for
the year ended September 27, 1997 follows:

<TABLE>
<CAPTION>
                                                  Options            Weighted Average
                                                   (000)              Exercise Price
                                                 ------------------------------------
         <S>                                     <C>                 <C>                
         Outstanding-beginning of year              --                        n/a
         Granted                                    60                       $10.50
         Exercised                                  --                        n/a
         Canceled/expired                           --                         n/a
                                                 -----
         Outstanding-end of year                    60                       $10.50
                                                 =====

         Exercisable at end of year                 --                         n/a

         Weighted-average fair value of
         options granted during the year         $3.95
</TABLE>

Exercise price for options outstanding as of September 27, 1997 was $10.50. The
weighted-average remaining contractual life of those options is 9 years.


13.  QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The following is a summary of the unaudited quarterly results of operations for
the years ended September 27, 1997 and September 28, 1996:


<TABLE>
<CAPTION>

                                            NET             GROSS                NET     NET INCOME (LOSS) PER
                                           SALES            PROFIT             INCOME      COMMON SHARE
                                           -------------------------------------------------------------------
<S>                                        <C>              <C>                <C>       <C>  
Fiscal year ended September 27, 1997
         First Quarter                     $30,727          $ 6,745            $  919          $0.15
         Second Quarter                     40,632           10,024             2,573           0.43
         Third Quarter                      44,249           10,512             2,675           0.45
         Fourth Quarter                     36,084            8,774             2,102           0.35

Fiscal year ended September 28, 1996
         First Quarter                     $20,396            3,141              (481)        $(0.08)
         Second Quarter                     32,389            7,491             1,792           0.30
         Third Quarter                      33,808            7,994             2,216           0.37
         Fourth Quarter                     30,762            7,597             1,644           0.27

</TABLE>






                                      37
<PAGE>   38



14.  SUBSEQUENT EVENTS

An initial public offering (the Offering) of the Company's common stock was
completed on October 28, 1997 in which the company raised approximately
$17,300,000 (net of offering costs). In connection with the Offering, the Board
formed a new corporation, Tropical Sportswear Int'l Corporation (the Company).
Outstanding common and preferred stock of the predecessor company, Apparel
International Group, Inc. (AIG), was exchanged for an equal amount of common and
preferred stock of the Company. Immediately preceding the closing of the
Offering, the subsidiaries of AIG, Tropical Acquisition Corporation and Tropical
Sportswear International Corporation, were merged into the Company.

The preferred stock of AIG had a par value of $100 per share. These shares were
exchanged for a special class of preferred stock which has a $.01 par value and
a $100 per share liquidation preference. These shares were redeemed upon the
closing of the Offering.

Effective October 23, 1997, the Board of Directors approved a change in the
Company's capital stock to authorize 50,000,000 shares of $.01 par value common
stock and 10,000,000 shares of $.01 par value preferred stock. At this time, the
Board also authorized a 6,000-for-1 stock split for holders of its common stock.
The accompanying consolidated financial statements have been restated to reflect
this change in capitalization.


                                      38
<PAGE>   39


                      TROPICAL SPORTSWEAR INT'L CORPORATION

                                   SCHEDULE II
                        VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)

Reserve for returns and allowances and bad debts:

<TABLE>
<CAPTION>
                                                      Additions
                                              ------------------------
                                Balance at    Charged to    Charged to               Balance at
                                Beginning     Costs and       Other                      End
                                of Period     Expenses      Accounts    Deductions    Of Period
                                ---------     --------      --------    ----------    ---------
<S>                             <C>           <C>           <C>         <C>           <C>

Year Ended:

September 30, 1995                $916         $3,061          ---         $3,495          $482
                                  ====         ======          ===         ======          ====

September 28, 1996                $482         $3,022          ---         $2,980          $524
                                  ====         ======          ===         ======          ====

September 27, 1997                $524         $2,457          ---         $2,334          $647
                                  ====         ======          ===         ======          ====

</TABLE>

Reserve for Excess and Slow-Moving Inventory:

<TABLE>
<CAPTION>

                                                                           Additions
                                                                   ------------------------ 
                                                Balance at         Charged to    Charged to               Balance at
                                                Beginning          Costs and      Other                       End
                                                of Period          Expenses      Accounts    Deductions    Of Period
                                                ---------          --------      --------    ----------    ---------
<S>                                             <C>                <C>           <C>         <C>            <C>
Year Ended:

September 30, 1995                               $1,941            $468            ---          $629         $1,780
                                                 ======            ====            ===          ====         ======

September 28, 1996                               $1,780            $798            ---          $378         $2,200
                                                 ======            ====            ===          ====         ======

September 27, 1997                               $2,200            $756            ---          $756         $2,200
                                                 ======            ====            ===          ====         ======

</TABLE>


                                      39

<PAGE>   40


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Tampa,
and State of Florida, on this 23rd day of December, 1997.


                                   TROPICAL SPORTSWEAR INT'L CORPORATION
                                   (Registrant)


                                   By:    /s/ William W. Compton
                                   -------------------------------------------- 
                                              William W. Compton
                                      Chairman of the Board and Chief 
                                            Executive Officer


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated. Each person whose
signature appears below constitutes and appoints William W. Compton and Michael
Kagan and each of them individually, his true and lawful attorney-in-fact and
agent, with full power of substitution and revocation, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments to
this report and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them , full power and
authority to do and perform each and every act and this requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, may lawfully do or cause to be
done by virtue hereof.

<TABLE>
<CAPTION>

              Signature                               Title                                 Date
              ---------                               -----                                 ----
<S>                                             <C>                                  <C>
         /s/  William W. Compton                Chairman of the Board                 December 23, 1997
--------------------------------------          Chief Executive Officer
         William W. Compton                     and Director
                                                
         /s/  Richard J. Domino                 President                             December 23, 1997
--------------------------------------
         Richard J. Domino

         /s/  Michael Kagan                     Executive Vice President,             December 23, 1997
--------------------------------------          Chief Financial Officer,
         Michael Kagan                          Treasurer, Secretary and Director

         /s/  Jesus Alvarez-Morodo              Director                              December 23, 1997
--------------------------------------
         Jesus Alvarez-Morodo

                                                Director                              December 23, 1997
--------------------------------------
         Eloy S. Vallina-Laguera

         /s/  Leslie J. Gillock                 Director                              December 23, 1997
--------------------------------------
         Leslie J. Gillock

         /s/  Donald H. Livingstone             Director                              December 23, 1997
--------------------------------------
         Donald H. Livingstone

         /s/  Leon H. Reinhart                  Director                              December 23, 1997
--------------------------------------
         Leon H. Reinhart

</TABLE>

                                      40
<PAGE>   41
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
EXHIBIT
NUMBER                                 EXHIBIT DESCRIPTION
-------                                -------------------
   <S>     <C>
   2.1---  Agreement and Plan of Merger by Tropical Sportswear Int'l Corporation, as the Surviving Corporation,
              and Apparel International Group, Inc., as the Merging Corporation. (filed herewith)

   2.2---  Agreement and Plan of Merger by Tropical Sportswear Int'l Corporation, as the Surviving Corporation,
              and Tropical Acquisition Corporation and Tropical Sportswear International Corporation, as the
              Merging Corporations. (filed herewith)

   3.1---  Amended and Restated Articles of Incorporation of Tropical Sportswear Int'l Corporation. (1)

   3.2---  Amended and Restated Bylaws of Tropical Sportswear Int'l Corporation. (1)

   4.1---  Specimen certificate for the Common Stock of Tropical Sportswear Int'l Corporation. (2)

   4.2---  Shareholders' Agreement by and among Tropical Sportswear Int'l Corporation, William W. Compton, the
              Compton Family Limited Partnership, Michael Kagan, the Kagan Family Limited Partnership, Shakale
              Internacional, S.A., and Accel, S.A. de C.V. (2)

  10.1---  Loan and Security Agreement, dated September 28, 1994, by and between Tropical Sportswear Int'l
              Corporation and Fleet Capital Corporation (formerly Barclays Business Credit, Inc.) (1)

  10.2---  Construction and Term Loan Agreement, dated as of May 7, 1996, by
              and between Tropical Sportswear Int'l Corporation and SouthTrust
              Bank of Alabama, National Association, as amended.(1)

  10.3---  Retail - Domestic Collection Factoring Agreement, dated October 1, 1995, by and between Heller
              Financial, Inc. and Tropical Sportswear Int'l Corporation.(1)
    
  10.4---  Employment Agreement between William W. Compton and Tropical Sportswear Int'l Corporation. (filed herewith)

  10.5---  Employment Agreement between Michael Kagan and Tropical Sportswear Int'l Corporation. (filed herewith)

  10.6---  Employment Agreement between Richard J. Domino and Tropical Sportswear Int'l Corporation. (filed herewith)

  10.7---  Tropical Sportswear Int'l Corporation Employee Stock Option Plan.(1)

  10.8---  Tropical Sportswear Int'l Corporation on-Employee Director Stock Option Plan.(1)

  10.9---  1996 Apparel International Group, Inc. Stock Option Plan.(1)

  11.1---  Statement re:  computation of per share earnings.  (filed herewith)

  21.1---  List of subsidiaries of Tropical Sportswear Int'l Corporation.(2)

  24.1---  Power of Attorney relating to subsequent amendments (included on the signature page of this 10-K).

  27.1---  Financial Data Schedule for the year ended September 28, 1996. (filed for SEC purposes only) (1)

  27.2---  Financial Data Schedule for the year ended September 27, 1997. (filed for SEC purposes only) (filed herewith)
</TABLE>



(1)  Filed with Registration Statement (Form S-1) on August 15, 1997, 
     Registration No. 333-33729 and incorporated herein by reference.

(2)  Filed with Amendment #1 to Registration Statement (Form S-1) on October 
     2, 1997, Registration No. 333-33729 and incorporated herein by reference.




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