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                      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

      FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES ACT OF
      1934

                       COMMISSION FILE NUMBER:  0-18054

                            BRAZOS SPORTSWEAR, INC.
            (Exact name of registrant as specified in its charter)

            DELAWARE                                  91-1770931      
  (State or other jurisdiction                     (I.R.S. Employer   
of incorporation or organization)                 Identification No.) 

                  3860 VIRGINIA AVENUE, CINCINNATI, OHIO 45227
               (Address of principal executive offices) (zip code)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 513-272-3600

          SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                                     None

          SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

                                                      NAME OF EACH EXCHANGE
   TITLE OF EACH CLASS                                 ON WHICH REGISTERED
   -------------------                                ---------------------
Common Stock, $.001 par value                         Nasdaq National Market

   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. [ ]

   Aggregate market value of voting stock held by non-affiliates of the
registrant as of March 17, 1997 was $19,823,100. As of March 17, 1997, there
were 4,319,166 shares of the registrant's Common Stock, $.001 par value,
outstanding.

   DOCUMENTS INCORPORATED BY REFERENCE. Certain portions of the registrant's
definitive Proxy Statement for the 1997 Annual Meeting of Stockholders are
incorporated in Part III by reference.

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<PAGE>
                               TABLE OF CONTENTS

                                                                            PAGE

                                    PART I

Item  1. Business..............................................................1
Item  2. Properties............................................................5
Item  3. Legal Proceedings.....................................................5
Item  4. Submission of Matters to a Vote of Security Holders...................5
         
                                    PART II

Item  5. Market for the Registrant's Common Equity and Related 
          Stockholder Matters..................................................5
Item  6. Selected Financial Data...............................................6
Item  7. Management's Discussion and Analysis of Financial Condition 
          and Results of Operations............................................7
Item  8. Financial Statements and Supplementary Data..........................10
Item  9. Changes in and Disagreements with Accountants on Accounting 
          and Financial Disclosure............................................28
       
                                   PART III

Item 10. Directors and Executive Officers of the Registrant...................28
Item 11. Executive Compensation...............................................28
Item 12. Security Ownership of Certain Beneficial Owners and Management.......28
Item 13. Certain Relationships and Related Transactions.......................28

                                    PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K......29

                                     (i)
<PAGE>
                                    PART I

ITEM 1.  BUSINESS

GENERAL

   Brazos Sportswear, Inc. ("Brazos" or the "Company") designs, sources, prints
and markets moderately-priced sportswear, including sportswear featuring various
licensed character images, such as fictional cartoon characters and collegiate
logos. Brazos also markets sportswear decorated with its proprietary designs and
creates private label programs for its major retail customers. In addition,
Brazos distributes undecorated garments to over 12,000 customers, which
typically decorate the product for later sale.

   The Company was formerly named Sun Sportswear, Inc. ("Sun"). On March 14,
1997, the Company completed a merger (the "Merger") with BSI Holdings, Inc.
("BSI") and was reincorporated in Delaware under the name Brazos Sportswear,
Inc. The Merger was consummated in an effort to increase sales and profitability
through the benefits that may be obtained from a combination of the two
company's sales forces, customer bases, license portfolio, design and graphic
art functions, manufacturing operations and sourcing capabilities. All incumbent
officers and directors resigned under the terms of the Merger, and as of the
closing of the transaction, persons formerly associated with BSI filled all
Brazos board and executive officer positions. ALL REFERENCES TO "SUN" IN THIS
ANNUAL REPORT ON FORM 10-K ARE MADE TO INDICATE THAT THE INFORMATION DISCLOSED
RELATES TO THE OPERATIONS OF THE COMPANY PRIOR TO THE MERGER, WITHOUT REGARD TO
ANY OPERATIONS OF BSI OR THE ENTERPRISE ON A COMBINED BASIS.

   Pursuant to the terms of the Merger, BSI developed and with its assistance,
Sun began implementing a business plan designed to accomplish three primary
objectives: (i) reduce operating expenses and improve operating efficiencies
through the elimination of redundant positions and a realignment of Sun's
employee base with its then-existing sales and operating levels, (ii) reduce
inventory levels and the number of inventory types and styles to levels
commensurate with then-existing sales levels, and (iii) integrate Sun's combined
sales, marketing and licensing activities with those of BSI in an effort to
maximize the sales and operating profit of the Company's products.

   Prior to the Merger, BSI had grown significantly through acquisitions. BSI
completed five acquisitions of complementary businesses since 1990, which
included a contract screen printer, a provider of uniform and other specialty
apparel products, an apparel maker specializing in licensed character and
decorated sportswear sales, a provider of embroidery services, and an apparel
maker specializing in proprietary and private label markets.

   The Company was incorporated in Delaware in March 1997 in connection with the
reincorporation completed pursuant to the Merger. The Company's principal
executive offices are located at 3860 Virginia Avenue, Cincinnati, Ohio 45227,
and its telephone number is (513) 272-3600.

   HISTORICAL FINANCIAL INFORMATION CONTAINED IN THIS ANNUAL REPORT ON FORM 10-K
RELATES ONLY TO THE OPERATIONS OF SUN PRIOR TO THE MERGER WITH BSI AND DOES NOT
INCLUDE ANY RESULTS OF OPERATIONS OR FINANCIAL DATA OF BSI FOR ANY PRIOR PERIOD.
THE FOLLOWING DESCRIPTION OF THE COMPANY'S BUSINESS INCLUDES THE OPERATIONS OF
THE COMBINED COMPANY RESULTING FROM THE MERGER.

PRODUCTS

   Brazos' principal products are T-shirts and fleecewear, in youth and adult
sizes. Presently, Brazos' products consist of four distinct lines: (i) licensed
character, (ii) collegiate logo, (iii) private label and (iv) proprietary. A
variety of decorating techniques are used to decorate blank garments with
graphic designs. The techniques include screen printing in up to 14 colors, belt
printing, direct embroidery, applique, combination applique and screen print and
flock transfer. A significant portion of the graphic designs involve creative
enhancements of fictional cartoon characters, collegiate logos and other
identifying marks made available under license agreements from licensors,
including Disney Enterprises, Inc. ("Disney"), Warner Bros., Chic by H.I.S.,
Major League Baseball(R) and most major colleges and universities.

   Brazos' products are available in a wide variety of colors, styles and fabric
weights. T-shirts are available in solid, stripe, roll sleeve, weathered natural
and micro-stripe styles, and range in fiber content from 50 percent cotton/50
percent polyester to 100 percent cotton. Brazos' fleecewear products range from
seven ounces to 12 ounces in weight. Garments are sourced from domestic and
foreign mills and are decorated at Brazos' facilities in Cincinnati, Ohio,
Staten Island, New York, Millersburg, Pennsylvania, College Station, Texas, and
Kent, Washington. In addition to basic sportswear, products offered by Brazos
include windsuits, denim jackets, parkas, canvas shorts and knit shirts.

                                      1
<PAGE>
   Screen print designs are developed by the Company after taking into
consideration industry trends, visits to fashion and trade shows, and most
significantly, frequent meetings with apparel label owners and major customers.
Sales managers work closely with Brazos' merchandisers, designers and artists to
develop appropriate styles and color shades. The design process is interactive,
requiring the creation and delivery of numerous samples for customer feedback
and further changes. For larger customers, the design staff typically
incorporates minor styling changes to a basic design to create a unique product
line for the customer.

   Brazos devotes considerable resources to ensure that its products are of a
high quality. The quality control department is responsible for monitoring all
phases of screen print production and ensuring that purchased garments meet the
Company's quality standards. Brazos believes that its product quality is among
the highest in its market segment.

   Brazos' blank distribution operations are conducted under the name Gulf Coast
Sportswear ("Gulf Coast"). Gulf Coast sells basic T-shirts and sweatshirts, golf
shirts, baseball shirts, athletic jackets, athletic jerseys and shorts to screen
printers, embroiderers, advertising and specialty companies, retailers, sporting
good outlets and uniform suppliers, which in turn typically decorate the product
for later sale. Gulf Coast purchases its inventory in bulk quantities and
distributes products to over 12,000 customers from eight warehouses. Brazos
believes that its blank distribution operation offers one of the broadest
product lines in the industry.

LICENSES AND TRADEMARKS

   Brazos obtains rights through licenses to manufacture and market products
with recognizable cartoon character images. These license agreements include the
rights to use fictional character images and trade names such as Disney's Mickey
Mouse, Disney's Winnie the Pooh and various Warner Bros. Looney Tunes(C)
characters (including Bugs Bunny(C) and the Tazmanian Devil(C)). In addition,
Brazos has entered into license agreements with respect to the manufacturing and
marketing of collegiate apparel for most major colleges and universities, as
well as Major League Baseball(R).

   Many of Brazos' license agreements limit sales of products to certain market
categories. Brazos' licenses are typically for a term of one-to-two years but
are terminable on 30 days notice. These license agreements generally require
minimum annual payments and certain quality control procedures. Further, these
license agreements give the licensor the right to approve licensed products by
Brazos and to terminate the license if Brazos does not satisfy its contractual
obligations in any material respect. Royalties under these license agreements
generally range from 7% to 13% of net sales for products sold.

   Brazos has registered and owns a variety of trademarks under which a number
of Brazos' products are sold. Brazos believes that its trademarks have
significant value in the marketing and sale of its proprietary products.

SALES AND MARKETING

   Brazos utilizes approximately 45 independent sales representatives that sell
one or more of its product lines. In addition, 14 in-house key account
executives concentrate on national retail accounts, including Wal-Mart, Kmart,
J.C. Penney, Target, Hills Stores Co. and Venture Stores, Inc. Management
believes that a combination of key account sales representatives and independent
sales representatives gives Brazos a thorough penetration of the retail
marketplace. Independent sales representatives are compensated on a
commission-only basis with rates averaging 6% and ranging from 1% to 10% of net
sales. Key account sales representatives are salaried employees with bonus
incentives tied to sales and profitability. Territories for independent sales
representatives are determined by geographical location, markets covered and
products sold.

   In addition to sales activities through its independent sales
representatives, Brazos maintains a presence in New York City's garment
district. Brazos has a 4,200 square foot showroom, specializing in women's,
men's and boy's apparel, located at 1411 Broadway, and a 1900 square foot
showroom, specializing in children's apparel, located at 112 West 34th Street.
Brazos' products are presented at a number of trade shows, including the
semi-annual MAGIC Show.

   In 1996, Sun's sales to Wal-Mart, Kmart and Target, accounted for
approximately 41%, 10% and 26%, respectively of its gross sales. The loss of, or
significantly decreased sales to, significant customers could have a material
adverse effect on Brazos' financial condition and results of operations.

                                      2
<PAGE>
SOURCING OF GARMENTS

   Brazos sources each of its product lines based on the individual design,
style and quality specifications of such products. Brazos sources the majority
of its products through large domestic mills and independently owned contractors
with manufacturing facilities primarily in the United States, China, Guatemala,
Pakistan, Mexico and Syria. Brazos believes that outsourcing the manufacture of
blank garments allows it to enhance production flexibility and capacity while
substantially reducing expenditures and avoiding the expense of managing a large
production work force.

   Brazos contracts for the manufacture and sewing of its products with numerous
domestic and overseas contractors. During 1996, approximately 77% of Sun's
products sold were manufactured by domestic suppliers. The balance of Sun's
products were manufactured in foreign countries. Brazos anticipates that the
percentage of garments which are imported will increase primarily due to its
increased focus on decorated sportswear sales.

   Brazos utilizes sourcing agents which assist in selecting and overseeing
foreign third-party contractors and monitoring quotas and other trade
regulations. Brazos' production staff and sourcing agents oversee all aspects of
apparel manufacturing and production. Brazos and its sourcing agents separately
negotiate with suppliers for the purchase of fabrics which are then purchased
either by Brazos or its contractors.

   Brazos generally orders products from foreign sources in situations where the
magnitude of the order and the amount of lead time prior to delivery of the
order are sufficient. Since many customers orders change with respect to colors,
sizes, allotments or assortments prior to the delivery date, in certain
situations, Brazos must estimate production requirements in order to secure
necessary fabrics and manufacturing capacity.

   There are no formal arrangements between Brazos and any of its contractors or
suppliers; however, Brazos believes that its relationships with its contractors
and suppliers are good.

   Brazos' quality control program is designed to ensure that all goods bearing
Brazos', its customers' or its licensors' trademarks meet its standards. With
respect to its products, Brazos develops and inspects prototypes of each product
type, establishes fittings based on the prototype, inspects samples and, through
its employees or sourcing agents, inspects fabric prior to cutting. Brazos or
its sourcing agents inspect the final product prior to shipment to Brazos'
facilities.

COMPETITION

   The apparel industry is highly competitive. Several of Brazos' competitors
have substantially greater financial, distribution, marketing and other
resources, including greater brand awareness. Brazos competes with numerous
apparel vendors, including those whose merchandise displays licensed characters,
and colors and symbols of professional sports teams and colleges and
universities. Competitive factors include product quality, price, ability to
meet delivery requirements and other aspects of customer service, changes in
styles and consumer preferences, and the limited availability of customer shelf
and rack space.

BACKLOG

   Brazos typically receives information from customers concerning projected
purchases several months in advance of delivery, with written purchase orders
for particular garments being submitted shortly before shipment. In addition,
customers may cancel or reschedule orders with little or no penalty. Typically,
the backlog of firm orders at any point in time is not representative of
expected sales for the upcoming 12 months. For these reasons, Brazos does not
believe that backlog at any time is a meaningful indicator of sales for future
periods. At December 31, 1996, Sun's backlog of firm orders was approximately
$7.7 million. At December 31, 1995, Sun's backlog of firm orders was
approximately $8.6 million.

EMPLOYEES

   As of March 31, 1997, Brazos had approximately 1,400 full time employees.
Brazos believes relations with its employees are good.

                                      3
<PAGE>
EXECUTIVE OFFICERS AND DIRECTORS OF BRAZOS

   The table below sets forth certain information regarding the executive
officers and directors of Brazos:

    NAME                          AGE           POSITION(S)
    ----                          ---           -----------
Randall B. Hale................    34     Director and Chairman
J. Ford Taylor.................    39     Director, chief executive officer, 
                                            and president
Nolan Lehmann..................    52     Director
Michael S. Chadwick............    45     Director
Alan Elenson...................    47     Director and president of Plymouth 
                                            Mills operations 
F. Clayton Chambers............    37     Director, vice president, chief 
                                            financial officer, treasurer and 
                                            secretary

   RANDALL B. HALE. Mr. Hale has been a director and chairman of the board of
Brazos since March 1997 and previously served as a director and chairman of the
board of BSI. He has served as a vice president of Equus II and Equus Capital
Management Co. ("Equus") since November 1992 and a director of Equus since
February 1996. From June 1985 to October 1992, he was employed by Andersen
Worldwide. Mr. Hale is a director of American Residential Services, Inc. and is
also a director of numerous privately-owned companies. Mr. Hale is a certified
public accountant.

   J. FORD TAYLOR. Mr. Taylor has been a director, president and the chief
executive officer of Brazos since March 1997, and previously served in those
capacities with BSI. From August 1990 to December 1993 he served as president of
BSI's Red Oak/CC Creations facility in College Station, Texas. In December 1993,
he was promoted to vice president -- operations of the decorated sportswear
operations of BSI. In August 1995, Mr. Taylor was promoted to chief operating
officer of the decorated sportswear operations and in August 1996, he was
elected as president and chief executive officer of BSI.

   NOLAN LEHMANN. Mr. Lehmann has been a director of Brazos since March 1997 and
was previously a director of BSI. He has served as a director and president of
Equus since 1980, and as a director and president of Equus II since inception.
Prior to joining Equus, Mr. Lehmann served in a number of executive management
positions with Service Corporation International from 1973 to 1980. Mr. Lehmann
is also a director of Allied Waste Industries, Inc., American Residential
Services, Inc., Drypers Corporation and Garden Ridge Corporation. In addition,
he serves as a director of numerous privately-owned companies. Mr. Lehmann is a
certified public accountant.

   MICHAEL S. CHADWICK. Mr. Chadwick has been a director of Brazos since March
1997 and was previously a director of BSI. He is a senior vice president and a
managing director of the corporate finance department of Sanders Morris Mundy, a
Houston-based financial services and investment banking firm. From 1988 to
August 1994, Mr. Chadwick served as president of Chadwick, Chambers &
Associates, Inc., an investment and merchant banking firm specializing in
corporate finance services. Mr. Chadwick presently serves on the Board of
Directors of Watermarc Food Management Company and Blue Dolphin Energy Company,
publicly traded corporations, and Moody-Price, Inc. a privately held
corporation.

   ALAN ELENSON. Mr. Elenson has been a director of Brazos since March 1997 and
was previously a director of BSI. He founded Plymouth Mills, Inc. ("Plymouth")
in 1975 and owned and operated Plymouth prior to its acquisition by BSI in
August 1996. Mr. Elenson is president of Brazos' Plymouth Mills operations.

   F. CLAYTON CHAMBERS. Mr. Chambers has been a director and vice president,
chief financial officer, treasurer and secretary of Brazos since March 1997, and
previously served as a corporate officer of BSI beginning in November 1994. Mr.
Chambers was a principal in the firm of Chadwick, Chambers & Associates, Inc.,
an investment banking firm located in Houston, Texas, from June 1988 until
October 1994.

                                      4
<PAGE>
ITEM 2.  PROPERTIES

   Brazos' printing and embroidery operations are performed from six leased
facilities aggregating approximately 620,000 square feet located in Cincinnati,
Ohio, Staten Island, New York, Millersburg, Pennsylvania, College Station,
Texas, and Kent, Washington. The distribution of undecorated blank apparel is
conducted from nine warehouses with an aggregate of approximately 205,000 square
feet located throughout the southern United States. Brazos also maintains a cut
and sew facility in Dallas, Texas, two showrooms in the garment district of New
York City, and an administrative office in Clute, Texas.

ITEM 3.  LEGAL PROCEEDINGS

   A lawsuit is pending in the Supreme Court of the State of New York, County of
Oneida, against the Company, E.R.O. Industries, Inc., Toys "R" Us, Inc., Grace
International Apparel, Inc., and Bradlees Department Store. The plaintiff is a
child who was severely burned while allegedly lying in a polyester slumber sack
(manufactured by E.R.O. Industries, Inc. and sold by Toys "R Us, Inc.), watching
television and playing with a butane lighter. He was allegedly wearing a flannel
shirt (manufactured by Grace International Apparel, Inc. and sold by Bradlees
Department Store) over a T-shirt (printed by the Company and sold by Bradlees
Department Stores). In July of 1995, Bradlees Department Stores filed for
Chapter 11 protection.

   The plaintiff seeks compensatory damages of $150 million and punitive damages
of $50 million against all defendants under various tort law theories, including
false labeling and flammability of the slumber sack against its manufacturer and
for negligence against all defendants together. The Company has tendered the
defense of this suit to its insurance carrier, which is opposing the suit
vigorously. The Company believes its coverage is sufficient in the event it is
held liable for compensatory damages. While its coverage may not extend to
punitive damages awards, the Company believes there are no grounds for such
damages. Although it cannot predict with certainty the outcome of this suit, the
Company believes its disposition should not result in a material adverse effect
on the results of operations or the financial condition of the Company.

   The Company is subject to other legal proceedings in the ordinary course of
business. While the outcome of lawsuits or other proceedings cannot be predicted
with certainty, management does not expect these matters to have a material
adverse effect on the financial condition or results of operations of the
Company.

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

   There were no matters submitted to a vote of security holders during the
fourth quarter of 1996.

                                    PART II

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

   The Company's Common Stock is traded on the Nasdaq National Market under the
symbol "BRZS." After giving effect to the one-for-five reverse stock split
effected in connection with the Company's reincorporation in Delaware in March
1997, the high and low sales prices per share for the periods indicated were as
follows:

                                                          HIGH        LOW
1995                                                     ------      ------
   First Quarter......................................   25 5/8      21 1/4
   Second Quarter.....................................   22 1/2      18 3/4
   Third Quarter......................................   25          21 1/4
   Fourth Quarter.....................................   23 1/8      12 13/16
1996
   First Quarter......................................   15 5/8      12 1/2
   Second Quarter.....................................   18 1/8      13 1/8
   Third Quarter......................................   17 1/2      10
   Fourth Quarter.....................................   14 3/8       8 3/4

                                       5
<PAGE>
   On March 17, 1997, the last reported sale price for the Common Stock, as
quoted by the Nasdaq National Market, was $12.00 per share. As of the same date,
there were approximately 142 holders of record of the Common Stock, and the
Company estimates that there are over 1,500 beneficial owners of Common Stock.

DIVIDEND POLICY

   The Company has never declared or paid cash dividends on the Common Stock.
The Company intends to retain any future earnings for reinvestment in its
business and does not intend to pay cash dividends in the foreseeable future.
Furthermore, the Company is prohibited from declaring or paying cash dividends
on its capital stock under the terms of certain of the Company's indebtedness.

ITEM 6.  SELECTED FINANCIAL DATA

   The following data reflects the historical operating results of Sun prior to
the Merger, and insofar as it relates to each of the years 1992 to 1996, has
been derived from audited financial statements of Sun, including the balance
sheets at December 31, 1996 and 1995, the related statements of income and of
cash flows for the years ended December 31, 1996, 1995, and 1994, and notes
thereto appearing elsewhere herein. THE FOLLOWING DATA DOES NOT INCLUDE ANY
INFORMATION WITH RESPECT TO THE HISTORICAL OPERATIONS, ASSETS OR LIABILITIES OF
BSI FOR ANY PERIOD. The data should be read in conjunction with the financial
statements, related notes and other financial information included herein.
<TABLE>
<CAPTION>
                                          FOR THE YEAR ENDED DECEMBER 31,
                               -----------------------------------------------------
                                   1996       1995      1994       1993      1992
                                   ----       ----      ----       ----      ----
                                    (AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
INCOME STATEMENT DATA:
<S>                                <C>       <C>       <C>       <C>        <C>    
   Net sales                       $65,535   $93,965   $113,213  $104,773   $70,645
   Operating (loss) income          (5,296)   (4,569)     4,242     4,522       (92)
   Net (loss) income                (5,836)   (3,736)     2,449     2,737      (517)
   Net (loss) income per share       (1.02)    (0.65)      0.43      0.49     (0.09)

                                                   DECEMBER 31,
                               -----------------------------------------------------
                                   1996       1995      1994       1993      1992
                                   ----       ----      ----       ----      ----
                                               (AMOUNTS IN THOUSANDS)
BALANCE SHEET DATA:
   Total assets                   $ 28,434  $ 47,315   $ 62,384  $ 42,247   $ 40,278
   Working capital                  16,695    21,419     25,031    22,981     19,418
   Long-term debt, including
    current portion                    -0-       338        715     3,273      3,259
   Shareholder's equity             20,182    26,018     29,750    26,820     23,902
</TABLE>
                                       6
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.

   THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE CONSOLIDATED
FINANCIAL STATEMENTS AND THE NOTES THERETO INCLUDED ELSEWHERE HEREIN. ALL
STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACTS INCLUDED IN THE FOLLOWING
DISCUSSION REGARDING THE COMPANY'S FINANCIAL POSITION, BUSINESS STRATEGY, AND
PLANS OF MANAGEMENT FOR FUTURE OPERATIONS ARE FORWARD-LOOKING STATEMENTS.
ALTHOUGH THE COMPANY BELIEVES THAT THE EXPECTATIONS REFLECTED IN SUCH
FORWARD-LOOKING STATEMENTS ARE REASONABLE, IT CAN GIVE NO ASSURANCE THAT SUCH
EXPECTATIONS WILL PROVE TO HAVE BEEN CORRECT.

GENERAL

   On March 14, 1997, Sun merged with BSI Holdings, Inc. ("BSI") and was
reincorporated as a Delaware corporation. Except for Seafirst Bank, shareholders
of Sun prior to the Merger who did not elect to retain their shares received
$2.20 per share ($11.00 per share as adjusted for the effective one-for-five
reverse stock split (the "Reverse Split") in the reincorporation merger) for 50%
of such shares and the remaining shares were converted into Company common
stock. Seafirst Bank received $2.20 per share ($11.00 per share as adjusted for
the Reverse Split) for 59.5% of its shares in a combination of a note and cash,
with its remaining shares being converted into Company common stock. The
stockholders of BSI received approximately 18.65 million shares of the Company's
common stock (3.73 million shares as adjusted for the Reverse Split) for all
issued and outstanding shares of BSI common stock. The Merger was accounted for
as a purchase, and the following discussion of results of operations relates
only to the operations of Sun prior to the Merger. The results of operations of
BSI during the periods discussed are not included.

RESULTS OF OPERATIONS

1996 COMPARED WITH 1995

  NET SALES

   Net sales for the year ended December 31, 1996 decreased 30% to $65.5 million
from $94.0 million in 1995. The decrease in sales is primarily attributable to a
decline in licensed character product sales, which resulted from (i) the
continued impact of the loss of key sales personnel (particularly in the men's
and boys' mass merchant category), (ii) increased competition in certain market
segments and (iii) a reduction in film property sales during 1996.

  GROSS MARGIN

   Gross margin as a percentage of net sales increased to 12% in 1996 from 10%
in 1995, primarily as a result of (i) reduced production costs from the
employment of fewer manufacturing personnel and improved operating efficiencies,
(ii) improved domestic and international sourcing, resulting in lower blank
garment costs and (iii) a reduction in the amount of valuation reserves required
for obsolete or slow-moving inventory in 1996 as compared to 1995.

   OPERATING EXPENSES

   Operating expenses decreased to $13.1 million (or 20% of net sales) in 1996
from $14.0 million (or 14.9% of net sales) in 1995. The decrease in operating
expenses was primarily attributable to lower royalty and commission expense,
partially offset by one-time severance and merger expenses of approximately $1.2
million in 1996. The increase in operating expenses as percentage of net sales
resulted from lower sales volume in 1996 compared with 1995.

   INTEREST EXPENSE

   Interest expense decreased 54% to $584,000 in 1996 from $1.3 million in 1995
as a result of lower borrowing levels in 1996.

   INCOME TAX BENEFIT

   The tax benefit derived from losses incurred was offset by a valuation
allowance of $1,567,000 and a $326,000 tax effect of non-deductible merger
expenses. (See Note 9 to Financial Statements).

                                       7
<PAGE>
1995 COMPARED WITH 1994

   NET SALES

   Net sales for the year ended December 31, 1995 decreased 17% to $94.0 million
from $113.2 million in 1994, primarily as a result of decreases in sales of
men's and boys' products, which the Company believes was caused by the Major
League Baseball strike and the non-renewal of the Company's joint Looney Tunes
(C)/National Football League(R) license. The decline in sales was partially
offset by an increase in sales of garments bearing Pocahontas ((C) Disney) and
Winnie the Pooh ((C) Disney) designs.

   GROSS MARGIN

   Gross margin as percentage of net sales decreased to 10% in 1995 from 15.3%
in 1994, primarily as a result of (i) a $2.0 million inventory charge taken in
the third quarter in 1995 arising from expected losses on the sale of surplus
inventory, (ii) low margins in 1995 because of the Company's efforts to reduce
men's inventory, (iii) $350,000 in charges taken in the third quarter of 1995 to
cover minimum royalty commitments and (iv) the impact of reduced sales in 1995,
and the Company's resulting higher fixed costs as a percentage of net sales.

  OPERATING EXPENSES

   Operating expenses increased to $14.0 million (or 14.9% of net sales) in 1995
from $13.1 million (or 11.6% of net sales) in 1994. The increase was primarily
attributable to general and administrative expenses which increase to $7.7
million (or 8.2% of net sales) in 1995 from $6.7 million (or 5.9% of net sales)
in 1994, as a result of costs associated with the Company's management
information system and $747,000 in consulting costs incurred in the Company's
restructuring efforts.

   INTEREST EXPENSE

   Interest expense increased 87% to $1.3 million in 1995 from $677,000 million
in 1994 as a result of higher borrowing levels and interest rates in 1995.

LIQUIDITY AND CAPITAL RESOURCES

   The Company's existing capital resources consist of cash balances, cash
provided by its operating activities and funds available under its line of
credit. Cash provided by operations in 1996 was $9.9 million, which was
primarily provided by a decrease in accounts receivable and inventory. During
1996, Sun made net repayments of $10.5 million under its credit facility. The
Company's cash requirements consist of its general working capital needs,
capital expenditures, obligations under its leases and promissory notes, and
capital required for future acquisitions.

   Prior to the Merger, Sun maintained a credit agreement with Heller Financial,
Inc. ("Heller"). The Heller agreement provided for a line of credit (including
commercial letters of credit) of up to $24 million, and at December 31, 1996,
approximately $8.9 million was available for borrowing under that facility. The
Heller facility was secured by all of Sun's assets, including accounts
receivable and inventory. In connection with the consummation of the Merger, the
Heller facility was terminated, and the Company became a party to a new credit
facility, consisting of a $12 million term loan and a $73.2 million revolving
line of credit. As of March 17, 1997, $7.0 million was available for future
borrowings under the line of credit, based on existing collateral. Advances
under the line of credit are based on a percentage of the Company's inventory
and receivables. Interest on the line of credit is payable at prime plus .5% or
the Eurodollar base rate plus 2.75%. The term loan facility requires principal
payments of $0.2 million per month and had an outstanding balance of $11.6
million on March 17, 1997. Interest on the term loan facility is payable at
prime plus 1.5% or the Eurodollar base rate plus 3.5%. Additionally, in
connection with BSI's acquisition of Plymouth Mills, the Company's principal
operating subsidiary issued $3.5 million in subordinated debentures to two
institutional lenders. The subordinated debentures bear interest at 13% per
annum and provide for quarterly principal payments beginning in September 2001.

   The Company's principal credit facility and the subordinated debentures
require the Company to maintain certain levels of working capital and
stockholders' equity and contain other restrictive covenants. Such instruments
limit the ability of the Company to incur additional indebtedness, pay dividends
and to make acquisitions and certain investments.

                                       8
<PAGE>
   Management believes that funds available under its principal credit facility,
together with cash generated from operations, will be sufficient to meet the
Company's anticipated cash requirements for 1997, including its anticipated
capital expenditures of approximately $1.0 million. The Company is continually
evaluating opportunities for growth, including acquisitions of businesses which
distribute complementary apparel products. Management believes that the Company
could obtain additional capital to make acquisitions primarily through either
issuances of common or preferred stock or debt financing, although no assurance
can be given with respect to whether such financing will be available when
required or whether such financing can be obtained on terms acceptable to the
Company.

SEASONALITY

   The Company's sales levels are higher in the second and third quarters of
each year. During these periods, spring, summer, back-to-school and pre-holiday
season products are produced and sold. The Company expects that the seasonable
nature of apparel sales will continue in future periods.

                                       9
<PAGE>
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                       REPORT OF INDEPENDENT ACCOUNTANTS

To The Board of Directors
and Stockholders of
Brazos Sportswear, Inc.

In our opinion, the accompanying balance sheets and related statements of
income, of changes in shareholders' equity and of cash flows present fairly, in
all material respects, the financial position of Brazos Sportswear, Inc.
(formerly Sun Sportswear, Inc.) at December 31, 1996 and 1995, and the results
of its operations and its cash flows for each of the three years in the period
ended December 31, 1996, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.

/s/ Price Waterhouse LLP

PRICE WATERHOUSE LLP

Seattle, Washington
February 12, 1997, except for Note 1 ("Merger and Subsequent Reincorporation")
for which the date is March 14, 1997

                                       10
<PAGE>
                           BRAZOS SPORTSWEAR, INC.
                       (FORMERLY SUN SPORTSWEAR, INC.)

                                BALANCE SHEETS

                                                  DECEMBER 31,
                                           -------------------------
                                               1996         1995
                                           -----------   -----------
ASSETS

CURRENT ASSETS:

   Cash ................................   $    84,532   $ 2,006,633
   Accounts receivable, net of allowance
   for doubtful accounts of $33,930 and
   $46,317, respectively (Note 11) .....     7,180,833    13,102,275
   Inventories, net (Note 3) ...........    15,760,393    23,631,358
   Prepaid expenses and other
      current assets ...................       847,641       959,872
   Deferred income taxes (Note 9) ......        19,740       788,332
   Federal income tax receivable .......     1,033,985     1,979,535
                                           -----------   -----------
   Total current assets ................    24,927,124    42,468,005

EQUIPMENT AND LEASEHOLD
IMPROVEMENTS, net:
   (Note 4) ............................     3,492,013     4,831,994

OTHER ASSETS: ..........................        14,506        15,107
                                           -----------   -----------
   Total assets ........................   $28,433,643   $47,315,106
                                           ===========   ===========

                                 (continued)
                See accompanying notes to financial statements

                                       11
<PAGE>
                           BRAZOS SPORTSWEAR, INC.
                       (FORMERLY SUN SPORTSWEAR, INC.)

                                BALANCE SHEETS
                                 (CONTINUED)

                                                  DECEMBER 31,
                                          ---------------------------
                                               1996          1995
                                          ------------    -----------
      LIABILITIES AND
      SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
      Notes payable (note 5) ..........   $  2,960,513    $13,500,000
      Accounts payable ................      3,592,365      4,985,953
      Accrued royalties payable .......      1,061,597      1,753,745
      Accrued wages and taxes payable .        591,971        512,078
      Accrued interest payable ........         25,381         51,263
      Current portion of
        long-term debt (Note 6) .......            -0-        245,652
                                          ------------    -----------
      total current liabilities .......      8,231,827     21,048,691
                                          ------------    -----------
NONCURRENT LIABILITIES:
      Long-term debt,
        net of current portion (Note 6)            -0-         92,354
      Deferred income taxes (Note 9) ..         19,740        155,642
                                          ------------    -----------
      Total noncurrent liabilities ....         19,740        247,996
                                          ------------    -----------
SHAREHOLDERS' EQUITY:
      Common stock, no par value,
        20,000,000 shares authorized;
        5,748,500 shares issued
        and outstanding ...............     21,618,339     21,618,339
      Retained (deficit) earnings .....     (1,436,263)     4,400,080
                                          ------------    -----------
      Total shareholders' equity ......     20,182,076     26,018,419
                                          ------------    -----------
COMMITMENTS AND
  CONTINGENCIES (Note 2 and Note 10)
      Total liabilities and
        shareholders' equity ..........   $ 28,433,643    $47,315,106
                                          ============    ===========

                See accompanying notes to financial statements

                                       12
<PAGE>
                             BRAZOS SPORTSWEAR, INC.
                         (FORMERLY SUN SPORTSWEAR, INC.)

                             STATEMENTS OF INCOME

                                           FOR THE YEAR ENDED DECEMBER 31,
                                 ---------------------------------------------
                                     1996            1995             1994
                                 ------------    ------------    -------------
Net sales (note 8) ...........     65,534,545      93,965,325      113,212,896
Cost of goods sold ...........     57,679,610      84,569,855       95,878,764
                                 ------------    ------------    -------------
Gross margin .................      7,854,935       9,395,470       17,334,132
                                 ------------    ------------    -------------
Operating expenses:
      Selling ................      3,342,014       3,649,256        3,781,116
      Design and pattern .....      2,503,370       2,492,222        2,527,013
      General and
        administrative .......      7,210,176       7,690,321        6,712,365
      Provision for doubtful
        accounts and factoring
        fees (Note 11) .......         95,694         132,284           71,586
                                 ------------    ------------    -------------
                                   13,151,254      13,964,083       13,092,080
                                 ------------    ------------    -------------
      Operating (loss) income      (5,296,319)     (4,568,613)       4,242,052
                                 ------------    ------------    -------------
Other expense (income):
      Interest expense .......        584,046       1,267,442          676,612
      Other, net .............        (37,114)       (200,981)        (111,236)
                                 ------------    ------------    -------------
                                      546,932       1,066,461          565,376
                                 ------------    ------------    -------------
(Loss) income before provision
  for income taxes ...........     (5,843,251)     (5,635,074)       3,676,676
(Benefit) provision for
  income taxes (Note 9) ......         (6,908)     (1,898,620)       1,228,000
                                 ------------    ------------    -------------
Net (loss) income ............   $ (5,836,343)   $ (3,736,454)   $   2,448,676
                                 ============    ============    =============
(Loss) earnings per share: ...   $      (1.02)   $      (0.65)   $        0.43
                                 ============    ============    =============
Weighted average shares
  outstanding ................      5,748,500       5,748,249        5,722,121

                See accompanying notes to financial statements

                                       13
<PAGE>
                            BRAZOS SPORTSWEAR, INC.
                        (FORMERLY SUN SPORTSWEAR, INC.)

                 STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                        COMMON STOCK           RETAINED
                                    ----------------------     (DEFICIT)
                                     SHARES       AMOUNT       EARNINGS         TOTAL
                                    ---------   -----------   -----------    ------------
<S>                                 <C>         <C>           <C>            <C>         
Balance,
  December 31, 1993 .............   5,637,500   $21,132,521   $ 5,687,858    $ 26,820,379

Exercise of stock options
including tax benefit of $109,498     109,625       481,170          --           481,170

Net income for the
  year ended
  December 31, 1994 .............        --            --       2,448,676       2,448,676
                                    ---------   -----------   -----------    ------------
Balance,
  December 31, 1994 .............   5,747,125    21,613,691     8,136,534      29,750,225

Exercise of stock options, -0-
tax benefit .....................       1,375         4,648          --             4,648

Net loss for the
  year ended
  December 31, 1995 .............        --            --      (3,736,454)     (3,736,454)
                                    ---------   -----------   -----------    ------------
Balance,
  December 31, 1995 .............   5,748,500    21,618,339     4,400,080      26,018,419

Net loss for the
  year ended
  December 31, 1996 .............        --            --      (5,836,343)     (5,836,343)
                                    ---------   -----------   -----------    ------------
Balance,
  December 31, 1996 .............   5,748,500   $21,618,339   $(1,436,263)   $ 20,182,076
                                    =========   ===========   ===========    ============
</TABLE>
                See accompanying notes to financial statements

                                       14
<PAGE>
                            BRAZOS SPORTSWEAR, INC.
                        (FORMERLY SUN SPORTSWEAR, INC.)

                           STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                            FOR THE YEAR ENDED DECEMBER 31,
                                                      --------------------------------------------
                                                         1996             1995           1994
                                                      ------------    ------------    ------------
<S>                                                   <C>             <C>             <C>         
Cash flows from operating activities:
    Net (loss) income .............................   $ (5,836,343)   $ (3,736,454)   $  2,448,676
    Adjustments to reconcile net
     income (loss) to net cash provided
      by (used in) operating activities:
      depreciation and amortization ...............      1,723,025       1,526,015       1,225,139
      Loss (gain) on disposal
             of equipment .........................         18,609         (18,054)          1,025
          Decrease (increase) in
            accounts receivable ...................      5,921,442      11,322,559     (10,644,227)
      Decrease (increase) in inventories ..........      7,870,965       6,524,260      (8,094,570)
      Decrease (increase)  in federal
        income tax receivable,
        and net deferred tax assets ...............      1,578,240      (2,189,620)         92,158
      Decrease (increase) in other assets .........        112,832        (366,117)        (84,790)
      (Decrease) increase in
        accounts payable ..........................       (880,571)     (6,754,384)      5,925,735
      (Decrease) increase in
        accrued liabilities .......................       (638,137)       (238,914)        938,153
                                                      ------------    ------------    ------------
    Net cash provided by (used in)
     operating activities .........................      9,870,062       6,069,291      (8,192,701)
                                                      ------------    ------------    ------------
Cash flows from investing activities:
    capital expenditures ..........................       (416,199)     (1,169,168)     (1,953,218)
    proceeds from sale of equipment ...............         14,545          46,133          70,956
                                                      ------------    ------------    ------------
    Net cash used in investing activities                 (401,654)     (1,123,035)     (1,882,262)
                                                      ------------    ------------    ------------
 Cash flows from financing activities:
    (Decrease) increase in outstanding
      checks in excess of funds on deposit.........        (513,015)     (1,297,807)        186,329
    Net (repayments) borrowings
      under line of credit agreement ..............    (10,539,488)     (2,487,000)     12,534,000
    Principal payments under
      long-term debt ..............................       (338,006)       (376,635)     (2,558,454)
    Proceeds from issuance of common
      stock for employee stock options ............            -0-           4,648         481,171
                                                      ------------    ------------    ------------
    Net cash (used in) provided by
      financing activities ........................    (11,390,509)     (4,156,794)     10,643,046
                                                      ------------    ------------    ------------
</TABLE>
                                       15
<PAGE>
<TABLE>
<CAPTION>
                                                        FOR THE YEAR ENDED DECEMBER 31,
                                                     --------------------------------------
                                                        1996           1995        1994
                                                     -----------    ----------   ----------
<S>                                                   <C>             <C>             <C>         
Net (decrease) increase in cash..................     (1,922,101)      789,462      568,083
Cash at beginning of period .....................      2,006,633     1,217,171      649,088
                                                     -----------    ----------   ----------
Cash at end of period ...........................    $    84,532    $2,006,633   $1,217,171
                                                     ===========    ==========   ==========
SUPPLEMENTAL DISCLOSURE OF
  CASH FLOW INFORMATION:
Cash paid during the period for:
      Interest ..................................    $   609,927    $1,269,992   $  688,174
      Income taxes ..............................    $   137,607    $  291,000   $1,251,000
</TABLE>
                                       16
<PAGE>
                           BRAZOS SPORTSWEAR, INC.
                       (FORMERLY SUN SPORTSWEAR, INC.)

                        NOTES TO FINANCIAL STATEMENTS

NOTE 1 - OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:

   MERGER AND SUBSEQUENT REINCORPORATION
   On March 14, 1997, Sun Sportswear, Inc. (the "Company") merged with BSI
Holdings, Inc. ("BSI") and was reincorporated as a Delaware corporation which
was renamed Brazos Sportswear, Inc. The merger was accounted for as a reverse
acquisition with the Company being the surviving legal entity and BSI being the
predecessor entity for accounting purposes. The merger will be accounted for as
a purchase. In connection with the reincorporation, a one for five reverse stock
split was implemented.

   Except for Seafirst Bank, shareholders of the Company prior to the merger who
did not elect to retain their shares received $2.20 per share ($11.00 per share
as adjusted for the effective one-for-five reverse stock split (the "Reverse
Split")) for 50% of such shares and the remaining shares were converted into
common stock of Brazos Sportswear, Inc. Seafirst Bank received $2.20 per share
($11.00 per share as adjusted for the Reverse Split) for 59.5% of its shares in
a combination of a note and cash, with its remaining shares being converted into
shares of Brazos Sportswear, Inc.

   The Company underwent a change in a control as of the effective date of the
merger. As of March 14, 1997, all the former directors of the Company resigned
and six directors designated by BSI became the directors of Brazos Sportswear,
Inc. In addition, on or before the effective date of the merger, the president,
executive vice president, and two senior vice presidents resigned. The financial
statements of the Company for the year ended December 31, 1996 include the costs
associated with these resignations as well as the merger related charges
incurred by the Company through December 31, 1996, which totaled $1.2 million.
The merger, including the Reverse Split, was not otherwise reflected in the
December 31, 1996 financial statements.

   OPERATIONS
   The Company is engaged in designing, sourcing, printing and marketing
moderately priced apparel. Products consist primarily of garments printed with
designs which are subject to licenses or distributor agreements with third
parties, and proprietary designs developed by the Company. Revenues from
operations are principally generated in the United States.

   RECLASSIFICATIONS
   Certain reclassifications have been made to prior year amounts to conform to
the presentation of the December 31, 1996 financial statements.

   INVENTORIES
   Inventories are stated at the lower of cost or market, cost being determined
using the first-in, first-out (FIFO) method. Cost includes the purchase price of
unprinted garments, the cost of manufacturing "cut-and-sewn" garments and the
cost of production of printed garments.

   EQUIPMENT AND LEASEHOLD IMPROVEMENTS
   Furniture, vehicles, equipment and leasehold improvements are stated at cost.
Depreciation and amortization are computed using the straight-line method over
the estimated useful lives of the respective assets for furniture, vehicles and
equipment and over the lease term or useful life for leasehold improvements.

   ACCOUNTS PAYABLE
   Outstanding checks in excess of funds on deposit of $490,000 and $1,003,000
at December 31, 1996 and 1995, respectively, have been classified as accounts
payable.

                                       17
<PAGE>
   ACCRUED ROYALTIES PAYABLE
   Royalties are accrued when the related licensed garments are shipped.
Additionally, the Company periodically reviews its royalty agreements, which
contain guaranteed minimum payments, and accrues the amount of the guaranteed
minimum royalties not expected to be met by sales of the licensed product.

   INCOME TAXES
   The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 (FAS 109), ACCOUNTING FOR INCOME TAXES.
Deferred taxes have been provided on income and expense items that are reported
in different periods for financial and tax reporting purposes, net of
appropriate valuation allowance.

   REVENUE RECOGNITION
   Sales are recognized when finished garments are shipped from the Company's
facilities.

   SALES DEDUCTIONS
   Sales discounts and allowances are accrued as sales are recorded. Sales
returns, the other component of sales deductions, are accrued when the Company
believes sales returns will occur.

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

   NET (LOSS) INCOME PER SHARE
   Net (loss) income per share has been computed based upon the weighted average
number of shares outstanding for all periods presented. Fully diluted per share
amounts do not differ materially from primary per share amounts.

NOTE 2 - COMMITMENTS:

   The Company has historically leased office, warehouse and manufacturing space
in Kent, Washington from a company owned by David Sabey, the majority
shareholder until December 1992 (at which time Mr. Sabey divested himself of all
his shares in the Company). The current lease requires monthly payments of
$115,000 plus operating and maintenance expense of the facility. Rent expense
for leases with Sabey totaled $1,392,000, $1,389,000 and $1,386,000 in 1996,
1995 and 1994, respectively. The Company has an option to purchase the facility
it presently occupies during the five year period October 6, 1994 through
October 5, 1999 for a mutually agreeable fair market price. This lease expires
in 1999.

   The Company also leases warehouse space in Kent, Washington from a third
party. The lease expires in June 1997. Rent expense for this third party lease,
and other expired leases, in 1996, 1995 and 1994 totaled $227,000, $181,000 and
$89,000, respectively.

   Future minimum rent commitments under all operating leases for periods after
December 31, 1996 are as follows:
                                    RENT COMMITMENTS
                              1997                 1,437,300
                              1998                 1,380,000
                              1999                 1,035,000
                                                 -----------
                                                 $ 3,852,300
                                                 ===========

   Sun acquires rights to use trademarks and characters on specified types of
garments, under license agreements from third parties. At December 31, 1996, the
Company was party to approximately 28 such license agreements. Under these
license agreements, the Company pays royalties of between 4% and 14% of the
sales price of products sold displaying the licensed character or trademark.
Royalty expense for Sun's license agreements totaled $5,917,049, $9,004,513 and

                                       18
<PAGE>
$9,354,684 in 1996, 1995 and 1994, respectively. These license agreements
typically require that the Company guarantee a minimum royalty payment. Unmet
guaranteed minimum royalty commitments under all licensing agreements in place
at December 31, 1996, are as follows:

                                   ROYALTY COMMITMENTS
                              1997            $      900,000
                              1998                 3,600,000
                                                ------------
                                                $  4,500,000
                                                ============

At December 31, 1996, the Company had an allowance of $198,753 recorded on its
balance sheet primarily to cover 1997 and 1998 minimum royalty commitments which
are not anticipated to be recovered through licensed product sales.
(See "Note 11 - Valuation and Qualifying Accounts")

NOTE 3 - INVENTORIES:

   Inventories are composed of:

                                                      December 31,
                                            -----------------------------------
                                                 1996                 1995
                                            ---------------      --------------
Garments in process                            $  1,480,782        $  2,244,781
Unprinted finished garments                      14,542,492          19,827,823
Printed finished garments                         1,096,859           5,617,347
Supplies                                            651,978             407,064
Lower of cost or market allowance                (2,011,718)         (4,465,657)
                                            ---------------      --------------
                                                $15,760,393         $23,631,358
                                            ===============      ==============

NOTE 4 - EQUIPMENT AND LEASEHOLD IMPROVEMENTS:

   Equipment and leasehold improvements are summarized by major classifications
as follows:
<TABLE>
<CAPTION>
                                                              December 31,           
                                         Estimated     -------------------------------- 
                                        useful lives        1996              1995
                                        ------------   ---------------    -------------
<S>                                         <C>            <C>              <C>        
Production equipment                        5-7            $ 3,707,247      $ 3,658,352
Leasehold improvements                      5-10             2,369,882        2,380,317
Design system hardware and software         3-5                967,294          851,056
Information system hardware and software    3-5              1,837,237        2,145,582
Furniture and fixtures                       5                 937,675        1,116,112
Distribution equipment                      5-10               371,033          343,941
Warehouse equipment                         5-7                357,814          395,797
Vehicles                                     5                  12,417           12,417
                                                       ---------------    -------------
                                                            10,560,599       10,903,574
Construction in progress                                           -0-              509
LESS - Accumulated depreciation                             (7,068,586)      (6,072,089)
                                                       ---------------    -------------
                                                           $ 3,492,013      $ 4,831,994
                                                       ===============    =============
</TABLE>
                                       19
<PAGE>
NOTE 5 - NOTES PAYABLE:

   Notes payable consist of the following:
<TABLE>
<CAPTION>
                               Interest rate at
                                December 31,                  December 31,
                               ---------------      -----------------------------------
                                    1996                 1996                1995
                               ---------------      ---------------     ---------------
<S>                                 <C>                <C>              <C>
Heller line of credit,
   Prime based                      8.50%              $  2,960,513     $         -0-

Bank line of credit,
   LIBOR based                       - -                        -0-          13,500,000
                                                       $  2,960,513        $ 13,500,000
                                                    ===============     ===============
</TABLE>
   At December 31, 1996, the Company's credit agreement with a Heller Financial,
Inc. provided for a line of credit (including commercial letters of credit) of
up to $24,000,000. The borrowing rate for the revolving portion of the line is
the prime rate and all the Company's assets, including accounts receivable and
inventories, are pledged as security for borrowings under the Heller credit
agreement. The Heller credit agreement requires compliance with certain
financial covenants principally relating to working capital, tangible net worth,
ratio of debt to equity, expenditures for fixed assets, minimum earnings (before
taxes, interest and depreciation), interest coverage, restrictions on the
payment of dividends and restrictions on the incurrence of long-term debt. At
December 31, 1996, approximately $8.9 million was available for borrowing.


NOTE 6 - LONG-TERM DEBT:

   Long-term debt consists of the following:

                                                 December 31,
                                       --------------------------------
                                            1996               1995
                                       --------------     --------------
Notes payable to GE Capital
in monthly installments of $25,694     $          -0-     $     338,006
                                       --------------     --------------
                                                                 338,006
Less - Current installments                       -0-           (245,652)
                                       --------------     --------------
Long-term debt                         $          -0-     $       92,354
                                       ==============     ==============

   The notes payable to GE Capital were repaid in February 1996.


NOTE 7 - CASH PROFIT SHARING, 401-K PROFIT SHARING PLAN, STOCK OPTION PLANS, AND
RETIREMENT BENEFITS:

CASH PROFIT SHARING AND SALES BONUS PLAN. The Company has a Cash Profit Sharing
and Sales Bonus Plan for its employees ("Cash Plan"). Under the Cash Plan, the
Board of Directors determines, at its discretion, a percentage of the Company's
net profits to be distributed to employees on an annual basis. The amount of the
distribution to any employee is based upon the employee's compensation level or
sales performance and in some instances, length of service with the Company. The
Cash Plan is administered by a committee of senior management employees
appointed by the 

                                       20
<PAGE>
Board of Directors. The amount charged to expense under the Cash Plan totaled
$63,000, $94,000 and $194,000 in 1996, 1995 and 1994, respectively.

401-K PROFIT SHARING PLAN. Effective January 1, 1992, the Company established a
401-K profit sharing plan for qualifying employees. Employee contributions to
the 401-K plan are matched by the Company dollar for dollar on the first $200
contributed to the plan; then $.25 for every $1 up to 6.0% of the employee's
gross earnings. Employees are fully vested in the 401-K plan after three years
of service. The 401-K plan is administered by a non-related, third party. The
amount charged to expense under the 401-K plan totaled $55,000, $66,000 and
$57,000 in 1996, 1995 and 1994, respectively.

FASB 123 - EFFECT ON NET INCOME AND EARNINGS PER SHARE. At December 31, 1996,
the Company has two stockbased compensation plans, which are described below. In
October 1995, the Financial Accounting Standards Board issued FASB 123,
"Accounting for Stock-Based Compensation", which established financial
accounting and reporting standards for stock-based employee compensation plans
and for the issuance of equity instruments to acquire goods and services from
non-employees. The Company applies APB Opinion 25 and related interpretations in
accounting for its plans. Accordingly, no compensation expense cost has been
recognized for its fixed stock option plans. Had compensation cost for the
Company's two stock-based compensation plans been determined based on the fair
value at the grant dates for awards under those plans consistent with the method
of FASB Statement 123, the Company's net income and earnings per share would
have been reduced to the amounts indicated below:

                                                 1996               1995
                                           ----------------    ---------------
Net Income                   As reported      $ (5,836,343)      $ (3,736,454)
                             Pro forma          (5,886,443)        (3,780,796)

Primary earnings per share   As reported            $(1.02)           $ (0.65)
                             Pro forma               (1.02)             (0.66)

The pro forma effect on net income and primary earnings per share resulting from
the compensation expense attributed to stock options as calculated under FASB
Statement 123 may not be representative of the effects on future years as
options vest over several years and additional awards may be granted in the
future.

STOCK OPTION PLANS. In October 1989, the Board of Directors approved stock
option plans for Company employees and directors coincident with the completion
of the public offering of common stock of the Company. The plans provide for the
issuance of options to purchase common stock to employees and non-employee
directors of the Company, at an exercise price in most cases equal to the fair
market value at the date of grant. The maximum term of options granted is ten
years, vesting from one to five years depending on the specific grant. Options
to employees are granted at the discretion of the Compensation Committee of the
Board of Directors. Options granted to non-employee directors are granted in
accordance with a formula set forth in the director plan. A total of 660,000
common stock shares have been reserved for issuance under these plans.

                                       21
<PAGE>
   A summary of the status of the Company's stock option plans as of December
31, 1995 and 1996, and changes during the years then ended are presented below.
The stock option exercise prices do not reflect the Reverse Split described in
Note 1.
<TABLE>
<CAPTION>
                                          Employee Plan                    Director Plan
                                  -----------------------------     ---------------------------
                                                      Weighted-                        Weighted-
                                                       Average                          Average
        Stock Options                 Shares        Exercise Price      Shares       Exercise Price
------------------------------    --------------    -------------     -----------    -------------
<S>                                      <C>            <C>                <C>           <C>  
Outstanding at December 31, 1994         321,250        $4.32             18,000        $4.61
Options granted                           54,500        $4.13              2,000        $4.13
Options exercised                         (1,375)       $3.38                --           - -
Options canceled                          (8,875)       $5.44             (1,000)       $4.13
                                   -------------                          -------
Outstanding at December 31, 1995         365,500        $4.27             19,000        $4.84
Options granted                           10,500        $2.88                - -          - -
Options exercised                            -0-         - -                 - -          - -
Options canceled                        (111,437)       $4.13            (11,000)       $4.97
                                  --------------                      -----------
Outstanding at December 31, 1996         264,563        $4.27              8,000        $4.06
                                  ==============                      ===========
</TABLE>
   The fair value of each option grant is estimated on the date of the grant
using the Black-Scholes option-pricing model with the following weighted average
assumptions used for grants in 1995 and 1996, respectively: expected volatility
of 70% and 64%, risk-free interest rates of 6.49% and 6.5%, and expected lives
of 6 years and 5.98 years. The Company does not anticipate declaring dividends
during the expected lives of the options.

   At December 31, 1996, 254,063 options were exercisable under the Employee
Plan, and 8,000 options were exercisable under the Director Plan The
weighted-average fair value of options granted during the calendar year 1996 was
$1.54 under the Employee Plan. No options were granted in the calendar year 1996
under the Director Plan. At December 31, 1995, 268,541 options were exercisable
under the Employee Plan and 18,000 options were exercisable under the Director
Plan. The weighted fair market value of options granted during calendar year
1995 was $2.34 for both plans.

                                       22
<PAGE>
The following table summarizes information about fixed stock options outstanding
at December 31, 1996:
<TABLE>
<CAPTION>
                                  OPTIONS OUTSTANDING                    OPTIONS EXERCISABLE
                     ---------------------------------------------   ---------------------------
                                    Weighted-Average
                        Number         Remaining          Weighted-        Number         Weighted-
Range of Exercise    Outstanding at Contractual Life       Average      Exercisable at     Average
     Prices            12/31/96                         Exercise Price    12/31/96      Exercise Price
-----------------    ------------   ----------------    -------------   ------------    -------------
<S>                   <C>            <C>                    <C>            <C>              <C>  
EMPLOYEE PLAN
$2.88 to $3.38        112,750        5.44 years             $3.28          102,250          $3.30
$4.25 to $4.50         83,313        6.59 years             $4.30           83,313          $4.30
$5.88                  68,500        7.42 years             $5.88           68,500          $5.88
                                                                                          
DIRECTOR PLAN                                                                             
$3.75 to $5.88          8,000        1.79 years             $4.06            8,000          $4.06
</TABLE>
NOTE 8 - INDUSTRY PROFILE AND MAJOR CUSTOMERS:

   The Company operates almost exclusively in one industry, which is the
wholesale distribution of imprinted, dyed and decorated casual apparel. The
Company's customers consist of large retail mass merchants. A substantial
portion of the Company's customers' ability to honor their obligations is
dependent on the retail apparel economic sector.

   The Company has three major customers who are mass merchants. The percentage
of gross sales for each customer and the total percentage of gross sales for the
three customers are as follows:

                            PERCENTAGE OF GROSS SALES FOR      TOTAL PERCENTAGE
                              KMART, TARGET AND WAL-MART,     OF GROSS SALES FOR
                                     RESPECTIVELY            THE THREE CUSTOMERS
                               ------------------------      -------------------
For the year ended December 31,
       1996                        10%, 26% and 41%                  77%
       1995                        17%, 24% and 47%                  88%
       1994                        19%, 29% and 40%                  88%

                                  23
<PAGE>
NOTE 9 - INCOME TAXES:

   The (benefit) provision for income taxes was as follows:

                                  For the year ended December 31,
                            -----------------------------------------
                                1996           1995          1994
                            -----------    -----------    -----------
Current.................    $  (896,378)   $(1,854,594)   $ 1,554,000
Deferred................        889,470        (44,026)      (326,000)
                            -----------    -----------    -----------
                            $    (6,908)   $(1,898,620)   $ 1,228,000
                            ===========    ===========    ===========

   Federal Income Tax Rate Schedule:

                                           For the year ended December 31,
                                     -----------------------------------------
                                         1996           1995          1994
                                     -----------    -----------    -----------
Income taxes (benefit) at
  federal rate ....................  $(1,986,705)   $(1,915,925)   $ 1,250,070
Non-deductible merger expenses ....      325,962            -0-            -0-
Change in valuation allowance .....    1,567,237            -0-            -0-
Other .............................       86,598         17,305        (22,070)
                                     -----------    -----------    -----------
Income tax (benefit) provision ....  $    (6,908)   $(1,898,620)   $ 1,228,000
                                     ===========    ===========    ===========

   Deferred tax assets (liabilities) at December 31 comprised the following:

                                      1996                 1995
                                  -------------        -------------
Inventory capitalization             $  583,897           $  463,749
Allowance for doubtful accounts          11,537               15,748
Accrued expenses                         28,365               39,116
Accrued royalties                       136,065              235,077
AMT credits                              78,203                  -0-
Net operating loss carry forward        673,552                  -0-
Other                                   119,623               78,907
                                  -------------        -------------
Gross deferred tax assets             1,631,242              832,597

Less - Depreciation                     (64,005)            (199,907)
Valuation Allowance                  (1,567,237)                 -0-
                                  -------------        -------------
                                  $          -0-          $  632,690
                                  =============        =============

                                       24
<PAGE>
                                           1996         1995
                                         --------    ---------
Net current deferred tax asset .......   $ 19,740    $ 788,332
Net noncurrent deferred tax liability     (19,740)    (155,642)
                                         --------    ---------
                                         $    -0-    $ 632,690
                                         ========    =========

Due to uncertainty in the realization of certain tax assets, including those
representing the net operating loss and alternative minimum tax credit
carryforwards, the Company has established a valuation allowance of $1,567,237
in the quarter and fiscal year ended December 31, 1996. At December 31, 1996,
the Company had net operating loss carryforwards of approximately $2.0 million
for federal tax purposes which begin to expire in 2010. Due to changes in the
ownership structure of the Company, the availability of certain net operating
loss carryforwards may be limited.

NOTE 10 - CONTINGENCIES

   The Company is involved in litigation arising in the ordinary course of
business, which in the opinion of management, will not have a material effect on
the Company's financial position or results of operations.


NOTE 11 - VALUATION AND QUALIFYING ACCOUNTS

   Activity of the Company's allowance for doubtful accounts follows:

                                       For the year ended December 31,
                                 -------------------------------------------
                                     1996             1995             1994
                                 ------------     ------------     ------------
Balance, beginning of the year    $    46,317      $    46,524      $    88,000
Provision for doubtful accounts           -0-              -0-              -0-
Chargeoffs/collections                (12,387)            (207)         (41,476)
                                 ------------     ------------     ------------
Balance, end of the year          $    33,930      $    46,317      $    46,524
                                 ============     ============     ============

   During 1994, 1995 and 1996, the Company had an agreement with Heller
Financial, Inc. intended to transfer the collection risk to Heller for Sun's
accounts receivable for essentially all of its customers other than Target,
Kmart and Wal-Mart. Under the agreement, Heller assumed 100% of the collection
risk associated with the Company's covered receivables. Heller received a fee
equal to .55% of the gross amount of covered receivables for assuming such
collection risk. The amount charged to expense for factoring fees was $119,000,
$48,000, and $80,000 in 1996, 1995 and 1994, respectively. This agreement
expired in March 1997.

   In February 1996, Sun amended the risk-transfer agreement with Heller,
whereby Heller also assumes 70% of the collection risk associated with the Kmart
receivables for a fee equal to .65% of the gross amount of such receivables.

   Activity of the Company's lower of cost or market inventory reserves follows:

                                        For the year ended December 31,
                                 ----------------------------------------------
                                     1996             1995             1994
                                 ------------     ------------     ------------
Balance, beginning of the year     $4,465,657       $3,080,755       $1,501,876
Accruals                            1,938,999        3,773,078        2,470,097
Chargeoffs                         (4,392,938)      (2,388,176)        (891,218)
                                 ------------     ------------     ------------
Balance, end of the year           $2,011,718       $4,465,657       $3,080,755
                                 ============     ============     ============

                                      25
<PAGE>
   Activity of the Company's unmet guaranteed minimum royalty reserves follows:

                                        For the year ended December 31,
                                 ----------------------------------------------
                                     1996             1995             1994
                                 ------------     ------------     ------------
Balance, beginning of the year    $   691,403      $   301,085      $   147,333
Accruals                              173,315          693,643          350,000
Chargeoffs                           (665,965)        (303,325)        (196,248)
                                 ------------     ------------     ------------
Balance, end of the year          $   198,753      $   691,403      $   301,085
                                 ============     ============     ============

NOTE 12 - RELATED PARTY TRANSACTIONS

   During 1995, Sun hired the consulting firm of Wiley, Pene and Company to
assist in the Company's re-engineering efforts. Wiley, Pene and Company was paid
$243,000 from March to October 1995 for its services. Wiley, Pene and Company is
owned by Robert Pene, a former director of Sun, who resigned from the Company's
Board of Directors in September 1995; and by William S. Wiley, who was appointed
as the Company's Chief Executive Officer, President and Director in October
1995, and subsequently resigned as Chief Executive Officer in January of 1997.
Mr. Wiley remained as Chairman and Director through March 14, 1997, the date of
the merger.

                                       26
<PAGE>
NOTE 13 - SUMMARY OF QUARTERLY FINANCIAL INFORMATION (UNAUDITED):

   Quarterly financial information for the years ended December 31, 1996 and
1995 is as follows:
<TABLE>
<CAPTION>
                                  FIRST        SECOND         THIRD         FOURTH
                                 QUARTER      QUARTER        QUARTER        QUARTER          TOTAL
                               -----------   -----------   -----------    ------------    ------------ 
<S>                            <C>           <C>           <C>            <C>             <C>         
1996
Net sales ..................   $24,433,440   $20,034,565   $ 9,133,714    $ 11,932,826    $ 65,534,545
Cost of goods sold .........    20,623,529    16,871,903     9,101,063      11,083,115      57,679,610
                               -----------   -----------   -----------    ------------    ------------ 
Gross margin ...............     3,809,911     3,162,662        32,651         849,711       7,854,935
Operating expenses .........     3,181,998     2,984,052     3,333,181       3,652,023      13,151,254

Other expenses .............       223,187       149,338        68,373         106,034         546,932
                               -----------   -----------   -----------    ------------    ------------ 
(Loss) income before 
  provision for income taxes       404,726        29,272    (3,368,903)     (2,908,346)     (5,843,251)
(Benefit) provision  for ...       138,000         9,000    (1,145,000)        991,092          (6,908)
  income taxes
                               -----------   -----------   -----------    ------------    ------------ 
Net (loss) income ..........   $   266,726   $    20,272   $(2,223,903)   $ (3,899,438)   $ (5,836,343)
                               ===========   ===========   ===========    ============    ============ 
Net (loss) income per share    $      0.05   $      0.00   $     (0.39)   $      (0.68)   $      (1.02)
</TABLE>
During the fourth quarter of 1996, the Company reevaluated the likely
realization of its deferred tax assets given its continuing pre-tax losses.
Accordingly, a charge of $1,567,237 was recorded to write-off the net deferred
tax asset.
<TABLE>
<CAPTION>
                                  FIRST          SECOND         THIRD           FOURTH
                                 QUARTER         QUARTER       QUARTER          QUARTER         TOTAL
                               ------------    -----------   ------------    ------------    ------------
<S>                            <C>             <C>           <C>             <C>             <C>         
1995
Net sales ..................   $ 25,720,562    $30,581,505   $ 16,224,578    $ 21,438,680    $ 93,965,325
Cost of goods sold .........     22,522,498     25,310,087     17,097,761      19,639,509      84,569,855
                               ------------    -----------   ------------    ------------    ------------
Gross margin ...............      3,198,064      5,271,418       (873,183)      1,799,171       9,395,470
Operating expenses .........      3,627,428      3,662,095      3,504,743       3,169,817      13,964,083
Other expense ..............        330,034        314,033        152,794         269,600       1,066,461
                               ------------    -----------   ------------    ------------    ------------
(Loss) income before 
  provision for income taxes       (759,398)     1,295,290     (4,530,720)     (1,640,246)     (5,635,074)
(Benefit) provision for 
  income taxes .............       (258,000)       440,000     (1,540,500)       (540,120)     (1,898,620)
                               ------------    -----------   ------------    ------------    ------------
Net (loss) income ..........   $   (501,398)   $   855,290   $ (2,990,220)   $ (1,100,126)   $ (3,736,454)
                               ============    ===========   ============    ============    ============
Net (loss) income per share    $      (0.09)   $      0.15   $      (0.52)   $      (0.19)   $      (0.65)
</TABLE>
The sum of quarterly earnings per share will not necessarily equal the earnings
per share reported for the entire year, due to rounding.

                                       27
<PAGE>
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

   Not applicable.

                                   PART III

   Part III (Items 10 through 13) is omitted since the Company expects to file
with the Securities and Exchange Commission within 120 days following December
31, 1996, definitive proxy materials pursuant to Regulation 14A under the
Securities Exchange Act of 1934 involving the annual election of directors and
certain other matters. If for any reason such a statement is not so filed, this
Report will be appropriately amended.

                                       28
<PAGE>
                                    PART IV

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

   (A)(1) AND (2)  FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

   See financial statements at pages 10 to 27

   (A)(3)EXHIBITS

   EXHIBIT NO.    DESCRIPTION
   -----------    -----------
         2.1 -- Agreement and Plan of Merger ("Merger Agreement") dated as of
                November 13, 1996, as amended, by and between the Registrant and
                BSI Holdings, Inc. (filed as an appendix to Form S-4
                Registration Statement (No. 333-17871) and incorporated herein
                by reference.)

         2.2 -- Plan and Agreement of Merger with respect to reincorporation
                in Delaware (filed as an appendix to Form S-4 Registration
                Statement (No. 333-17871) and incorporated herein by reference.)

        *3.1 -- Amended and Restated Certificate of Incorporation of the
                Registrant.

        *3.2 -- Bylaws of the Registrant, as amended.

         4.1 -- See Exhibits 3.1 and 3.2 for provisions of the Certificate of
                Incorporation and Bylaws of the Registrant defining the rights
                of holders of common and preferred stock.

        10.1 -- 1989 Employee Stock Option Plan of the Registrant (filed as an
                exhibit to Form S-1 Registration Statement (No. 33-31688) and
                incorporated herein by reference.)

        10.2 -- 1989 Director Stock Option Plan of the Registrant as amended
                (filed as an exhibit to Form 10- Q for the quarter ended June
                30, 1995 and incorporated herein by reference.)

       *10.3 -- 1995 Incentive Stock Option Plan assumed pursuant to Merger
                Agreement.

       *10.4 -- Annual Incentive Compensation Plan - Brazos, Inc.

        10.5 -- Industrial Lease, dated April 3, 1989, between the Registrant
                and Sabey Corporation (filed as an exhibit to Form S-1
                Registration Statement (No. 33-31688) and incorporated herein by
                reference.)

        10.6 -- Tax Claims and Access Agreement, dated as of October 6, 1989,
                between the Registrant and David A. Sabey (filed as an exhibit
                to Form S-1 Registration Statement (No. 33-31688) and
                incorporated herein by reference.)

        10.7 -- Form of Indemnification Agreement between the Company and its
                directors (filed as an exhibit to Form 10-K for the year ended
                December 31, 1991 and incorporated herein by reference.)

       *10.8 -- Employment Agreement dated October 1, 1996, between Brazos,
                Inc. and J. Ford Taylor.

       *10.9 -- Employment Agreement dated October 1, 1996, between Brazos,
                Inc. and F. Clayton Chambers.

                                       29
<PAGE>
      *10.10 -- Employment Agreement, dated August 2, 1996, between Brazos,
                Inc. and Alan Elenson.

      *10.11 -- Asset Purchase Agreement dated August 2, 1996, with respect to
                acquisition of Plymouth Mills, Inc.

      *10.12 -- Junior Subordinated Debenture, dated as of August 2, 1996,
                payable to Plymouth Mills, Inc. in the principal amount of $4
                million.

      *10.13 -- Second Amended and Restated Loan and Security Agreement dated
                August 9, 1996, as amended, by and between Brazos, Inc., The
                First National Bank of Boston and Fleet Capital.

      *10.14 -- Investment Agreement dated as of August 9, 1996, as amended, by
                and between Brazos, Inc., the Registrant, Equus II Incorporated,
                Allied Investment Corporation and Allied Investment Corporation
                II.

      *10.15 -- Loan Agreement assumed by Brazos Embroidery, Inc.

      *10.16 -- Convertible Subordinated Note Agreement with Seafirst Bank.

       *21.1 -- Subsidiaries of the Registrant.

       *23.1 -- Consent of Price Waterhouse LLP.

       *27.1 -- Financial Data Schedule

*Filed herewith.

      (B)   REPORTS ON FORM 8-K

      None.

                                       30
<PAGE>
                                  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, ON THE DAY 11TH OF
APRIL, 1997.

                                                BRAZOS SPORTSWEAR, INC.

                                                BY /s/ J. FORD TAYLOR
                                                       J. FORD TAYLOR, 
                                                       PRESIDENT 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 IN THE CAPACITIES INDICATED ON THE 11TH DAY OF APRIL, 1997.

                  SIGNATURE                        TITLE
                  ---------                        -----
           /s/ RANDALL B. HALE        Director and Chairman of the Board
               Randall B. Hale

           /s/ J. FORD TAYLOR         Director, President and Chief Executive 
               J. Ford Taylor           Officer

           /s/ F. CLAYTON CHAMBERS    Director, Principal Financial and 
               F. Clayton Chambers      Accounting Officer

           /s/ MICHAEL S. CHADWICK    Director
               Michael S. Chadwick

           /s/ NOLAN LEHMANN          Director
               Nolan Lehmann

                                      Director
               Alan Elenson

                                       31