SYNTHETIC INDUSTRIES INC, S-1/A, 1996-09-13

SYNTHETIC INDUSTRIES INC
S-1/A, 1996-09-13
TEXTILE MILL PRODUCTS

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<PAGE> 1

As filed with the Securities and Exchange Commission on September 13, 1996
REGISTRATION NO. 333-09377

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

----------------------------

AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

----------------------------

SYNTHETIC INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

----------------------------

<TABLE>
<S> <C> <C>
DELAWARE 2221 58-1049400
(State or other jurisdiction of (Primary Standard Industrial Classification (I.R.S. Employer
incorporation or organization) Code Number) Identification number)
</TABLE>

----------------------------

309 LAFAYETTE ROAD
CHICKAMAUGA, GEORGIA 30707
(706) 375-3121
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)

----------------------------

LEONARD CHILL
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SYNTHETIC INDUSTRIES, INC.
309 LAFAYETTE ROAD
CHICKAMAUGA, GEORGIA 30707
(706) 375-3121
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

----------------------------

COPIES TO:

MARK ZVONKOVIC, ESQ. THOMAS POLLOCK, ESQ.
ANDREWS & KURTH L.L.P. PAUL, HASTINGS, JANOFSKY & WALKER LLP
425 LEXINGTON AVENUE 399 PARK AVENUE
NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10022
(212) 850-2800 (212) 318-6000

----------------------------

Approximate date of commencement of proposed sale to the public: As
soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be
offered on a delayed or continuing basis pursuant to Rule 415 under the
Securities Act of 1933 check the following box. [ ]

If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]

----------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

================================================================================
<PAGE> 2
SYNTHETIC INDUSTRIES, INC.

Cross-reference sheet furnished pursuant to Item 501(b) of Regulation S-K.

<TABLE>
<CAPTION>
ITEM IN FORM S-1 LOCATION IN PROSPECTUS
---------------- ----------------------
<S> <C> <C>
1. Forepart of the Registration Statement and Outside Front
Cover Page of Prospectus..................................... Outside Front Cover Page of Prospectus

2. Inside Front and Outside Back Cover Pages of Prospectus...... Inside Front Cover Page of Prospectus

3. Summary Information, Risk Factors and Ratio of Earnings
to Fixed Charges............................................. Prospectus Summary; Risk Factors; Business

4. Use of Proceeds.............................................. Use of Proceeds

5. Determination of Offering Price.............................. Outside Front Cover Page; Underwriting

6. Dilution..................................................... Dilution

7. Selling Security Holders..................................... Not Applicable

8. Plan of Distribution......................................... Outside Front Cover Page of Prospectus;
Underwriting

9. Description of Securities to be Registered................... Description of Capital Stock; Dividend Policy

10. Interests of Named Experts and Counsel....................... Legal Matters; Experts

11. Information with Respect to the Registrant................... Outside Front Cover Page of Prospectus;
Prospectus Summary; Risk Factors; The
Company; Use of Proceeds; Dividend
Policy; Capitalization; Dilution;
Selected Consolidated Financial
Information; Management's Discussion
and Analysis of Financial Condition
and Results of Operations; Business;
Management; Principal Stockholders;
Certain Relationships and Related
Transactions; Description of Certain
Indebtedness; Description of Capital
Stock; Shares Eligible for Future
Sale; Underwriting; Legal Matters;
Experts; Available Information;
Consolidated Financial Statements

12. Disclosure of Commission Position on Indemnification for
Securities Act Liabilities................................... Not Applicable
</TABLE>

<PAGE> 3

***************************************************************************
* *
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
* REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED *
* WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT *
* BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE *
* REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT *
* CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY *
* NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH *
* SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO *
* REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH *
* STATE. *
* *
***************************************************************************

SUBJECT TO COMPLETION, DATED SEPTEMBER 13, 1996

PROSPECTUS

3,400,000 SHARES

SYNTHETIC INDUSTRIES, INC.

COMMON STOCK

All of the 3,400,000 shares (the "Shares") of common stock, par value
$1.00 per share (the "Common Stock"), offered hereby are being sold by
Synthetic Industries, Inc. ("SI" or the "Company"). Prior to this Offering,
there has been no public market for the Common Stock. It is currently estimated
that the initial public offering price will be between $15.00 and $17.00 per
share. See "Underwriting" for information relating to the factors to be
considered in determining the initial public offering price. Application has
been made to include the Common Stock for listing on the Nasdaq National Market
under the symbol "SIND".

----------------------------

SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR CERTAIN INFORMATION THAT SHOULD
BE CONSIDERED BY PROSPECTIVE INVESTORS.

----------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
=============================================================================================================
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS (1) COMPANY (2)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE........................... $ $ $
- -------------------------------------------------------------------------------------------------------------
TOTAL (3)............................ $ $ $
=============================================================================================================
</TABLE>

(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting".

(2) Before deducting expenses payable by the Company estimated at $544,000.

(3) The Company has granted the Underwriters a 30-day option to purchase up
to 510,000 additional shares of Common Stock on the same terms and
conditions as set forth above to cover over-allotments, if any. If the
Underwriters exercise this option in full, the total Price to Public,
Underwriting Discounts and Commissions and Proceeds to Company will be
$__________, $__________ and $__________, respectively. See
"Underwriting".

----------------------------

The shares of Common Stock are offered, subject to prior sale, when, as and
if delivered to and accepted by the Underwriters and subject to certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the shares of Common Stock will be made against payment therefor,
on or about _______, 1996, at the offices of Bear, Stearns & Co. Inc., 245 Park
Avenue, New York, New York 10167.

----------------------------

BEAR, STEARNS & CO. INC.

THE DATE OF THIS PROSPECTUS IS __________, 1996

<PAGE> 4

[Product Pictures]

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

2
<PAGE> 5
PROSPECTUS SUMMARY

The following summary information is qualified in its entirety by, and
should be read in conjunction with, the more detailed information and financial
data, including the Consolidated Financial Statements and notes thereto,
appearing elsewhere in this Prospectus. The terms "SI" and "Company" refer to
Synthetic Industries, Inc. and its subsidiaries, unless otherwise stated or
indicated by the context. References to a "fiscal" year refer to the Company's
fiscal year which ends on September 30 (e.g., "fiscal 1995" means the Company's
fiscal year ended September 30, 1995). In addition, prior to the consummation
of the Offering, the Company will amend its Certificate of Incorporation to
increase its authorized shares of Common Stock and to revise certain other
provisions in its Certificate of Incorporation, and will declare a stock split
(the "Stock Split") of approximately 115,740.74 shares for each currently
outstanding share. The information contained in this Prospectus (i) assumes
that the Underwriters' over-allotment option is not exercised and (ii) has been
adjusted to give effect to the Stock Split, unless otherwise noted. See
"Description of Capital Stock".

THE COMPANY

Synthetic Industries, Inc. ("SI" or the "Company") is one of the
world's leading producers of polypropylene fabrics and fibers for the home
furnishing, construction, environmental, recreational and agricultural
industries. The Company manufactures and sells more than 2,000 products in over
65 end-use markets. The Company believes that it is the second largest producer
of carpet backing in the world and is the largest producer of synthetic fiber
additives for concrete reinforcement through its Fibermesh(R) line of products.
SI also produces polypropylene products for the geotextile and erosion control
markets and is a leader in designing innovative products for specialty
applications. The Company's products are engineered to meet specific customer
criteria such as strength, flexibility, resistance to sunlight, water/air
permeability and resistance to bacteria. The Company aims to compete in markets
in which it can be the primary or secondary provider of such products, with
over 93% of its products meeting this criterion. The Company's consolidated
sales have grown from $188 million in fiscal 1991 to $271 million in fiscal
1995.

The Company's products are sold along three principal product lines:
carpet backing, construction and civil engineering products, and technical
textiles. The Company has a worldwide presence in carpet backing, a woven
fabric used in all modern tufted carpets, and is one of the two leading
manufacturers in the U.S. that produce a broad range of primary and secondary
carpet backing. Carpet backing accounted for approximately 49% of the Company's
fiscal 1995 sales. The Company's construction and civil engineering products
are its fastest growing product line and include fiber additives for concrete
reinforcement and environmental and geotextile products used in roadways,
landfills and building sites to stabilize soils and control erosion. The
Company's sales to the construction and civil engineering market have grown
from approximately $24 million in fiscal 1991 to approximately $83 million in
fiscal 1995. These products represented approximately 31% of the Company's
total sales in fiscal 1995, up from approximately 13% of total sales in fiscal
1991. The Company's technical textile products are comprised of specialty
fabrics, industrial yarns and fibers used in diverse applications such as
filtration (e.g., wastewater treatment, air filtration and bauxite mining),
agriculture (e.g., shade cloth and ground cover) and recreation (e.g., swimming
pool covers and trampoline mats). These products are highly engineered to meet
niche customer applications and represented approximately 20% of fiscal 1995
sales. The Company's products are principally sold through direct sales to
customers by the Company's sales force and through a broad network of
distributors located across North and South America, Europe and the Pacific
Rim.

3
<PAGE> 6

and has completed a major $35 million, 130,000 square foot expansion of its
largest manufacturing facility. Based on existing product prices and demand,
this expansion should increase the Company's sales by as much as $30 million
over the next twelve months. The Company is one of the largest independent
consumers of polypropylene in the world. The Company believes its position as a
vertically-integrated manufacturer -- performing each step in the conversion of
polypropylene into value-added end products -- provides a competitive advantage
by allowing the Company to manufacture high quality products to customer's
specifications, while controlling manufacturing costs.

o Expand Penetration of Existing Markets. The Company is committed to
expanding sales in markets where it currently has a leadership
position by increasing market penetration through the offering of a
broader product line to meet its customers' varied needs and by
expanding its customer base. The Company is pursuing this goal
through (i) the expansion of geographical coverage of its sales
efforts; (ii) the development of applications-oriented marketing
efforts that focus on the Company's product solutions as alternatives
to traditional industry practices; (iii) increased customer acceptance
of its products created through stringent quality standards and
industry accreditation for its test labs; and (iv) the use of in-house
technical consultants to educate industry leaders as to the cost
savings offered by the Company's products as compared to traditional
solutions. The Company has experienced success with this strategy, as
evidenced by the growth of its civil engineering product line for
which sales have increased from approximately $17 million in fiscal
1993 to approximately $42 million in 1995, and which were
approximately $37 million for the nine months ended June 30, 1996 as
compared to approximately $26 million for the comparable period in
1995. Within this product line, the Company has focused on the
roadway and building sites, erosion control and waste containment
sectors. Among other products, nonwoven geotextile sales to the
roadway and building site markets have grown from approximately $5
million in fiscal 1993 to approximately $16 million in fiscal 1995 and
were approximately $13 million for the nine months ended June 30,
1996. In addition, the Company has expanded its presence in
international markets primarily through additional distribution
arrangements, increased marketing efforts focused primarily on major
international construction projects and the expansion of its
international sales force. As a result, total international sales
increased from approximately $17 million in fiscal 1993 to
approximately $34 million in fiscal 1995 and were approximately $21
million for the nine months ended June 30, 1996.

o Develop Innovative Products. The Company seeks to develop innovative
products and modify existing products in response to specific customer
needs and to establish new markets through the development of novel
applications for its existing products. By increasing its
expenditures for research, product development and marketing, the
Company believes it will be able to capitalize on its manufacturing
strengths and distribution network to introduce new value added
products and extend product lines to complement its existing product
base. For example, the Company's specially designed Fibermesh(R)MD
products provide after-crack strength retention to concrete, thus
mitigating immediate failure of the concrete. Since its introduction
in 1991, sales of Fibermesh(R)MD have grown to approximately $26
million in fiscal 1995 and were approximately $18 million for the nine
months ended June 30, 1996.

o Strengthen Market Position in Carpet Backing. The Company intends to
increase its carpet backing market share through (i) continued capital
investment in state-of-the-art equipment for additional carpet backing
production capacity, (ii) expansion of sales in the growing commercial
carpet sector of the domestic market and (iii) the continued
development and strengthening of its relationships with key customers.
As an example of this strategy, the Company has completed an expansion
at its largest facility that should increase the Company's current
capacity in carpet backing by approximately 16%.

o Continue to Improve Manufacturing Efficiencies and Expand
Manufacturing Capacity. The Company has continued to invest in
capital improvements and new facilities to expand capacity, add new
capabilities and

4
<PAGE> 7

enhance production technologies, and has completed a major expansion
at its largest manufacturing facility that serves both the carpet
backing and geotextile markets. The Company plans to continue to spend
additional capital to increase its manufacturing capability for
primary and secondary carpet backing and woven and nonwoven
geotextiles, subject to prevailing market conditions.

o Pursue Strategic Acquisitions. The Company is continually evaluating
the potential acquisition of companies, technologies or products which
will complement its existing product lines and manufacturing and
distribution strengths. Acquisition opportunities will be evaluated
based on the strategic fit, the expected return on capital invested
and the ability of management to improve the profitability of acquired
operations through cost reductions and other synergies with existing
operations.

While the Company's sales have grown in each of the past five years,
the Company's operating income has fluctuated due to a variety of factors,
principally related to changes in the cost of polypropylene, the Company's
primary raw material. The Company believes that the sales prices of its
products will adjust over time to reflect changes in polypropylene costs,
although such cost changes favorably affected operating results for fiscal 1994
and adversely affected operating results for fiscal 1995. Recently, these
movements have positively affected the Company's operating income, which
increased by 50% to $14.5 million for the third quarter of fiscal 1996 from
$9.7 million for the comparable period of fiscal 1995. The Company anticipates
that these favorable conditions will continue in the fourth quarter of fiscal
1996.

RECENT DEVELOPMENTS

The Company's net sales for July 1996 were $30,298,000, as compared to
$23,459,000 for July 1995, the Company's operating income for July 1996 was
$5,006,000, as compared to $1,286,000 for July 1995, and the Company's net
income for July 1996 was $1,484,000, as compared to a net loss of $425,000 for
July 1995.

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the Company....................................... 3,400,000 Shares
Common Stock to be outstanding after the Offering......................... 9,181,250 Shares (1) (2)
Use of Proceeds........................................................... To repay all outstanding bank
indebtedness and for other general
corporate purposes.
Proposed Nasdaq National Market Symbol.................................... "SIND"
</TABLE>

- ---------------

(1) Does not include up to 510,000 shares of Common Stock which may be
offered by the Company upon exercise of the Underwriters' overallotment
option.

(2) Excludes 638,397 shares of Common Stock at September 6, 1996 which are
subject to options granted under the Company's 1994 Stock Option Plan for
Non-Employee Directors, 1994 Stock Option Plan and 1996 Stock Option Plan
(collectively, the "Stock Option Plans"), 173,119 of which are subject to
currently exercisable options.

RISK FACTORS

Prospective purchasers of the Common Stock offered hereby should
carefully consider the factors set forth in "Risk Factors," as well as the
other information set forth in this Prospectus before making an investment in
the Common Stock.

5
<PAGE> 8
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(in thousands, except share and per share data)

The following summary consolidated financial information should be
read in conjunction with the Consolidated Financial Statements and notes
thereto and the other selected financial data set forth elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
NINE MONTHS
FISCAL YEAR ENDED
ENDED SEPTEMBER 30, JUNE 30,
-------------------------------------- ------------------------
1993 1994 1995 (1) 1995 1996
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales .............................. $ 210,516 $ 234,977 $ 271,427 $ 194,349 $ 212,060
Gross profit ........................... 68,335 82,672 76,721 57,399 60,839
Operating income ....................... 29,921 40,770 28,687 23,437 23,612
Interest expense ....................... 20,854 20,011 22,514 17,027 17,253
Income from continuing operations
before provision for income taxes .... 8,134 20,020 5,436 5,855 5,836
Income from continuing
operations ........................... 3,662 11,420 1,936 2,555 2,786
PRO FORMA FINANCIAL DATA:
Net income(2) .......................... $ 4,686 $ 4,661
Net income per share (2) ............... 0.50 0.49
Weighted average common and
common equivalent shares
outstanding .......................... 9,422,214 9,422,214
OTHER FINANCIAL DATA:
EBITDA(3) .............................. $ 41,061 $ 52,421 $ 42,887 $ 33,960 $ 35,330
EBITDA as a percentage of net sa1es..... 19.5% 22.3% 15.8% 17.5% 16.7%
Depreciation and amortization........... $ 12,073 $ 12,390 $ 14,937 $ 11,078 $ 12,241
Capital expenditures ................... 11,759 31,866 13,313 12,169 30,439(4)

<CAPTION>
THREE MONTHS
ENDED
JUNE 30,
-----------------------
1995 1996
---------- ----------
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales .............................. $ 72,767 $ 82,843
Gross profit ........................... 21,900 27,709
Operating income ....................... 9,682 14,521
Interest expense ....................... 5,846 5,863
Income from continuing operations
before provision for income taxes .... 3,650 8,483
Income from continuing
operations ........................... 1,879 5,093
PRO FORMA FINANCIAL DATA:
Net income(2) .......................... $ 5,718
Net income per share (2) ............... 0.61
Weighted average common and
common equivalent shares
outstanding .......................... 9,422,214
OTHER FINANCIAL DATA:
EBITDA(3) .............................. $ 13,258 $ 18,556
EBITDA as a percentage of net sa1es..... 18.2% 22.4%
Depreciation and amortization........... $ 3,762 $ 4,210
Capital expenditures ................... 3,942 16,789(4)
</TABLE>

AS OF JUNE 30, 1996
AS OF --------------------------
SEPTEMBER AS
BALANCE SHEET DATA: 30, 1995 ACTUAL ADJUSTED(5)
--------- -------- -----------
<S> <C> <C> <C>
Working capital ...................................... $ 69,039 $ 66,800 $ 66,800

Total assets ......................................... 312,300 325,532 325,532

Long-term debt ....................................... 192,048 204,145 154,097

Stockholder's equity ................................. 57,756 60,508 110,556
</TABLE>

6
<PAGE> 9
FOOTNOTES TO SUMMARY CONSOLIDATED FINANCIAL INFORMATION

(1) Fiscal 1995 results of operations include a pre-tax charge of $2,852
which occurred during the fourth quarter of fiscal 1995 to increase
the allowance for doubtful accounts due to a customer who experienced
severe financial difficulty. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations".

(2) Pro forma net income and pro forma net income per share reflect the
reduction in interest expense resulting from the use of the estimated
net offering proceeds of $50,048 to repay certain bank indebtedness
calculated as of the beginning of the period indicated. See "Use of
Proceeds".

(3) Represents income before interest, taxes, depreciation, and
amortization. EBITDA is presented because it is generally accepted as
providing useful information regarding a company's ability to service
and/or incur debt. EBITDA should not be considered in isolation from
or as a substitute for net income, cash flows from operating
activities and other consolidated income or cash flow statement data
prepared in accordance with generally accepted accounting principles
or as a measure of profitability or liquidity.

(4) Capital expenditures for the three and nine months ended June 30, 1996
include $5 million for equipment purchased under a capital lease.

(5) Adjusted to give effect to the sale of the 3,400,000 Shares offered by
the Company hereby (assuming an initial public offering price of
$16.00 per share and after deducting the estimated underwriting
discounts and expenses of the Offering) and the application of the
estimated net proceeds therefrom. See "Use of Proceeds".

<PAGE> 10
RISK FACTORS

Prospective investors should carefully review the information set
forth below, in addition to the other information set forth in this Prospectus,
prior to purchasing shares of Common Stock offered hereby.

RAW MATERIAL PRICES AND AVAILABILITY

Polypropylene, a petroleum derivative, is the basic raw material used
in the manufacture of substantially all of the Company's products. For the nine
months ended June 30, 1996 and in fiscal 1995, polypropylene purchases
accounted for approximately 50% of the Company's cost of sales. The price of
polypropylene is primarily a function of manufacturing capacity, demand and the
prices of petrochemical feedstocks, crude oil and natural gas liquids.
Historically, the market price of polypropylene has fluctuated, such as in
fiscal 1995 when the average market cost of polypropylene was approximately 50%
higher than in fiscal 1994. A significant increase in the price of
polypropylene that cannot be passed on to customers could have a material
adverse effect on the Company's results of operations and financial condition.
There can be no assurance that the price of polypropylene will not increase in
the future or that the Company will be able to pass on any such increase to its
customers. In addition, significant increases in demand for, or a significant
disruption in supply of, polypropylene, without a corresponding expansion of
polypropylene manufacturing capacity, could result in production shortages.
Historically, the creation of such additional facilities has helped to relieve
supply pressures although there can be no assurance that this will continue to
be the case.

The Company's major suppliers of polypropylene are Fina Oil & Chemical
Company, Lyondell Polymers Company, Huntsman Polypropylene and Union Carbide.
The loss of any one of the Company's suppliers could adversely affect the
Company's business until alternative supply arrangements were secured. In
addition, there is no assurance that any new supply agreement entered into by
the Company would have terms comparable to those contained in current supply
arrangements. See "Business--Raw Materials".

LEVERAGE

The Company is highly leveraged. As of June 30, 1996, the Company had
outstanding consolidated long-term debt (including current maturities) of
approximately $154 million on a pro forma basis taking into account the
application of the estimated net proceeds to the Company from the Offering.
Furthermore, the Company may incur additional indebtedness in the future,
subject to certain limitations contained in the instruments governing its
indebtedness. The degree to which the Company is leveraged could have important
consequences to holders of Common Stock, including: (i) impairment of the
Company's ability to obtain additional financing in the future; (ii) reduction
of funds available to the Company for its operations and general corporate
purposes or for capital expenditures, as a result of the dedication of a
substantial portion of the Company's net cash flow from operations to the
payment of principal of and interest on the Company's indebtedness; (iii) the
possibility of an event of default under financial and operating covenants
contained in the Company's debt instruments which, if not cured or waived,
could possibly have a material adverse effect on the Company; (iv) a relative
competitive disadvantage if the Company is substantially more leveraged than
its competitors; and (v) an inability to adjust to rapidly changing market
conditions and consequent vulnerability in the event of a downturn in general
economic conditions or its business because of the Company's reduced financial
flexibility. The Company's ability to make scheduled payments or to refinance
its obligations with respect to its indebtedness depends on its financial and
operating performance, which, in turn, is subject to prevailing economic
conditions and to financial, business and other factors beyond its control.
Although the Company's cash flow from its operations has historically been
sufficient to meet its debt service obligations, there can be no assurance that
the Company's operating results will continue to be sufficient for payment of
the Company's indebtedness. See "Capitalization" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources".

<PAGE> 11

COMPETITION

The markets for the Company's products are highly competitive. In the
manufacture and sale of carpet backing, which represented in excess of 50% and
49% of the Company's total net sales for the nine months ended June 30, 1996
and in fiscal 1995, respectively, the Company competes primarily with Amoco
Fabrics and Fibers Co. ("Amoco"), a subsidiary of Amoco Corporation, and, to a
lesser extent, certain other companies. Amoco has the leading position in the
carpet backing market worldwide. In the manufacture and sale of the Company's
other products, the Company generally competes with a number of other
companies, including, in some cases, Amoco. Several of these competitors,
particularly Amoco, are significantly larger and have substantially greater
resources than the Company. The pricing policies of the Company's competitors
have at certain times in the past limited the Company's ability to increase its
sales prices or caused the Company to lower its sales prices. See
"Business--Products," "--Marketing and Sales" and "--Raw Materials".

SIGNIFICANT CUSTOMER

For the nine months ended June 30, 1996 and in fiscal 1995, Shaw
Industries, Inc. ("Shaw"), a major carpet manufacturer and long-time customer
of the Company, was the Company's largest single customer, accounting for
approximately 18.4% and 18.2%, respectively, of the Company's total net sales
and approximately 36.7% and 37.1%, respectively, of the Company's carpet
backing sales. If Shaw were to significantly reduce or terminate its purchases
of carpet backing from the Company, the Company's results of operations and
financial condition could be materially adversely affected. The Company has no
other customers that account for greater than 10% of its total net sales. For
the nine months ended June 30, 1996 and in fiscal 1995, the Company's ten
largest customers for carpet backing accounted for approximately 78% and 77%,
respectively, of its total net sales to the carpet industry. See
"Business--Products--Carpet Backing".

CONTROL BY CERTAIN STOCKHOLDERS

Upon completion of the Offering, Synthetic Industries, L.P., a
Delaware limited partnership (the "Partnership") will own approximately 63%
(approximately 60% if the Underwriters' over-allotment option is exercised in
full) of the outstanding shares of Common Stock. As a result, the Partnership
will be able to effectively control the outcome of certain matters requiring a
stockholder vote, including the election of directors. Such ownership of Common
Stock may have the effect of delaying, deferring or preventing a change of
control of the Company and may adversely affect the voting and other rights of
other stockholders.

CERTAIN ANTI-TAKEOVER EFFECTS OF CHARTER

The Company's Certificate of Incorporation and By-laws restrict the
ability of stockholders to call special meetings or take stockholder action by
written consent. These provisions could delay or hinder the removal of
incumbent directors and could discourage or make more difficult a proposed
merger, tender offer or proxy contest involving the Company or may otherwise
have an adverse effect on the market price of the Common Stock. See
"Description of Capital Stock--Certain Provisions of the Certificate of
Incorporation". The Company also is subject to provisions of Delaware corporate
law that will restrict the Company from engaging in certain business
combinations with a person who, together with affiliates and associates, owns
15% or more of the Common Stock (an "Interested Stockholder") for three years
after the person becomes an Interested Stockholder, unless certain conditions
are met or the business combination is approved by the Company's Board of
Directors (the "Board") and/or the Company's stockholders in a prescribed
manner. These provisions also could render more difficult or discourage a
merger, tender offer or other similar transaction. See "Description of Capital
Stock--Section 203 of the DGCL".

<PAGE> 12

ABSENCE OF PRIOR MARKET FOR COMMON STOCK; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offering there has been no public market for shares of
the Common Stock and there can be no assurances that an active trading market
in the Common Stock will develop or be sustained after the Offering. The
initial public offering price for the Common Stock will be determined solely by
negotiations among Bear, Stearns & Co. Inc., as the Representative of the
Underwriters, and the Company based on several factors and may not be
indicative of the market price for the Common Stock after the Offering. See
"Underwriting" for a description of the factors to be considered in determining
the initial public offering price. In addition, the market price for shares of
the Common Stock may be highly volatile. Factors such as the Company's cost of
raw materials, average selling price, the introduction of new products by the
Company or its competitors, changes in the estimates or recommendations of
financial analysts regarding the Company and general market conditions may have
a material adverse effect on the market price of the Common Stock.

ENVIRONMENTAL

Certain local governments have adopted ordinances prohibiting or
restricting the use or disposal of certain polypropylene products. Widespread
adoption of such prohibitions or restrictions could adversely affect demand for
the Company's products and thereby have a material adverse effect upon the
Company. In addition, a decline in consumer preference for polypropylene
products due to environmental considerations could have a material adverse
effect upon the Company.

SHARES ELIGIBLE FOR FUTURE SALE

Future sales of substantial amounts of Common Stock in the public
market or the perception that such sales could occur could adversely affect
market prices of the Common Stock. Upon completion of the Offering, the Company
will have outstanding 9,181,250 shares of Common Stock. Of these shares, the
3,400,000 shares of Common Stock sold in the Offering will be freely tradeable
without restriction or further registration under the Securities Act of 1933,
as amended (the "Securities Act"), except for any shares owned by an
"affiliate" of the Company, which will be subject to the limitations of Rule
144 under the Securities Act ("Rule 144"). The remaining 5,781,250 shares of
Common Stock were acquired by the Partnership prior to the Offering without
registration under the Securities Act in reliance upon exemptions from
registration and are "restricted securities" for purposes of the Securities
Act. These shares may not be sold unless their offer and sale are registered
under the Securities Act or unless an exemption from registration, such as the
exemption provided by Rule 144 under the Securities Act, is available. Each of
the Company, its executive officers, senior management and directors and the
Partnership have entered into certain "lock-up" agreements with the
Underwriters with respect to the sale of shares of Common Stock. Under these
"lock-up" agreements, (i) the Company has agreed not to offer, sell, agree to
sell, grant any option for the sale of or otherwise dispose of, directly or
indirectly, any shares of Common Stock (or any security convertible into,
exercisable for or exchangeable for Common Stock) without the consent of Bear,
Stearns & Co. Inc. for a period of 180 days after the date of this Prospectus
and (ii) the Partnership and the executive officers, senior management and
directors of the Company have agreed not to offer, sell, agree to sell, grant
any option for the sale of or otherwise dispose of, directly or indirectly, any
shares of Common Stock (or any security convertible into, exercisable for or
exchangeable for Common Stock) without the consent of Bear, Stearns & Co. Inc.
for a period of one year after the date of this Prospectus, and thereafter for
a period of one year only pursuant to an underwritten public offering, except
with respect to transfers made by officers or directors as gifts, provided that
the donee agrees to be bound by the foregoing restrictions, and except that the
Company may issue shares of Common Stock upon the exercise of options granted
under its stock option plans. In addition, the Company has entered into a
Registration Rights Agreement with the Partnership which gives the Partnership
certain rights to registration under the Securities Act, subject to certain
conditions. See "Description of Capital Stock--Registration Rights" and "Shares
Eligible for Future Sale".

<PAGE> 13

DILUTION

Investors in the Common Stock offered hereby will experience
immediate and substantial dilution. See "Dilution".

-----------------------------

This Prospectus includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended and Section
21E of the Securities Exchange Act of 1934, as amended. All statements other
than statements of historical facts included in this Prospectus, including,
without limitation, statements under the captions "Risk Factors", "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business" regarding the Company's financial position, business strategy and
plans and objectives of management of the Company for future operations,
constitute 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.
Cautionary statements describing important factors that could cause actual
results to differ materially from the Company's expectations are disclosed
under the caption "Risk Factors" and elsewhere in this Prospectus, including,
without limitation, in conjunction with the forward-looking statements included
in this Prospectus. All subsequent written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by such cautionary statements.

<PAGE> 14

THE COMPANY

The Company is one of the world's leading producers of polypropylene
fabrics and fibers for the home furnishing, construction, environmental,
recreational and agricultural industries. The Company manufactures and sells
more than 2,000 products in over 65 end-use markets. The Company believes that
it is the second largest producer of carpet backing in the world and is the
largest producer of synthetic fiber additives for concrete reinforcement
through its Fibermesh(R) line of products. SI also produces polypropylene
products for the geotextile and erosion control markets and is a leader in
designing innovative products for specialty applications. The Company's
products are engineered to meet specific customer criteria such as strength,
flexibility, resistance to sunlight, water/air permeability and resistance to
bacteria. The Company aims to compete in markets in which it can be the primary
or secondary provider of such products, with over 93% of its products meeting
this criterion. The Company's consolidated sales have grown from $188 million
in fiscal 1991 to $271 million in fiscal 1995.

Immediately prior to the completion of the Offering, all of the issued
and outstanding capital stock of the Company was owned by the Partnership. SI
Management L.P., a Delaware limited partnership, is the sole general partner of
the Partnership and controls the management and affairs of the Partnership and
therefore the Company. SI Management L.P. is controlled indirectly by Leonard
Chill, Ralph Kenner, William Gardner Wright, Jr. and W. Wayne Freed, current
executive officers of the Company, and Jon P. Beckman, a former executive
officer of the Company. See "Management--Executive Officers and Directors of
the Company" and "Certain Relationships and Related Transactions".

Immediately following the Offering, the Partnership will own 5,781,250
shares of Common Stock, or approximately 63% of the issued and outstanding
shares of Common Stock. Employees, officers and directors have been granted
options to purchase an additional 6.5% of the Common Stock on a fully diluted
basis. See "Principal Stockholders".

The principal executive offices of the Company are located at 309
LaFayette Road, Chickamauga, Georgia 30707, and the Company's telephone number
is (706) 375-3121.

<PAGE> 15

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 3,400,000 Shares
to be sold by the Company hereby (after payment of underwriting discounts and
commissions and estimated expenses of the Offering) are estimated to be
$50,048,000 ($57,555,200 if the Underwriters' overallotment option is exercised
in full). The full amount of the net proceeds to the Company from the Offering
will be used to repay all outstanding bank indebtedness and for other general
corporate purposes. On September 6, 1996, $45.0 million was outstanding, at an
interest rate of 8.1875%, under the Company's Fourth Amended and Restated
Revolving Credit and Security Agreement, dated as of October 20, 1995, as
subsequently amended (the "Credit Facility"), among the Company, the financial
institutions party thereto from time to time, as the lenders (the "Lenders"),
and the First National Bank of Boston, as agent for the Lenders. The Credit
Facility expires on October 1, 2001.

DIVIDEND POLICY

The Company has not declared or paid any cash or other dividends on
the Common Stock and intends for the foreseeable future to retain its earnings
to finance the development of its business and for repayment of debt. The
declaration and payment of dividends by the Company are subject to the
discretion of the Board. Any future determination to pay dividends will depend
on the Company's results of operations, financial condition, capital
requirements, contractual restrictions and other factors deemed relevant by the
Board. In addition, the Credit Facility and the Company's $140 million original
principal amount of 12 3/4% Senior Subordinated Debentures due December 1, 2002
(the "Debentures") contain restrictions on the Company's ability to declare and
pay dividends. See "Description of Certain Indebtedness".

<PAGE> 16

CAPITALIZATION

The following table sets forth the capitalization of the Company (i)
at June 30, 1996, and (ii) as adjusted to give effect to (a) the
115,740.74-for-1 stock split to be consummated prior to the Offering, (b) the
Offering and (c) the application of the estimated net proceeds therefrom. The
information presented below should be read in conjunction with "Summary
Consolidated Financial Information", "Selected Consolidated Financial
Information", "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the Consolidated Financial Statements and notes
thereto, appearing elsewhere in this Prospectus.

<TABLE>
<CAPTION>
JUNE 30, 1996
-----------------------
ACTUAL AS ADJUSTED
--------- -----------
(In thousands, except share
and per share data)
<S> <C> <C>
Long-term debt(1):
Credit Facility(2):
Revolving credit portion ............................................. $ 13,014 $ --
Term loan portion .................................................... 45,000 7,966
12 3/4% Senior Subordinated Debentures due 2002 .......................... 140,000 140,000
Capitalized lease obligation ............................................. 4,843 4,843
Other .................................................................... 1,348 1,348
--------- ---------
Total long-term debt ................................................. 204,205 154,157
Less current portion ................................................... (60) (60)
--------- ---------
Long term debt, net ........................................................ 204,145 154,097
--------- ---------

Stockholder's equity:
Common Stock $1.00 par value; 5,000 shares authorized, 49.95 shares issued
and outstanding; 25,000,000 shares authorized and 9,181,250 shares
issued and outstanding, as
adjusted(3) .......................................................... 9,181
Additional paid-in capital ............................................... 69,300 110,167
Cumulative translation adjustments ....................................... (5) (5)
Deficit .................................................................. (8,787) (8,787)
--------- ---------
Total stockholder's equity ........................................... 60,508 110,556
--------- ---------

Total capitalization .......................................................... $ 264,653 $ 264,653
========= =========
</TABLE>

- ----------

(1) For a description of the Company's long-term debt, see Note 8 of Notes
to Consolidated Financial Statements.

(2) At September 6, 1996, the amount of borrowings under the Credit
Facility was $45,000,000 and the amount available under the Credit
Facility and as adjusted for the Offering was $38,705,000.

(3) Excludes 638,397 shares of Common Stock at September 6, 1996 which are
subject to options granted under the Stock Option Plans, 173,119 of
which are subject to currently exercisable options.

<PAGE> 17

DILUTION

The net tangible book value of the Company as of June 30, 1996 was a
deficit of approximately $24.3 million, or ($4.21) per share. Net tangible book
value per share is equal to stockholder's equity less the net book value of
goodwill and identified intangible assets, divided by the number of shares
outstanding. After giving effect to the sale by the Company of 3,400,000 Shares
in the Offering and the application of the estimated net proceeds therefrom as
described under "Use of Proceeds," the pro forma net tangible book value of the
Company at June 30, 1996 would have been approximately $26 million, or $2.80
per share. This represents an immediate increase in net tangible book value of
$7.01 per share to the existing stockholder and an immediate net dilution of
tangible book value of $13.20 per share to new investors purchasing Shares in
the Offering. The following table illustrates this dilution:

<TABLE>
<S> <C> <C>
Initial public offering price(1)........................................ $ 16.00
Net tangible book value per share before the Offering............... $ (4.21)
Increase per share attributable to new investors.................... 7.01
--------------
Pro forma net tangible book value per share after the Offering.......... 2.80
-----------
Dilution per share to new investors(2).................................. $ 13.20
===========
</TABLE>

(1) Initial public offering price before deduction of underwriting
discounts and commissions and estimated expenses of the Offering to be
paid by the Company.
(2) Assumes no exercise of outstanding stock options.

The following table summarizes, on a pro forma basis as of June 30,
1996, the differences between the existing stockholder and the new investors
with respect to the number of shares of Common Stock purchased from the
Company, the total consideration paid and the average price per share paid by
the existing stockholder and new investors (based on the assumed initial public
offering price):

<TABLE>
<CAPTION>
TOTAL
SHARES PURCHASED CONSIDERATION AVERAGE
----------------------- --------------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- -------------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholder................. 5,781,250 63.0% $ 69,300,000 56.0% $ 11.99
New investors........................ 3,400,000 37.0 54,400,000 44.0 16.00
--------- ----- -------------- -----
Total.......................... 9,181,250 100.0% $ 123,700,000 100.0%
========= ===== ============== =====
</TABLE>

The table set forth above assumes no exercise of the Underwriters'
overallotment option or of any outstanding stock options. See footnote 3 under
"Capitalization" for information regarding the number of shares issuable upon
exercise of stock options outstanding at September 6, 1996 and "Underwriting"
for information concerning the Underwriters' over-allotment option.

<PAGE> 18

SELECTED CONSOLIDATED FINANCIAL INFORMATION
(in thousands, except share and per share data)

The statement of operations data for the fiscal years ended September
30, 1993, 1994 and 1995 and the balance sheet data as of September 30, 1994 and
1995 are derived from the Consolidated Financial Statements that have been
audited by Deloitte & Touche LLP, independent auditors, and are included
elsewhere in this Prospectus. The statement of operations data for the years
ended September 30, 1991 and 1992 and the balance sheet data as of September
30, 1991, 1992 and 1993 are derived from audited financial statements of the
Company that are not included herein. The statement of operations and balance
sheet data as of and for the three and nine month periods ended June 30, 1995
and 1996 have been derived from the unaudited interim financial statements of
the Company and include, in the opinion of management, all adjustments
(consisting only of normal recurring adjustments) necessary to fairly present
the data for such periods. The pro forma financial data is provided for
informational purposes only, is unaudited and is not necessarily indicative of
future results or what the operating results would have been had the
transactions actually been consummated as of the beginning of the periods
indicated. The following Selected Consolidated Financial Information should be
read in conjunction with the Consolidated Financial Statements and the notes
thereto and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included elsewhere in this Prospectus.

FISCAL YEAR ENDED SEPTEMBER 30,
-----------------------------------------------------------
1991 1992 1993 1994 1995 (1)
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales ................................... $ 188,446 $ 195,739 $ 210,516 $ 234,977 $ 271,427
Cost of sales ............................... 130,828 133,690 142,181 152,305 194,706
--------- --------- --------- --------- ---------
Gross profit ................................ 57,618 62,049 68,335 82,672 76,721
Selling, general and ad-
ministrative expenses ..................... 27,192 31,795 35,799 39,403 45,468
Amortization of
intangibles ............................... 2,835 2,598 2,615 2,499 2,566
--------- --------- --------- --------- ---------
Operating income ............................ 27,591 27,656 29,921 40,770 28,687
Interest expense ............................ 19,155 17,865 20,854 20,011 22,514
Amortization of deferred
financing costs ........................... 2,151 1,636 933 739 737
--------- --------- --------- --------- ---------
Income from continuing
operations before
provision for income
taxes ..................................... 6,285 8,155 8,134 20,020 5,436
Provision for income
taxes ..................................... 4,475 4,560 4,472 8,600 3,500
--------- --------- --------- --------- ---------
Income from continuing
operations ................................ $ 1,810 $ 3,595 $ 3,662 $ 11,420 $ 1,936
========= ========= ========= ========= =========

Net income (loss) (2) ....................... $ 1,501 $ (3,972) $ (12,310) $ 11,420 $ 1,936
========= ========= ========= ========= =========

PRO FORMA FINANCIAL DATA:
Net income (3)............................... $ 4,686
Net income per share(3)...................... 0.50
Weighted average
common and
common equivalent
shares outstanding......................... 9,422,214

<CAPTION>
NINE MONTHS THREE MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
--------------------- ---------------------
1995 1996 1995 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales ................................... $ 194,349 $ 212,060 $ 72,767 $ 82,843
Cost of sales ............................... 136,950 151,221 50,867 55,134
--------- --------- --------- ---------
Gross profit ................................ 57,399 60,839 21,900 27,709
Selling, general and ad-
ministrative expenses ..................... 32,044 35,283 11,570 12,540
Amortization of
intangibles ............................... 1,918 1,944 648 648
--------- --------- --------- ---------
Operating income ............................ 23,437 23,612 9,682 14,521
Interest expense ............................ 17,027 17,253 5,846 5,863
Amortization of deferred
financing costs ........................... 555 523 186 175
--------- --------- --------- ---------
Income from continuing
operations before
provision for income
taxes ..................................... 5,855 5,836 3,650 8,483
Provision for income
taxes ..................................... 3,300 3,050 1,771 3,390
--------- --------- --------- ---------
Income from continuing
operations ................................ $ 2,555 $ 2,786 $ 1,879 $ 5,093
========= ========= ========= =========

Net income (loss) (2) ....................... $ 2,555 $ 2,786 $ 1,879 $ 5,093
========= ========= ========= =========

PRO FORMA FINANCIAL DATA:
Net income (3)............................... $ 4,618 $ 4,661 $ 2,566 $ 5,718
Net income per share(3)...................... 0.49 0.49 0.27 0.61
Weighted average
common and
common equivalent
shares outstanding......................... 9,422,214 9,422,214 9,422,214 9,422,214
</TABLE>

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, AS OF JUNE 30,
---------------------------------------------------- --------------------
BALANCE SHEET DATA: 1991 1992 1993 1994 1995 1995 1996
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Working capital......... $ 40,414 $ 33,980 $ 42,055 $ 44,114 $ 69,039 $ 70,452 $ 66,800
Total assets............ 251,918 254,581 260,372 287,933 312,300 316,450 325,532
Long-term debt.......... 152,381 158,638 164,723 172,490 192,048 196,760 204,145
Stockholders equity..... 62,838 56,700 44,423 55,817 57,756 58,389 60,508
</TABLE>

<PAGE> 19

FOOTNOTES TO SELECTED CONSOLIDATED FINANCIAL INFORMATION

(2) Net income for fiscal 1993 includes (i) an extraordinary loss of
$8,892 from the early extinguishment of debt, (ii) a charge of $8,500
for the cumulative effect of an accounting change and (iii) a gain of
$1,420 on the disposal of discontinued operations. See Notes 9, 11 and
12 of Notes to Consolidated Financial Statements. Net income for the
fiscal 1992 includes a loss from discontinued operations of $553 and a
loss on the disposal of discontinued operations of $7,014. Net income
for fiscal 1991 includes a loss from discontinued operations of $309.

(3) Pro forma net income and pro forma net income per share reflect the
reduction in interest expense resulting from the use of the estimated
net offering proceeds of $50,048 to repay certain bank indebtedness
calculated as of the beginning of the period indicated. See "Use of
Proceeds".

<PAGE> 20

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the financial condition and results of
operations of the Company should be read in conjunction with the information
contained in the Consolidated Financial Statements, including the notes
thereto, and the other financial information appearing elsewhere in this
Prospectus. Dollar amounts are in thousands. The following discussion includes
forward-looking statements that involve certain risks and uncertainties. See
"Risk Factors".

INTRODUCTION

The Company's net sales in recent years have increased due to a
variety of factors, including generally increasing sales volumes as a result of
growing demand for the Company's products and the Company's ability to expand
its markets through development of new products.

The Company's products are sold along three principal product lines:
carpet backing, construction and civil engineering products, and technical
textiles. The following table summarizes net sales growth for each of these
product lines during the fiscal years ended September 30, 1993, 1994 and 1995
and the nine month periods ended June 30, 1995 and 1996:

<TABLE>
<CAPTION>
FISCAL YEAR ENDED SEPTEMBER 30, NINE MONTHS ENDED JUNE 30,
------------------------------------------------------- ------------------------------------
1993 1994 1995 1995 1996
----------------- --------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Carpet backing............. $106,406 50.5% $117,791 50.1% $133,025 49.0% $ 98,748 50.8% $106,376 50.2%
Construction and civil
engineering............. 47,899 22.8 68,706 29.3 82,933 30.6 54,134 27.9 64,981 30.6
Technical textiles......... 56,211 26.7 48,480 20.6 55,469 20.4 41,467 21.3 40,703 19.2
-------- ----- -------- ---- -------- ----- -------- ---- -------- -----
Net sales.................. $210,516 100.0% $234,977 100.0% $271,427 100.0% $194,349 100.0% $212,060 100.0%
======== ===== ======== ===== ======== ===== ======== ===== ======== =====
</TABLE>

The Company's carpet backing business has grown at a faster rate than
that of the industry as a whole, principally due to recent market share gains
in the consumer carpet backing market and increased penetration of the
commercial carpet backing market. The Company's construction and civil
engineering business has grown significantly over the past three years due to
increased acceptance of the Company's proprietary concrete reinforcement
products, the expansion of this product line to offer a full range of
geosynthetic products to the markets the Company serves and other innovative
product offerings. Over the past three years, the Company has streamlined its
technical textile business and exited several product lines which did not meet
the Company's strategic sales and profitability objectives. The Company
believes that it has positioned its technical textile business for increased
sales and profitability.

While the Company's sales have grown in each of the past three years,
the Company's operating income has fluctuated due to a variety of factors,
principally related to changes in the cost of polypropylene, the Company's
primary raw material. The Company believes that the selling prices of its
products will adjust over time to reflect changes in polypropylene costs,
although movements in polypropylene costs favorably affected operating results
for fiscal 1994 and adversely affected operating results for fiscal 1995. Based
upon normal Company inventory levels, changes in polypropylene costs generally
affect the Company's results of operations two to three months after the change
occurs. Accordingly, as a result of polypropylene price decreases in the first
quarter of fiscal 1996, the Company's effective cost of polypropylene began to
decline in the second quarter of fiscal 1996. This decrease in polypropylene
costs, without a corresponding decrease in selling prices, in part accounted
for increased operating income in the third quarter of fiscal 1996 to $14,521,
as compared to $9,682 for the comparable period of fiscal 1995. Recent
polypropylene price increases in the third and fourth quarters of fiscal 1996
are expected to be offset by the Company's recently effected price increases
for a majority of its products.

<PAGE> 21

According to a June 1996 report by Chemical Data Inc. ("Chem Data"), a
monthly petrochemical and plastics analysis publication, current annual
polypropylene capacity in North America is 12.4 billion pounds per year, up
from 11.4 billion pounds at December 31, 1995. Total average annual capacity
will rise to 12.6 billion pounds per year for 1997 and 14.0 billion pounds per
year for 1998. Historically, the creation of additional capacity has helped to
relieve supply pressures although there can be no assurance that this will
continue to be the case. Chem Data also projects that polypropylene prices will
peak in the third calendar quarter of 1996 before beginning to decline in the
last three months of calendar 1996.

The Company historically has operated at or near full capacity on a
24-hour per day, seven days per week, 350 days per year schedule. Reflecting
this level of capacity utilization, the Company invested approximately $80,000
on its six manufacturing facilities during the five year period ended September
30, 1995, and has completed a major $35,000 expansion at its largest
manufacturing facility. Based on existing product prices and demand, this
expansion should increase the Company's sales by as much as $30,000 over the
next twelve months.

The following table sets forth the percentage relationships to net
sales of certain income statement items. See "Selected Consolidated Financial
Information", as well as the Consolidated Financial Statements, the notes
thereto and other financial information included elsewhere in the Prospectus
for more detailed financial information.

<TABLE>
<CAPTION>
NINE MONTHS THREE MONTHS
YEAR ENDED SEPTEMBER 30, ENDED JUNE 30, ENDED JUNE 30,
------------------------------- ------------------ ------------------
1993 1994 1995 1995 1996 1995 1996
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales............ 67.6 64.8 71.7 70.5 71.3 69.9 66.6
----- ----- ----- ----- ----- ----- -----
Gross profit............. 32.4 35.2 28.3 29.5 28.7 30.1 33.4
Selling expenses............ 9.2 9.3 9.0 9.1 9.1 9.1 8.8
General and
administrative
expenses................. 7.8 7.5 7.8 7.4 7.6 6.8 6.3
Amortization of 0.9
intangibles.............. 1.2 1.0 0.9 1.0 0.9 0.8
----- ----- ----- ----- ----- ----- -----
Operating income......... 14.2 17.4 10.6 12.0 11.1 13.3 17.5
Interest expense............ 9.9 8.5 8.3 8.8 8.1 8.0 7.1
Amortization of deferred
financing costs.......... 0.4 0.3 0.3 0.2 0.3 0.3 0.2
----- ----- ----- ----- ----- ----- -----
Income from continuing
operations before
provision for taxes...... 3.9 8.6 2.0 3.0 2.7 5.0 10.2
Provision for income
taxes.................... 2.1 3.7 1.3 1.7 1.4 2.4 4.1
----- ----- ----- ----- ----- ----- -----
Income from continuing
operations............... 1.8% 4.9% 0.7% 1.3% 1.3% 2.6% 6.1%
===== ===== ===== ===== ===== ===== =====
</TABLE>

<PAGE> 22

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 1996 AS COMPARED TO THREE MONTHS ENDED
JUNE 30, 1995

Net sales for the three months ended June 30, 1996 were a record
$82,843 for a quarterly period compared to $72,767 for the same period of
fiscal 1995, an increase of $10,076, or 13.8%. This increase was primarily due
to increased sales of carpet backing and construction and civil engineering
products. Carpet backing sales for the three months ended June 30, 1996 were
$37,487 compared to $34,441 for the same period of fiscal 1995, an increase of
$3,046 or 8.8%. This increase was primarily the result of higher unit volume in
primary and secondary carpet backing partially offset by lower average selling
prices from the prior period. Construction and civil engineering product sales
for the three months ended June 30, 1996 were $30,525 compared to $23,780 for
the same period of fiscal 1995, an increase of $6,745, or 28.4%. This increase
was primarily due to a 5.5% increase in sales of Fibermesh(R) and a 51.1%
increase in sales of geotextile and erosion control products during the third
quarter of fiscal 1996 compared to the same period in fiscal 1995. Technical
textiles sales for the three months ended June 30, 1996 were $14,831 compared
to $14,546 for the same period of fiscal 1995, an increase of $285, or 2.0%,
resulting primarily from sales gains in the furniture and bedding markets.

Gross profit for the three months ended June 30, 1996 was $27,709
compared to $21,900 for the same period of fiscal 1995, an increase of $5,809,
or 26.5%. As a percentage of sales, gross profit increased to 33.4% from 30.1%.
This increase was primarily due to increased sales volumes as well as lower
average polypropylene costs. See "--Introduction".

Selling expenses for the three months ended June 30, 1996 increased
$680, or 10.3%, to $7,307 as compared to $6,627 for the same period of fiscal
1995, reflecting increased expenditures associated with higher sales volume as
well as increased marketing expenses. These expenses related to the Company's
strategy to leverage its market position in its core businesses as well as the
Company's expectation of higher sales resulting from the completion of its
capacity expansion program later this year. As a percentage of sales, selling
expenses decreased from 9.1% to 8.8%, principally due to the significant
increase in sales without a corresponding increase in selling costs.

General and administrative expenses for the three months ended June
30, 1996 were $5,233 compared to $4,943 for the same period of fiscal 1995, an
increase of $290, or 5.9%, principally due to expenditures related to continued
improvements in the Company's Management Information Systems. As a percentage
of sales, general and administrative expenses decreased from 6.8% to 6.3%,
principally due to the increase in sales without a corresponding increase in
general and administrative expenses.

Operating income for the three months ended June 30, 1996 was $14,521
compared to $9,682 for the same period of fiscal 1995, an increase of $4,839,
or 50%. As a percentage of sales, operating income increased to 17.5% from
13.3%. This increase was primarily due to the factors discussed above.

Total interest expense for the three months ended June 30, 1996 was
$5,863 compared to $5,846 for the same period of fiscal 1995, principally due
to higher average borrowings under the Credit Facility partially offset by
lower effective interest rates.

The effective income tax rate for the three months ended June 30, 1996
was 40.0% compared to 48.5% for the same period of 1995, principally due to the
effect of higher nondeductible expenses, including the amortization of
goodwill, on lower taxable income in fiscal 1995.

Net income for the three months ended June 30, 1996 was a record
$5,093 for a quarterly period compared to $1,879 for the same period of fiscal
1995, an increase of $3,214, or 171%. This increase was primarily due to higher
sales volumes and lower average polypropylene costs.

<PAGE> 23

NINE MONTHS ENDED JUNE 30, 1996 AS COMPARED TO NINE MONTHS ENDED JUNE
30, 1995

Net sales for the nine months ended June 30, 1996 were $212,060
compared to $194,349 for the same period of fiscal 1995, an increase of
$17,711, or 9.1%. This increase was primarily due to increased sales of carpet
backing and construction and civil engineering products. Carpet backing sales
for the nine months ended June 30, 1996 were $106,376 compared to $98,748 for
the same period of fiscal 1995, an increase of $7,628, or 7.7%. This increase
was the result of higher unit volume in primary and secondary carpet backing,
partially offset by lower average selling prices. Construction and civil
engineering product sales for the nine months ended June 30, 1996 were $64,981
compared to $54,134 for the same period of fiscal 1995, an increase of $10,847
or 20%. This increase was due to an increase in sales of geotextile and erosion
control fabrics of $10,771, or 41.9%, resulting primarily from nonwoven sales
in the landfill and roadway and building site markets. Technical textiles sales
for the nine months ended June 30, 1996 were $40,703 compared to $41,467 for
the same period of fiscal 1995, a decrease of $764, or 1.8%. This decrease was
primarily due to an adverse condition in the agricultural market that the
Company serves as well as the discontinuance of several product lines which did
not meet the Company's strategic and profitability objectives, partially offset
by sales increases in the furniture and bedding markets.

Gross profit for the nine months ended June 30, 1996 was $60,839
compared to $57,399 for the same period of fiscal 1995, an increase of $3,440,
or 6.0%. As a percentage of sales, gross profit decreased from 29.5% to 28.7%.
These results were primarily due to lower average carpet backing selling prices
and increased manufacturing costs associated with plant shutdowns due to the
winter ice storms in 1996. See "--Introduction".

Selling expenses for the nine months ended June 30, 1996 were $19,259
compared to $17,591 for the same period of fiscal 1995, an increase of $1,668,
or 9.5%. This increase was primarily due to increased expenditures associated
with higher sales volume as well as increased marketing expenses. These
expenses related to the Company's strategy to leverage its market position in
its core businesses as well as the Company's expectation of higher sales
resulting from the completion of its capacity expansion program later this
year. As a percentage of sales, selling expenses remained constant at 9.1% of
sales.

General and administrative expenses for the nine months ended June 30,
1996 were $16,024 compared to $14,453 for the same period of fiscal 1995, an
increase of $1,571, or 10.9%. As a percentage of sales, general and
administrative expenses increased from 7.4% to 7.6%. This increase was
primarily due to the increased marketing expenses related to the Company's
expectation of higher sales resulting from the completion of its capacity
expansion program later this year as well as an increased investment in the
Company's Management Information Systems.

Operating income for the nine months ended June 30, 1996 was $23,612
compared to $23,437 for the same period of fiscal 1995, an increase of $175, or
0.7%. As a percentage of sales, operating income decreased to 11.1% from 12.1%.
These changes were primarily due to the factors discussed above.

Total interest expense for the nine months ended June 30, 1996 was
$17,253 compared to $17,027 for the same period of fiscal 1995, an increase of
$226, or 1.3%. This increase was primarily due to higher average total
borrowings outstanding under the Credit Facility, partially offset by lower
interest rates.

The effective income tax rate for the nine months ended June 30, 1996
was 52.3% as compared to 56.4% for the same period of 1995, principally due to
the timing of certain nondeductible expense charges in 1995. Nondeductible
expense charges include the amortization of goodwill.

Net income for the nine months ended June 30, 1996 was $2,786 compared
to $2,555 for the same period of fiscal 1995, an increase of $231, or 9.0%.
This increase was primarily due to higher sales volumes, partially offset by
lower average selling prices, higher manufacturing costs associated with plant
shutdowns as a result of the winter ice storms in 1996 and increased selling,
general and administrative expenses in expectation of future sales growth.

<PAGE> 24

FISCAL 1995 COMPARED TO FISCAL 1994

Net sales for fiscal 1995 were $271,427 compared to $234,977 for
fiscal 1994, an increase of $36,450, or 15.5%. This increase was primarily due
to unit volume growth in certain product lines and higher average selling
prices. Carpet backing sales for fiscal 1995 were $133,025 compared to $117,791
for fiscal 1994, an increase of $15,234, or 12.9%. This increase was primarily
due to higher unit volume due in part to increased market share in both primary
and secondary carpet backing as well as higher selling prices as compared to
fiscal 1994. Construction and civil engineering product sales for fiscal 1995
were $82,933 compared to $68,706 for fiscal 1994, an increase of $14,227, or
20.7%. This increase was primarily due to a significant growth in sales of
geosynthetic products as well as an increase in sales of Fibermesh(R) fibers.
Technical textiles sales for fiscal 1995 were $55,469 compared to $48,480 for
fiscal 1994, an increase of $6,989, or 14.4%. This increase was primarily due
to unit volume growth in the furniture and bedding markets.

Gross profit for fiscal 1995 was $76,721 compared to $82,672 for
fiscal 1994, a decrease of $5,951, or 7.2%. As a percentage of sales, gross
profit decreased to 28.3% from 35.2%. This decrease was primarily due to the
higher polypropylene costs, offset partially by higher average selling prices.
See "--Introduction".

Selling expenses for fiscal 1995 were $24,273 compared to $21,815 for
fiscal 1994, an increase of $2,458, or 11.3%. This increase was primarily due
to increased marketing efforts in the construction and civil engineering
products lines as a direct result of increased sales. However, as a percentage
of sales, selling expenses decreased from 9.3% to 8.9%.

General and administrative expenses for fiscal 1995 were $21,195
compared to $17,588 for fiscal 1994, an increase of $3,607, or 20.5%. As a
percentage of sales, general and administrative expenses increased from 7.5% to
7.8%. This increase was primarily due to a charge of $2,852 related to an
increase in the allowance for doubtful accounts during the fourth quarter of
fiscal 1995. The charge was taken to establish a reserve for accounts
receivable for a carpet backing customer who experienced severe financial
difficulties. The Company believes the reserve provided is adequate for this
account to cover any future potential losses and in the opinion of management,
no significant future loss of revenue is anticipated.

Operating income for fiscal 1995 was $28,687 compared to $40,770 for
fiscal 1994, a decrease of $12,083, or 29.6%. As a percentage of sales,
operating income decreased to 10.6% from 17.4%. This decrease was primarily due
to the change in gross profit associated with higher raw material costs.

Total interest expense for fiscal 1995 was $22,514 compared to $20,011
for fiscal 1994. This increase was due to a higher average total debt
outstanding and a higher base rate for the Credit Facility.

The effective income tax rate for fiscal 1995 was 64.3% compared to
43% for fiscal 1994. The increase was primarily due to the effect of
nondeductible expenses, including the amortization of goodwill, on lower
taxable income in fiscal 1995.

Net income for fiscal 1995 was $1,936 compared to $11,420 for fiscal
1994, a decrease of $9,484, or 83%. This decrease was primarily due to
increased raw material and interest costs.

FISCAL 1994 COMPARED TO FISCAL 1993

Net sales for fiscal 1994 were $234,977, as compared to $210,516 for
fiscal 1993, an increase of $24,461, or 11.6%. This increase was the result of
increased sales of carpet backing and construction and civil engineering
products offset by a decrease in sales of technical textiles. Carpet backing
sales for fiscal 1994 were $117,791, as compared to $106,406 for fiscal 1993,
an increase of $11,385, or 10.7%. This was principally due to increased volume
due in part to increased market share of both primary and secondary carpet
backing. Construction and civil engineering product

<PAGE> 25

sales were $68,706 for fiscal 1994, as compared to $47,899 for fiscal 1993, an
increase of $20,807, or 43.4%. This was due to a 20.4% increase in Fibermesh(R)
sales and an 85% increase in sales of geotextiles and erosion control fabrics.
Technical textiles sales were $48,480 for fiscal 1994, as compared to $56,211
for fiscal 1993, a decrease of $7,731, or 13.8%. This decrease was principally
due to the phase out of several product lines which did not meet the Company's
strategic and profitability objectives. The equipment associated with the
discontinued product lines was redirected to the additional production of woven
geotextiles.

Gross profit for fiscal 1994 was $82,672, as compared to $68,335 for
fiscal 1993, an increase of $14,337, or 21.0%. As a percentage of net sales,
gross profit increased from 32.5% for fiscal 1993 to 35.2% in fiscal 1994. The
increase in gross profit was due primarily to the increased sales volume, as
well as increased gross margin on such sales. Gross margin improved principally
as a result of lower average polypropylene costs during fiscal 1994. See
"--Introduction".

Selling expenses for fiscal 1994 were $21,815, as compared to 19,395
for fiscal 1993, an increase of $2,420, or 12.5%. The increase in selling
expenses was primarily due to the growth in net sales. As a percentage of net
sales, selling expenses increased from 9.2% to 9.3%. General and administrative
expenses for fiscal 1994 were $17,588, as compared to $16,404 for fiscal 1993,
an increase of $1,184, or 7.2%. However, as a percentage of net sales, general
and administrative expenses decreased from 7.8% to 7.5%.

Operating income was $40,770 for fiscal 1994 compared to $29,921 for
fiscal 1993. As a percentage of net sales, operating income increased to 17.4%
in fiscal 1994 from 14.2% in fiscal 1993. The increase in operating income was
primarily due to increased gross profit partially offset by higher selling
expenses.

Interest expense for fiscal 1994 was $20,011 as compared to $20,854
for fiscal 1993. This decrease was a result of decreased average borrowings
under the Credit Facility and the redemption of the Company's $40,000 zero
coupon junior debenture due December 1, 1999, at its accreted value ($17,093)
during 1993, partially offset by the interest payments made in fiscal 1994
relating to the Debentures.

The effective income tax rate for fiscal 1994 was 43.0% as compared to
55.0% for fiscal 1993, principally due to the effect of nondeductible expenses
on lower income in fiscal 1993.

Income from continuing operations for fiscal 1994 was $11,420 as
compared to $3,662 for fiscal 1993, an increase of $7,758, or 211.9%. The
Company had net income of $11,420 for fiscal 1994 compared to a net loss of
$12,310 for fiscal 1993. The net loss for fiscal 1993 included an extraordinary
loss of $8,892 (net of tax) from the early extinguishment of debt, a charge of
$8,500 for the cumulative effect on prior fiscal years of a change in
accounting principle for income taxes, and a gain of $1,420 from the reversal
of a provision for disposal of discontinued operations in fiscal 1992.

LIQUIDITY AND CAPITAL RESOURCES

To finance its capital expenditures program and fund its operational
needs, the Company has relied upon cash provided by operations, supplemented as
necessary by bank lines of credit and long-term indebtedness. Cash provided by
(used in) operating activities was $18,353 and ($11,934) for the nine months
ended June 30, 1996 and 1995, respectively, and ($35) and $23,962 for fiscal
1995 and 1994, respectively.

Cash provided by operating activities in the nine months ended June
30, 1996 and 1995 consists of net income of $2,786 and $2,555, respectively,
after deducting non-cash charges of $13,544 and $12,788 and changes in net
working capital of $2,023 and ($27,277) for each respective period. The
increase in cash provided by operating activities during the nine months ended
June 30, 1996 as compared to 1995 was principally due to fluctuations in the
Company's working capital requirements. The changes included reduced inventory
and accounts payable balances in

<PAGE> 26

1996 resulting primarily from lower inventory quantities and lower
polypropylene costs, as well as increased collections on accounts receivable.

Cash provided by (used in) operating activities in fiscal 1995 and
1994 resulted primarily from net income of $1,936 and $11,420, respectively,
after deducting non-cash charges of $17,945 and $16,703 and net working capital
changes of approximately ($19,916) and ($4,161), for each respective period.
The decrease in cash provided by operating activities in fiscal 1995 as
compared to fiscal 1994 was principally due to lower net income and
fluctuations in working capital requirements. Working capital requirements
increased primarily due to increases in accounts receivable, inventory and
accounts payable. The increase in accounts receivable results from increased
sales over the prior year particularly in certain seasonal product lines. The
increases in inventory and accounts payable result from the effects of higher
polypropylene costs, as well as increased units in finished goods and raw
materials. Working capital amounted to $66,800 and $70,452 at June 30, 1996 and
1995, respectively, and $69,039 and $44,114 at September 30, 1995 and 1994,
respectively.

Capital expenditures in fiscal 1995 and 1994 were approximately
$13,300 and $31,900, respectively. The Company has planned $37,000 of capital
expenditures during fiscal 1996, primarily to increase woven manufacturing
capacity at its largest facility. Of this amount, $30,439 has been spent
through June 30, 1996, including a capital lease to finance $5,000 of
equipment. The Company expects to incur approximately $35,000 of additional
capital expenditures in each of fiscal 1997 and 1998, primarily to expand
capacity and to continue to reduce manufacturing costs, subject in each case to
prevailing market conditions.

The Credit Facility provides for potential borrowing capacity of up to
$85,000 and is comprised of term loan borrowings of $45,000 (of which $10,000
is payable in 1999 and $17,500 is payable in each of 2000 and 2001) and a
revolving credit loan portion (the "Revolver") of up to $40,000. The Revolver
provides for availability based on a borrowing formula consisting of 85% of
eligible accounts receivable and 50% of eligible inventory, subject to certain
limitations. The maximum amount available for borrowing under the Revolver at
June 30, 1996 was $25,691. The Credit Facility expires on October 1, 2001. See
"Description of Certain Indebtedness".

On December 14, 1992, the Company issued $140,000 of the Debentures,
which represent unsecured obligations of the Company. The Debentures are
redeemable at the option of the Company at any time on or after December 1,
1997, at an initial redemption price of 106.375% of their principal amount
together with accrued interest, with declining redemption prices thereafter.
Interest on the Debentures is payable semi-annually on June 1 and December 1.

At June 30, 1996, the Company's total outstanding indebtedness
amounted to $204,205. Such indebtedness consists primarily of borrowings under
the Credit Facility of $58,014, $140,000 aggregate principal amount of the
Debentures and an outstanding capital lease obligation of $4,843 dated as of
May 28, 1996. Cash interest paid during the nine months ended June 30, 1996 and
1995 was $21,125 and $21,079, respectively, and during fiscal 1995, 1994 and
1993 was $22,334, $19,787 and $14,913, respectively. The Company intends to use
the estimated net proceeds of approximately $50,048 from the Offering to repay
the term loan borrowings under the Credit Facility. See "Use of Proceeds" and
"Capitalization".

Based on current levels of operations and anticipated growth, the
Company's management expects cash from operations to provide sufficient cash
flow to satisfy the debt service requirements of the long-term obligations,
including interest thereon, permit anticipated capital expenditures and fund
the Company's working capital requirements for the next twelve months.

<PAGE> 27

INFLATION AND SEASONALITY

The Company does not believe that its operations have been materially
affected by inflation during the three most recent fiscal years. While the
Company does not expect that inflation will have a material impact upon
operating results, there is no assurance that its business will not be affected
by inflation in the future.

The Company's sales and income from continuing operations have
historically been higher in the third and fourth quarters of its fiscal year.
While sales and operating income in the carpet backing and technical textile
product lines are not greatly affected by seasonal trends, sales of
construction and civil engineering products are lower in the first and second
quarters of any given fiscal year due to the impact of adverse weather
conditions on the construction and civil engineering markets. Consequently, as
sales from construction and civil engineering products continue to increase as
a percentage of the Company's total sales, the seasonality of these products'
sales will affect total sales of the Company to a greater degree.

RECENT ACCOUNTING PRONOUNCEMENTS

In March 1995, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of," which requires impairment losses to be recorded on
long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount. SFAS No. 121 also addresses the
accounting for long-lived assets that are expected to be disposed of. SFAS No.
121 is effective for financial statements for fiscal years beginning after
December 15, 1995; therefore, the Company will adopt SFAS No. 121 in the first
quarter of fiscal 1997 and, based on current circumstances, does not believe
the effect of adoption will be material.

In October 1995, the FASB issued SFAS No. 123, "Accounting for
Stock-Based Compensation" which will be effective for the Company beginning
October 1, 1996. SFAS No. 123 establishes financial accounting and reporting
standards for stock-based employee compensation plans. The Company will account
for stock-based compensation awards under the provisions of Accounting
Principles Board Opinion No. 25, as permitted by SFAS No. 123. In accordance
with SFAS No. 123, beginning in the fiscal year ended September 30, 1997, the
Company will make pro forma disclosures relative to stock-based compensation as
part of the accompanying footnotes to the consolidated financial statements.

<PAGE> 28

BUSINESS

THE COMPANY

Management believes that the Company has a reputation in its markets
as a high quality, cost-efficient manufacturer. The Company is committed to
maintaining its market leadership and reputation for innovation through capital
investment in facilities and state-of-the-art equipment, by hiring and training
skilled employees and through process control standards and productivity
improvements. The Company has been awarded ISO-9002 certification at all of its
major manufacturing facilities, and believes it is the only U.S. manufacturer
in a majority of its markets to have been awarded such certification. SI
invested approximately $80 million in capital improvements in its facilities
and equipment during the five year period ended September 30, 1995, and has
completed a major $35 million, 130,000 square foot expansion of its largest
manufacturing facility. Based on existing product prices and demand, this
expansion should increase the Company's sales by as much as $30 million over
the next twelve months. The Company is one of the largest independent consumers
of polypropylene in the world. The Company also believes its position as a
vertically-integrated manufacturer -- performing each step in the conversion of
polypropylene into value-added end products -- provides a competitive advantage
by allowing the Company to manufacture high quality products to customer's
specifications, while controlling manufacturing costs.

The Company's principal business strategy is to leverage its market
presence in its core businesses into additional growth while maintaining its
market position as a high quality, cost-efficient manufacturer. The primary
components of this strategy are to expand penetration of existing markets,
develop innovative products, strengthen market position in carpet backing,
continue to improve manufacturing efficiencies and expand manufacturing
capacity and pursue strategic acquisitions.

<PAGE> 29

HISTORY

The Company was founded in 1969 to produce polypropylene-based primary
carpet backing. Following the acquisition of the Company in 1976 by a group of
private investors, the Company diversified into the manufacture and sale of
polypropylene-based industrial fabrics and specialty yarns. Between 1981 and
1983, the Company entered the construction and civil engineering products
market, initially by manufacturing woven geotextiles and later through its
introduction of Fibermesh(R) fibers for concrete reinforcement. In 1985, the
Company added secondary carpet backing to its product offerings. In 1990, the
Company purchased a technical synthetic fabrics operation located in
Gainesville, Georgia, from Chicopee, a subsidiary of Johnson & Johnson (the
"Chicopee Acquisition"). In addition to broadening the Company's line of
geosynthetic products, the acquisition gave the Company access to new markets
for high performance geotextiles. As a result of improved fiber technology and
increased fiber manufacturing capabilities, the Company opened its sixth
facility, the nonwoven geotextile plant in Ringgold, Georgia in 1992, enabling
the Company to offer a full line of geotextile products.

The Company was acquired by the Partnership in December 1986. All of
the issued and outstanding Common Stock is currently owned by the Partnership.
See "The Company", "Principal Stockholders" and "Certain Relationships and
Related Transactions".

INDUSTRY OVERVIEW

The Company manufactures polypropylene fiber, most of which it
consumes internally to manufacture its products. Polypropylene fiber is the
second largest polymeric material used in synthetic fabrics, representing
approximately 30% of the total U.S. synthetic fiber market, behind polyester
and ahead of nylon. According to the Society for the Plastics Industry ("SPI"),
total domestic production of polypropylene fiber was approximately 3 billion
pounds in 1995 and grew at an annual rate of approximately 9.3% per year in the
period from 1993 to 1995.

In 1995, the Company was one of the largest manufacturers of
polypropylene fiber in the U.S. with approximately 8% of total domestic output.
The top ten manufacturers of polypropylene fiber in the United States generate
approximately 70% of the annual domestic output of polypropylene fiber. Most of
the large producers of polypropylene fiber, including the Company, are
vertically integrated, converting polypropylene into fiber which can be used to
manufacture fabrics or can be sold directly to other manufacturers. These large
producers often have significant shares of the markets in which they compete,
such as the Company's share of the primary and secondary carpet backing markets
and concrete fiber reinforcement market.

Most of the products manufactured by the Company are woven and
nonwoven polypropylene fabrics. Woven polypropylene fabrics are produced by
weaving narrow tapes of slit film, which are made by extruding polypropylene
into long sheets. Such fabrics are characterized by high strength to weight
ratios. All of the Company's carpet backing products and approximately 53% of
its civil engineering products are woven polypropylene fabrics. Nonwoven
polypropylene fabrics are produced by mechanically interlocking fibers with
barbed needles. Several of the Company's technical textile products and 47% of
its civil engineering products, principally for waste containment, roadway and
building site applications, are nonwoven polypropylene fabrics.

Approximately 45% of the polypropylene fiber manufactured by the
Company is used by the Company to make carpet backing. The Carpet and Rug
Institute ("CRI") estimates that 1995 U.S. shipments of primary polypropylene
carpet backing were approximately 1.64 billion square yards. The Company
believes that 1995 U.S. shipments of secondary polypropylene carpet backing
were 1.56 billion square yards, or approximately 95% of primary carpet backing
shipments. The Company shipped worldwide an aggregate of 790 million square
yards of primary and secondary polypropylene carpet backing in 1995. According
to CRI, growth of total domestic primary carpet backing shipments averaged 1.6%
in the period from 1993 to 1995 and 4.1% for the six months ended June 30,
1996. The growth rate of the Company's primary and secondary carpet backing
shipments has generally exceeded that of the

<PAGE> 30

market, with an average annual increase in shipments of 7.7% for the period
from fiscal 1993 to fiscal 1995 and 8.9% for the nine months ended June 30,
1996.

Approximately 33% of the polypropylene fiber manufactured by the
Company is used to make construction and civil engineering products, of which
approximately 22% and 11% are geotextiles and concrete reinforcing fibers,
respectively. According to Industrial Fabrics Association International,
approximately 414 million square yards of woven and nonwoven geotextiles were
shipped domestically in 1995 for the civil engineering fabric market. According
to industry sources, domestic shipments of woven and nonwoven geotextiles are
expected to grow at an average annual rate of approximately 6% over the next
five years. The growth rate of the Company's civil engineering product lines
has outpaced that of the market with average annual growth in shipments of
48.9% for the period from fiscal 1993 to fiscal 1995. In addition, the Company
believes that its Fibermesh(R) products currently have a 70% share of the fiber
reinforced concrete industry. Fibermesh(R) concrete reinforcing fiber shipments
grew at an average annual rate of 16.0% for the period from fiscal 1993 to
fiscal 1995.

Approximately 22% of the polypropylene fiber manufactured by the
Company is used to make technical textiles. The technical textiles market
consists of a large number of relatively stable product lines with annual sales
in each product line of approximately $10 million to $12 million. The Company
expects to generate growth in its technical textiles sales through new products
such as building product components and nonwoven furniture construction
fabrics.

BUSINESS STRATEGY

The Company's goals are to maintain steady growth in its core
business, develop innovative and value-added products to expand its product
lines, penetrate new international markets, and continue to create new high
margin niche products out of engineered fabrics and fibers. The Company seeks
to be the leading or second supplier in its chosen markets by delivering
high-quality products at competitive prices. Key elements of the Company's
strategy to achieve these goals are:

EXPAND PENETRATION OF EXISTING MARKETS

The Company is committed to expanding sales in markets where it
currently has a leadership position by increasing market penetration through
the offering of a broader product line to meet its customers' varied needs and
by expanding its customer base. The Company is pursuing this goal through (i)
the expansion of geographical coverage of its sales effort; (ii) the
development of applications-oriented marketing efforts that focus on the
Company's product solutions as alternatives to traditional industry practices;
(iii) increased customer acceptance of its products created through stringent
quality standards and industry accreditation for its test labs; and (iv) the
use of in-house technical consultants to educate industry leaders as to the
cost savings offered by the Company's products as compared to traditional
solutions.

The Company believes that it has significant expansion opportunities
for its existing products. The Company is developing comprehensive marketing
efforts to increase sales of its products in existing markets and to penetrate
new domestic and international markets, particularly Europe and the Pacific
Rim, by increasing awareness of its products among existing and potential
customers. The Company focuses on education of its customers' engineering
support personnel, advertising and application-oriented marketing efforts as it
seeks to expand acceptance of its products. The Company has experienced success
with this strategy, as evidenced by the growth of its civil engineering product
line for which sales have increased from $17.0 million in fiscal 1993 to $42.4
million in fiscal 1995, and which were $36.5 million for the nine months ended
June 30, 1996 as compared to $25.6 million for the comparable period in 1995.
Within this product line, the Company has focused on the roadway and building
site, erosion control and waste containment sectors. Among the Company's other
products, nonwoven geotextile sales to the roadway and building site markets
have grown from $4.8 million in fiscal 1993 to $16.2 million in fiscal 1995 and
were $13.0 million for the nine months ended June 30, 1996.

<PAGE> 31

The Company has also expanded its presence in international markets
primarily through additional distribution arrangements, increased marketing
efforts focused primarily on major international construction projects and the
expansion of its international sales force. As a result, total international
sales increased from $16.6 million in fiscal 1993 to $33.8 million in fiscal
1995 and were $21 million for the nine months ended June 30, 1996.

DEVELOP INNOVATIVE PRODUCTS

The Company seeks to develop innovative products and modify existing
products in response to specific customer needs and to establish new markets
through the development of novel applications for its existing products. By
increasing its expenditures for research, product development and marketing,
the Company believes it will be able to capitalize on its manufacturing
strengths and distribution network to introduce new value added products and
extend product lines to complement its existing product base. For example, the
Company's specially designed Fibermesh(R) MD products provide after-crack
strength retention to concrete, thus mitigating immediate failure of the
concrete. Since its introduction in 1991, sales of Fibermesh(R) MD have grown
to $26 million in fiscal 1995 and were $17.9 million for the nine months ended
June 30, 1996.

The redesign and enhancement of its core products have also resulted
in the development of high strength geotextiles and the Company's building
material products. These developments utilize existing weaving technology to
permit construction over extremely weak soils and to replace fiberglass in
certain construction applications such as wallboard. The Company's soil
reinforcement fibers are used in roadway construction and maintenance and its
biotechnical composite three dimensional mats enable vegetation to be grown on
steep slopes and in high-flow water channels. The Company believes that these
products are environmentally friendly, aesthetically pleasing and low-cost
alternatives to crushed rock. The Company has also developed a new line of
products that are manufactured using the same production techniques as nonwoven
geotextiles but are used as vinyl substrates and spill control products.

STRENGTHEN MARKET POSITION IN CARPET BACKING

The Company intends to increase its carpet backing market share
through (i) continued capital investment in state-of-the-art equipment for
additional carpet backing production capacity, (ii) expansion of sales in the
growing commercial carpet sector of the domestic market and (iii) the continued
development and strengthening of its relationships with key customers. The
Company's sales of primary and secondary carpet backing have grown from $106.4
million in fiscal 1993 to $133.0 million in fiscal 1995, and $106.4 million for
the nine months ended June 30, 1996 as compared to $98.7 million for the same
period in 1995. To support this growth, beginning in fiscal 1994, the Company
introduced a new production initiative supported by capital expenditures in
each of fiscal 1994, 1995 and 1996. Recent expenditures include investments to
expand capacity and improve production output through installation of
state-of-the-art equipment, including the Company's soon to be completed 88
loom, $35 million expansion at its largest manufacturing facility that should
increase the Company's current capacity in carpet backing by approximately
16.0%.

Despite the Company's recent strong growth, customer demand for the
Company's products has exceeded capacity. The Company believes it is well
positioned, based upon its relationships with its customers, the quality of its
products and its planned expansion in manufacturing capacity, to gain market
share. While the Company estimates that its share of the domestic residential
carpet backing market is 22%, in the growing commercial carpet segment of the
U.S. market, which currently represents approximately 25% of the total U.S.
carpet market, its share is less than 10%.

The Company has successfully cultivated long-term relationships with
key customers, which include nine of the top ten largest carpet manufacturers
in the world. The Company's success in developing and strengthening its
relationships with these and other key customers is attributable to its
commitment to product quality, dedication to customer technical service and
sensitivity and responsiveness to changing customer needs.

<PAGE> 32

CONTINUE TO IMPROVE MANUFACTURING EFFICIENCIES AND EXPAND
MANUFACTURING CAPACITY

The Company is committed to implementing improvements throughout its
manufacturing system that will increase product volume and lower costs. The
Company's product design teams continuously seek to incorporate new operating
capabilities that enhance or maintain performance specifications while lowering
the cost of manufacturing its products. State-of-the-art equipment, much of
which has been developed with direct input from internal engineers, has been
modified and installed to exceed manufacturing processing specifications, to
continuously measure process parameters and to maintain very narrow tolerances,
resulting in less product variation. As a result, the Company has been able to
improve its manufacturing processes to utilize less labor and material and
produce higher quality fabrics. In addition, the Company maintains a human
resource program aimed at capturing productivity gains through team building,
formal training and employee empowerment.

The Company also believes that its sales are enhanced as a result of
its reputation for quality control and process improvement (especially in
markets where product reliability is critical, such as waste containment). The
Company has led this market by being the first (and in many cases, the only)
manufacturer to achieve ISO-9002 quality certification for its manufacturing
facilities. In addition, the Company was the first geosynthetic manufacturer to
have its own test laboratories accredited by the Geosynthetic Research
Institute which assures that a quality system and laboratory infrastructure is
in place to perform specific tests required in the industry.

The Company believes that increasing manufacturing capacity at its
existing plants will provide the capability to gain market share in its current
markets and to continue to expand into new markets. The Company has invested
approximately $80 million in capital improvements and new facilities during the
five year period ended September 30, 1995 and continuously evaluates
opportunities to expand its existing production capacity, add new capabilities
and enhance production technologies. Specifically, in response to opportunities
in the nonwoven market, the Company constructed a state-of-the-art nonwoven
facility in 1992 which management believes to be one of the largest such
facilities in the United States. This facility today generates sales exceeding
$35 million per year as its products support the geotextile, furniture and
building materials markets. The Company's soon to be completed $35 million
capital expenditure will increase capacity for carpet backing and woven
geotextile production, thus expanding the Company's market base and should
increase consolidated sales over the next twelve months by a projected $30
million. Included in this expansion is a 130,000 square foot building addition
to the Company's largest manufacturing facility, 88 new looms and related
equipment to support these looms. The Company plans to continue to spend
additional capital to increase its manufacturing capability for primary and
secondary carpet backing, and woven and nonwoven geotextiles, subject to
prevailing market conditions.

PURSUE STRATEGIC ACQUISITIONS

The Company is continually evaluating the potential acquisition of
companies, technologies or products which will complement its existing product
lines and manufacturing and distribution strengths. Acquisition opportunities
will be evaluated based on the strategic fit, the expected return on capital
invested and the ability of management to improve the profitability of acquired
operations through cost reductions and other synergies with existing
operations.

PRODUCTS

The Company develops, manufactures and sells a wide array of
polypropylene-based industrial fibers and fabrics along its three principal
product lines: carpet backing, construction and civil engineering, which
comprises environmental/geotextile products and concrete reinforcement
products, and technical textiles. The Company manufactures five basic yarn and
fiber types, from which approximately 2,000 products are manufactured to serve
in excess of 65 end-use markets. The Company aims to compete in markets in
which it can be the primary or secondary provider of such products, with over
93% of its products meeting this criterion. Although end-use applications are
diverse, the Company has been able to leverage its manufacturing expertise to
introduce new products that often define industry standards. Through research,
internal developments, marketing and acquisitions, the Company has developed

<PAGE> 33

or acquired new technologies to capitalize on a broad range of new niche
product opportunities, enabling it to expand beyond its traditional primary
carpet backing business. Since 1981, the following product lines have been
added to the Company's portfolio: filtration, specialty yarns, geotextiles,
Fibermesh(R) concrete reinforcing fibers, secondary carpet backing, staple
fibers, erosion control fibers, soil reinforcing fibers and high performance
wovens and nonwovens. This diversification has contributed to average annual
sales increases of 21.5% for the period from fiscal 1986 to fiscal 1990 and
10.9% for the period from fiscal 1991 to fiscal 1995.

CARPET BACKING

Carpet backing is the Company's oldest and largest product line.
Carpet backing represented approximately 50.5%, 50.1% and 49.0%, or $106.4
million, $117.8 million and $133.0 million, of the Company's fiscal 1993, 1994
and 1995 net sales, respectively. The technology utilized in the Company's
carpet backing business has provided the basic woven fabric technology for the
Company's other product lines. For example, certain geotextiles, agriculture
fabrics and furniture construction fabrics are woven on the same looms used to
weave carpet backing.

The Company's carpet backing product line consists of woven primary
and secondary fabrics in a variety of styles and widths that are manufactured
from polypropylene raw materials. Primary carpet backing is a tightly woven
material into which carpet yarn is tufted in the manufacture of broadloom
floorcoverings. Secondary carpet backing, which forms the base of the carpet,
is the coarser woven fabric that is laminated to the back of tufted broadloom
to insure both carpet integrity and dimensional stability. The Company produces
a broad range of primary and secondary backing.

The Company believes it is the second largest producer of carpet
backing in the United States, where carpeting is the most popular floor
covering material. The total market for carpeting in the United States has
grown approximately 4% per year over the past decade. In recent years, the
growth rate of the Company's carpet backing sales has generally outpaced that
of the market due to the Company's ability to gain market share. Management
believes that the Company's growth rate has been limited by its production
capacity.

CONSTRUCTION AND CIVIL ENGINEERING

The Company's construction and civil engineering product line has two
distinct segments: environmental and geotextile products and concrete
reinforcement fibers. Construction and civil engineering has achieved rapid
growth since 1993 when the Company enhanced its channels of distributions for
Fibermesh(R) and expanded into production of nonwoven geotextiles. Construction
and civil engineering products represented approximately 22.8%, 29.3% and
30.6%, or $47.9 million, $68.7 million and $82.9 million, of the Company's
fiscal 1993, 1994 and 1995 net sales, respectively. Within this product line,
geotextile products principally serve the environmental market, with end uses
such as landfill containment and stabilization, erosion control and soil
stabilization, separation and reinforcement. The construction market includes
subbase reinforcement and stabilization for highway and commercial construction
and reinforcement of conventional and pre-cast concrete. Growth in sales in the
environmental/geotextiles sector for the period fiscal 1992 to fiscal 1995
averaged 57.9% annually, with a 34.8% increase in fiscal 1995 over fiscal 1994.
Fibermesh(R) concrete reinforcing fiber sales grew at an average annual rate of
14.6% for the period from fiscal 1993 to fiscal 1995, with an 8.8% increase for
the period from fiscal 1994 to fiscal 1995.

Environmental/Geotextile Products. The Company's
environmental/geotextile product line consists of erosion control fabrics,
geotextiles, and soil fibers. These products control erosion and capture
sediment; provide filtration, separation and reinforcement of soils; improve
engineering properties of native soils; protect landfill liners; and extend
pavement life. The specifications of the Company's geosynthetic fabrics and
fibers vary depending on specific site conditions, including such factors as
slope angles, water flow velocities, climate, runoff, soil profile and ultimate
land use. The Company's geosynthetic products generally comply with state
agency guidelines pertaining to geosynthetic products issued to date.

<PAGE> 34

The Company produces a variety of nonwoven geotextiles for use in
landfill construction, asphalt roadway construction and drainage systems. The
Company's woven geotextiles are typically used in road and building
construction to form a separation barrier between unstable soils and aggregate
foundations. The Company's LANDLOK(R) erosion control products are used in
water runoff channels and in areas of exposed soil and shoreline erosion. These
products hold the soil in place, while allowing and supporting vegetative
growth. LANDLOK(R) products are an environmentally friendly and aesthetically
pleasing alternative to rock or concrete erosion control methods.

The Company has developed a strong market position in
environmental/geotextile products on the basis of sales growth and engineering
strengths. The Company believes it is now the fastest growing supplier of
geotextiles to this market, and has the broadest environmental/geotextile
product line in North America.

Environmental and economic concerns have contributed to an increase in
government mandates as well as industry practices to control surface runoff and
soil erosion and improve water quality. Geotextiles tend to be more durable,
easier to use, and more cost effective as compared to similar products made of
conventional materials. In highly populated urban areas with high
concentrations of roads and buildings the need for good conservation practices
is becoming increasingly acute. The Company believes that this market will
continue to expand as environmental concerns continue to grow, thereby
increasing demand for the Company's products. The Company believes its strength
as a cost-effective manufacturer of geotextiles will allow it to continue to
increase sales of current products, and introduce new products to this market.

Concrete Reinforcement. The Company pioneered the concept of using
polypropylene fibers as a secondary reinforcement for concrete and developed
and introduced Fibermesh(R) to the concrete industry in 1983. The Company
believes that its Fibermesh(R) products have a 70% share of the fiber treated
segment of the concrete industry. All concrete reinforcement fibers, including
Fibermesh(R), have only approximately 9% penetration of the total concrete
industry. Growth in this market will be based on increased acceptance of the
use of synthetic fibers for concrete reinforcement as a replacement for
conventional wire mesh. The Company estimates that 250 million cubic yards of
concrete poured annually in the United States could potentially benefit from
the use of Fibermesh(R) fibers.

The addition of Fibermesh polypropylene fibers to the concrete mixture
gives the concrete greater crack resistance and improved impact strength.
Primary applications for fiber reinforced concrete are commercial and
residential slabs, precast pipe and other products, shotcrete installations,
and whitetopped highways. In 1994, the Company started marketing Fibermesh(R)
fibers containing an antibacterial additive. This niche product is available
for use in concrete where bacteria growth is a concern. Primary targets are
hospitals, clinics, food processing facilities, and veterinary facilities.
Fibermesh(R) provides a cost-effective replacement for the nonstructural wire
mesh traditionally used in concrete construction and improves the concrete's
durability. Fibermesh(R) complies with construction guidelines and
specifications issued by all of the national building code associations. Of the
three synthetic fiber types used in fiber reinforced concrete, polypropylene is
recognized for its superior properties over nylon and polyester. Fibermesh(R)
is sold in fibrillated, monofilament and multi-denier designs, the latter of
which is protected by a U.S. patent.

TECHNICAL TEXTILES

Technical textiles produced by the Company are products and systems
that offer high performance solutions for niche markets. Technical textiles
represented approximately 26.7%, 20.6% and 20.4%, or $56.2 million, $48.5
million and $55.5 million, of the Company's fiscal 1993, 1994 and 1995 net
sales, respectively. Technical textiles are sold to several niche markets,
including the furniture, filtration, agricultural and recreational industries,
and each product in those markets generally accounts for $10 to $12 million or
less in sales. The Company's technical textile products are generally
differentiated on the basis of product uniqueness, quality and service rather
than price.

The Company's technical textiles consist of specialty fabrics,
industrial yarns and fibers. The specialty fabrics are manufactured in a
variety of widths, weights, permeability ranges and dimensional configurations
primarily from polypropylene and, to a minor extent, other synthetic fibers.
Customers use these fabrics to manufacture products used

<PAGE> 35

in diverse applications such as filtration (e.g., bauxite mining, wastewater
treatment, electrostatic-air filters and chemical separation), agriculture
(e.g., shade for foliage protection and environmental screening), and
recreation (e.g., swimming pool covers and trampoline mats).

The Company also sells its industrial yarns and fibers directly to
weavers, knitters, and non-woven manufacturers who produce niche market
products, such as automobile upholstery, coat linings, geotextiles, air filters
and water filtration media.

Recent product line repackaging has created new business programs for
the Company, which programs are currently in the new product launch phase.
These programs include professional landscaping products, livestock maintenance
fabrics, antibacterial products and building product components.

MARKETING AND SALES

Carpet Backing. The Company sells its carpet backing products to 91
customers in the carpet industry, most of whom are carpet manufacturers located
in the United States. In fiscal 1995, the Company's ten largest carpet backing
customers accounted for approximately 77% of its total net sales to the carpet
industry. In fiscal 1995, sales to Shaw, the Company's largest customer,
accounted for approximately 37% of net carpet backing sales and approximately
18% of the Company's total net sales. Shaw is estimated to have 27% of the
United States carpet market.

The Company's carpet backing products are sold primarily through the
Company's sales force that is directed from a central sales office in Calhoun,
Georgia. All of the sales managers have significant industry experience and
monitor ongoing product requirements, styling changes and competitive trends
affecting their customers.

Construction and Civil Engineering. The Company's geosynthetic
products are sold primarily in North America to regional and national
distributors, installers of landfill liners and various governmental
transportation departments, port authorities and waterway commissions. In
fiscal 1995, the ten largest geosynthetic product customers accounted for
approximately 28% of the Company's total net sales in this product line.

The Company's geosynthetic products are marketed by full-time
salespeople with expertise in civil engineering and agronomy who are directed
from a central office in Chattanooga, Tennessee. These salespeople, along with
a technical support staff at Company headquarters, provide design and field
engineering services to customers. They also are integral to the process of
obtaining required governmental permits for use of the products by end-users.
In addition, the Company has an ongoing marketing communications program to
build awareness of product capabilities and expand interest in and use of
geotextiles.

Fibermesh(R) is sold through a direct sales force to ready-mix
concrete companies and precast concrete product manufacturers located primarily
in the United States and the United Kingdom. The Fibermesh(R) sales force
operates out of divisional offices in Austin, Texas, Denver, Colorado,
Chattanooga, Tennessee and Chesterfield, England. In addition, Fibermesh(R) is
sold through a contract with Master Builders, Inc., a construction industry
product distributor. Other construction industry product distributors market
Fibermesh(R) in over 50 foreign countries. In fiscal 1995, the ten largest
Fibermesh(R) customers accounted for approximately 12% of the Company's total
net sales of Fibermesh(R).

Technical Textiles. The Company sells its specialty fabrics to a
diverse group of approximately 400 manufacturers located primarily in North and
Central America and the Pacific Rim countries. The Company sells its industrial
yarns and fibers to a diverse group of approximately 100 manufacturers located
in North America and Europe. In fiscal 1995, the Company's ten largest
technical textile customers accounted for approximately 29% of the Company's
total net sales of technical textiles. The Company's technical textiles are
marketed by salespersons through sales offices in Gainesville, Ringgold and
Calhoun, Georgia and Chesterfield, England.

<PAGE> 36

COMPETITION

The markets for the Company's products are highly competitive. In the
manufacture and sale of carpet backing, which represented in excess of 50% and
49% of the Company's total net sales for the nine months ended June 30, 1996
and for fiscal 1995, respectively, the Company competes primarily with Amoco,
and, to a lesser extent, Wayn-Tex Inc. and certain other companies. Amoco has
the dominant position in the carpet backing market worldwide. In the United
States, only the Company and Amoco produce a broad range of primary and
secondary carpet backing in a variety of styles and widths. The Company
competes in the carpet backing market primarily on the basis of quality,
availability, service, price and product line variety, providing carpet
manufacturers with a reliable alternative source of supply to Amoco.

In the manufacture and sale of the Company's other products, the
Company generally competes with a number of other companies, some of which are
significantly larger and have substantially greater resources than the Company.
The Company's primary competitors in the construction and civil engineering
market are Amoco and Nicolon Corporation with respect to geotextiles, North
American Green, Inc. with respect to environmental and erosion control
products, and W.R. Grace & Co., which markets but does not manufacture concrete
reinforcement fibers, with respect to concrete reinforcement. The Company
competes in the concrete reinforcement fiber market primarily on the basis of
product design and technical service. In some applications, Fibermesh(R) also
competes with welded wire fabric on the basis of product performance and cost.
The Company competes in the construction and civil engineering market on the
basis of product line breadth and quality, price, and the custom design,
engineering and other services it provides to customers. With respect to
technical textiles, competitors vary depending upon the specific market niche.
The Company competes in each segment of the technical textiles market primarily
on the basis of service, quality, innovation and product line variety.

The pricing policies of the Company's competitors have at certain
times in the past limited the Company's ability to increase the prices or
caused the Company to lower the prices of certain of its products. See
"--Products," "--Marketing and Sales" and "--Raw Materials".

MANUFACTURING PROCESS

Polypropylene, a chemically inert plastic derived from petroleum, is
the basic raw material used in the manufacture of substantially all of the
Company's products. SI believes it is a technological leader in the conversion
of polypropylene into woven and nonwoven polypropylene products. The expertise
of the Company's research and development and marketing staff has enabled the
Company to develop innovative products, frequently in response to specific
customer needs.

Woven fabrics are produced by interlacing thousands of strands of
extruded yarn at right angles to one another. The manner in which the yarn is
interlaced determines the type of weave. Woven fabrics are characterized by
strength and dimensional stability. The Company's woven fabric products include
primary and secondary carpet backing, geotextiles, erosion control fabrics, and
specialty fabrics for the filtration, recreational, construction and
agricultural markets.

Nonwoven fabrics are produced by first stacking several layers of
webbed short length fibers and then entangling the layers by punching barbed
needles through the layers. Nonwoven fabrics provide extensibility without
rupture and dimensionality. The Company's nonwoven fabric products include
geotextiles, erosion control fabrics, furniture and bedding construction
fabrics, and spill control fabrics.

The Company believes that it has state-of-the-art manufacturing
capability in both its woven and nonwoven product lines and is one of the most
cost-efficient producers in the markets in which it participates. The Company's
three primary manufacturing processes are extrusion, weaving and
needlepunching.

<PAGE> 37

Extrusion. Much of the Company's expertise has been developed in its
extrusion processes. Many of the product's specification properties are created
by engineering the polymeric raw materials during the extrusion process. In
addition to yarns and fibers for conventional end-uses, the Company has also
developed value-added products through the use of additives including those
which resist sunlight degradation or provide resistance to bacteria. The
Company owns and operates one of the world's largest polypropylene staple fiber
lines. Most of the Company's extruded products are consumed internally and
become value-added woven and nonwoven fabrics, but some are sold to weavers,
knitters, nonwovens producers and convertors.

Weaving. The yarns produced in the Company's extrusion and yarn
spinning operations are woven on looms to produce the wide variety of fabrics
that the Company sells through all of its marketing divisions. Fabric
properties are engineered to industry specifications by altering constituent
yarns and weave patterns. Looms are generally interchangeable to weave carpet
backing, geotextiles and certain agricultural fabrics. The breadth of the
Company's woven product offerings was enhanced by the Chicopee Acquisition.

Needlepunching. In 1993, the Company constructed a state-of-the-art
needlepunched nonwovens fabric facility. This modern plant produces a new
generation of engineered cost-effective fabrics for the geotextile, furniture
construction and chemical spill cleanup markets.

The Company maintains a complete rigorous quality control program
centered around statistical process control and customer key measures. Each
stage of the process from the raw material to the final product is monitored
using standard procedures and test methods which satisfy the quality control
standards established by ISO. The Company's Chickamauga, Chattanooga, Ringgold
and Gainesville manufacturing facilities have been granted ISO-9002
certification for their systematic approach to quality in all areas of
operation.

The Company's production equipment is capable of manufacturing a
variety of woven and nonwoven polypropylene products. This versatility enables
the Company to alter the product mix within its woven and nonwoven product
lines in response to market demand or to take advantage of specific profit
opportunities.

The Company's plants are run on a continuous 24-hour per day basis,
seven days a week, 350 days per year. Orders are typically filled from
inventory.

RESEARCH AND DEVELOPMENT

The Company's research and development is focused primarily on
development and as such the Company engages in product design, development and
performance validation to improve existing products and to create new products.
The Company expended approximately $1.9 million (approximately 0.7% of sales)
on Company-sponsored research and development activities in fiscal 1995 and
anticipates spending approximately the same amount in fiscal 1996. As part of a
recently completed strategic review, the Company expects to increase research
and development expenses beginning in fiscal 1997 to approximately 1% of sales.

INTERNATIONAL OPERATIONS

The Company conducts its foreign sales operations through subsidiaries
in Europe and a network of distributors worldwide. In fiscal 1995, the
aggregate sales (principally of construction and civil engineering products) by
such foreign subsidiaries and marketing divisions were approximately $5.3
million. International sales from United States operations in fiscal 1995 were
$28.5 million, or 11 % of net sales.

<PAGE> 38

RAW MATERIALS

Polypropylene, which is a petroleum derivative, is the basic raw
material used in the manufacture of substantially all of the Company's
products. The Company currently purchases polypropylene in pellet form
principally from four suppliers, with Fina Oil & Chemical Company being the
Company's largest supplier of polypropylene. These purchases are generally made
pursuant to long-standing arrangements.

Polypropylene purchases account for approximately 50% of the Company's
cost of sales. Increases in the price of polypropylene without offsetting
increases in selling prices could have a significant negative effect on the
Company's results of operations and financial condition. The Company believes
that the sales prices of its products will adjust over time to reflect changes
in polypropylene costs. The Company did not experience production curtailment
due to shortages of polypropylene supply during the very tight market in fiscal
1995.

REGULATION

The Company is subject to federal, state and local laws and
regulations affecting its business, including those promulgated under the
Occupational Safety and Health Act and by the Environmental Protection Agency.
Many of the Company's construction and civil engineering products have
applications that are subject to building code association guidelines and
specifications and highway department guidelines. Obtaining the necessary
approvals can delay new product introductions in some areas. Moreover, the
enactment of new legislation or the issuance of new guidelines may require the
Company to modify its existing geotextile and erosion control fabric products
and may also delay the Company's introduction of new geotextiles and erosion
control fabric products.

The Company's expenditures to date in connection with such federal,
state and local laws and regulations have not been material to its operations.
The Company believes it is currently in compliance with applicable governmental
regulations.

ENVIRONMENTAL COMPLIANCE

The Company is subject to a broad range of federal, foreign, state and
local laws and regulations relating to the pollution and protection of the
environment. Among the many environmental requirements applicable to the
Company are laws relating to air emissions, wastewater discharges and the
handling, disposal and release of solid and hazardous substances and wastes.
Based on continuing internal review and advice from independent consultants,
the Company believes that it is currently in substantial compliance with
applicable environmental requirements. A cease- and-desist order was issued by
the U.S. Army Corps of Engineers on June 13, 1996, concerning the Chickamauga,
Georgia facility and the deposit of filling material into national wetlands
without a permit. The Company is working with the Army Corps of Engineers to
create an equivalent wetland area. The Company does not anticipate that such
order will have a material adverse effect on its operations.

The Company is also subject to laws, such as the federal Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"),
that may impose liability retroactively and without fault for releases or
threatened releases of hazardous substances at on-site or off-site locations.
The Company is not aware of any releases for which it may be liable under
CERCLA or any analogous provision.

Actions by federal, state and local governments in the United States
and abroad concerning environmental matters could result in laws or regulations
that could increase the cost of producing the products manufactured by the
Company or otherwise adversely affect demand for its products. For example,
certain local governments have adopted ordinances prohibiting or restricting
the use or disposal of certain polypropylene products. Widespread adoption of
such prohibitions or restrictions could adversely affect demand for the
Company's products and thereby have a material adverse effect upon the Company.
In addition, a decline in consumer preference for polypropylene products due to
environmental considerations could have a material adverse effect upon the
Company.

<PAGE> 39

Most of the Company's manufacturing processes are mechanical and are
therefore considered to be environmentally benign. Polypropylene resins are
readily recyclable, and the Company maintains a network of recyclers to receive
post-industrial waste for certain of the Company's products. In addition, each
of the Company's manufacturing sites has equipment and procedures for
reclaiming a majority of internally generated scrap, thus reducing the amount
of waste sent to local landfills. As a result, the Company does not currently
anticipate any material adverse effect on its operations, financial condition
or competitive position as a result of its efforts to comply with environmental
requirements. Some risk of environmental liability is inherent, however, in the
nature of the Company's business, and there can be no assurance that material
environmental liabilities will not arise. It is also possible that future
developments in environmental regulation could lead to material environmental
compliance or cleanup costs.

PROPERTIES

The Company operates the following principal domestic manufacturing
and distribution facilities. All of the Company's owned properties are subject
to liens in favor of the lenders under the Credit Facility.

<TABLE>
<CAPTION>
APPROXIMATE
SQUARE
FOOTAGE OWNED OR
LOCATION PRINCIPAL FUNCTION OF FACILITY LEASED
-------- ------------------ ----------- --------
<S> <C> <C> <C>
Chickamauga, Georgia Manufacturing of carpet backing, 738,800 Owned
geotextiles and fibers

Dalton, Georgia Distribution center and multi- 216,000 Owned
product warehouse

Ringgold, Georgia Manufacturing of geotextiles 183,750 Owned

Chattanooga, Tennessee Manufacturing of specialty yarns 126,432 Owned

Alto, Georgia Manufacturing of certain yarns 92,400 Owned

Dalton, Georgia Needlepunching of carpet backing 44,945 Owned

Gainesville, Georgia Manufacturing of certain fabrics 200,000 Leased

Dalton, Georgia Woven, nonwoven and geotextile 185,000 Leased
124 Keene Street warehouse

Dalton, Georgia Geosynthetic products and fiber 168,000 Leased
120 Keene Street warehouse

Chickamauga, Georgia Manufacturing of carpet backing, 143,736 Leased
geotextiles and fibers

Dalton, Georgia Specialty yarn warehouse 104,827 Leased
Cleveland Highway

Cornelia, Georgia Assembly of certain fabrics 100,000 Leased

Westside, Georgia Carpet backing warehouse 86,440 Leased

Dalton, Georgia Carpet backing warehouse 85,000 Leased
North Dug Gap
</TABLE>

<PAGE> 40

<TABLE>
<CAPTION>
APPROXIMATE
SQUARE
FOOTAGE OWNED OR
LOCATION PRINCIPAL FUNCTION OF FACILITY LEASED
-------- ------------------ ----------- --------
<S> <C> <C> <C>
Dalton, Georgia Geosynthetic products warehouse 36,000 Leased
Florence

Dalton, Georgia Geosynthetic products warehouse 31,500 Leased
1408 Coronet

Claremont, North Carolina Nonwoven fabrics warehouse 14,000 Leased

Tupelo, Mississippi Nonwoven fabrics warehouse 13,500 Leased

Chattanooga, Tennessee Corporate support offices 4,800 Leased
---------
Total 2,575,130
=========
</TABLE>

ORDER BACKLOG

The Company generally sells its products pursuant to customer orders
which are satisfied either out of inventory or by the manufacture and shipment
of the product promptly following receipt of an order. Accordingly, the dollar
amount of backlog orders believed to be firm is not significant or indicative
of the Company's future sales and earnings.

EMPLOYEES

As of June 30, 1996, the Company employed 2,071 persons in the United
States, of whom 446 were salaried employees and the remainder were hourly
employees. None of the Company's employees are unionized. The Company has never
experienced any strikes and believes its relations with employees to be
satisfactory. The Company employs 13 persons in the United Kingdom.

PATENTS AND TRADEMARKS

The Company owns or is licensed under several United States and
foreign patents. While these patents are helpful to the Company's business, it
is believed that a loss of patent exclusivity would not be materially adverse
to the Company's business.

The Company has registered several of its trademarks, including
FIBERGRIDS(R), FIBERMESH(R) and LANDLOK(R), with the United States Patent and
Trademark office and with several foreign trademark offices.

CLAIMS AND LEGAL PROCEEDINGS

In January 1995, an arbitration proceeding was initiated by Fibermesh
(Suisse), S.A. against the Company in the United States, alleging a breach by
the Company of an exclusive distribution agreement for the distribution of
Fibermesh(R) in Switzerland and claiming actual damages of 6,104,000 Swiss
Francs ($4.9 million at June 30, 1996) and punitive damages of $20 million. The
Company believes that it has meritorious defenses to all claims in the action
and that the ultimate resolution will not have a materially adverse effect on
the Company's financial position or results of operations.

<PAGE> 41

The Company and its subsidiaries are parties to litigation arising out
of their business operations. Most of such litigation involves claims for
personal injury, property damage, breach of contract and claims involving
employee relations and certain administrative proceedings. The Company believes
such claims are adequately covered by insurance or do not involve a risk of
material loss to the Company.

<PAGE> 42

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY

The following table sets forth certain information concerning each of
the executive officers and directors of the Company:

<TABLE>
<CAPTION>
NAME AGE POSITION AND OFFICES HELD
- ------------------------------------- ----------------- -----------------------------------------------
<S> <C> <C>
Leonard Chill........................ 64 President, Chief Executive Officer and Director

W. Wayne Freed....................... 61 Vice President-- Marketing

Ralph Kenner......................... 52 Vice President-- Manufacturing

William Gardner Wright, Jr........... 67 Vice President-- General Manager Carpet Backing
Division

Robert J. Breyley.................... 67 Vice President-- Fibermesh(R)Division

W.O. Falkenberry..................... 54 Vice President-- Human Resources

C. Ted Koerner....................... 47 Vice President-- General Manager Construction/Civil
Engineering Products Group

John Michael Long.................... 53 Vice President-- General Manager Technical Textiles
Group

Joseph Sinicropi..................... 42 Chief Financial Officer and Secretary

Bobby Callahan....................... 54 Controller

Joseph F. Dana (1)................... 49 Director

Lee J. Seidler (1)................... 61 Director

William J. Shortt (1)................ 71 Director

Robert L. Voigt (1).................. 78 Director
</TABLE>

- ----------

(1) Member of Compensation Committee and Audit Committee.

Directors of the Company are elected each year at the annual meeting
of stockholders. The Company's officers serve at the discretion of the Board.

Leonard Chill joined the Company in December 1973 as President and was
appointed Chief Executive Officer in 1986. From 1967 until joining the Company,
he held a number of positions with Thiokol Corporation in its Fibers Division,
including that of General Manager. Mr. Chill is also the sole director and sole
stockholder of one of the general partners of Synthetic Management G.P., the
entity which is the sole general partner of the general partner of the
Partnership. See "The Company".

<PAGE> 43
W. Wayne Freed joined the Company in 1981 and became Vice
President--Market Development in 1987. Prior thereto, he had 28 years
experience in the textile industry. Mr. Freed is also the sole director and
sole stockholder of one of the general partners of Synthetic Management G.P.

Ralph Kenner has been Vice President--Manufacturing since 1984. He
joined the Company in 1974 as Director, Industrial Relations and served in that
capacity until 1976. In 1976, he was appointed Plant Manager and served in that
capacity until 1984. Mr. Kenner is also the sole director and sole stockholder
of one of the general partners of Synthetic Management G.P.

William Gardner Wright, Jr. was Vice President--Marketing and Sales
from 1983 to 1996 at which time he was named Vice President-General Manager of
the Carpet Backing Division. From 1977 until 1983, he was President of Synca
Marketing Corp., a textile sales agency which served as a sales agent for the
Company's primary carpet backing, as well as the products of other
manufacturers. Mr. Wright is a Director of the Sun Trust Bank of Northwest
Georgia. Mr. Wright is also the sole director and sole stockholder of one of
the general partners of Synthetic Management G.P.

Robert J. Breyley joined the Company in 1984 and became Vice
President--Fibermesh Division in December 1984. Prior thereto, he held a
variety of managerial positions with Master Builders, Inc., a leading concrete
admixtures supplier. During his last six years with Master Builders, he was
Senior Vice President of Sales and Marketing.

W.O. Falkenberry joined the Company in 1993 as Vice President of Human
Resources. Prior thereto, he was Director of Human Resources with the Champion
Products Division of the Sara Lee Corporation from 1989 to 1993.

C. Ted Koerner joined the Company in 1990 and became Vice
President-Construction Products Division in 1993. He was named Vice President
and General Manager--Construction/Civil Engineering Products Division in 1995.
Prior thereto, Mr. Koerner was an Engineer with the Ohio Department of
Transportation; a Sales Engineer, Product Supervisor and Regional Engineer with
Armco Steel Corporation; and a Sales Manager with National Seal Corporation.

John Michael Long was appointed Vice President--Nonwoven Fabrics in
October 1991. Prior thereto, he held a variety of managerial positions with
Spartan Mills, a manufacturer of nonwoven geotextile fabrics. During his last
five years at Spartan, he was Vice President and General Manager.

Joseph Sinicropi joined the Company in 1995 as Chief Accounting
Officer. He was named Chief Financial Officer and Secretary in February 1996.
Prior to joining the Company, he was an audit senior manager in the
international accounting firm of Deloitte & Touche LLP from 1985 to 1995.

Bobby Callahan joined the Company in 1977 and has been Controller
since 1980. Prior thereto, he held a variety of financial management positions
in the carpet industry.

Joseph F. Dana has been engaged in the private practice of law for
over twenty years and has been a member of the law firm Watson & Dana,
LaFayette, Georgia, since its formation in 1978. Mr. Dana has served as general
counsel to the Company since 1987 and has been a Director since 1993.

Lee J. Seidler was Senior Managing Director at Bear, Stearns & Co.
Inc. from 1981 to 1989. He is presently associated with Bear, Stearns & Co.
Inc. as Managing Director Emeritus. Mr. Seidler is a director of the Shubert
Foundation, The Shubert Organization, and Players International, Inc. and has
been a director of SafeCard Services, Inc. and Eastbank, N.A. He has been a
Director since 1993.

William J. Shortt retired from Johnson & Johnson in 1989. From 1977 to
1989, he was Director of Government and Trade Relations, Southeast at Johnson &
Johnson. Mr. Shortt has also been a director of Standard Telephone Company,
Standard Group Inc., and First National Bank of Habersham. He has been a
Director since 1993.

<PAGE> 44
Robert L. Voigt served as a consultant to Dixie Yarns Inc. from 1985
until his retirement at the end of 1991. Mr. Voigt also served as a director
of Dixie Yarns, Inc., from 1981 to 1987. He has been a Director since 1993.

Each of the executive officers, except Mr. Breyley, has an Employment
Agreement with the Company. There are no family relationships between any of
the above officers or directors of the Company.

DIRECTORS' COMPENSATION

Outside directors receive $15,000 per annum for services as a director
and $800 per meeting attended. Directors who are members of management do not
receive any meeting attendance fees or additional compensation for service as a
director or service on committees of the Board. All directors are reimbursed
for reasonable out-of-pocket expenses incurred in connection with their
attendance at meetings of the Board and its committees on which they serve.

Under the Company's 1994 Stock Option Plan for Non-Employee Directors
(the "Directors' Plan"), Messrs. Dana, Seidler, Shortt and Voigt were granted
non-qualified stock options (the "Directors' Options") to purchase 28,906,
57,813, 19,271 and 19,271 shares of Common Stock, respectively. The Directors'
Plan does not provide for any further grants of options thereunder.

The purchase price of the shares of Common Stock subject to the
Directors' Options was determined by reference to the fair market value of the
Common Stock, as determined by the Compensation Committee, at the time Messrs.
Dana, Seidler, Shortt and Voigt became members of the Board. As of June 30,
1996, 75% of the number of shares of Common Stock subject to each Director
Option had vested and are exercisable. As a Company employee, Mr. Chill is not
eligible to participate in the Directors' Plan. In the event that the
outstanding shares of Common Stock are changed by reason of reorganization,
merger, consolidation, recapitalization, reclassification, stock split,
combination or exchange of shares and the like, or dividends payable in Common
Stock, an appropriate adjustment shall be made by the Committee in the
aggregate number of shares of Common Stock available under the Directors' Plan
and in the number of shares and price per share subject to outstanding
Directors' Options. The term of each Directors' Option is ten years from the
date of grant.

BOARD COMMITTEES

The Board has established a Compensation Committee, composed of
Messrs. Dana, Seidler, Shortt and Voigt, which establishes salary, incentives
and other forms of compensation and administers the Company's 1994 Stock Option
Plan and 1996 Stock Option Plan and other incentive compensation and benefit
plans applicable to the Company's officers. The Board has also established an
Audit Committee, composed of Messrs. Dana, Seidler, Shortt and Voigt, which
recommends to the Board the selection of independent auditors, and reviews the
scope and results of the audit and other services provided by the independent
auditors.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth information regarding the compensation
paid during each of the Company's last three completed fiscal years to the
Chief Executive Officer of the Company and each of the other four most highly
compensated executive officers of the Company as of September 30, 1995
(collectively, the "Named Executive Officers").

<PAGE> 45

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
FISCAL AWARDS
YEAR ------------
ENDED ANNUAL COMPENSATION SECURITIES
NAME AND --------- ------------------------ UNDERLYING ALL OTHER
PRINCIPAL POSITION SEPT. 30, SALARY($) BONUS($) OPTIONS (#) COMPENSATION($)
- --------------------------- --------- --------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Leonard Chill 1995 254,871 89,939 -- 10,044(1)
Chief Executive Officer and 1994 247,447 127,260 -- 9,921(1)
President 1993 240,240 95,073 -- 9,921(1)

Ralph Kenner 1995 145,973 41,926 -- 4,482(2)
Vice President-- 1994 125,973 66,660 -- 4,497(2)
Manufacturing 1993 122,304 49,603 -- 4,706(2)

William Gardner Wright, Jr. 1995 235,664 70,238 -- 4,005(2)
Vice President-- General 1994 235,664 99,384 -- 4,497(2)
Manager-- Carpet Backing 1993 228,800 74,404 -- 4,549(2)
Division

Robert J. Breyley 1995 141,720 49,500 -- 3,329(2)
Vice President-- 1994 141,720 72,000 -- 4,198(2)
Fibermesh(R)Division 1993 137,592 46,851 -- 5,436(2)

Jon P. Beckman(3) 1995 147,130 50,539 -- 7,066(4)
Vice President-- Finance 1994 142,845 71,508 -- 7,148(4)
and Chief Financial Officer 1993 138,684 53,737 -- 7,093(4)
</TABLE>

(1) These amounts consist of $5,424 of insurance premiums paid by the
Company under a term life insurance policy in each of 1995, 1994 and
1993, and $4,620, $4,497 and $4,497 contributed by the Company under
its 401(k) plan in 1995, 1994 and 1993, respectively.

(2) These amounts represent the annual contribution made by the Company
under the Retirement Plan in the respective year.

(3) Mr. Beckman resigned as of January 22, 1996 from his duties as Vice
President--Finance, Chief Financial Officer, Secretary and Director.
He is being retained as a consultant to the Company. Pursuant to his
consulting agreement with the Company, Mr. Beckman will receive, until
January 31, 2000, or upon earlier termination of his consulting
agreement, $125,000 per year and various insurance coverages, and will
be authorized to exercise all stock options awarded to him, subject to
applicable vesting provisions. Under this agreement, Mr. Beckman is
required to provide the Company with 20 hours of consultation per
month, has agreed to release the Company from any liability resulting
from his employment and has also agreed not to compete against the
Company.

(4) These amounts consist of $2,928, $2,649 and $2,649 of insurance
premiums paid by the Company under a term life insurance policy and
$4,138, $4,499 and $4,444 contributed by the Company under the
Retirement Plan in 1995, 1994 and 1993, respectively.

OPTIONS GRANTS IN LAST FISCAL YEAR

The following table sets forth options granted to the Named Executive
Officers during fiscal 1995:

<PAGE> 46

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (1)
----------------------------------------------------------- ---------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% 10%
- --------------------------- ----------- ------------ ----------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Leonard Chill 110,407 34.9% $ 10.72 12/09/04 $ 744,143 $ 1,885,752

Ralph Kenner 33,413 10.6 10.72 12/09/04 225,204 570,694

William Gardner Wright, Jr. 33,413 10.6 10.72 12/09/04 225,204 570,694

Robert J. Breyley 9,685 3.1 10.72 12/09/04 65,277 165,420

Jon P. Beckman 40,676 12.8 10.72 12/09/04 274,156 694,746
</TABLE>

(1) These gains are based on arbitrary compounded rates of growth of stock
prices mandated by the Securities and Exchange Commission of 5% and
10% per year from the date the option was granted over the full option
term. These rates do not represent the Company's estimate or
projection of future prices of the Common Stock. There is no assurance
that the values that may be realized by any Named Executive Officer
upon exercise of his options will be at or near the value estimated in
the foregoing table.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

The following table sets forth option exercises by and the value of
the in-the-money unexercised options held at September 30, 1995:

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED FY-END (#) FY-END (1)
ON VALUE ----------------------------- -----------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------- ------------- ------------- ------------ --------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Leonard Chill -- -- -- 110,407 -- --

Ralph Kenner -- -- -- 33,413 -- --

William Gardner Wright, Jr. -- -- -- 33,413 -- --

Robert J. Breyley -- -- -- 9,685 -- --

Jon P. Beckman -- -- -- 40,676 -- --
</TABLE>

(1) Based on the fair market value of the option shares at fiscal year end
($10.72 per share) less the exercise price ($10.72 per share) payable
for such shares.

<PAGE> 47

EMPLOYMENT AGREEMENTS

Each of Messrs. Chill, Kenner and Wright (the "Executives") are
employed by the Company pursuant to individual employment agreements effective
as of September 6, 1996 (the "Effective Date"). The term of employment under
these agreements is three years from the Effective Date; provided that on each
anniversary of the month following the first Effective Date, and each
successive month, the term is automatically extended for one successive month,
providing a minimum remaining term of two years, unless either party terminates
the agreement by written notice. The current annual salaries for Messrs. Chill,
Kenner and Wright pursuant to these agreements are $254,871, $145,973 and
$235,664, respectively, and are subject to annual review by the Board.

The Company has the right to terminate the Executive's employment for
"cause" or "without cause", in each case as defined in the applicable
employment agreement. In the event that an Executive is terminated by the
Company "without cause," other than following a "Change in Control" (as defined
below), the Executive is entitled to receive his base salary at the rate in
effect on the date of termination of employment for a period of two years from
the date of termination, any unpaid, accrued amounts under the annual incentive
plan, a pro rata payment under the annual incentive plan for the termination
year, a payment equal to the three year average of incentive payments received
under the Company's annual incentive plan and any stock option rights due
through the end of the term. Under each employment agreement, a Change in
Control occurs when (i) any person or group becomes the beneficial owner of
capital stock of the Company representing 35% of all the voting stock, (ii) the
members of the Board on the Effective Date cease to constitute a majority of
the Board, or (iii) the Company combines with another entity and a person holds
more than 35% of the voting stock of the Company or the Company's directors, as
of the date immediately before such combination, constitute less than a
majority of the board of directors of the combined entity.

If the Executive is terminated by the Company "without cause" prior to
the occurrence of a Change in Control and it can be shown such termination
occurred in connection with, prior to or in anticipation of the Change in
Control, or if the termination resulted from a Change in Control, the Executive
is entitled to (i) a lump sum payment equal to two times the Executive's annual
base salary and annual incentive plan for the year in which the Change in
Control occurs or the prior year, whichever is greater, (ii) unpaid, accrued
amounts under the annual incentive plan and a payment that equals the average
of the incentive payment received by the Executive under the annual incentive
plan for the immediately preceding three years and (iii) certain other
supplemental insurance coverages, for a maximum of 18 months (the "Change in
Control Provision"). In the event of a Change in Control, whether or not the
Executive's employment continues with the Company, all options granted to such
Executive under any of the Management Plans (as defined below) shall vest
immediately on the date of the Change in Control.

In the event that an Executive's employment is terminated for
disability or death, the Executive (or his estate) is to be paid (a) his base
salary at the rate in effect on the date of termination until the earlier of
six months from the date of termination or the date of commencement of long
term disability payments, if applicable, and (b) any unpaid, accrued amounts
under the annual incentive plan, and will receive any stock option rights to
which such Executive would otherwise be entitled. In the case of termination by
reason of death, the executive is also entitled to a payment under the annual
incentive plan equal to the pro rata amount due for the termination year.

OPTION PLANS

The Company's 1994 Stock Option Plan (the "1994 Plan") was adopted by
the Board upon the recommendations of a special committee consisting of Messrs.
Seidler, Shortt and Voigt, and approved by the Company's sole stockholder
during the fourth quarter of fiscal 1994. The Company's 1996 Stock Option Plan
(the "1996 Plan") was similarly adopted on May 15, 1996, as amended as of July
31, 1996.

Under the 1994 Plan and 1996 Plan (collectively, the "Management
Plans") incentive stock options ("ISOs"), as provided in Section 422A of the
Internal Revenue Code, and non-qualified stock options may be granted to any
full-time employee of the Company or its subsidiaries. The maximum aggregate
number of shares of Common Stock that

<PAGE> 48

may be issued under the 1994 Plan and 1996 Plan is 491,413 and 289,062,
respectively. As of June 30, 1996, options to purchase an aggregate of 491,413
shares of Common Stock had been granted under the 1994 Plan. Of such amount,
Messrs. Chill, Wright, Freed, Kenner and other key managers hold options to
purchase 145,282, 53,871, 53,871, 53,871 and 130,648 shares of Common Stock,
respectively. Mr. Beckman holds options for 53,870 common shares. As of June
30, 1996, the only options granted under the 1996 Plan were options to purchase
21,723 shares of Common Stock granted to Mr. Sinicropi. Options may not be
granted under the Management Plans after August 28, 2004. See "Principal
Stockholders".

The purchase price of the shares of Common Stock subject to options
under the Management Plans must be no less than the fair market value of the
Common Stock at the date of grant, as determined by the Committee; provided,
however, that the purchase price of shares of Common Stock subject to ISOs
granted to any optionee who owns shares possessing more than 10% of the
combined voting power of the Company or any parent or subsidiary of the Company
("Ten Percent Stockholder") must not be less than 110% of the fair market value
of the Common Stock at the date of the grant. The maximum term of an option may
not exceed ten years from the date of grant, except with respect to ISOs
granted to Ten Percent Stockholders which must expire within five years of the
date of grant.

The Management Plans are administered by the Company's Compensation
Committee. Subject to the express provisions of the Management Plans, the
Compensation Committee has the discretion and authority to determine to whom
from among the eligible employees an option may be granted, the time or times
at which each option may be exercised, the number of shares of Common Stock
subject to each option and the terms and conditions of each stock option
agreement issued pursuant to the Management Plans; provided, however, that
shares of Common Stock subject to any such agreement shall vest and become
exercisable at a minimum rate of 25% per year over a four-year period.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During fiscal 1995 and the nine months ended June 30, 1996, the
Company paid legal fees totaling approximately $135,000 and $93,000 to the law
firm of Watson & Dana. Mr. Dana, a director of the Company and a member of the
Compensation Committee, is a member of Watson & Dana.

<PAGE> 49

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of September 6, 1996 and as
adjusted to reflect the sale of the Shares offered hereby by : (i) each
stockholder known by the Company to own beneficially 5% or more of the
outstanding shares of Common Stock; (ii) each director of the Company; (iii)
each of the Named Executive Officers; and (iv) all executive officers and
directors of the Company as a group. Unless otherwise indicated, the address
for each officer, director and 5% stockholder is c/o Synthetic Industries,
Inc., 309 LaFayette Road, Chickamauga, Georgia 30707.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED OWNED
PRIOR TO OFFERING AFTER OFFERING
-------------------------- --------------------
NUMBER OF SHARES
NAME NUMBER PERCENT BEING OFFERED NUMBER PERCENT
- ---- ----------------- ------- ---------------- ---------- -------
<S> <C> <C> <C> <C> <C>
5% STOCKHOLDER:
Synthetic Industries, L.P.................... 5,781,250 100% -- 5,781,250 62%

NAMED EXECUTIVE OFFICERS:
Leonard Chill ............................... 37,234(1)(2)(3) * -- 37,234 *
Jon P. Beckman .............................. 19,801(1)(2)(3) * -- 19,801 *
20040 Gulf Blvd .........................
Indian Shores, FL 34635
William Gardner Wright, Jr 17,985(1)(2)(3) * -- 17,985 *
Ralph Kenner ................................ 17,985(1)(2)(3) * -- 17,985 *
Robert J. Breyley ........................... 3,051(2)(4) * -- 3,051 *

DIRECTORS:
Joseph F. Dana .............................. 21,680(2) * -- 21,680 *
Lee J. Seidler .............................. 43,360(2) * -- 43,360 *
William J. Shortt ........................... 14,453(2) * -- 14,453 *
Robert L. Voigt ............................. 14,453(2) * -- 14,453 *

All executive officers and
directors as a group (14
persons)(3)(4)(5)............................ 194,844 3.27% -- 194,844 2.08%
</TABLE>

- ----------
* Less than 1.0%.

(1) Includes 9,632 shares as to which such person may be deemed to have
beneficial ownership as a result of his indirect beneficial ownership
of 0.1666% of a partnership interest in the Partnership.

(2) Includes shares of Common Stock subject to options exercisable within
60 days, as follows: Leonard Chill--27,602 shares; Jon P.
Beckman--10,169 shares; William Gardner Wright, Jr.--8,353 shares;
Ralph Kenner--8,353 shares; Robert J. Breyley--2,421 shares; Joseph F.
Dana--21,680 shares; Lee J. Seidler--43,360 shares; William J.
Shortt--14,453 shares; Robert L. Voigt--14,453 shares.

(3) Does not include 5,781,250 shares (other than the 9,632 Shares
described in footnote 1 above) as to which Messrs. Chill, Wright,
Kenner and Beckman and W. Wayne Freed may be deemed to have beneficial
ownership by virtue of their indirect control of the Partnership. See
"Certain Relationships and Related Transactions".

(4) Includes 630 shares as to which Mr. Breyley may be deemed to have
beneficial ownership as a result of his indirect beneficial ownership
of 0.0109% of a partnership interest in the Partnership.

<PAGE> 50

(5) Does not include (i) an aggregate of 22,275 shares of Common Stock
subject to options exercisable within 60 days that are owned by
employees of the Company other than the Named Executive Officers and
(ii) an aggregate of 465,278 shares of Common Stock subject to options
that are not exercisable within 60 days that are owned by directors,
officers and employees of the Company. Includes an aggregate of 38,528
shares as to which Messrs. Chill, Wright, Kenner and Freed may be
deemed to have beneficial ownership as a result of their indirect
beneficial ownership of 0.1666% each of a partnership interest in the
Partnership.

<PAGE> 51

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

As of June 30, 1996, all of the issued and outstanding Common Stock
was owned by the Partnership. See "Principal Stockholders". SI Management L.P.
is the sole general partner of the Partnership. Synthetic Management G.P. is
the sole general partner of SI Management L.P. By virtue of these
relationships, Synthetic Management G.P. controls the management and affairs of
the Partnership and, therefore, the Company. After the Offering, the
Partnership will own 5,781,250 shares of Common Stock, or approximately 63% of
the issued and outstanding shares of Common Stock, and will therefore hold the
voting power to determine the outcome of all matters upon which stockholders
vote.

The general partners of Synthetic Management G.P. are the following
five Delaware corporations: Chill Investments, Inc., Beckman Investments,
Inc., Freed Investments, Inc., Kenner Investments, Inc. and W.G. Wright
Investments, Inc. Each of Messrs. Chill, Beckman, Freed, Kenner and Wright is
the sole director and the sole stockholder of one of Synthetic Management
G.P.'s general partners. For further information concerning Messrs. Chill,
Beckman, Freed, Kenner and Wright, see "Management--Executive Officers and
Directors of the Company" and "--Executive Compensation".

The Company and the Partnership have entered into a Registration
Rights Agreement pursuant to which the Company has agreed that upon request of
the Partnership the Company will register under the Securities Act and
applicable state securities laws the sale of the Common Stock owned by the
Partnership and as to which registration has been requested. The Company's
obligation is subject to certain limitations relating to a minimum amount
required for registration, the timing of a registration and other similar
matters. The Company is obligated to pay any registration expenses incidental
to such registration, excluding underwriters' commissions and discounts. The
above description is qualified in its entirety by reference to the Registration
Rights Agreement, a copy of which has been filed as an exhibit to the
Registration Statement in the form executed or substantially in the form to be
executed. The Partnership, however, is subject to a lock-up agreement with the
Underwriters pursuant to which the Partnership has agreed not to offer, sell,
agree to sell, grant any option for the sale of or otherwise dispose of,
directly or indirectly, any shares of Common Stock (or any security convertible
into, exercisable for or exchangeable for Common Stock) without the consent of
Bear, Stearns & Co. Inc. for a period of one year after the date of this
Prospectus. See "Shares Eligible for Future Sale".

Lee J. Seidler, a director of the Company, is presently associated
with Bear, Stearns & Co. Inc. as Managing Director Emeritus and from time to
time receives fees in connection with consulting and referral services to Bear,
Stearns & Co. Inc.

See also the information and the transactions described under
"Management--Compensation Committee Interlocks and Insider Participation".

<PAGE> 52

DESCRIPTION OF CERTAIN INDEBTEDNESS

THE CREDIT FACILITY

On October 20, 1995, as subsequently amended, the Company entered into
the Credit Facility with the Lenders and The First National Bank of Boston, as
agent. The Credit Facility provides for a revolving credit line, a term loan
facility and a letter of credit facility pursuant to which the Company may
borrow up to an aggregate of $85 million.

At June 30, 1996, $45 million was borrowed under the term loan
facility and approximately $13.0 million was outstanding under the revolving
credit loan portion of the Credit Facility (the "Revolver") and approximately
$25.7 million was available for additional borrowing thereunder. The Revolver
provides for availability based on a borrowing formula consisting of 85% of
eligible receivables and 50% of eligible inventory, subject to certain
limitations. The entire amount outstanding under the Revolver matures on
October 1, 2001. Of the $45 million due under the term loan, $10 million is
payable in 1999 and $17.5 million is payable in each of 2000 and 2001.

The Credit Facility permits borrowings which bear interest, at the
Company's option, (i) for domestic borrowings, based on the lender's base rate
plus 0.75% or 1.00% for revolver or term loan advances, respectively (9.0% to
9.25% at June 30, 1996) or (ii) for Eurodollar borrowings, based on the
Interbank Eurodollar rate at the time of conversion plus 2.75% or 2.50% for
revolver or term loan advances, respectively (8.19% to 7.94% at June 30, 1996).

The Credit Facility provides for borrowings under a letter of credit
facility up to $3 million, which borrowings reduce amounts available under the
Revolver. As of June 30, 1996, approximately $1.3 million was outstanding under
the letter of credit facility.

The Credit Facility contains a number of covenants, including, among
others, covenants restricting the Company and its subsidiaries with respect to
the incurrence of indebtedness, limitations on sales of substantial assets,
mergers or consolidations and capital expenditures. The Company is also
required to comply with certain financial tests and maintain certain financial
ratios. Additionally, the Credit Facility and the Debentures contain
restrictions on the Company's ability to declare and pay dividends. Based on
such restrictions and financial covenants, the Company was prohibited from
paying dividends at June 30, 1996.

THE DEBENTURES

On December 14, 1992, the Company issued the Debentures, which
represent unsecured obligations of the Company. The Debentures are redeemable
at the option of the Company at any time on or after December 1, 1997,
initially at 106.375% of their principal amount, together with accrued
interest, with declining redemption prices thereafter. Interest on the
Debentures is payable semi-annually on June 1 and December 1.

<PAGE> 53

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company currently consists of
5,000 shares of Common Stock, par value $1.00 per share, of which 49.95 Shares
are issued and outstanding. All of the issued and outstanding shares of Common
Stock are owned by the Partnership. Immediately prior to the Offering, the
Company's Certificate of Incorporation (the "Certificate of Incorporation"), as
amended in December 1994, will be amended and restated to increase the
authorized capital stock of the Company to 25,000,000 shares of Common Stock
and the Stock Split will occur which will increase the number of shares of
Common Stock issued and outstanding to 5,781,250 shares. The information below
assumes that the amendment of the Certificate of Incorporation and the Stock
Split have occurred.

COMMON STOCK

Each share of Common Stock is entitled to share equally in dividends
if, as, and when declared by the Board and, upon liquidation or dissolution of
the Company, whether voluntary or involuntary, to share equally in the assets
of the Company available for distribution to the holders of the Common Stock.
Each holder of Common Stock is entitled to one vote per share for all purposes.
The holders of Common Stock have no preemptive rights and there is no
cumulative voting, redemption right or right of conversion with respect to the
Common Stock. All outstanding shares of Common Stock and all shares to be sold
and issued by the Company pursuant to the Offering will be fully paid and
nonassessable. The Board is authorized to issue additional shares of Common
Stock within the limits authorized by the Certificate of Incorporation and
without stockholder action.

INDEMNIFICATION OF OFFICERS AND DIRECTORS

The Certificate of Incorporation contains provisions to indemnify the
Company's directors and officers to the fullest extent permitted by the
Delaware General Corporation Law (the "DGCL"), including payment in advance of
a final disposition of a director's or officers' expenses and attorneys' fees
incurred in defending any action, suit or proceeding. The Company believes that
these provisions will assist the Company in attracting and retaining qualified
individuals to serve as directors.

CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION

The Certificate of Incorporation requires that any action required or
permitted to be taken by the Company's stockholders must be effected at a duly
called annual or special meeting of stockholders and may not be effected by
consent in writing. The provisions requiring stockholders to take action only
at a duly called annual or special meeting may be amended, altered or repealed
only upon the affirmative vote of the holders of at least 66 2/3% of the
outstanding shares of voting stock of the Company.

SECTION 203 OF THE DGCL

Generally, Section 203 of the DGCL prohibits certain Delaware
corporations from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the time of the transaction in
which the person became an interested stockholder, unless (i) prior to the time
the board of directors of the corporation approved either the business
combination or the transaction which resulted in the stockholder becoming an
interested stockholder, (ii) upon consummation of the transaction which
resulted in the stockholder becoming an interested stockholder, the interested
stockholder owns at least 85% of the outstanding voting stock, or (iii) at or
after such time the business combination is approved by the board of directors
and by the affirmative vote of at least 66 2/3% of the outstanding voting stock
which is not owned by the interested stockholder. A "business combination"
includes mergers, asset sales and other transactions resulting in a financial
benefit to the interested stockholder. Subject to certain exceptions, an
"interested stockholder" is a person who, together with affiliates and
associates, owns (or within three years, did own) 15% or more of the
corporation's voting stock. A Delaware corporation may "opt out" from the
application of Section 203 of the DGCL through a provision in its certificate
of incorporation or by-laws. The Company has not opted out of

<PAGE> 54

Section 203 of the DGCL and thus is subject to this provision which could
render more difficult or discourage a merger, tender offer or other similar
transaction.

REGISTRATION RIGHTS

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is The First
National Bank of Boston.

<PAGE> 55

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have outstanding
9,181,250 shares of Common Stock. Of these shares, the 3,400,000 shares of
Common Stock sold in the Offering will be freely tradeable without restriction
or further registration under the Securities Act, except for any shares owned
by an "affiliate" of the Company, which will be subject to the limitations of
Rule 144 under the Securities Act ("Rule 144").

The shares of Common Stock issued and outstanding prior to the
Offering were acquired by the Partnership without registration under the
Securities Act in reliance upon exemptions from registration and are
"restricted securities" for purposes of the Securities Act. These shares may
not be sold unless their offer and sale are registered under the Securities Act
or unless an exemption from registration, such as the exemption provided by
Rule 144 under the Securities Act, is available. Each of the Company, its
executive officers, senior management and directors and the Partnership have
entered into certain "lock-up" agreements with the Underwriters with respect to
the sale of shares of Common Stock. Under these "lock-up" agreements, (i) the
Company has agreed not to offer, sell, agree to sell, grant any option for the
sale of or otherwise dispose of, directly or indirectly, any shares of Common
Stock (or any security convertible into, exercisable for or exchangeable for
Common Stock) without the consent of Bear, Stearns & Co. Inc. for a period of
180 days after the date of this Prospectus and (ii) the Partnership and the
executive officers, senior management and directors of the Company have agreed
not to offer, sell, agree to sell, grant any option for the sale of or
otherwise dispose of, directly or indirectly, any shares of Common Stock (or
any security convertible into, exercisable for or exchangeable for Common
Stock) without the consent of Bear, Stearns & Co. Inc. for a period of one year
after the date of this Prospectus, and thereafter for a period of one year only
pursuant to an underwritten public offering, except with respect to transfers
made by officers or directors as gifts, provided that the donee agrees to be
bound by the foregoing restrictions, and except that the Company may issue
shares of Common Stock upon the exercise of options granted under its stock
option plans.

Executive officers and directors of the Company are generally
permitted to sell Common Stock in accordance with Rule 144. In general, under
Rule 144 as currently in effect, a person (or persons whose shares are
aggregated) who has beneficially owned his or her restricted securities (as
that term is defined in Rule 144) for at least two years from the date such
securities were acquired from the Company or an affiliate of the Company is
entitled to sell within any three-month period a number of shares that does not
exceed the greater of (i) one percent of the then outstanding shares of Common
Stock and (ii) the average weekly trading volume of the Common Stock during the
four calendar weeks preceding a sale by such person. Sales under Rule 144 are
also subject to certain manner-of-sale provisions, notice requirements and the
availability of current public information about the Company. Under Rule 144,
however, a person who has held shares for a minimum of three years from the
later of the date such securities were acquired from the Company or an
affiliate of the Company and who is not, and for the three months prior to the
sale of such shares has not been, an affiliate of the Company, is free to sell
such shares without regard to the volume, manner-of-sale and certain other
limitations contained in Rule 144.

Following expiration of the applicable "lock-up" agreements with the
Underwriters described above, all outstanding shares of Common Stock held by
the Partnership or the Company's officers and directors will be immediately
eligible for sale, subject to applicable volume limitations and other
provisions of Rule 144.

The Partnership also has the benefit of a Registration Rights
Agreement which provides the Partnership with certain rights to registration
under the Securities Act, subject to certain conditions. See "Description of
Capital Stock--Registration Rights".

There can be no certainty as to the effect, if any, that market sales
of shares of Common Stock or the availability of such shares for sale will have
on the market price prevailing from time to time. Nevertheless, sales of
substantial amounts of Common Stock in the public market may have an adverse
impact on the market for the Shares.

<PAGE> 56

UNDERWRITING

The Underwriters named below (the "Underwriters"), for whom Bear, Stearns & Co.
Inc. is acting as Representative (the "Representative"), have severally agreed,
subject to the terms and conditions of the Underwriting Agreement, to purchase
from the Company the aggregate number of shares of Common Stock set forth
opposite their names below:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES TO BE PURCHASED
------------ ----------------------
<S> <C>
Bear, Stearns & Co. Inc...................................

---------
Total............................................ 3,400,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the
Underwriters thereunder are subject to approval of certain legal matters by
their counsel and to various other conditions. The nature of the obligations of
the Underwriters is such that they are committed to purchase all of the shares
of Common Stock offered hereby if any are purchased.

The Representative has advised the Company that the Underwriters
propose initially to offer the shares of Common Stock offered hereby directly
to the public at the public offering price set forth on the cover page of this
Prospectus. The Underwriters may allow a selected dealer concession of not more
than $_____ per share, and the Underwriters may allow, and such dealers may
reallow, concessions not in excess of $_____ per share to certain other
dealers. After the initial public offering, the public offering price and
concessions and reallowances to dealers may be changed by the Representative.

The Company has granted an option to the Underwriters, exercisable at
any time during the 30-day period after the date of this Prospectus, to
purchase from the Company up to an additional 510,000 shares of Common Stock at
the public offering price set forth on the cover page of this Prospectus, less
the underwriting discount. The Underwriters may exercise such option solely for
the purpose of covering over-allotments, if any, made in connection with the
sale of the shares of Common Stock offered hereby. To the extent that the
Underwriters exercise this option, each Underwriter will be committed, subject
to certain conditions, to purchase a number of the additional shares of Common
Stock proportionate to such Underwriter's purchases obligations set forth in
the foregoing table.

The Underwriting Agreement provides that the Company will indemnify
the several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, or will contribute to payments the
Underwriters may be required to make in respect thereof.

The Company has agreed not to offer, issue, sell, transfer, assign,
contract to sell, grant any option for the sale of, or otherwise dispose of,
directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or any rights
to acquire Common Stock for a period of 180 days after the date of this
Prospectus without the prior written consent of the Representative.

Each of the Company, its executive officers, senior management and
directors and the Partnership have entered into certain "lock-up" agreements
with the Underwriters with respect to the sale of shares of Common Stock. Under
these "lock-up" agreements, (i) the Company has agreed not to offer, sell,
agree to sell, grant any option for the sale of or otherwise dispose of,
directly or indirectly, any shares of Common Stock (or any security convertible
into, exercisable for or exchangeable for Common Stock) without the consent of
Bear, Stearns & Co. Inc. for a period of 180 days after

<PAGE> 57

the date of this Prospectus and (ii) the Partnership and the executive
officers, senior management and directors of the Company have agreed not to
offer, sell, agree to sell, grant any option for the sale of or otherwise
dispose of, directly or indirectly, any shares of Common Stock (or any security
convertible into, exercisable for or exchangeable for Common Stock) without the
consent of Bear, Stearns & Co. Inc. for a period of one year after the date of
this Prospectus, and thereafter for a period of one year only pursuant to an
underwritten public offering, except with respect to transfers made by officers
or directors as gifts, provided that the donee agrees to be bound by the
foregoing restrictions, and except that the Company may issue shares of Common
Stock upon the exercise of options granted under its stock option plans. After
the expiration of the "lock-up" agreements, such persons will be entitled to
sell, distribute or otherwise dispose of the Common Stock that they hold
subject to the provisions of applicable securities laws.

The Representative has advised the Company that the Underwriters do
not expect to confirm sales to discretionary accounts.

Prior to the Offering, there has been no public market for the Common
Stock. The initial public offering price will be determined by negotiation
between the Company and the Representative. Among the factors which will be
considered in such negotiations are the Company's history, capital structure
and financial condition, its past and present earnings and the trend of such
earnings, prospects for the Company and its industry, the present state of the
Company's development, the recent market prices of publicly-held companies that
the Company and the Representative believe to be comparable to the Company and
general conditions prevailing in the securities markets at the time of this
Offering.

LEGAL MATTERS

Certain legal matters with respect to the validity of the Shares are
being passed upon for the Company by Andrews & Kurth L.L.P., New York, New
York. Paul, Hastings, Janofsky & Walker LLP (a limited liability partnership
including professional corporations), New York, New York, has acted as counsel
to the Underwriters in connection with the Offering.

EXPERTS

The Consolidated Financial Statements as of September 30, 1995 and
1994 and for each of the three fiscal years in the period ended September 30,
1995, appearing in this Prospectus and Registration Statement have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their reports
thereon appearing herein and elsewhere in the Registration Statement, and have
been so included in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, and in accordance therewith files
reports, proxy statements and other information with the Securities and
Exchange Commission. Such reports, proxy statements and other information as
filed by the Company can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and the following Regional Offices of the Commission:
Northeast Regional Office, 7 World Trade Center, Suite 1300, New York, New York
10048, and Midwest Regional Office, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, such reports, proxy
statements and other information may be electronically accessed at the
Commission's site on the World Wide Web located at http://www.sec.gov. Such
reports, proxy statements and other information concerning the Company may also
be inspected at the offices of the Nasdaq National Market, 1735 K Street, N.W.,
Washington, D.C. 20006.

The Company has filed with the Commission a Registration Statement on
Form S-1, of which this Prospectus forms a part (together with any amendments
thereto, the "Registration Statement"), under the Securities Act in respect

<PAGE> 58

of the Shares offered hereby. As permitted by the rules and regulations of the
Commission, this Prospectus omits certain information, exhibits and
undertakings contained in the Registration Statement. Such additional
information, exhibits and undertakings may be inspected at and obtained from
the Commission's principal office in Washington, D.C. Statements contained
herein concerning the provisions of documents are necessarily summaries of such
documents, and each statement is qualified in its entirety by reference to the
copy of the applicable document filed with the Commission.

<PAGE> 59

SYNTHETIC INDUSTRIES, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS:

<TABLE>
<CAPTION>
(1) Consolidated Financial Statements as of September 30, 1994 and 1995 and for each of the three years
in the period ended September 30, 1995.
Page
----
<S> <C>
Independent Auditors' Report..................................................................F-2
Consolidated Balance Sheets...................................................................F-3
Consolidated Statements of Operations.........................................................F-4
Consolidated Statements of Changes in Stockholder's Equity....................................F-5
Consolidated Statements of Cash Flows.........................................................F-6
Notes to Consolidated Financial Statements....................................................F-7

(2) Unaudited Consolidated Financial Statements as of June 30, 1995 and 1996 and for the three and
nine months periods then ended.

Consolidated Balance Sheets..................................................................F-18
Consolidated Statements of Operations........................................................F-19
Consolidated Statements of Cash Flows........................................................F-20
Notes to Consolidated Financial Statements...................................................F-21
</TABLE>

F-1

<PAGE> 60

INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholder
Synthetic Industries, Inc.
Chickamauga, Georgia

We have audited the accompanying consolidated balance sheets of
Synthetic Industries, Inc. (a wholly owned subsidiary of Synthetic Industries,
L.P.) and its subsidiaries as of September 30, 1994 and 1995, and the related
consolidated statements of operations, changes in stockholder's equity and cash
flows for each of the three years in the period ended September 30, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on the financial statements based on
our audits.

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

In our opinion, such consolidated financial statements present fairly,
in all material respects, the financial position of Synthetic Industries, Inc.
and subsidiaries at September 30, 1994 and 1995, and the results of their
operations and their cash flows for each of the three years in the period ended
September 30, 1995 in conformity with generally accepted accounting principles.

As discussed in Note 11 to the consolidated financial statements, the
Company changed its method of accounting for income taxes during the year ended
September 30, 1993.

DELOITTE & TOUCHE LLP

New York, New York
November 17, 1995 (September 6, 1996 as to Notes 10.c. and 15)

F-2

<PAGE> 61

SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------------
ASSETS 1994 1995
--------- ---------
<S> <C> <C>
CURRENT ASSETS:
Cash .............................................. $ 117 $ 108
Accounts receivable, net (Note 3) ................. 39,094 47,947
Inventory (Note 4) ................................ 32,520 45,597
Other current assets (Note 5) ..................... 10,859 14,708
--------- ---------
TOTAL CURRENT ASSETS ..................... 82,590 108,360

PROPERTY, PLANT AND EQUIPMENT, net (Note 6) ........... 115,050 116,729

OTHER ASSETS (Note 7) ................................. 90,293 87,211
--------- ---------

$ 287,933 $ 312,300
========= =========

LIABILITIES AND STOCKHOLDER'S EQUITY

CURRENT LIABILITIES:
Accounts payable .................................. $ 18,767 $ 24,021
Accrued expenses and other current liabilities .... 6,944 7,378
Income taxes payable (Note 11) .................... 482 1,455
Interest payable .................................. 6,247 6,427
Current maturities of long-term debt (Note 8) ..... 6,036 40
--------- ---------
TOTAL CURRENT LIABILITIES ................ 38,476 39,321

LONG-TERM DEBT (Note 8) ............................... 172,490 192,048

DEFERRED INCOME TAXES (Note 11) ....................... 21,150 23,175

COMMITMENTS AND CONTINGENCIES (Notes 10 and 11)

STOCKHOLDER'S EQUITY (Notes 14 and 15):
Common stock ...................................... -- --
Additional paid-in capital ........................ 69,300 69,300
Cumulative translation adjustments ................ 26 29
Deficit ........................................... (13,509) (11,573)
--------- ---------

TOTAL STOCKHOLDER'S EQUITY ............... 55,817 57,756
--------- ---------

$ 287,933 $ 312,300
========= =========
</TABLE>

See Notes to Consolidated Financial Statements.

F-3

<PAGE> 62

SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
FISCAL YEAR ENDED SEPTEMBER 30,
----------------------------------------
1993 1994 1995
----------- ----------- -----------
<S> <C> <C> <C>
Net sales ................................................. $ 210,516 $ 234,977 $ 271,427
----------- ----------- -----------
Costs and expenses:
Costs of sales ........................................ 142,181 152,305 194,706
Selling expenses ...................................... 19,395 21,815 24,273
General and administrative expenses ................... 16,404 17,588 21,195
Amortization of excess of purchase price over net
assets acquired and other intangibles .............. 2,615 2,499 2,566
----------- ----------- -----------

180,595 194,207 242,740
----------- ----------- -----------

Operating income ................................... 29,921 40,770 28,687
----------- ----------- -----------
Other expenses:
Interest expense ...................................... 20,854 20,011 22,514
Amortization of deferred financing costs .............. 933 739 737
----------- ----------- -----------

21,787 20,750 23,251
----------- ----------- -----------
Income from continuing operations before provision
for income taxes ...................................... 8,134 20,020 5,436

Provision for income taxes (Note 11) ...................... 4,472 8,600 3,500
----------- ----------- -----------

Income from continuing operations ......................... 3,662 11,420 1,936

Reversal of provision for discontinued operations (Note 12) 1,420 -- --
----------- ----------- -----------
Income before extraordinary item and cumulative effect
of change in accounting principle ..................... 5,082 11,420 1,936
Extraordinary item-- loss from early extinguishment of debt
(Note 9) .............................................. (8,892) -- --
Cumulative effect on prior years of change in accounting
for income taxes (Note 11) ............................ (8,500) -- --
----------- ----------- -----------
NET INCOME (LOSS) ......................................... $ (12,310) $ 11,420 $ 1,936
=========== =========== ===========

Pro Forma Financial Data (Unaudited):
Pro forma net income .................................. $ 4,686
===========
Weighted average shares outstanding used in computing
pro forma net income per share ..................... 9,422,214
===========
Pro forma net income per share ........................ $ 0.50
===========
</TABLE>

See Notes to Consolidated Financial Statements.

F-4

<PAGE> 63

SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
ADDITIONAL CUMULATIVE
COMMON PAID-IN TRANSLATION
STOCK CAPITAL ADJUSTMENTS DEFICIT TOTAL
----------- ------------ ------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Balance, October 1, 1992............ $ -- $ 69,300 $ 19 $ (12,619) $ 56,700
Net loss............................ -- -- -- (12,310) (12,310)
Foreign currency translation........ -- -- 33 -- 33
----------- ------------ ------------- ------------ -----------
Balance, September 30, 1993......... -- 69,300 52 (24,929) 44,423
Net income.......................... -- -- -- 11,420 11,420
Foreign currency translation........ -- -- (26) -- (26)
----------- ------------ ------------- ------------ -----------
Balance, September 30, 1994......... -- 69,300 26 (13,509) 55,817
Net income.......................... -- -- -- 1,936 1,936
Foreign currency translation........ -- -- 3 -- 3
----------- ------------ ------------- ------------ -----------
Balance, September 30, 1995......... $ -- $ 69,300 $ 29 $ (11,573) $ 57,756
=========== ============ ============= ============ ===========
</TABLE>

See Notes to Consolidated Financial Statements.

F-5

<PAGE> 64

SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
FISCAL YEAR ENDED SEPTEMBER 30,
-----------------------------------
1993 1994 1995
--------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income before extraordinary item and cumulative
effect of change in accounting principle ................. $ 5,082 $ 11,420 $ 1,936
Adjustments to reconcile net income to net cash provided
by operations:
Depreciation ............................................. 8,515 9,152 11,634
Amortization of intangibles and deferred financing
costs ................................................. 3,558 3,238 3,303
Deferred income taxes .................................... 5,489 3,830 (355)
Provision for bad debts .................................. 383 217 3,363
Loss on disposal of equipment ............................ 751 266 --
Reversal of provision for loss on disposal of discontinued
operations (net of tax) ............................... (1,420) -- --
Changes in assets and liabilities:
Increase in accounts receivable .......................... (5,335) (2,861) (12,212)
Decrease (increase) in inventory ......................... 1,758 (7,255) (13,076)
Increase in other current assets ......................... (647) (632) (1,469)
(Decrease) increase in accounts payable .................. (1,700) 5,348 5,254
Increase in accrued expenses and other current liabilities 2,499 533 434
(Decrease) increase in income taxes payable .............. (356) 482 973
Increase in interest payable ............................. 5,757 224 180
--------- --------- ---------
Cash provided by (used in) operating activities ....... 24,334 23,962 (35)
--------- --------- ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment ................. (11,759) (31,866) (13,313)
--------- --------- ---------
Cash used in investing activities ........................ (11,759) (31,866) (13,313)
--------- --------- ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under term loan ................................. 30,000 -- 11,000
Repayments under term loan ................................. (19,303) (6,000) (6,000)
Issuance of 12 3/4% senior subordinated debentures ......... 140,000 -- --
Redemption of 11 1/2% senior subordinated debentures ....... (116,344) -- --
Repayment costs on early extinguishment of debt ............ (720) -- --
Repayment of junior subordinated debentures ................ (17,093) -- --
Net repayment (borrowings) under revolving credit line ..... (23,298) 13,802 8,598
Repayments of other long term debt ......................... (28) (31) (36)
Deferred financing costs ................................... (5,784) -- (221)
--------- --------- ---------
Cash (used in) provided by financing activities .......... (12,570) 7,771 13,341
Effect of exchange rate changes on cash .................. (1) (3) (2)
--------- --------- ---------
NET INCREASE (DECREASE) IN CASH ............................ 4 (136) (9)
CASH AT BEGINNING OF YEAR .................................. 249 253 117
--------- --------- ---------
CASH AT END OF YEAR ........................................ $ 253 $ 117 $ 108
========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the year for:
Interest ................................................. $ 14,913 $ 19,787 $ 22,334
Income taxes ............................................. -- 3,901 2,882
</TABLE>

See Notes to Consolidated Financial Statements.

F-6

<PAGE> 65

SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE AMOUNTS)

1. ORGANIZATION

Synthetic Industries, Inc., a Delaware corporation (the "Company"),
manufactures and markets a wide range of polypropylene-based fabric and fiber
products designed for industrial applications. The Company's diverse mix of
products are marketed to the floor covering, construction and technical textile
markets for such end-use applications as carpet backing, geotextiles, erosion
control, concrete reinforcement and furniture construction fabrics. The Company
is a wholly-owned subsidiary of Synthetic Industries, L.P., a Delaware limited
partnership.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the
Company and its subsidiaries, all of which are wholly-owned. All significant
intercompany transactions and balances have been eliminated.

REVENUE RECOGNITION

Revenue from product sales is recognized at the time of shipment.

FOREIGN CURRENCY TRANSLATION

The assets and liabilities of foreign subsidiaries are translated at
the fiscal year-end rates of exchange, and the results of operations are
translated at the average rates of exchange for the years presented. Gains or
losses resulting from translating foreign currency financial statements are
accumulated in the cumulative translation adjustments account in the
stockholder's equity section of the accompanying consolidated balance sheets.

INVENTORY

Inventory is stated at the lower of cost, determined using the
first-in, first-out method, or market.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at cost less accumulated
depreciation and amortization. Depreciation is provided on the straight-line
method based on estimated useful lives, as follows:

Building and improvements 25 years
Machinery and equipment 14 years

Leasehold improvements are amortized over the shorter of the useful life of the
asset or the term of the lease. Expenses for repairs, maintenance and renewals
are charged to operations as incurred. Expenditures which improve an asset or
extend its useful life are capitalized. When properties are retired or
otherwise disposed of, the related cost and accumulated depreciation and
amortization are removed from the accounts and any gain or loss is included in
the results of operations.

The Company had capitalized interest costs of $283, $729 and $255 in
fiscal 1993, 1994 and 1995, respectively.

F-7

<PAGE> 66

INCOME TAXES

The Company accounts for income taxes using an asset and liability
approach in accordance with Financial Accounting Standards Board ("FASB")
Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes". Under SFAS No. 109, deferred income taxes are recognized for the
tax consequences of temporary differences by applying enacted statutory tax
rates applicable to future years to differences between the financial statement
carrying amounts and the tax bases of existing assets and liabilities. The
effect on deferred taxes of a change in tax rates is recognized in the
statement of operations in the period that includes the enactment date.

EXCESS OF PURCHASE PRICE OVER NET ASSETS ACQUIRED

The excess of purchase price over net assets acquired is amortized on
a straight-line basis over a period of 40 years. Excess of purchase price over
net assets acquired is assessed for recoverability on a regular basis. In
evaluating the value and future benefits of goodwill, its carrying value would
be reduced by the excess, if any, of the balance over management's best
estimate of undiscounted future operating income before amortization of the
related intangible assets over the remaining amortization period.

DEFERRED FINANCING COSTS AND INTANGIBLE ASSETS

Deferred financing costs are amortized over periods from 5 to 12
years. Intangible assets consist primarily of trademarks and patent on
Fibermesh(R) which are amortized on a straight-line basis over 40 and 5 years,
respectively.

COMPUTATION OF PRO FORMA NET INCOME PER SHARE

The Company has presented pro forma net income per share for the year
ended September 30, 1995 in lieu of historical net income per share. Historical
per share information is not meaningful as the Company is owned by one
shareholder. The pro forma net income per share has been computed assuming (a)
proceeds of the initial public offering (Note 15) were used to repay
indebtedness resulting in interest savings and (b) the weighted average number
of common shares and common share equivalents outstanding have been adjusted to
give effect to the stock split authorized in July 1996 (Note 15). Pursuant to
Securities and Exchange Commission Staff Accounting Bulletin No. 55, common
share equivalents attributable to stock options granted within one year of an
initial public offering have been included in the calculation of weighted
average shares outstanding.

RECLASSIFICATION OF PRIOR FINANCIAL STATEMENTS

Certain reclassifications have been made to previous years' financial
statements to conform with 1995 classifications.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported 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.

RECENT ACCOUNTING PRONOUNCEMENTS

In March 1995, the FASB issued SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,"
which requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. SFAS No. 121 also addresses the accounting for long-lived
assets

F-8

<PAGE> 67

that are expected to be disposed of. SFAS No. 121 is effective for financial
statements for fiscal years beginning after December 15, 1995; therefore, the
Company will adopt SFAS No. 121 in the first quarter of fiscal 1997 and, based
on current circumstances, does not believe the effect of adoption will be
material.

In October 1995, the FASB issued SFAS No. 123, "Accounting for
Stock-Based Compensation" which will be effective for the Company beginning
October 1, 1996. SFAS No. 123 establishes financial accounting and reporting
standards for stock based employee compensation plans. The Company will account
for stock-based compensation awards under the provisions of Accounting
Principles Board Opinion No. 25, as permitted by SFAS No. 123. In accordance
with SFAS No. 123, beginning in the fiscal year ended September 30, 1997, the
Company will make pro forma disclosures relative to stock-based compensation as
part of the accompanying footnotes to the consolidated financial statements.

3. ACCOUNTS RECEIVABLE

Accounts receivable are presented net of the allowances for doubtful
accounts of $1,201 and $4,053 as of September 30, 1994 and 1995, respectively.
During fiscal 1995, the Company recorded a pre-tax charge of $2,852 to increase
the allowance for doubtful accounts due to a customer who experienced severe
financial difficulty. Amounts written off against established allowances were
$383, $217 and $511 for the years ended September 30, 1993, 1994 and 1995,
respectively.

Most of the Company's carpet backing sales are with customers located
in Georgia. Net sales to one customer represented 17%, 18% and 18%,
respectively, of consolidated net sales for the fiscal years presented.

4. INVENTORY

Inventory consists of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------
1994 1995
---------- ----------
<S> <C> <C>
Finished goods..................... $ 20,580 $ 27,867
Work in progress................... 5,263 5,541
Raw materials...................... 6,677 12,189
---------- ----------
$ 32,520 $ 45,597
========== ==========
</TABLE>

5. OTHER CURRENT ASSETS

Other current assets consist of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------
1994 1995
---------- ----------
<S> <C> <C>
Prepaid supplies................... $ 6,416 $ 7,192
Deferred tax assets (Note 11)...... 3,085 5,465
Other.............................. 1,358 2,051
---------- ----------
$ 10,859 $ 14,708
========== ==========
</TABLE>

F-9

<PAGE> 68

6. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------
1994 1995
---------- ----------
<S> <C> <C>
Land............................... $ 3,061 $ 3,511
Buildings and improvements......... 21,183 23,457
Machinery and equipment and
leasehold improvements........ 141,332 151,921
---------- ----------
165,576 178,889
Accumulated depreciation........... (50,526) (62,160)
---------- ----------
$ 115,050 $ 116,729
========== ==========
</TABLE>

7. OTHER ASSETS

Other assets consist of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------
1994 1995
---------- ----------
<S> <C> <C>
Excess of purchase price over
net assets acquired............. $ 99,818 $ 99,818
Intangible assets.................. 4,485 3,546
Deferred financing and
organizational costs............ 12,034 12,230
---------- ----------
116,337 115,594
Accumulated amortization........... (26,044) (28,383)
---------- ----------
$ 90,293 $ 87,211
========== ==========
</TABLE>

The excess of purchase price over net assets acquired arose from the
purchase of the Company's common stock in 1986.

F-10

<PAGE> 69

8. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------
1994 1995
---------- ----------
<S> <C> <C>
Secured Revolving Credit Facility (a):
Secured revolving credit portion ....... $ 16,129 $ 24,727
Term loan portion ...................... 21,000 26,000
12 3/4% senior subordinated debentures (b) 140,000 140,000
Other .................................... 1,397 1,361
--------- ----------
178,526 192,088
Less current portion ..................... (6,036) (40)
--------- ----------
Total long-term portion .................. $ 172,490 $ 192,048
========= ==========
</TABLE>

A. THE SECURED REVOLVING CREDIT FACILITY

On January 13, 1995, the Company and its lenders entered into a Third
Amended and Restated Revolving Credit Agreement (as amended to date, the
"Credit Facility"). The Company's term loan portion of the Credit Facility (the
"Term Loan") increased to $30,000 from $19,000. Prior to the execution of the
Fourth Amended and Restated Revolving Credit Agreement (the "Amended Credit
Facility") on October 20, 1995, the Term Loan was payable in equal monthly
installments of $500, plus interest beginning on February 1, 1995. The Company
entered into the Amended Credit Facility, with a termination date of October 1,
2001, which provides for Term Loan borrowings of $45,000 of which $10,000 is
payable in 1999 and $17,500 is payable in each of 2000 and 2001. Accordingly,
at September 30, 1995, all term loan borrowings are classified as long term.

The revolving credit loan portion of the Amended Credit Facility (the
"Revolver") provides for availability based on a borrowing formula consisting
of 85% of eligible accounts receivable and 50% of eligible inventory, subject
to certain limitations. At September 30, 1995, the Company had $9,173 available
under the Revolver. Under the Amended Credit Facility, the maximum amount
available for borrowing under the Revolver is increased to $40,000.

The Amended Credit Facility permits borrowings which bear interest, at
the Company's option, (i) for domestic borrowings based on the lender's base
rate plus .75% (9.5% at September 30, 1995) or (ii) for Eurodollar borrowings
based on the Interbank Eurodollar rate at the time of conversion plus 2.5% or
2.75% for Term Loan or Revolver advances, respectively (8.5% to 8.625% at
September 30, 1995). The Credit Facility contained similar provisions for
payment of interests thereunder.

The Amended Credit Facility provides for borrowings under letters of
credit of up to $3,000, which borrowings reduce amounts available under the
Revolver. The Company is required to pay a .375% fee on the unused portion of
the commitment.

The Company considers the carrying values of amounts outstanding under
the Credit Facility to approximate fair value because they reprice frequently
at market rates.

F-11

<PAGE> 70

The Amended Credit Facility is collateralized by substantially all of
the Company's assets and contains covenants related to the maintenance of
certain operating and working capital levels and limitations as to the amount
of capital expenditures. The Credit Facility was similarly collateralized and
contained like limitations and restrictions. The Company's ability to pay
dividends on its Common Stock is restricted by both the Amended Credit Facility
and the indenture relating to the Debentures discussed below. Based on such
restrictions and financial covenants, the Company was prohibited from paying
dividends at September 30, 1995.

B. SENIOR SUBORDINATED DEBENTURES

On December 14, 1992, the Company issued $140,000 of 12-3/4% Senior
Subordinated Debentures due 2002 (the "Debentures"), which represent unsecured
obligations of the Company. The Debentures are redeemable at the option of the
Company at any time on or after December 1, 1997, initially at 106.375% of
their principal amount, together with accrued interest, with declining
redemption prices thereafter. Interest on the Debentures is payable
semi-annually on June 1 and December 1.

The fair value of the Company's Debentures is estimated based on
quoted market prices for the Debentures in the over-the-counter market. The
estimated fair value of the Debentures at September 30, 1995 is 97.5% of their
face amount, or $136,500.

Approximate aggregate minimum annual payments due on long term debt,
inclusive of additional borrowings pursuant to the Amended Credit Facility, for
the subsequent five years are as follows: 1996, $40; 1997, $45; 1998, $50;
1999, $10,057; 2000, $42,291; and thereafter, $158,605.

F-12

<PAGE> 71

9. EXTINGUISHMENT OF DEBT

On January 13, 1993, the Company's 11-1/2% Senior Subordinated
Debentures due 1999 (the "Old Debentures"), with a principal amount of
$110,000, were redeemed at 105.11% of the principal amount thereof. On April
22, 1993, the Company redeemed a $40,000 maturity value zero coupon junior
subordinated debenture scheduled to mature on December 1, 1999, for $17,488.
Also in fiscal 1993, deferred financing fees and prepayment costs associated
with a prior credit facility were written off. The principal amounts, related
prepayment costs and unamortized issuance costs resulted in an extraordinary
loss of $8,892 (net of tax benefit of $5,392).

10. COMMITMENTS AND CONTINGENCIES

A. LEASE COMMITMENTS

The Company leases certain factory and warehouse buildings and
equipment under long-term operating leases expiring through 2009. Future
minimum lease payments under noncancellable operating leases at September 30,
1995 are as follows:

<TABLE>
<CAPTION>
YEAR AMOUNT
---------- ------------
<S> <C>
1996 $ 3,755
1997 2,637
1998 1,707
1999 1,248
2000 1,080
Thereafter 1,461
------------

Total $ 11,888
============
</TABLE>

Total rental expense for the above operating leases and other
short-term leases for the fiscal years 1993, 1994 and 1995 was $4,340, $4,684
and $3,731, respectively.

B. CAPITAL EXPENDITURES

In fiscal 1996, the Company plans a $35,000 expansion of its
manufacturing facilities, of which $3,028 is committed at September 30, 1995.

C. CONTINGENCIES

In January 1995, an arbitration proceeding was initiated by Fibermesh
(Suisse), S.A. against the Company, in the United States, alleging a breach by
the Company of an exclusive distribution agreement for the distribution of
Fibermesh(R) in Switzerland and claiming actual damages of 6,104,000 Swiss
Francs ($4.9 million at June 30, 1996) and punitive damages of $20 million. The
Company believes that it has meritorious defenses to all claims in the action
and that the ultimate resolution will not have a materially adverse effect on
the Company's financial position or results of operations.

F-13

<PAGE> 72

11. INCOME TAXES

Income tax expense for each of the years presented is determined in
accordance with SFAS No. 109. The Company adopted SFAS No. 109 as of October
1, 1992, and reflected a charge of $8,500 representing the cumulative effect of
this accounting change on net income.

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

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------------
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
Current:
Federal .............. $ (764) $ 3,770 $ 3,180
State ................ (200) 1,000 400
Foreign .............. -- -- 275
------- ------- -------
(964) 4,770 3,855
------- ------- -------

Deferred:
Federal .............. 795 3,405 (218)
State ................ 49 425 (137)
------- ------- -------
844 3,830 (355)
------- ------- -------
Total taxes on income.......... $ (120) $ 8,600 $ 3,500
======= ======= =======
</TABLE>

The Omnibus Budget Reconciliation Act of 1993 (the "Tax Act"), enacted
in August 1993, increased the statutory corporate income tax 1% (to 35%) and
made other changes concerning the deductibility of certain costs in determining
taxable income. Provisions of the Tax Act were effective retroactive to January
1, 1993. As a result and in accordance with SFAS No. 109, deferred federal
income tax expense was increased by $423 in the quarter ended September 30,
1993.

A reconciliation of income taxes from continuing operations computed
at the statutory rate and actual tax expense is as follows:

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
----------------------------
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
Amount computed at statutory rate .......................... $ 2,522 $ 7,007 $ 1,900
State and local taxes less applicable federal income tax ... 289 747 270
Amortization of goodwill ................................... 915 871 873
Other nondeductible expenses ............................... 142 348 210
Effect of federal tax rate increase ........................ 423 -- --
Other, net ................................................. 181 (373) 247
------- ------- -------
$ 4,472 $ 8,600 $ 3,500
======= ======= =======
</TABLE>

F-14

<PAGE> 73

The tax effects of significant items comprising the Company's net
deferred tax liability are as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30,
-----------------
1994 1995
------- -------
<S> <C> <C>
Property, plant and equipment ................. $20,058 $22,121
Trademarks and patents ........................ 1,092 1,054
------- -------

Total deferred income tax liabilities.......... 21,150 23,175
------- -------

Receivables ................................... 480 1,609
Inventory ..................................... 397 628
Accrued expenses .............................. 691 1,581
AMT credit carryforward ....................... 1,517 1,647
------- -------

Total deferred income tax assets .............. 3,085 5,465
------- -------

Net deferred income tax liability ............. $18,065 $17,710
======= =======
</TABLE>

United States income tax returns for fiscal years 1992 and 1993 are
currently under examination by the Internal Revenue Service. In the opinion of
management, adjustments resulting from the examination will not have a material
adverse effect on the Company's consolidated financial position or results of
operations.

12. DISCONTINUED OPERATIONS

On March 15, 1993, the Company completed the disposal of its Irish
manufacturing operations, which had been accounted for as a discontinued
operation. In fiscal 1993, the Company reduced amounts previously provided for
the loss on disposal by $1,420 (net of income taxes of $800).

13. RETIREMENT PROGRAMS

For United States employees, the Company maintains a trustee
profit-sharing plan (the "Plan") which is qualified under Section 401(k) of the
Internal Revenue Code. All full-time employees over the age of 21 who have been
employed continuously for at least one year are eligible for participation in
the Plan. The Company may, but has not elected to, contribute a portion of its
profits to the Plan, as determined by the Board. Employer contributions vest
over 3 to 7 years. The Company has elected to match employee contributions to
the Plan on a 50% basis but not to exceed 6% of the employee's annual
compensation. During fiscal years 1993, 1994 and 1995, the Company contributed
$813, $891 and $921, respectively. The Plan provides for the Company to bear
the expense of the administration of the Plan. Pension expense on the foreign
plans is not significant.

14. STOCKHOLDERS EQUITY

A. COMMON STOCK

The authorized capital stock of the Company consisted of 5,000 shares
of common stock, par value $1.00 per share (the "Common Stock"), of which 49.95
shares were outstanding at September 30, 1995 and 1994. All of the issued and
outstanding shares of Common Stock are owned by Synthetic Industries, L.P. In
connection with the Recapitalization in July 1996 (Note 15.b), the Company
increased the authorized number of shares to 25,000,000 and approved a
115,740.74-for-1 stock split of the issued and outstanding shares. All share
and per share information have been adjusted to give retroactive recognition to
the stock split.

F-15

<PAGE> 74

B. STOCK OPTIONS

In August 1994, the Company adopted a stock option plan (the
"Directors' Plan"), pursuant to which non-qualified stock options to purchase
an aggregate of 125,261 shares of Common Stock were granted to the four
non-employee Directors of the Company at an exercise price of $6.83 per share
which was determined by reference to the fair market value of the Company's
equity at the time such Directors joined the Board. The stock options will be
fully vested by October 1, 1996 and have a term which expires on August 4,
2004. The Directors' Plan does not provide for any further grants of options
thereunder.

In August 1994, the Company adopted a stock option plan ( the "1994
Plan") for its key employees which provides for the grant of incentive stock
options, within the meaning of Section 422A of the Internal Revenue Code, and
non-qualified stock options. The maximum aggregate number of shares of Common
Stock that may be issued under the 1994 Plan is 491,413 shares. In December
1995, stock options to purchase an aggregate of 316,697 shares of Common Stock
were granted at an exercise price of $10.72 per share. The stock options vest
and become exercisable at a rate of 25% per year over a four-year period and
expire ten years from the date of grant. As of September 30, 1995, no options
were exercisable under the 1994 Plan.

The purchase price of the shares of Common Stock subject to options
under the 1994 Plan must be no less than the fair market value of the Common
Stock at the date of grant, provided, however, that the purchase price of
shares of Common Stock subject to ISOs granted to any optionee who owns shares
possessing more than 10% of the combined voting power of the Company ("Ten
Percent Stockholder") must not be less than 110% of the fair market value of
the Common Stock at the date of the grant. The maximum term of an option may
not exceed ten years from the date of grant, except with respect to ISOs
granted to Ten Percent Stockholders which must expire within five years of the
date of grant.

15. SUBSEQUENT EVENTS

A. STOCK OPTIONS

In December 1995, stock options for 174,716 shares of Common Stock
were granted to various employees under the 1994 Plan at an exercise price of
$10.72 per share. The stock options vest and become exercisable at a rate of
25% per year over a four-year period and expire ten years from the date of
grant. As of September 6, 1996, options to purchase an aggregate of 491,413
shares of Common Stock had been granted under the 1994 Plan. As of September 6,
1996, 79,173 stock options were exercisable under the 1994 Plan.

In May 1996, the Company adopted a stock option plan (the "1996
Plan"), which provides for the grant of incentive stock options and
nonqualified stock options to any full time employee of the Company under terms
substantially the same as the 1994 Plan. The maximum number of shares of Common
Stock that may be issued under the 1996 Plan is 57,812 shares. As of September
6, 1996, options to purchase an aggregate of 21,723 shares had been granted at
an exercise price of $10.72 per share. As of September 6, 1996, no options were
exercisable under the 1996 Plan.

B. RECAPITALIZATION

On July 31, 1996, the Board of Directors approved an amendment to the
Company's Certificate of Incorporation to effect a recapitalization of the
Company's Common Stock, pursuant to which the number of authorized shares of
the Company's Common Stock will be increased to 25,000,000 shares (the
"Recapitalization"). As part of the Recapitalization, the Board approved a
115,740.74-for-1 stock split of the issued and outstanding shares of Common
Stock. The Recapitalization, including the stock split, will be effective
immediately prior to a contemplated initial public offering. All share and per
share information included in the accompanying consolidated financial
statements and notes have been adjusted to give retroactive recognition to the
stock split.

F-16

<PAGE> 75

In addition, on July 31, 1996, the Board of Directors authorized an
increase to the number of available shares of Common Stock that may be issued
under the 1996 Plan by 231,250 to 289,062.

F-17

<PAGE> 76
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)

<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1995 1996
------------- ---------
<S> <C> <C>
ASSETS

CURRENT ASSETS
Cash ...................................................... $ 108 $ 165
Accounts receivable, net of allowance for doubtful accounts
of $4,053 and $4,050, respectively .................... 47,947 50,809
Inventory (Note 3) ........................................ 45,597 37,668
Other current assets ...................................... 14,708 14,812
--------- ---------

TOTAL CURRENT ASSETS ...................................... 108,360 103,454

PROPERTY, PLANT AND EQUIPMENT, net (Note 4) .................. 116,729 137,237

OTHER ASSETS ................................................. 87,211 84,841
--------- ---------

$ 312,300 $ 325,532
========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY

CURRENT LIABILITIES:
Accounts payable .......................................... $ 24,021 $ 23,600
Accrued expenses and other current liabilities ............ 7,378 8,235
Income taxes payable (Note 6) ............................. 1,455 2,204
Interest payable .......................................... 6,427 2,555
Current maturities of long-term debt (Note 5) ............. 40 60
--------- ---------

TOTAL CURRENT LIABILITIES ................................. 39,321 36,654

LONG-TERM DEBT (Note 5) ...................................... 192,048 204,145

DEFERRED INCOME TAXES (Note 6) ............................... 23,175 24,225

COMMITMENTS AND CONTINGENCIES (Note 7)

STOCKHOLDER'S EQUITY (Note 8):
Common stock .............................................. -- --
Additional paid-in capital ................................ 69,300 69,300
Cumulative translation adjustments ........................ 29 (5)
Deficit ................................................... (11,573) (8,787)
--------- ---------

TOTAL STOCKHOLDER'S EQUITY ................................ 57,756 60,508
--------- ---------
$ 312,300 $ 325,532
========= =========
</TABLE>

See Notes to Consolidated Financial Statements.

F-18

<PAGE> 77

SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
------------------- -------------------
1995 1996 1995 1996
-------- --------- -------- ---------
<S> <C> <C> <C> <C>
Net sales ........................................... $ 72,767 $ 82,843 $194,349 $ 212,060
-------- --------- -------- ---------
Costs and expenses:
Costs of sales .................................. 50,867 55,134 136,950 151,221
Selling expenses ................................ 6,627 7,307 17,591 19,259
General and administrative expenses ............. 4,943 5,233 14,453 16,024
Amortization of excess of purchase price over net
assets acquired and other intangibles ........ 648 648 1,918 1,944
-------- --------- -------- ---------

63,085 68,322 170,912 188,448
-------- --------- -------- ---------

Operating income ............................. 9,682 14,521 23,437 23,612
-------- --------- -------- ---------

Other expenses:
Interest expense ................................ 5,846 5,863 17,027 17,253
Amortization of deferred financing costs ........ 186 175 555 523
-------- --------- -------- ---------

6,032 6,038 17,582 17,776
-------- --------- -------- ---------

Income before provision for income taxes ............ 3,650 8,483 5,855 5,836

Provision for income taxes (Note 6) ................. 1,771 3,390 3,300 3,050
-------- --------- -------- ---------

NET INCOME .......................................... $ 1,879 $ 5,093 $ 2,555 $ 2,786
======== ========= ======== =========

Pro Forma Financial Data (Note 8):
Pro forma net income ...................... $ 5,718 $ 4,661
========= =========
Weighted average shares outstanding used in
computing pro forma net income per share 9,422,214 9,422,214
========= =========
Pro forma net income per share ............ $ 0.61 $ 0.49
========= =========
</TABLE>

See Notes to Consolidated Financial Statements.

F-19

<PAGE> 78

SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)
(UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED JUNE 30,
--------------------------
1995 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .............................................................. $ 2,555 $ 2,786
Adjustments to reconcile net income
to net cash provided by (used in) operations:
Depreciation ........................................................ 8,605 9,774
Amortization of deferred financing costs and intangibles ............ 2,473 2,467
Provision for bad debts ............................................. 580 23
Deferred income taxes ............................................... 1,130 1,280
Change in assets and liabilities:
Increase in accounts receivable ..................................... (9,814) (2,885)
(Increase) decrease in inventory .................................... (18,205) 7,929
Increase in other current assets .................................... (117) (334)
Increase (decrease) in accounts payable ............................. 4,917 (421)
(Decrease) increase in accrued expenses and other current liabilities (194) 857
Increase in income taxes payable .................................... 188 749
Decrease in interest payable ........................................ (4,052) (3,872)
-------- --------
Cash provided by (used in) operating activities ................ (11,934) 18,353

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment .............................. (12,169) (25,439)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under term loan .............................................. 11,000 19,500
Repayments under term loan .............................................. (4,500) (500)
Net borrowings (repayments) under revolving credit line ................. 17,800 (11,713)
Deferred financing costs ................................................ (201) (97)
Repayments of other long term obligations ............................... (27) (13)
-------- --------
Cash provided by financing activities ............................... 24,072 7,177
Effect of exchange rate changes on cash ............................. 17 (34)
-------- --------
NET (DECREASE) INCREASE IN CASH .............................................. (14) 57
CASH AT BEGINNING OF PERIOD .................................................. 117 108
-------- --------
CASH AT END OF PERIOD ........................................................ $ 103 $ 165
======== ========

SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest ............................................................ $ 21,079 $ 21,125
Income taxes ........................................................ 1,832 1,387

SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITY:
Capital lease obligations incurred for purchase of equipment ............ $ -- $ 5,000
</TABLE>

See Notes to Consolidated Financial Statements.

F-20

<PAGE> 79

SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)

1. ORGANIZATION

Synthetic Industries, Inc., a Delaware corporation (the "Company"),
manufactures and markets a wide range of polypropylene-based fabric and fiber
products designed for industrial applications. The Company's diverse mix of
products are marketed to the floor covering, construction and technical textile
markets for such end-use applications as carpet backing, geotextiles and
erosion control, concrete reinforcement and furniture construction fabrics. The
Company is a wholly-owned subsidiary of Synthetic Industries, L.P., a Delaware
limited partnership.

2. INTERIM CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements as of June 30, 1996 and for the
three and nine month periods ended June 30, 1995 and 1996 included herein have
been prepared, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of management, all
adjustments (consisting of normal recurring accruals) necessary for a fair
presentation of the financial position at June 30, 1995 and 1996, and the
results of operations for the three and nine months ended June 30, 1995 and
1996 have been made on a consistent basis. It is suggested that these
consolidated financial statements be read in conjunction with management's
discussion and analysis of financial condition and results of operations and
the audited consolidated financial statements and footnotes thereto included
elsewhere in this Prospectus. Operating results for the three and nine months
ended June 30, 1996 may not necessarily be indicative of the results that may
be expected for the full year.

3. INVENTORY

Inventory consists of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1995 1996
------------- --------
<S> <C> <C>
Finished goods ......................... $27,867 $23,358
Work in process ........................ 5,541 7,227
Raw materials .......................... 12,189 7,083
------- -------
$45,597 $37,668
======= =======
</TABLE>

F-21

<PAGE> 80

4. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1995 1996
------------- ----------
<S> <C> <C>
Land.................................................... $ 3,511 $ 3,511
Buildings and improvements.............................. 23,457 28,650
Machinery and equipment and
leasehold improvements............................. 151,921 177,010
----------- ----------
178,889 209,171
Accumulated depreciation................................ (62,160) (71,934)
------------ ----------
$ 116,729 $ 137,237
=========== ==========
</TABLE>

5. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1995 1996
------------- ----------
<S> <C> <C>
Secured revolving credit facility ("Amended
Credit Facility"):
Secured revolving credit portion ("Revolver")...... $ 24,727 $ 13,014
Term loan portion.................................. 26,000 45,000
12 3/4% Senior subordinated debentures.................. 140,000 140,000
Capitalized lease obligation............................ -- 4,843
Other................................................... 1,361 1,348
----------- ----------
192,088 204,205
Less current portion............................... (40) (60)
----------- ----------

Total long-term portion............................ $ 192,048 $ 204,145
=========== ==========
</TABLE>

The Amended Credit Facility, with termination date of October 1, 2001,
provides for term loan borrowings of $45,000, of which $10,000 is payable in
1999 and $17,500 is payable in each of 2000 and 2001.

The Revolver provides for availability based on a borrowing formula
consisting of 85% of eligible accounts receivable and 50% of eligible
inventory, subject to certain limitations. Under the Amended Credit Facility,
the maximum amount available for borrowing under the Revolver is increased to
$40,000. At June 30, 1996, the Company had $25,691 available for borrowings
under the Revolver.

The Company considers the carrying values for the amounts outstanding
under the Credit Facility to approximate fair value because they reprice
frequently at market rates.

F-22

<PAGE> 81

6. INCOME TAXES

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

<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
----------------- ------------------
1995 1996 1995 1996
------- ------- ------- -------
<S> <C> <C> <C> <C>
Current:
Federal ...................... $ 768 $ 1,320 $ 1,820 $ 1,320
State ........................ 170 190 350 190
Foreign ...................... -- 110 -- 260
------- ------- ------- -------

938 1,620 2,170 1,770
------- ------- ------- -------
Deferred:
Federal ...................... 805 1,640 1,308 1,180
State ........................ 28 130 (178) 100
------- ------- ------- -------
833 1,770 1,130 1,280
------- ------- ------- -------

Total taxes on income............ $ 1,771 $ 3,390 $ 3,300 $ 3,050
======= ======= ======= =======
</TABLE>

The federal income tax provision for the three and nine months ended
June 30, 1995 and 1996 reflects the non-deductibility of certain expenses for
income tax purposes such as amortization of goodwill. Deferred income taxes
result from temporary differences between tax bases of assets and liabilities
and their reported amounts in the financial statements. The Company's United
States income tax returns for the fiscal years 1992 and 1993 have been examined
and settled without material adjustment.

7. CONTINGENCY

8. PRO FORMA NET INCOME PER SHARE

The Company has presented pro forma net income per share for the three
and nine month periods ended June 30, 1996 in lieu of historical net income per
share. Historical information is not meaningful as the Company is owned by one
shareholder. The pro forma net income per share has been computed assuming (a)
proceeds of the initial public offering (Note 10) were used to repay
indebtedness resulting in interest savings and (b) the weighted average number
of common shares and common shares equivalents outstanding have been adjusted
to give effect to the stock split authorized in July 1996 (Note 10). Pursuant
to Securities and Exchange Commission Staff Accounting Bulletin No. 55, common
share equivalents attributable to stock options granted within one year of an
initial public offering have been included in the calculation of weighted
average shares outstanding.

F-23

<PAGE> 82

9. STOCK OPTIONS

In May 1996, the Company adopted a stock option plan (the "1996
Plan"), which provides for the grant of incentive stock options and
nonqualified stock options to any full time employee of the Company under terms
substantially the same as the 1994 Plan. The maximum number of shares of Common
Stock that may be issued under the 1996 Plan is 57,812 shares. As of
September 6, 1996, options to purchase an aggregate of 21,723 shares had been
granted at an exercise price of $10.72 per share. As of September 6, 1996, no
options were exercisable under the 1996 Plan.

10. SUBSEQUENT EVENTS

In addition, on July 31, 1996, the Board of Directors authorized an
increase to the number of available shares of Common Stock that may be issued
under the Amended 1996 Plan by 231,250 to 289,062.

F-24

<PAGE> 83
================================================================================

NO DEALER, SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE
OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE COMMON STOCK TO ANY PERSON IN
ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.

------------------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary.............................. 3
Risk Factors.................................... 8
The Company..................................... 12
Use of Proceeds................................. 13
Dividend Policy................................. 13
Capitalization.................................. 14
Dilution........................................ 15
Selected Consolidated Financial Information..... 16
Management's Discussion and Analysis of
Financial Condition and Results of Operations... 18
Business........................................ 26
Management...................................... 40
Principal Stockholders.......................... 47
Certain Relationships and Related Transactions.. 49
Description of Certain Indebtedness............. 50
Description of Capital Stock.................... 51
Shares Eligible for Future Sale................. 53
Underwriting.................................... 54
Legal Matters................................... 55
Experts......................................... 55
Available Information........................... 55
Index to Consolidated Financial Statements...... F-1
</TABLE>

UNTIL __________, 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN SHARES OF THE COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

================================================================================

3,400,000 SHARES

SYNTHETIC INDUSTRIES, INC.

COMMON STOCK

----------

PROSPECTUS

----------

BEAR, STEARNS & CO. INC.

, 1996

================================================================================
<PAGE> 84
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, to be paid in connection with the sale
of the Common Stock being registered, all of which will be paid by the
Registrant.
All amounts are estimates except the registration fee and the NASD filing fee.

<TABLE>
<S> <C>
Registration fee..................................... $ 50,561
NASD filing fee...................................... 15,163
Nasdaq National Market listing fee................... 39,062.50
Blue Sky fees and expenses........................... *
Accounting fees and expenses......................... *
Legal fees and expenses.............................. *
Transfer agent and registrar fees.................... *
Printing and engraving expenses...................... *
Miscellaneous expenses...............................
-------------
Total............................................ $ *
=============
</TABLE>
- ----------
* To be completed by amendment

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law (the "DGCL")
empowers a Delaware corporation to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation or
enterprise. A corporation may, in advance of the final disposition of any
civil, criminal, administrative or investigative action, suit or proceeding,
pay the expenses (including attorneys' fees) incurred by any officer, director,
employee or agent in defending such action, provided that the director or
officer undertakes to repay such amount if it shall ultimately be determined
that he or she is not entitled to be indemnified by the corporation. A
corporation may indemnify such person against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if
he or she acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful.

A Delaware corporation may indemnify officers and directors in an
action by or in the right of the corporation to procure a judgment in its favor
under the same conditions, except that no indemnification is permitted without
judicial approval if the officer or director is adjudged to be liable to the
corporation. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him or her against the expenses (including attorneys' fees) which he
or she actually and reasonably incurred in connection therewith. The
indemnification provided is not deemed to be exclusive of any other rights to
which an officer or director may be entitled under any corporation's by-laws,
agreement, vote or otherwise.

In accordance with Section 145 of the DGCL, Article Eleventh of the
Registrant's Certificate of Incorporation, as amended and restated (the
"Amended Certificate") provides that the Registrant shall indemnify each person
who is or was a director, officer, employee or agent of the Registrant
(including the heirs, executors, administrators or estate of such person) or is
or was serving at the request of the Registrant as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, to the fullest extent permitted under Section 145 of the
DGCL, as the same may be amended or supplemented. The indemnification provided
by the Amended Certificate shall not be deemed exclusive of any other rights to
which any of those seeking indemnification or advancement of expenses may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his or her official capacity and
as to action in another capacity while holding such office, and shall continue

II-1
<PAGE> 85
as to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such a
person.

The foregoing statements are subject to the detailed provisions of
Section 145 of the DGCL and Article Eleventh of the Amended Certificate.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Not applicable

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

1 -- Form of Underwriting Agreement++

2.1 -- Acquisition Agreement dated November 21, 1986 between
Synthetic Industries, Inc., Synthetic Industries Limited,
Polyweave Corporation, the stockholders of Synthetic
Industries, Inc., Synthetic Industries Limited and SI
Holding Inc., including exhibits thereto+

2.2 -- Plan and Agreement of Merger dated December 4, 1986+

2.3 -- Asset Purchase Agreement dated October 12, 1990 between
Synthetic Industries, Inc. and Chicopee+

3.1 -- Certificate of Incorporation of Synthetic Industries, Inc.
(including all amendments to date) filed with the Secretary
of the State of Delaware+

3.2 -- Amended and Restated By-Laws of Synthetic Industries, Inc.
(including all amendments to date)+

4.1 -- Specimen of Common Stock Certificate++

4.2 -- Form of Indenture between Synthetic Industries, Inc. and
United States Trust Company of New York, Trustee, in respect
to the 12-3/4% Senior Subordinated Debentures due 2002+

4.3 -- Supplemental Form of Indenture between Synthetic
Industries, Inc. and United States Trust Company of New
York, Trustee, in respect to the 12-3/4% Senior Subordinated
Debentures due 2002+

5 -- Opinion of Andrews & Kurth L.L.P. regarding the legality of
Common Stock being registered+

10.1 -- Fourth Amended and Restated Revolving Credit and Security
Agreement dated as of October 20, 1995 among Synthetic
Industries, Inc., The First National Bank of Boston and
other Lenders listed on Schedule 1 thereto, and The First
National Bank of Boston, as agent on behalf of the Lenders+

10.2 -- Amendment No. 1 to the Fourth Amended and Restated
Revolving Credit and Security Agreement dated as of
December 1, 1995+

10.3 -- Amendment No. 2 to the Fourth Amended and Restated
Revolving Credit and Security Agreement dated as of
February 14, 1996+

10.4 -- Amendment No. 3 to the Fourth Amended and Restated
Revolving Credit and Security Agreement dated as of
March 15, 1996+

10.5 -- US Patent No. 4,867,614, Reinforced Soil and Method (Exp.
December 13, 2003)+

10.6 -- US Patent No. 4,790,691, Fiber Reinforced Soil and Method
(Exp. December 13, 2003)+

10.7 -- US Patent No. 5,007,766, Shaped Barrier for Erosion Control
and Sediment Collection (Exp. April 16, 2008)+

10.8 -- Lease agreement dated November 22, 1971 between Murray
Sobel and Synthetic Industries, Inc. (including all
amendments to date)+

10.9 -- Lease agreement dated February 13, 1969, between Murray
Sobel and wife, Marcella S. Sobel, and Joseph F. Decosimo,
Frank M. Thompson and Murray Sobel, Trustees, Synthetic
Industries, Inc. (including all amendments to date)+

10.10 -- Lease agreement dated December 17, 1990 between Chicopee
and Synthetic Industries, Inc.+

10.11 -- Lease agreement dated January 17, 1991 between Herchel L.
Webster and Allie Ree Webster and Synthetic Industries, Inc.
(the "Lumite Lease")+

10.12 -- Amendment to the Lumite Lease dated October 1, 1992+

10.13 -- Consulting Agreement dated July 23, 1991 between Texpro
Limitada y Cia S.C.A. and Synthetic Industries, Limited +

10.14 -- Supply Contract between Eastman Chemical Products, Inc. and
Synthetic Industries, Inc. dated December 13, 1991 +

10.15 -- Agreement dated September 6, 1996 between Leonard Chill and
Synthetic Industries, Inc.++

II-2

<PAGE> 86

10.16 -- Agreement dated September 6, 1996 between W. Wayne Freed
and Synthetic Industries, Inc.++

10.17 -- Agreement dated September 6, 1996 between Ralph A. Kenner
and Synthetic Industries, Inc.++

10.18 -- Agreement dated September 6, 1996 between William Gardner
Wright, Jr. and Synthetic Industries, Inc.++

10.19 -- Agreement dated September 2, 1991 between John M. Long and
Synthetic Industries, Inc.+

10.20 -- Agreement dated September 6, 1996 between Charles T. Koerner
and Synthetic Industries, Inc.++

10.21 -- Agreement dated September 1, 1984 between Robert J. Breyley,
Sr. and Fibermesh Company ++

10.22 -- Agreement dated September 6, 1996 between Joseph Sinicropi
and Synthetic Industries, Inc.++

10.23 -- Agreement dated September 6, 1996 between W.O. Falkenberry
and Synthetic Industries, Inc.++

10.24 -- Agreement dated September 6, 1996 between Bobby Callahan
and Synthetic Industries, Inc.++

10.25 -- 1994 Stock Option Plan for Non-Employee Directors +

10.26 -- 1994 Stock Option Plan +

10.27 -- 1996 Stock Option Plan +

10.28 -- Incentive Compensation Plan Fiscal Year 1994/1995+

10.29 -- Incentive Compensation Plan Fiscal Year 1995/1996+

10.30 -- Form of Registration Rights Agreement*

21 -- List of Subsidiaries of Synthetic Industries, Inc.+

23.1 -- Consent of Deloitte & Touche LLP, independent auditors +

23.2 -- Consent of Andrews & Kurth L.L.P. (included in the opinion
filed as Exhibit 5)

24 -- Power of Attorney of the Board of Directors (included in
Part II of the Registration Statement)

- ------------

* Filed herewith
+ Previously filed
++ To be supplied by amendment

(b) Not applicable

ITEM 17. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed the by final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(a) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(b) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-3

<PAGE> 87
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Chickamauga, State of Georgia, on September 13, 1996.

SYNTHETIC INDUSTRIES, INC.

By: /s/ LEONARD CHILL
------------------------------
Leonard Chill
President

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment No. 1 to the Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated:

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/S/ LEONARD CHILL President, Chief Executive Officer and September 13, 1996
- ------------------------------------------ Director (Principal Executive Officer)
Leonard Chill

/S/ JOSEPH SINICROPI Chief Financial Officer and Secretary September 13, 1996
- ------------------------------------------ (Principal Accounting Officer)
Joseph Sinicropi

*/S/ JOSEPH F. DANA Director September 13, 1996
- ------------------------------------------
Joseph F. Dana

*/S/ LEE J. SEIDLER Director September 13, 1996
- ------------------------------------------
Lee J. Seidler

*/S/ WILLIAM J. SHORTT Director September 13, 1996
- ------------------------------------------
William J. Shortt

*/S/ ROBERT L. VOIGT Director September 13, 1996
- ------------------------------------------
Robert L. Voigt

*BY: /S/ JOSEPH SINICROPI September 13, 1996
- ------------------------------------------
Joseph Sinicropi
Attorney-in-Fact
</TABLE>

II-4

<PAGE> 88

INDEX TO EXHIBITS