SYNTHETIC INDUSTRIES INC, S-3, 1997-10-06

SYNTHETIC INDUSTRIES INC
S-3, 1997-10-06
TEXTILE MILL PRODUCTS

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<PAGE> 1
As Filed With The Securities and Exchange Commission on October 6, 1997

Registration No. 333-
------

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

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

DELAWARE 58-1049400
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)

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

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 OF COMMUNICATIONS TO:

MARK ZVONKOVIC, ESQ. THOMAS R. POLLOCK, ESQ.
KING & SPALDING PAUL, HASTINGS, JANOFSKY & WALKER LLP
1185 AVENUE OF THE AMERICAS 399 PARK AVENUE
NEW YORK, NEW YORK 10036 NEW YORK, NEW YORK 10022
(212) 556-2100 (212) 318-6000

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after this Registration Statement is declared effective.

If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|

If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, 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, 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. |_|

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
===================================================================================================================================
PROPOSED PROPOSED MAXIMUM
AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
TITLE OF SHARES TO BE REGISTERED REGISTERED PRICE PER UNIT (1) PRICE (1) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $1.00 per share, of Synthetic
Industries, Inc. 3,450,000 $29.00 $100,050,000 $ 30,319
===================================================================================================================================
</TABLE>

(1) Estimated solely for the purpose of computing the registration fee.

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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

<PAGE> 2
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 OCTOBER 6, 1997

PROSPECTUS
3,000,000 SHARES

SYNTHETIC INDUSTRIES, INC.

COMMON STOCK

Of the 3,000,00 shares (the "Shares") of common stock, par value $1.00
per share (the "Common Stock"), of Synthetic Industries, Inc., a Delaware
corporation (the "Company") offered hereby (the "Offering"), 71,287 Shares are
being offered by the Company and 2,928,713 Shares are being sold by certain
current and former limited partners (the "Selling Stockholders") of Synthetic
Industries, L.P., a Delaware limited partnership (the "Partnership"). The
Selling Stockholders received their Shares pursuant to an Agreement and Plan of
Withdrawal and Dissolution (the "Plan") of the Partnership. A description of
the Plan is set forth in this Prospectus under the caption "The Plan of
Withdrawal and Dissolution." The Company will not receive any proceeds from the
sale of the Shares by the Selling Stockholders. The Common Stock is listed on
the Nasdaq National Market (the "NNM") under the symbol "SIND." On September
30, 1997, the last reported sale price of the Common Stock on the NNM was
$29.00 per share. See "Common Stock Price Range and Dividends."

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

SEE "RISK FACTORS" BEGINNING ON PAGE 7 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>
===============================================================================================================================
Price Underwriting Proceeds to
to Discounts and Proceeds to Selling
Public Commissions (1) Company (2) Stockholders
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share.................................... $ $ $ $

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

Total (3).................................... $ $ $ $
===============================================================================================================================
</TABLE>

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

(2) Before deducting expenses estimated at $_________ payable by the
Company.

(3) The Company has granted the Underwriters a 30-day option to purchase
up to 450,000 additional shares of Common Stock (the "Additional
Shares") 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, Proceeds to Company and Proceeds to Selling Stockholders
will be $_________, $_______, $ and $_______, respectively. See
"Underwriting."

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

The Shares 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 _________, 1997, 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 , 1997
------------

<PAGE> 3

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT 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 STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME. CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN PASSIVE
MARKET MAKING TRANSACTIONS IN THE COMMON STOCK ON THE NASDAQ NATIONAL MARKET IN
ACCORDANCE WITH RULE 103 OF REGULATION M UNDER THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED (THE "EXCHANGE ACT"). SEE "UNDERWRITING."

<PAGE> 4

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 1997" means the Company's
fiscal year ended September 30, 1997). Unless otherwise noted, the information
contained in this Prospectus assumes that the Underwriters' over-allotment
option is not exercised.

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 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, the second largest producer of geosynthetic products in
North America and is the largest producer of synthetic fiber additives for
secondary concrete reinforcement through its Fibermesh(R) line of products. SI
also produces polypropylene and polyester products for the furniture and
bedding, filtration and agricultural 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 and water/air permeability. 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 $196 million in fiscal 1992 to $300 million
in fiscal 1996.

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, woven fabrics
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 1996
sales. The Company's construction and civil engineering products are its
fastest growing product line and include fiber additives for secondary concrete
reinforcement and geosynthetic products used in the environmental and
transportation markets, with end uses such as landfill waste containment and
soil stabilization. The Company's sales to the construction and civil
engineering market have grown from approximately $35 million in fiscal 1992 to
approximately $97 million in fiscal 1996. These products represented
approximately 32% of the Company's total sales in fiscal 1996, up from
approximately 18% of total sales in fiscal 1992. The Company's technical
textile products are comprised of specialty fabrics, industrial yarns and
fibers used in diverse applications such as furniture and bedding construction,
filtration (e.g., wastewater treatment, air filtration and bauxite mining) and
agriculture (e.g., shade cloth and ground cover). These products are highly
engineered to meet niche customer applications and represented approximately
19% of fiscal 1996 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.

-2-

<PAGE> 5

Technologies division of Spartan Mills for $9.4 million. Based on existing
product prices and demand, the Company expects incremental sales arising from
its acquisition and capital expenditures to total approximately $50 million in
fiscal 1998. The Company anticipates that ongoing maintenance capital
expenditures will be less than $5 million per year. Additional capital
expenditures, if any, will be focused on expansion opportunities, subject to
market conditions. 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. See "Business--The
Company."

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:

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 geosynthetic product line for which
sales have increased from approximately $31 million in fiscal 1994 to
approximately $55 million in fiscal 1996, and were approximately $44
million for the nine months ended June 30, 1997, an increase of 21.9%
over the same period of fiscal 1996. Within this product line, the
Company has focused on nonwoven material for roadway and building
sites, erosion control and waste containment sectors. Nonwoven
geosynthetic sales to these and other markets have grown from
approximately $18 million in fiscal 1994 to approximately $36 million
in fiscal 1996, and were approximately $38 million for the nine months
ended June 30, 1997, an increase of 51.6% over the same period of
fiscal 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 $25 million in fiscal 1994 to
approximately $33 million in fiscal 1996, and were approximately $27
million for the nine months ended June 30, 1997, an increase of 28.6%
over the same period of fiscal 1996. See "Business--Business
Strategy--Expand Penetration of Existing Markets."

o STRENGTHEN MARKET POSITION IN CARPET BACKING. The Company intends to
increase its carpet backing market share through: (i) expansion of
sales in the growing domestic commercial backing market; (ii) the
continued development and strengthening of its relationships with key
customers; and (iii) continued capital investment in state-of-the-art
equipment for additional carpet backing production capacity. The
Company's sales of primary and secondary carpet backing have grown
from $117.8 million in fiscal 1994 to $146.5 million in fiscal 1996,
and were $122.1 million for the nine months ended June 30, 1997, an
increase of 14.7% over the same period of fiscal 1996. See
"Business--Business Strategy--Strengthen Market Position in Carpet
Backing."

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 enhance production technologies. During the five year
period ended September 30, 1996, the Company invested approximately
$113 million in capital improvements in its facilities and equipment.
The Company has recently embarked on an additional capital expenditure
program targeted at increasing its manufacturing

-3-

<PAGE> 6

capacity for each of its three major product lines. For the nine
months ended June 30, 1997, expenditures under this plan totaled
approximately $35 million. The Company plans to spend an additional
$15 million during the balance of fiscal 1997, and approximately $50
million in fiscal 1998, to further increase its manufacturing
capability, subject to prevailing market conditions. See
"Business--Business Strategy--Continue to Improve Manufacturing
Efficiencies and Expand Manufacturing Capacity."

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. In addition, the Company
continues to identify new markets and applications where polymer-based
products can replace traditional raw materials. To further these
efforts, the Company has significantly increased its expenditures in
research and market development, from $2.8 million and $2.9 million in
fiscal 1995 and fiscal 1996 respectively, to an estimated $5.2 million
in fiscal 1997, of which $3.6 million has been expended through June
30, 1997. By increasing its research and market development
expenditures, the Company believes it will be able to capitalize on its
manufacturing strengths, sales and marketing expertise and distribution
network to introduce new value added products and extend product lines
to complement its existing product base. As an example, the Company's
civil engineering product group has added two newly patented products,
Pyramat and Geofibers(TM), which together had sales of $2.4 million for
the nine months ended June 30, 1997. Pyramat is a biotechnical
composite three dimensional mat which enables vegetation to be grown on
steep slopes and in high-flow storm drainage channels. Geofibers(TM)are
soil and turf reinforcement fibers used in roadway construction and
maintenance as well as the sports field market including ballfields and
horse racetracks. See "Business--Business Strategy--Develop Innovative
Products."

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. On February 27, 1997, the Company acquired all of the
nonwoven manufacturing equipment and certain other assets of Spartan
Technologies, a division of Spartan Mills, for $9.4 million. This
acquisition adds to the Company's strength as one of the largest
needlepunch nonwoven manufacturers in the world. The added capacity
will be used to grow the Company's furniture and bedding construction
business, and its nonwoven carpet backing and geotextile businesses.
See "Business--Business Strategy--Pursue Strategic Acquisitions."

-4-

<PAGE> 7

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the
Selling Shareholders.................. 2,928,713 shares (1)
---------------
Common Stock offered by the
Company.............................. 71,287 shares
---------------
Common Stock to be outstanding after the
Offering.............................. 8,656,250 shares (2)
---------------

Use of Proceeds........................... The Company will not receive any cash proceeds from the
sale of the Shares by the Selling Stockholders.

The net proceeds to the Company from the Offering will
be used to repay certain outstanding bank indebtedness.(3)

Nasdaq National Market Symbol............. SIND
</TABLE>

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

(1) See "Principal and Selling Stockholders."

(2) Based on shares outstanding at September 30, 1997. Excludes 768,897
shares of Common Stock at June 30, 1997 which are subject to options
granted under the Stock Option Plans, 332,719 of which are subject to
currently exercisable options. See Notes to the Company's Consolidated
Financial Statements included elsewhere in this Prospectus.

(3) See "Use of Proceeds."

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 the notes
thereto and the other selected financial data included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED NINE MONTHS ENDED
SEPTEMBER 30, JUNE 30,
---------------------------------------------------- -------------------
1992 1993 1994 1995 1996 1996 1997
-------- -------- -------- -------- -------- -------- --------
STATEMENT OF OPERATIONS DATA:
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales .......................... $195,739 $210,516 $234,977 $271,427 $299,532 $212,060 $245,327
Gross profit ....................... 62,049 68,335 82,672 76,721 91,211 60,839 78,399
Operating income ................... 27,656 29,921 40,770 28,687 38,474 23,612 34,501
Interest expense ................... 17,865 20,854 20,011 22,514 22,773 17,253 15,722
Income from continuing operations
before provision for income
taxes and extraordinary item ..... 8,155 8,134 20,020 5,436 15,002 5,836 18,290
Income from continuing operations
before extraordinary item ....... 3,595 3,662 11,420 1,936 8,102 2,786 10,740

OTHER FINANCIAL DATA:

Depreciation and amortization....... $ 10,978 $ 12,073 $ 12,390 $ 14,937 $ 16,299 $ 12,241 $ 13,687
Capital expenditures:
Maintenance ...................... 1,857 1,770 1,970 1,406 2,563 1,673 3,253
Expansion ........................ 20,245 9,989 29,896 11,907 31,690 23,766 32,000
-------- -------- -------- -------- -------- -------- --------
Total ....................... 22,102 11,759 31,866 13,313 34,253 25,439 35,253

PRO FORMA FINANCIAL DATA(1):

Net income before
extraordinary item ............... $ 11,485 $ 5,323 $ 11,374
Net income per share before
extraordinary item................ 1.33 0.60 1.28
Weighted average shares
outstanding....................... 8,656,250 8,918,431 8,918,431
</TABLE>

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, AS OF JUNE 30,
1996 1997
------------------ -------------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital .......... $ 64,077 $ 82,945
Total assets ............. 324,058 381,065
Long-term debt, net....... 194,353 209,356
Stockholders' equity...... 65,844 98,442
</TABLE>

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

(1) Pro forma financial data reflect (i) the reduction in interest expense
after giving effect to the Company's initial public offering on
November 1, 1996 and the application of net proceeds therefrom and
(ii) the issuance of $170 million of 9 1/4% Senior Subordinated Notes
due 2007 on February 11, 1997 and the application of the net proceeds
therefrom calculated as of the beginning of the period indicated.

-6-

<PAGE> 9

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.

RISK OF INCREASE IN RAW MATERIAL PRICES AND LIMITED AVAILABILITY OF RAW
MATERIALS

Polypropylene, a petroleum derivative, is the basic raw material used
in the manufacture of substantially all of the Company's products, accounting
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".

RISK OF HIGH LEVERAGE

The Company is highly leveraged. As of June 30, 1997, the Company had
outstanding consolidated long-term debt (including current maturities) of
approximately $210 million. 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 stockholders, 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."
Substantially all of the assets of the Company and its subsidiaries secure 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 as the lenders (the
"Lenders"), and BankBoston, as agent for the Lenders. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

-7-

<PAGE> 10

MARKETS FOR COMPANY PRODUCTS ARE HIGHLY COMPETITIVE

The markets for the Company's products are highly competitive. In the
manufacture and sale of carpet backing, which represented approximately 49% of
the Company's total net sales for the fiscal years ended 1996 and 1995, 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."

LOSS OF SIGNIFICANT CUSTOMER COULD ADVERSELY AFFECT THE COMPANY

For the fiscal years ended 1996 and 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% of
the Company's total net sales and approximately 36% and 37%, 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. In fiscal 1996 and 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--Marketing and Sales--Carpet Backing."

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 stockholders 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."

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. The Company has outstanding 8,656,250 shares
of Common Stock. Of these shares, the 2,875,000 shares of Common Stock sold in
the November 1, 1996 initial public offering (the "Initial Public Offering")
are, and the Shares sold in this Offering will be, freely tradeable without
restriction or further registration under the Securities Act of 1933, as
amended (the "Securities Act"), except for any

-8-

<PAGE> 11

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
2,781,250 shares of Common Stock which are held by the Partnership (the
"Remaining Shares") will be distributed to the Limited Partners in up to three
distributions, each one hundred eighty (180) days apart, beginning one hundred
eighty (180) days from the completion of this Offering in accordance with the
Plan. See "The Plan of Withdrawal and Dissolution -- The Dissolution and
Distribution." Pursuant to the Plan, such distribution or distributions will
not occur unless or until an effective registration statement becomes
effective. Therefore, the Remaining Shares, upon distribution, will be freely
tradeable without restriction or further registration under the Securities Act.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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 caption "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.

-9-

<PAGE> 12

THE COMPANY

The Company is a Delaware corporation founded in 1969 to produce
polypropylene-based primary carpet backing. Since that time the Company's
business has expanded into the manufacturing and sale of a full line of
polypropylene-based industrial fabrics, specialty yarns and geotextiles.

The Company is one of the world's leading producers of polypropylene
fabrics and fibers for the home furnishing, construction, environmental 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, the second largest producer of
geosynthetic products in North America and is the largest producer of synthetic
fiber additives for secondary concrete reinforcement through its Fibermesh(R)
line of products. SI also produces polypropylene and polyester products for the
furniture and bedding, filtration and agricultural 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 and water/air permeability. 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 $196 million in fiscal 1992 to
$300 million in fiscal 1996.

On November 1, 1996, the Company sold 2,875,000 shares of Common Stock
in an underwritten public offering (the "Initial Public Offering"). The net
proceeds to the Company from the sale (after payment of underwriting discounts
and commissions and expenses) were approximately $34 million. On February 11,
1997, the Company issued $170 million in aggregate principal amount of 9 1/4%
Senior Subordinated Notes due 2007 (the "Notes"), which represent unsecured
obligations of the Company. In connection with the issuance of the Notes, the
Company redeemed approximately $133 million principal amount of its 12 3/4%
Senior Subordinated Debentures due 2002 (the "Debentures") at a redemption
price of 111.07% of the principal amount thereof. In addition, the Company
repaid $20 million of its outstanding term loan borrowings as of March 5, 1997.

Immediately prior to the approval of the Plan of Withdrawal and
Dissolution on October 24, 1997, 5,781,250 shares, or approximately 67%, of the
issued and outstanding capital stock of the Company was owned by the
Partnership. Four current executive officers and one former executive officer
of the Company are affiliates of the general partner of the Partnership. As a
result of the Plan, pursuant to which the Partnership will be dissolved,
3,000,000 shares will be sold in the Offering and, beginning 180 days after the
completion of the Offering, 2,781,250 shares will be distributed to the Limited
Partners in up to three distributions, each 180 days apart, in dissolution of
the Partnership. See "The Plan of Withdrawal and Distribution -- The
Dissolution and Distribution". Certain employees, officers and directors have
been granted options to purchase an additional 10% of the Common Stock on a
fully diluted basis and are not participating in the Offering. See "Principal
and Selling 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.

-10-

<PAGE> 13

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 71,287 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
$___________ ($___________ if the Underwriters' over-allotment option is
exercised in full). The full amount of the net proceeds to the Company from the
Offering will be used to repay certain outstanding bank indebtedness. On June
30, 1997, approximately $27.5 million was outstanding under the Credit
Facility, at interest rates ranging from ___% to ___%. The Company will not
receive any proceeds from the sale of the 2,928,713 Shares to be sold by the
Selling Stockholders hereby.

-11-

<PAGE> 14

CAPITALIZATION

The following table sets forth the capitalization of the Company at
June 30, 1997. 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, 1997
----------------
(UNAUDITED)
(IN THOUSANDS,
EXCEPT SHARE AND
PER SHARE DATA)

<S> <C>
Cash ......................................................... $ 499
=========

Long-term debt(1):
Credit Facility(2):
Revolving credit portion .................................. 2,126
Term loan portion ......................................... 25,000
12 3/4% Senior Subordinated Debentures due 2002 (3) .......... 7,403
9 1/4% Senior Subordinated Notes due 2007 .................... 170,000
Capitalized lease obligation ................................. 4,242
Other ........................................................ 1,288
---------
Total long-term debt ...................................... 210,059
Less current portion ......................................... 703
---------
Long term debt, net ....................................... 209,356
---------

Stockholders' equity:
Common stock $1.00 par value; 25,000,000 shares authorized;
8,656,250 shares issued and outstanding (4) .......... 8,656
Additional paid-in capital ................................ 94,325
Cumulative translation adjustments ........................ 142
Deficit ................................................... (4,681)
---------
Total stockholders' equity ........................... 98,442
---------
Total capitalization ......................................... $ 307,798
=========
</TABLE>

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

(1) For a description of the Company's long-term debt, see Note 5 of Notes
to Consolidated Financial Statements (page F-21).

(2) At June 30, 1997, the amount available under the Credit Facility was
$27,477. The Company is currently in the process of renegotiating the
Credit Facility.

(3) The Debentures are first redeemable as of December 1, 1997 at a
redemption price of 106.375% of their principal amount. The Company
intends to redeem the remaining $7,403 aggregate principal amount of
the Debentures on December 1, 1997.

(4) Excludes 768,897 shares of Common Stock at June 30, 1997 which are
subject to options granted under the Stock Option Plans, 332,719 of
which are subject to currently exercisable options.

-12-

<PAGE> 15

COMMON STOCK PRICE RANGE AND DIVIDENDS

The Company's Common Stock is listed on the NNM under the Symbol
"SIND". The following table sets forth for the periods indicated the high and
low closing bid prices per share of Common Stock as reported on the NNM.

<TABLE>
<CAPTION>
COMMON STOCK BID PRICE
---------------------------
HIGH LOW
----------- ------------
<S> <C> <C>
YEAR ENDED SEPTEMBER 30, 1997

First Quarter (from November 1, 1996) ... $ 15.750 $ 12.000

Second Quarter .......................... 19.750 15.000

Third Quarter ........................... 21.250 17.750

Fourth Quarter .......................... 28.000 21.125

YEAR ENDED SEPTEMBER 30, 1998

First Quarter (through October 1, 1997) 29.000 28.000
</TABLE>

At September 30, 1997, there were approximately 21 holders of record
of Common Stock. On September 30, 1997, the reported last sale price of the
Common Stock on the NNM was $29.00 per share.

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 Indenture governing the
Company's 9 1/4% Senior Subordinated Notes due 2007 (the "Notes") contain
restrictions on the Company's ability to declare and pay dividends.

-13-
<PAGE> 16

SELECTED CONSOLIDATED FINANCIAL INFORMATION

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

The statement of operations data for the fiscal years ended September
30, 1994, 1995 and 1996 and the balance sheet data as of September 30, 1995 and
1996 are derived from the Consolidated Financial Statements of the Company 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, 1992 and 1993 and the balance sheet data as of
September 30, 1992, 1993 and 1994 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 nine month periods ended June 30, 1996 and
1997 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 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.

<TABLE>
<CAPTION>
Nine Months Ended
Fiscal Year Ended September 30, June 30,
----------------------------------------------------------------- -------------------------
1992 1993 1994 1995 1996 1996 1997
---------- ---------- ---------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:

Net sales . . . . . . . . . . . $ 195,739 $ 210,516 $ 234,977 $ 271,427 $ 299,532 $ 212,060 $ 245,327
Cost of sales . . . . . . . . . 133,690 142,181 152,305 194,706 208,321 151,221 166,928
---------- ---------- ---------- ---------- ---------- ----------- ----------
Gross profit . . . . . . . . . . 62,049 68,335 82,672 76,721 91,211 60,839 78,399
Selling, general and
administrative expenses . 31,795 35,799 39,403 45,468 50,145 35,283 41,954
Amortization of intangibles . . 2,598 2,615 2,499 2,566 2,592 1,944 1,944
---------- ---------- ---------- ---------- ---------- ----------- ----------
Operating income . . . . . . . . 27,656 29,921 40,770 28,687 38,474 23,612 34,501
Interest expense . . . . . . . . 17,865 20,854 20,011 22,514 22,773 17,253 15,722
Amortization of deferred
financing costs . . . . . 1,636 933 739 737 699 523 489
---------- ---------- ---------- ---------- ---------- ----------- ----------
Income from continuing
operations before provision for
income taxes and extraordinary
item . . . . . . . . . . . . . 8,155 8,134 20,020 5,436 15,002 5,836 18,290
Provision for income
taxes . . . . . . . . . . . . 4,560 4,472 8,600 3,500 6,900 3,050 7,550
---------- ---------- ---------- ---------- ---------- ----------- ----------
Income from continuing
operations before extraordinary
item . . . . . . . . . . . . . 3,595 3,662 11,420 1,936 8,102 2,786 10,740
Net income (loss) (1) . . . . . $ (3,972) $ (12,310) $ 11,420 $ 1,936 $ 8,102 $ 2,786 $ (1,210)
========== ========== ========== ========== ========== =========== ==========

Income per share from
continuing operations
before extraordinary item . $ 0.62 $ 0.63 $ 1.93 $ 0.33 $ 1.37 $ 0.47 $ 1.25
Weighted average shares
outstanding . . . . . . . . . 5,781,250 5,781,250 5,930,502 5,930,502 5,930,502 5,930,502 8,598,959

OTHER FINANCIAL DATA:

Depreciation and amortization . $ 10,978 $ 12,073 $ 12,390 $ 14,937 $ 16,299 $ 12,241 $ 13,687
Capital expenditures:
Maintenance . . . . . . . . . $ 1,857 $ 1,770 $ 1,970 $ 1,406 $ 2,563 $ 1,673 $ 3,253
Expansion . . . . . . . . . . 20,245 9,989 29,896 11,907 31,690 23,766 32,000
---------- ---------- ---------- ---------- ---------- ----------- ----------
Total . . . . . . . . . . 22,102 11,759 31,866 13,313 34,253 25,439 35,253

PRO FORMA FINANCIAL DATA(2):

Net income before
extraordinary item . . . . . . $ 11,485 $ 5,323 $ 11,374
Net income per share before
extraordinary item . . . . . . 1.33 0.60 1.28
Weighted average Shares
outstanding . . . . . . . . . 8,656,250 8,918,431 8,918,431
</TABLE>

-14-
<PAGE> 17
<TABLE>
<CAPTION>
As of September 30, As of June 30,
----------------------------------------------------------- --------------
1992 1993 1994 1995 1996 1997
--------- --------- --------- --------- --------- --------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital . . . . . $ 33,980 $ 42,055 $ 44,114 $ 69,039 $ 64,077 $ 82,945
Total assets . . . . . . 254,581 260,372 287,933 312,300 324,058 381,065
Long-term debt, net . . . 158,638 164,723 172,490 192,048 194,353 209,356
Stockholders' equity . . 56,700 44,423 55,817 57,756 65,844 98,442
</TABLE>

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

FOOTNOTES TO SELECTED CONSOLIDATED FINANCIAL INFORMATION

(1) Net loss for the nine month period ended June 30, 1997 includes an
extraordinary loss of $11,950 from the early extinguishment of debt. Net
loss 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 relating to the adoption of
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes", and (iii) a gain of $1,420 on the disposal of discontinued
operations. Net loss for fiscal 1992 includes a loss from discontinued
operations of $553 and a loss on the disposal of discontinued operations
of $7,014.

(2) Pro forma financial data reflect (i) the reduction in interest expense
after giving effect to the Company's initial public offering on November
1, 1996 and the application of net proceeds therefrom and (ii) the
issuance of $170 million of 9 1/4% Senior Subordinated Notes due 2007 on
February 11, 1997 and the application of the net proceeds therefrom
calculated as of the beginning of the period indicated.

-15-
<PAGE> 18
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 "Special Note Regarding Forward-Looking Statements."

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, 1994, 1995 and 1996
and the nine month periods ended June 30, 1996 and 1997:

<TABLE>
<CAPTION>
Fiscal Year Ended September 30, Nine Months Ended June 30,
--------------------------------------------------------- -------------------------------------
1994 1995 1996 1996 1997
----------------- ---------------- ----------------- ---------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Carpet backing........ $117,791 50.1% $133,025 49.0% $146,491 48.9% $106,376 50.2% $122,090 49.8%
Construction and civil
engineering........... 68,706 29.3 82,933 30.6 97,043 32.4 64,981 30.6 75,930 31.0
Technical textiles 48,480 20.6 55,469 20.4 55,998 18.7 40,703 19.2 47,307 19.2
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Net sales............. $234,977 100.0% $271,427 100.0% $299,532 100.0% $212,060 100.0% $245,327 100.0%
======== ===== ======== ===== ======== ===== ======== ===== ======== =====
</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.

While the Company's sales have grown in each of the past three years, the
Company's gross profit has fluctuated due to a variety of factors, primarily
related to changes in the price of polypropylene. Polypropylene is the basic
raw material used in the manufacture of substantially all of the Company's
products, accounting for approximately 50% of the Company's costs of goods
sold. The Company believes that the selling prices of its products have
adjusted over time to reflect changes in polypropylene prices, although such
price changes favorably affected gross profit for fiscal 1994 and adversely
affected gross profit for fiscal 1995. Gross profit for the first nine months
of fiscal 1997 was $78,399, compared to $60,839 for the same period of fiscal
1996, an increase of $17,560, or 28.9%. As a percentage of sales, gross profit
in these comparative periods increased to 32.0% from 28.7%. This increase was
primarily due to increased sales volume, slightly higher average selling prices
and growth of higher margin business, coupled with comparable average
polypropylene costs to the prior period. Gross profit for fiscal 1996 was
$91,211, compared to $76,721 for the same period of fiscal 1995, an increase of
$14,490, or 18.9%. As a percentage of sales, gross profit increased to 30.5%
from 28.3%.

-16-
<PAGE> 19
According to a June 1997 report by Chemical Data Inc. ("Chem Data"), a
monthly petrochemical and plastics analysis publication, annual polypropylene
capacity in North America as of December 31, 1996 was 12.6 billion pounds per
year, up from 11.4 billion pounds at December 31, 1995. Total average annual
capacity will rise to 14.1 billion pounds per year for 1997, and to 18.2
billion pounds per year by 2000. 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.

The Company's improvement in gross profit performance also reflects its
diversification strategy for its products as well as its primary raw material.
The Company expects that construction and civil engineering and technical
textiles will continue to be of increasing importance to the Company's overall
sales. Reflecting the success of this strategy, sales of carpeting backing, the
Company's core product line, have decreased from an actual 55.2% of total net
sales in fiscal 1992 to approximately 45% of total net sales, on a pro forma
basis for the Spartan Acquisition, for the nine months ended June 30, 1997. In
addition, the Company plans to expand its polyester-based product offerings,
particularly in high strength geosynthetics and furniture and bedding
construction products.

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 $113,000
in its six manufacturing facilities during the five year period ended September
30, 1996, and approximately $35,000 for the nine month period ended June 30,
1997.

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
Ended
Year Ended September 30, June 30,
------------------------- ---------------
1994 1995 1996 1996 1997
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Net sales . . . . . . . . . . . . . 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales 64.8 71.7 69.5 71.3 68.0
------ ------ ------- ------ ------
Gross profit . . . . . . . . . . 35.2 28.3 30.5 28.7 32.0

Selling expenses . . . . . . . . . 9.3 9.0 9.2 9.1 9.2
General and administrative expenses 7.5 7.8 7.6 7.6 7.9
Amortization of intangibles . . . . 1.0 0.9 0.9 0.9 0.8
------- ------- ------- ------ ------
Operating income . . . . . . . . 17.4 10.6 12.8 11.1 14.1
Interest expense . . . . . . . . . 8.5 8.3 7.6 8.1 6.4
Amortization of deferred financing
costs . . . . . . . . . . . . . . 0.3 0.3 0.2 0.3 0.2
------- ------- ------- ------ ------
Income before provision for income
taxes and extraordinary item . 8.6 2.0 5.0 2.7 7.5
Provision for income taxes . . . . 3.7 1.3 2.3 1.4 3.1
------- ------- ------- ------ ------

Income before extraordinary
item . . . . . . . . . . . . . 4.9% 0.7% 2.7% 1.3% 4.4%
======= ======= ======= ====== ======
</TABLE>

RESULTS OF OPERATIONS

NINE MONTHS ENDED JUNE 30, 1997 AS COMPARED TO NINE MONTHS ENDED JUNE 30,
1996

Net sales for the first nine months of fiscal 1997 were $245,327 compared
to $212,060 for the same period of fiscal 1996, an increase of $33,267, or
15.7%. Carpet backing sales for the first nine months of fiscal 1997 were
$122,090 compared to $106,376 for the same period of fiscal 1996, an increase
of $15,714, or 14.8%. The increase was primarily due to higher unit volume in
both primary and secondary carpet backing, as well as slightly higher selling

-17-
<PAGE> 20
prices. Construction and civil engineering product sales for the first nine
months of fiscal 1997 were $75,930 compared to $64,981 for the same period of
fiscal 1996, an increase of $10,949, or 16.8%. This increase was primarily due
to an increase in nonwoven geosynthetic sales. Technical textiles sales for
the first nine months of fiscal 1997 were $47,307 compared to $40,703 for the
same period of fiscal 1996, an increase of $6,604, or 16.2%, of which the
Spartan Acquisition contributed approximately $4,800.

Gross profit for the first nine months of fiscal 1997 was $78,399
compared to $60,839 for the same period of fiscal 1996, an increase of $17,560,
or 28.9%. As a percentage of sales, gross profit increased to 32.0% from
28.7%. This increase was primarily due to increased sales volume, slightly
higher average selling prices and growth of higher margin business, coupled
with comparable average polypropylene costs to the prior period. See
"--Introduction."

Selling expenses for the first nine months of fiscal 1997 were $22,480
compared to $19,259 for the same period of fiscal 1996, an increase of $3,221,
or 16.7%. This increase was primarily due to increased expenditures associated
with higher sales volume as well as increased marketing expenses. As a
percentage of sales, selling expenses increased from 9.1% to 9.2%.

General and administrative expenses for the first nine months of fiscal
1997 were $19,474 compared to $16,024 for the same period of fiscal 1996, an
increase of $3,450, or 21.5%. As a percentage of sales, general and
administrative expenses increased from 7.6% to 7.9%. The increase in general
and administrative expenses was primarily due to infrastructure expenditures,
which included an increased investment in the Company's information technology
department, to support anticipated Company growth.

Operating income for the first nine months of fiscal 1997 was $34,501 as
compared to $23,612 for the same period of fiscal 1996, an increase of $10,889,
or 46.1%. As a percentage of sales, operating income increased to 14.1% in
fiscal 1997 from 11.1% in fiscal 1996. This increase was primarily due to
higher sales volumes as well as the growth of higher margin business, partially
offset by slightly increased selling, general and administrative costs.

Interest expense for the first nine months of fiscal 1997 was $15,722
compared to $17,253 for the same period of fiscal 1996, a decrease of $1,531,
or 8.9%, due to lower average interest rates on the outstanding debt.

The effective income tax rate before the effect of the extraordinary item
for the nine months ended June 30, 1997 and 1996 was approximately 41% and 52%,
respectively. The higher rate for 1996 was due primarily to the effect of
nondeductible expenses, including the amortization of goodwill, on lower income
in fiscal 1996.

Income before extraordinary item for the first nine months of fiscal 1997
was $10,740 compared to $2,786 for the same period of fiscal 1996, an increase
of $7,954. Earnings before interest, taxes, depreciation and amortization
("EBITDA") (1) for the first nine months of fiscal 1997 were $47,694 compared to
$35,350 for the same period of fiscal 1996, an increase of $14,344, or 43.0%.
The increase in income before extraordinary item, as well as EBITDA, was
primarily due to higher sales volumes and continued growth of higher margin
business, partially offset by slightly increased selling, general and
administrative costs.

Earnings per share before extraordinary item for the first nine months of
fiscal 1997 was $1.25 compared to $0.47 for the same period of fiscal 1996 on
increased weighted average shares outstanding of 2,668 shares, or 45.0%, as a
result of the Initial Public Offering. Supplemental pro forma net income per
share before extraordinary item, assuming the net proceeds from the Initial
Public Offering and the bond refinancing were used to reduce outstanding
indebtedness and the shares issued in the Initial Public Offering were
outstanding as of the beginning of each respective period, would have been
$1.28 and $0.60 per share for the nine months ended June 30, 1997 and 1996,
respectively.

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

(1) The Company believes that EBITDA is helpful in understanding cash flow
from operations that is available for debt service, taxes and capital
expenditures. EBITDA is not a concept recognized with generally accepted
accounting principles and is not a substitute for operating income, net income
or cash flows from operating activities.

-18-
<PAGE> 21

FISCAL 1996 COMPARED TO FISCAL 1995

Net sales for fiscal 1996 were $299,532 compared to $271,427 for fiscal
1995, an increase of $28,105, or 10.4%. This increase was primarily due to
increased sales of carpet backing and construction and civil engineering
products. Carpet backing sales for fiscal 1996 were $146,491 compared to
$133,025 for fiscal 1995, an increase of $13,466, or 10.1%. 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 fiscal 1996 were $97,043 compared to $82,933 for
fiscal 1995, an increase of $14,110, or 17.0%. This increase was due to an
increase in sales of geotextile and erosion control fabrics of $13,018, or
30.7%, resulting primarily from nonwoven sales in the landfill and roadway and
building site markets. Technical textiles sales for fiscal 1996 were $55,998
compared to $55,469 for fiscal 1995, an increase of $529, or 1.0%.

Gross profit for fiscal 1996 was $91,211, compared to $76,721 for the
same period of fiscal 1995, an increase of $14,490, or 18.9%. As a percentage
of sales, gross profit increased to 30.5% from 28.3%. This increase was
primarily due to increased sales volume as well as lower average polypropylene
costs. See "-- Introduction."

Selling expenses for fiscal 1996 were $27,488 compared to $24,273 for the
same period of fiscal 1995, an increase of $3,215, or 13.2%. This increase was
primarily due to increased expenditures associated with higher sales volume as
well as increased marketing expenses. These expenses are related to the
Company's expectation of higher sales in 1997 resulting from the completion of
the 1996 capacity expansion program. As a percentage of sales, selling
expenses increased from 9.0% to 9.2%.

General and administrative expenses for fiscal 1996 were $22,657 compared
to $21,195 for the same period of fiscal 1995, an increase of $1,462, or 6.9%.
As a percentage of sales, general and administrative expenses decreased from
7.8% to 7.6%. In fiscal 1995, general and administrative expenses included a
pre-tax charge of $2,852 related to an increase in the allowance for doubtful
accounts taken to establish a reserve for a carpet backing customer who
experienced severe financial difficulties. Without this charge, fiscal 1995
general and administrative expenses as a percentage of sales would have been
6.8%. The increase in general and administrative expenses was primarily due to
infrastructure expenditures, which included an increased investment in the
Company's Management Information System, to support anticipated Company growth.

Operating income for fiscal 1996 was $38,474 as compared to $28,687 for
fiscal 1995, an increase of $9,787, or 34.1%. As a percentage of sales,
operating income increased to 12.8% in fiscal 1996 from 10.6% in fiscal 1995.
This was primarily due to factors discussed above.

Total interest expense for fiscal 1996 was $22,773 compared to $22,514
for fiscal 1995, an increase of $259, or 1.2%, due to higher average total debt
outstanding.

The effective income tax rate was 46% and 64% in fiscal 1996 and 1995,
respectively. The decrease was primarily due to the effect of nondeductible
expenses, including the amortization of goodwill, on higher taxable income in
fiscal 1996.

Net income for fiscal 1996 was $8,102 compared to net income of $1,936
for fiscal 1995, an increase of $6,166, or 318.5%. EBITDA for fiscal 1996 was
$54,074 compared to $42,887 for fiscal 1995, an increase of $11,187, or 26.1%.
The increase in net income, as well as EBITDA, was primarily due to higher
sales volumes and lower average raw material cost partially offset by slightly
lower average selling prices, higher manufacturing costs associated with plant
shutdowns as a result of the winter ice storms in 1996 and increased selling
and general and administrative costs.

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

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<PAGE> 22
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.

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 $17,740 and $18,353 for the nine months
ended June 30, 1997 and 1996, respectively, and $31,421 and ($35) for fiscal
1996 and 1995, respectively.

Cash provided by operating activities for the nine months ended June 30,
1997 consisted primarily of $10,740 earnings before extraordinary item and
noncash charges of $14,751, as well as an increase in accounts payable of
$9,507, which financed increases in accounts receivable and inventories of
$24,762.

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Cash provided by (used in) operating activities in fiscal 1996 and 1995
resulted primarily from net income of $8,102 and $1,936, respectively, after
deducting non-cash charges of $20,723 and $17,945 and net working capital
changes of approximately $2,596 and ($19,916), for each respective period. The
increase in cash provided by operating activities for fiscal 1996 as compared
to fiscal 1995 was principally due to fluctuations in net income and the
Company's working capital requirements. The changes included reduced inventory
and accounts payable balances in 1996 resulting primarily from lower inventory
quantities and lower polypropylene costs. 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 resulted from the effects of higher polypropylene costs, as well as
increased units in finished goods and raw materials. Working capital amounted
to $82,945 and $66,802 at June 30, 1997 and 1996, respectively, and $64,077 and
$69,039 at September 30, 1996 and 1995, respectively.

On February 11, 1997, the Company issued $170,000 aggregate principal
amount of 9 1/4% Senior Subordinated Notes due February 15, 2007 (the
"Notes"), which represent unsecured obligations of the Company. The Notes are
redeemable at the option of the Company at any time on or after February 15,
2002, at an initial redemption price of 104.625% of their principal amount
together with accrued interest, with declining redemption prices thereafter.
Interest on the Notes are payable semi-annually on February 15 and August 15 in
the amount of $7,863.

On November 1, 1996, the Company received net proceeds of approximately
$34,000 (after payment of underwriting discounts and commissions and expenses)
from the sale of 2,875,000 shares of Common Stock in an underwritten public
offering. These proceeds, together with the proceeds received from the
issuance of the Notes, were utilized primarily to retire approximately $133,000
of the Company's 12 3/4% Senior Subordinated Debentures due 2002 (the
"Debentures"), pay the related call premium and prepayment costs and fees
associated with the refinancing of $15,920, pay debt issuance costs of $5,540
and to repay approximately $21,900 of certain outstanding indebtedness under
the Company's Fourth Amended and Restated Revolving Credit and Security
Agreement, dated as of October 20, 1995, as subsequently amended, among the
Company, the lenders party thereto and BankBoston, as agent (the "Credit
Facility"). In connection therewith, the Company recorded an extraordinary
loss of $11,950 net of tax benefit of $7,481. The Company intends to redeem to
remaining $7,403 of the Debentures on December 1, 1997.

The net proceeds from financing and operating activities were also
utilized to fund capital expenditures of $35,253 and to acquire certain assets
of the Spartan Technologies division of Spartan Mills for approximately $9,400.
Additional capital expenditures planned for fiscal 1997 and 1998 are
approximately $15,000 and $40,000, respectively, primarily to expand the
capacity of the Company's manufacturing facilities, subject to prevailing
market conditions. Capital expenditures in fiscal 1996 and 1995 were
approximately $34,200 and $13,300, respectively.

The Credit Facility provides for potential borrowing capacity of up to
$85,000 and is comprised of term loan borrowings of $45,000 and a revolving
credit loan portion (the "Revolver") of up to $40,000. The term loan balance
at June 30, 1997 was $25,000, of which $10,000 is payable in 1999 and $15,000
is payable in 2000. The Lenders under the Credit Facility are BankBoston,
Sanwa Business Credit Corporation and South Trust Bank of Georgia, N.A. 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 and reserves. These reserves include the remaining balance
due under the Debentures of approximately $7,400. At June 30, 1997, the
maximum amount available for borrowing under the Revolver was $27,477. The
Credit Facility expires on October 1, 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 .75% (8.5% at June 30, 1997 and 9.0% at September 30, 1996) 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
(7.6875% to 8.1875% at June 30, 1997 and 8.0938% to 9.25% at September 30,
1996).

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<PAGE> 24
The Credit Facility provides for borrowings under letters of credit of up
to $3,000, which borrowings reduce amounts available under the Revolver. The
letters of credit outstanding under the Credit Facility were $197 and $1,892 at
June 30, 1997 and September 30, 1996, respectively. The Company is required to
pay a .375% fee on the unused portion of the commitment and an agency fee of
$150 per annum.

At June 30, 1997, the Company's total outstanding indebtedness amounted
to $210,059. Such indebtedness consists primarily of borrowings under the
Credit Facility of $27,126, $170,000 aggregate principal amount of the Notes,
$7,403 aggregate principal amount of the Debentures and an outstanding capital
lease obligation of $4,242 dated as of May 28, 1996. Cash interest paid during
the nine months ended June 30, 1997 and 1996 was $15,657 and $21,125,
respectively, and during fiscal 1996, 1995 and 1994 was $23,176, $22,334 and
$19,787, respectively.

The Company is currently negotiating a new five year credit facility,
which the Company expects to consist of up to a $40 million receivables
securitization program and a $60 million senior secured revolving credit
facility.

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 the Credit Facility and lease agreements, permit anticipated capital
expenditures and fund the Company's working capital requirements.

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 textiles
product lines are not greatly affected by seasonal trends, sales and operating
income 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 and operating income 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
and quarterly operating results of the Company to a greater degree.

RECENT ACCOUNTING PRONOUNCEMENTS

In October 1995, the Financial Accounting Standard Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation" which is effective for the Company's fiscal year
ending September 30, 1997. 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 ending 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.

In March 1997, the FASB issued SFAS No. 128, "Earnings Per Share." This
new standard requires presentation of both basic and diluted earnings per share
("EPS") on the face of the statements of operations and requires a
reconciliation of the numerators and denominators of basic and diluted EPS
calculations. This statement will be effective for the Company's first quarter
1998 consolidated financial statements. The adoption of this statement is not
expected to have a material impact on the Company's consolidated financial
statements.

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<PAGE> 25
BUSINESS

THE COMPANY

The Company is one of the world's leading producers of polypropylene
fabrics and fibers for the home furnishing, construction, environmental 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, the second largest
producer of geosynthetic products in North America and is the largest producer
of synthetic fiber additives for secondary concrete reinforcement through its
Fibermesh(R) line of products. SI also produces polypropylene and polyester
products for the furniture and bedding, filtration and agricultural 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 and water/air permeability. 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 $196 million in
fiscal 1992 to $300 million in fiscal 1996.

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, woven
fabrics 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 1996 sales. The Company's construction and civil engineering
products are its fastest growing product line and include fiber additives for
secondary concrete reinforcement and geosynthetic products used in the
environmental and transportation markets, with end uses such as landfill waste
containment and soil stabilization. The Company's sales to the construction
and civil engineering market have grown from approximately $35 million in
fiscal 1992 to approximately $97 million in fiscal 1996. These products
represented approximately 32% of the Company's total sales in fiscal 1996, up
from approximately 18% of total sales in fiscal 1992. The Company's technical
textile products are comprised of specialty fabrics, industrial yarns and
fibers used in diverse applications such as furniture and bedding construction,
filtration (e.g., wastewater treatment, air filtration and bauxite mining) and
agriculture (e.g., shade cloth and ground cover). These products are highly
engineered to meet niche customer applications and represented approximately
19% of fiscal 1996 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.

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. SI invested approximately $113 million in capital improvements
in its facilities and equipment during the five year period ended September 30,
1996, including a $35 million, 130,000 square foot expansion, completed in
August, 1996, of its largest manufacturing facility. The Company has recently
embarked on an additional capital expenditure program targeted on increasing
its manufacturing capacity for each of its three major product lines. For the
nine months ended June 30, 1997, expenditures under this plan totaled
approximately $ 35 million. In addition, on February 27, 1997, the Company
acquired certain assets of the Spartan Technologies division of Spartan Mills
(the "Spartan Acquisition") with 1996 sales of $ 20 million, for $9.4 million.
The Company expects sales arising from its acquisition and capital expenditures
to total approximately $50 million in fiscal 1998. The Company anticipates
that ongoing maintenance capital expenditures will be less than $5 million per
year. Additional capital expenditures, if any, will be focused on expansion
opportunities, subject to market conditions. 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.

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<PAGE> 26
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.

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 fiscal
1991, 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. On February 27, 1997,
the Company acquired certain assets of the Spartan Technologies division of
Spartan Mills for $ 9.4 million. The assets will be used primarily in the
manufacturing of nonwoven fabrics used in the geotextile and furniture and
bedding markets.

The Company was acquired by the Partnership in December 1986. On
November 1, 1996, the Company sold 2,875,000 shares of Common Stock in the
Initial Public Offering. On October 24, 1997, the Limited Partners of the
Partnership approved the adoption of the Plan, pursuant to which 3,000,000
Shares are being offered hereby and 2,871,250 shares of Common Stock will be
distributed in up to three distributions, each 180 days apart, to the remaining
Limited Partners beginning 180 days following the completion of this Offering.
See "The Plan of Withdrawal and Dissolution -- The Dissolution and
Distribution."

INDUSTRY OVERVIEW

The Company manufactures primarily polypropylene staple fibers and slit
film yarn ("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 usage of
Polypropylene Fiber was approximately 3 billion pounds in 1996 and grew at an
annual rate of approximately [8%] per year in the period from 1994 to 1996.

The Company believes it is one of the largest manufacturers of
Polypropylene Fiber in the U.S. with approximately [10%] 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 geosynthetic and concrete fiber
reinforcement markets.

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.
Virtually all of the Company's carpet backing products and approximately 38% 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

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<PAGE> 27
technical textile products and 62% of its civil engineering products,
principally for waste containment, roadway and building site applications, are
nonwoven polypropylene fabrics.

CARPET BACKING

The domestic floor covering industry is comprised of several product
types designed for both commercial and residential end-uses. Business Trend
Analysts, Inc., a market research concern in Commack, New York, estimated the
total domestic floorcovering market in 1996 to be $13.8 billion at wholesale.
Total sales within the floorcovering market can be segmented into several
categories including carpets and rugs (72%) and resilient flooring (16%), with
the balance in clay and ceramic tile, hardwood flooring and laminate flooring.
Of the $9.9 billion carpet and rug sales, 86% was broadloom, 6% was scatter
rugs, 5% was transportation and 3% was other uses.

The Company believes that approximately 75% of the U.S. broadloom market
is composed of residential sales, with commercial sales accounting for the
remaining 25%. Of the residential sales, 30% are for new floorcoverings, and
70% are for replacement floorcoverings. Of the commercial sales, 16% are for
new floorcoverings, and 84% are for replacement coverings. The Company
participates in the broadloom market by supplying primary and secondary backing
to both residential and commercial carpet mills. According to the Carpet and
Rug Institute ("CRI"), calendar year 1996 shipments of primary backing were 1.7
billion square yards. The Company believes that secondary backing shipments
approximate an additional 1.5 billion in square yards, or 95% of primary backing
shipments, for 1996.

With the Spartan Acquisition, the Company entered the modular carpet tile
backing market and now participates in virtually all of the commercial and
residential segments of the broadloom supply. According to CRI, total square
yards of residential carpet increased 2.8%, compounded annually, from calendar
year 1992 to calendar year 1996, while total square yards of commercial carpet
increased 3.6%, compounded annually, during this same period. For the nine
months ended June 30, 1997, the residential market has been essentially flat,
while commercial carpet has increased approximately 8.0%. Through expansion and
the Spartan Acquisition, the Company has added capacity to more fully
participate in the faster growing commercial backing market.

Due to its participation in the faster growing commercial market and its
market share gains in the residential market, the Company's carpet backing
shipments have increased at a faster rate than the market, resulting in sales
increases of 10.1% from fiscal 1995 to fiscal 1996 and 14.8% for the nine
months ended June 30, 1997 compared to the same period in fiscal 1996.

CONSTRUCTION AND CIVIL ENGINEERING

Construction and civil engineering products provide cost effective,
longer lasting alternatives to traditional construction methods. Geosynthetic
products are utilized primarily in infrastructure and environmental
applications in such diverse end uses as transportation, waste containment,
erosion control, mining and recreational activities. In these applications,
geosynthetics replace traditional construction practices such as excavation,
steel pilings, aggregate (rock), or concrete. Industry experts believe the
annual total market in North America for geosynthetic products could
approximate 4.0 billion square yards, with an as yet untapped international
market potential of at least twice this size. According to Industrial Fabrics
Association International, approximately 450 million square yards of woven and
nonwoven geosynthetics were expected to be shipped in North America in calendar
year 1996 for the civil engineering market. Industry sources project domestic
shipments of geosynthetic products will increase at an average annual rate of
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 29% for the period from fiscal 1994 to fiscal 1996. For
the nine months ended June 30, 1997, civil engineering sales have grown by
19.1%.

The total North American market for placed concrete in 1996 was
approximately 340 million cubic yards. The Company estimates that
approximately 34 million cubic yards, or 10% of this market, are presently
treated with fibers. In addition, the Company believes that 120 million cubic
yards, or 35% of the total market, is currently economically

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available for polypropylene fiber reinforcement. The North American market
represents only approximately 6% of the international market for concrete,
based on data supplied by the Bureau of Mines/United States Geological Service.
The Company's concrete reinforcing fiber products have grown 10% for the period
from fiscal 1994 to fiscal 1996. For the nine months ended June 30, 1997,
these sales have grown by 8%. International shipments of concrete reinforcing
fibers have grown $4.5 million, or 16.2%, over this same period.

TECHNICAL TEXTILES

The technical textiles business consists of a large number of relatively
stable product lines with annual sales in each market of approximately $10
million to $12 million. Furniture and bedding construction, agricultural and
filtration product sales currently represent 24%, 16% and 16%, respectively, of
total technical textile sales. In the furniture and bedding construction
market, the Company competes primarily in the nonwoven segment. Nonwoven
products are utilized primarily for internal construction applications such as
decking, padding and dust covers, and replace such traditional materials as
wool, horsehair and jute.

The Company produces nonwoven fabrics that are utilized for both air and
liquid filtration applications. The Company produces permanent air filters
primarily for HVAC and OEM systems, which replace the traditional disposable
fiberglass filters. The Company's liquid filter fabrics are used principally
in the mining industry as well as in waste water separation treatment,
commercial water purification and beverage filtration, replacing costly and
less efficient alternatives such as spun/multifilament systems.

The Company produces woven and nonwoven fabrics for foliage protection,
landscape and ground cover for the agriculture industry. These horticultural
products provide shade, block weeds and control water flow and replace commonly
used materials including gravel and polyethylene film.

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 geosynthetic
product line for

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<PAGE> 29
which sales have increased from $31.4 million in fiscal 1994 to $55.4 million
in fiscal 1996, and were $44.5 million for the nine months ended June 30, 1997,
an increase of 21.9% over the same period of fiscal 1996. Within this product
line, the Company has focused on nonwoven material for roadway and building
site, erosion control and waste containment sectors. Nonwoven geosynthetic
sales to these and other markets have grown from $18.3 million in fiscal 1994
to $36.3 million in fiscal 1996, and were $38.5 million for the nine months
ended June 30, 1997, an increase of 51.6% over the same period of fiscal 1996.

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 $25.0 million in fiscal 1994 to $33.3 million in fiscal
1996, and were $26.6 million for the nine months ended June 30, 1997, an
increase of 28.6% over the same period in fiscal 1996.

STRENGTHEN MARKET POSITION IN CARPET BACKING

The Company intends to increase its carpet backing market share through:
(i) expansion of sales in the growing domestic commercial backing market; (ii)
the continued development and strengthening of its relationship with key
customers; and (iii) continued capital investment in state-of-the-art equipment
for additional carpet backing production capacity. The Company's sales of
primary and secondary carpet backing have grown from $117.8 million in fiscal
1994 to $146.5 million in fiscal 1996, and were $122.1 million for the nine
months ended June 30, 1997, an increase of 14.7% over the same period of
fiscal 1996.

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 26%, in the
growing commercial carpet segment of the U.S. market, which currently
represents approximately 25% to 26% of the total broadloom supply, its
estimated share is less than 15%.

The Company has successfully cultivated long-term relationships with key
customers, which include all of the top ten largest carpet manufacturers in
North America. 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.

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). For
example, 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.

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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 $113 million in capital improvements in its facilities and
equipment during the five year period ended September 30, 1996, including a $35
million, 130,000 square foot expansion of its largest manufacturing facility
completed in August 1996. The Company 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 $75 million
per year as its products support the geotextile, furniture and building
materials markets.

Recently, the Company also embarked upon a new capital expenditure
program designed to expand its manufacturing capacity in each of its three
major product lines. For the nine months ended June 30, 1997, expenditures
under this program totaled approximately $35 million. The Company plans to
spend an additional $15 million during the balance of fiscal 1997 and
approximately $50 million in fiscal 1998 to further increase its manufacturing
capability and market share, subject to prevailing market conditions. In
addition, the Company will continue to equip for commercial carpet backing
opportunities as well as to support industry growth.

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. In
addition, the Company continues to identify new markets and applications where
polymer-based products can replace traditional raw materials. To further these
efforts, the Company has significantly increased its expenditures in research
and market development, from $2.8 million and $2.9 million in fiscal 1995 and
1996 respectively, to an estimated $5.2 million in fiscal 1997, of which $3.6
million has been expended through June 30, 1997. By increasing its research and
market development expenditures, the Company believes it will be able to
capitalize on its manufacturing strengths, sales and marketing expertise and
distribution network to introduce new value added products and extend product
lines to complement its existing product base. As an example, the Company's
civil engineering product group has added two newly patented products, Pyramat
and Geofibers(TM), which together had sales of $2.4 million for the nine months
ended June 30, 1997. Pyramat is a biotechnical composite three dimensional mat
which enables vegetation to be grown on steep slopes and in high-flow storm
drainage channels. Geofibers(TM) are soil and turf reinforcement fibers used in
roadway construction and maintenance as well as the sports field market,
including ballfields and horse racetracks.

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. Under its Geotex
trademark, the Company has begun the marketing and production of high strength
geotextile tubes used for such civil engineering applications as wetland and
island reclamation, shoreline protection and containment and dewatering of
contaminated materials. 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.

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.

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On February 27, 1997, the Company acquired all of the nonwoven
manufacturing equipment and certain other assets of Spartan Technologies, a
division of Spartan Mills for approximately $9.4 million. This division
realized annual revenues of approximately $20 million in fiscal 1996. This
acquisition adds to the Company's strength as one of the largest needlepunch
nonwoven manufacturers in the world. The added capacity will be used to grow
the Company's furniture and bedding construction business, and nonwoven carpet
backing and geotextile businesses.

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 geosynthetic 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 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 fabrics, soil reinforcing fibers and high performance
wovens and nonwovens. This diversification has contributed to average annual
sales increases of 23.4% for the period from fiscal 1987 to fiscal 1991 and
9.8% for the period from fiscal 1992 to fiscal 1996.

CARPET BACKING

Carpet backing is the Company's oldest and largest product line. Carpet
backing represented approximately 50.1%, 49.0% and 48.9%, or $117.8 million,
$133.0 million and $146.5 million, of the Company's fiscal 1994, 1995 and 1996
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.

Through fiscal 1996, 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 floor coverings. Secondary carpet backing, which forms the base of
the carpet, is the open weave 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
entered the modular carpet tile backing market in February 1997 through the
Spartan Acquisition.

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 combined market for residential and commercial 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 product lines: geosynthetic products and concrete reinforcement
fibers. Construction and civil engineering has achieved rapid growth since
1993 when the Company enhanced its channels of distribution for Fibermesh(R)
and expanded into production of nonwoven geotextiles. Construction and civil
engineering products represented approximately 29.3%, 30.6% and 32.4%, or $68.7

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<PAGE> 32
million, $82.9 million and $97.0 million of the Company's fiscal 1994, 1995 and
1996 net sales, respectively. Within this product line, geotextile products
principally serve the environmental and transportation market, with end uses
such as landfill waste containment, erosion control and soil stabilization,
separation and reinforcement. Fibermesh(R) provides secondary reinforcement of
conventional and pre-cast concrete. Growth in sales in the geosynthetic sector
for the period fiscal 1993 to fiscal 1996 averaged 48.3% annually. Fibermesh(R)
concrete reinforcing fiber sales grew at an average annual rate of 10.5% for
the period from fiscal 1993 to fiscal 1996.

Geosynthetic Products. The Company's geosynthetic 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
and ultimate land use. The Company's geosynthetic products generally comply
with state agency guidelines pertaining to geosynthetic products issued to
date.

The Company produces a variety of nonwoven and woven geotextiles for use
in landfill, roadway and mining construction. The Company's LANDLOK(R) erosion
control products are used in storm water drainage channels, steep slopes and
shoreline protection. 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 geosynthetic
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 geosynthetic 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,
storm water quality and soil erosion. Geosynthetics tend to be more durable,
easier to use, and more cost effective as compared to traditional construction
methods and 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
strengths as a technical marketer and 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 practical use of
polypropylene fibers as a secondary reinforcement for concrete with the
development and introduction of Fibermesh(R) to the concrete industry in 1983.
The Company believes that its Fibermesh(R) product line has a 62% share of the
fiber reinforced segment of the concrete industry. Further, the Company
believes that Fibermesh(R) has only an 18% penetration of the 120 million cubic
yards of placed concrete currently economically available to it. However, all
concrete reinforcement fibers, including Fibermesh(R), have only approximately
10% penetration of the 340 million cubic yards of placed concrete market in the
United States. The Company believes that the concrete market will accommodate
significant growth through the increased acceptance of the use of synthetic
fibers for concrete reinforcement as a replacement for conventional wire mesh.
The Company continues to seek to expand its current product line to increase
the economically viable portion of the placed concrete market available to it.

The addition of Fibermesh(R) polypropylene fibers to concrete inhibits
the formation of early cracking while providing greater impact, abrasion, and
shattering resistance from external forces. The hardened fibrous concrete has
lower permeability and a level of toughness (residual strength) not found in
plain concrete.

Primary applications for fiber reinforced concrete are residential and
commercial slabs, elevated decks, precast products, shotcrete tunnels, canals
and pools, and whitetopping restoration of deteriorated asphalt pavements and
parking areas.

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<PAGE> 33
Fibermesh(R) complies with all national model building codes and the
American Society of Testing Materials (ASTM) standards. 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
manufactured for sale 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 20.6%, 20.4% and 18.7%, or $48.5 million, $55.5
million and $56.0 million of the Company's fiscal 1994, 1995 and 1996 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 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.

Sales to the furniture and bedding markets constituted $1.2 million, $3.9
million and $5.7 million of the Technical Textiles fiscal 1994, 1995 and 1996
sales, respectively. Furniture and bedding construction products consist of
woven and nonwoven decking and padding, mattress ticking, dust covers, spring
insulators and flange materials. Beginning with the Spartan Acquisition in
February of 1997, product sales have increased to an annualized $19.6 million,
or 28.5%, of the Technical Textile group. This acquisition added to the
Company's expertise in the nonwoven needlepunching of not only polypropylene
but also polyester, which is approximately 45% of this acquisition's production.

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 1996, the Company's ten largest carpet backing
customers accounted for approximately 78% of its total net sales to the carpet
industry. In fiscal 1996, sales to Shaw, the Company's largest customer,
accounted for approximately 36% 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 which 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 broad product line is
marketed in conjunction with its industry expertise in application and material
engineering, as well as expertise in construction design and installation, as
cost effective, longer lasting alternatives to traditional construction
methods. Its ongoing marketing communications program for owners, architects,
specifying agencies, including both the public and private sectors, and the
engineering community as a whole, is designed to continue to build awareness of
both product capabilities and in-house and technical expertise, and to expand
interest in and use of concrete reinforcing fibers and geosynthetics.

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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. International sales, which comprise approximately 10% of
geosynthetic sales, are sold through worldwide distribution networks. In
fiscal 1996, the ten largest geosynthetic product customers accounted for
approximately 30% of the Company's net sales in this product line.

Fibermesh(R) is sold through a direct sales force primarily to ready-mix
concrete companies and precast concrete product manufacturers located primarily
in North America and the United Kingdom. The sales force operates out of ten
regional offices in the United States and in Chesterfield, England. In
addition, Fibermesh(R) is sold through a contract with Masters Builders, Inc.,
a worldwide leader in concrete technology. Internationally, in addition to the
United Kingdom sales force, construction industry product distributors market
Fibermesh(R) in over 50 countries. In fiscal 1996, 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 1996, the Company's ten largest technical
textile customers accounted for approximately 26% of the Company's total net
sales of technical textiles. The Company's technical textiles are marketed by
salespersons through sales offices in Gainesville and Calhoun, Georgia and
Chesterfield, England and, beginning with the Spartan Acquisition, in
Spartanburg, South Carolina, Hickory, North Carolina and Tupelo, Mississippi.

COMPETITION

The markets for the Company's products are highly competitive. In the
manufacture and sale of carpet backing, which represented approximately 49% of
the Company's total net sales for each of fiscal 1996 and 1995, 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 T.C. Mirafi 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".

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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 geosynthetic
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.

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. 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. In February 1997, the Company
acquired certain assets of the Spartan Technologies division of Spartan Mills
to be used primarily in the manufacturing of needlepunched nonwoven fabrics
used in the geotextile, carpet backing and furniture and bedding 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 the International Standards Organization.

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.

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<PAGE> 36
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 market 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 $2.9 million (approximately 1.0% of sales) and $2.8
million (approximately 1.0% of sales) on Company-sponsored research and market
development activities in fiscal 1996 and fiscal 1995, respectively. As part
of a recently completed strategic review, the Company expects to increase
research and market development expenses in fiscal 1997 to approximately $5.2
million, of which $3.6 million has been expended through June 30, 1997.

INTERNATIONAL OPERATIONS

The Company conducts its foreign sales operations through subsidiaries in
Europe and a network of distributors worldwide. In fiscal 1996, the aggregate
sales (principally of construction and civil engineering products) by such
foreign subsidiaries and marketing divisions were approximately $5.5 million.
International sales from United States operations in fiscal 1996 were $27.8
million. Total international sales were 9.3% of consolidated net sales.

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 has not experienced production curtailment
due to shortages of polypropylene supply at any time.

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 or similar
agencies. 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 substantial 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 or release of solid and hazardous

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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.

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.

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 recycles post-industrial waste for certain
of the its 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
</TABLE>

-35-
<PAGE> 38
<TABLE>
<CAPTION>
Approximate
Square Footage Owned or
Location Principal Function of Facility Leased
- ---------------------- -------------------------------- -------------- --------
<S> <C> <C> <C>
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 76,000 Leased

Westside, Georgia Carpet backing warehouse 86,440 Leased

Dalton, Georgia Carpet backing warehouse 85,000 Leased
North Dug Gap

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 2,551,130
=========
</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 September 30, 1997, the Company employed 2,562 persons in the United
States, of whom 545 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.

-36-
<PAGE> 39
CLAIMS AND LEGAL PROCEEDINGS

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.

Certain of the Company's officers and directors who are affiliated with
the General Partner of the Partnership have been named in two putative class
action lawsuits filed by a limited partner of the Partnership in connection with
the dissolution of the Partnership pursuant to the Plan. The Company does not
believe that the ultimate resolutions will have a material adverse effect on the
Company. In the first action, filed on February 11, 1997 in the Delaware Court
of Chancery and amended on June 11, 1997, the plaintiff has alleged, among other
things, breach of the defendants' fiduciary duty to achieve the highest possible
value for the limited partners in connection with the November 1, 1996 Initial
Public Offering of the Company by failing to explore alternative transactions
that could potentially threaten their positions with and control over the
Company and the benefits derived therefrom. The plaintiff seeks, among other
things, removal of the General Partner, dissolution of the Partnership,
appointment of a receiver, rescission of certain stock option grants and
employment agreements and compensatory damages in an undetermined amount. On
June 25, 1997, defendants filed a motion to dismiss the amended complaint. On
September 2, 1997, the plaintiff filed a motion to amend his complaint, a motion
for preliminary injunction and a motion for expedited discovery. At a hearing
on September 4, 1997, the court denied these motions without prejudice to the
plaintiff refiling the motions at an appropriate date in the future. On
September 24, 1997, the plaintiff filed renewed motions to amend his complaint,
for preliminary injunction and for expedited proceedings. The plaintiff has
alleged in his amended complaint, in addition to the matters alleged in his
original complaint, that the Plan is unlawfully coercive and that the General
Partner has allegedly failed to satisfy certain conditions precedent to the
right of limited partners to amend the partnership agreement. The plaintiff
seeks, among other things, to enjoin the special meeting of limited partners.
The plaintiff's motion for preliminary injunction is being briefed and a hearing
has been set for October 23, 1997. The second lawsuit was filed in the U.S.
District Court of the Northern District of California on May 1, 1997. In
connection with a letter sent by the General Partner to the limited partners,
the plaintiff has alleged that the defendants have violated federal securities
laws by mailing a proxy solicitation to the limited partners without first
filing with the Commission, mailing out the solicitation without filing or
disseminating a proxy statement and failing to disclose numerous material facts
in the solicitation. The complaint seeks an injunction to remedy the alleged
violations of securities regulations and a declaratory judgment stating that the
defendants violated securities regulations. On May 23, 1997, the plaintiff
filed a motion for a preliminary injunction. By order dated August 4, 1997, the
plaintiff's motion was denied. The plaintiff filed a notice of appeal of the
August 4, 1997 order on August 15, 1997. On September 26, 1997, the plaintiff
moved to voluntarily dismiss the appeal. On October 1, 1997, the plaintiff
filed an ex parte motion to amend his complaint and an ex parte motion for a
temporary restraining order, a preliminary injunction and expedited discovery.
The plaintiff has alleged in his amended complaint, in addition to the matters
in his original complaint, various federal securities and proxy violations
allegedly arising out of the joint proxy statement and prospectus. The
plaintiff has also added the Company as a named defendant. The plaintiff seeks,
among other things, to restrain the further solicitation of proxies in
connection with the Plan, to enjoin the special meeting of limited partners and
unspecified damages. The Partnership is a principal stockholder of the Company
and certain members of the Company's management control the General Partner.
See "Certain Relationships and Related Transactions."

-37-
<PAGE> 40
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

Joseph F. Dana . . . . . . . . 50 Chief Operating Officer, General Counsel and Director

Joseph Sinicropi . . . . . . . 43 Chief Financial Officer and Secretary

W. Wayne Freed . . . . . . . . 61 Vice President -- Market Development

Ralph Kenner . . . . . . . . . 53 Vice President -- Manufacturing

C. Ted Koerner . . . . . . . . 48 Vice President -- General Manager Construction/Civil
Engineering Products Group

John Michael Long . . . . . . . 54 Vice President -- General Manager Technical Textiles
Group

William Gardner Wright, Jr. . . 68 Vice President -- General Manager Carpet Backing
Division

Robert J. Breyley . . . . . . . 68 Vice President -- Fibermesh(R) Division

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

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

Richard E. Hingson . . . . . . 42 Vice President -- Technical Services

Lee J. Seidler (1) . . . . . . 62 Director

William J. Shortt (1) . . . . . 72 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. He has been a director since 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". In
addition, Mr. Chill is a director of Synthetic Textiles Ltd.

-38-
<PAGE> 41
Joseph F. Dana was appointed Chief Operating Officer and General Counsel
on July 1, 1997. Prior to joining the Company, Mr. Dana had been engaged in
the private practice of law for over twenty years and had been a member of the
law firm Watson & Dana, LaFayette, Georgia, since its formation in 1978,
serving as general counsel to the Company since 1987. He has been a Director
since 1993.

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.

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.

C. Ted Koerner joined the Company in 1990 and became Vice President --
Construction Products Division in 1993. He was named Vice President -- General
Manager of the Construction/Civil Engineering Products Group 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 Company.

John Michael Long was Vice President -- Nonwoven Fabrics from 1991 to
1996 at which time he was named Vice President -- General Manager of the
Technical Textiles Group. 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.

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(R) 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.

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.

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

Richard E. Hingson joined the Company in 1984 as Quality Control Manager
and became Technical Director in 1989. He was promoted to Vice President -
Technical Services in 1997. Prior thereto, he held a variety of managerial
positions with Amoco Fabrics Company, a producer of polypropylene and
polyethylene yarns and fabrics.

Lee J. Seidler was professor of accounting and Price Waterhouse professor
of auditing at New York University. Dr. 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. Dr. Seidler is a
director of the Shubert Foundation, The

-39-
<PAGE> 42
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.

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 and Mr. Hingson, 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 October 1,
1996, 100% of the number of shares of Common Stock subject to each Director
Option are 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.
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. 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.

-40-
<PAGE> 43
PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of October 24, 1997 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; (iv) all executive officers and directors
of the Company as a group; and (v) the Selling Stockholders 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
Owned Prior to Being Shares Beneficially
Offering Offered Owned After Offering
Name Number Percent Number Percent
---- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
5% STOCKHOLDERS:
Synthetic Industries, L.P. . . . . . . . . . 2,781,250 (1) 30.83% - 2,781,250 30.83%
The Crabbe Huson Group, Inc.(2) . . . . . . . 597,300 (2) 6.62% - 597,300 6.62%

NAMED EXECUTIVE OFFICERS:
Leonard Chill . . . . . . . . . . . . . . . . 109,875 (3)(4)(5) * - 109,875 (3)(4)(5) *
W. Wayne Freed . . . . . . . . . . . . . . . 44,921 (3)(4)(5) * - 44,921 (3)(4)(5) *
William Gardner Wright, Jr. . . . . . . . . . 44,921 (3)(4)(5) * - 44,921 (3)(4)(5) *
Ralph Kenner . . . . . . . . . . . . . . . . 44,921 (3)(4)(5) * - 44,921 (3)(4)(5) *
Robert J. Breyley . . . . . . . . . . . . . . 7,894 (4)(6) * - 7,894 (4)(6) *

DIRECTORS:
Joseph F. Dana . . . . . . . . . . . . . . . 28,906 (4) * - 28,906 (4) *
Lee J. Seidler . . . . . . . . . . . . . . . 57,813 (4) * - 57,813 (4) *
William J. Shortt . . . . . . . . . . . . . . 19,271 (4) * - 19,271 (4) *
Robert L. Voigt . . . . . . . . . . . . . . . 19,271 (4) * - 19,271 (4) *

All executive officers and directors as a
group (14 persons)(5)(6)(7) . . . . . . . 430,387 4.77% - 430,837 4.77%

SELLING STOCKHOLDERS:
All Selling Stockholders as a group (__
persons)(8) . . . . . . . . . . . . . . . 2,928,713 32.46% 2,928,713 - -
</TABLE>

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

* Less than 1.0%.

(1) Pursuant to the Plan, the 2,781,250 shares of Common Stock held by the
Partnership will be distributed beginning 180 days following the
completion of this Offering. See "The Plan of Withdrawal and Dissolution
-- The Dissolution and Distribution." No individual Limited Partner will
receive in the aggregate more than 14,132 shares of Common Stock in the
Distribution

(2) The business address for The Crabbe Huson Group, Inc. is 121 S.W.
Morrison, Suite 1400, Portland, Oregon 97204. Information regarding The
Crabbe Huson Group, Inc. has been obtained by the Company from a
Questionnaire for Directors, Officers and Certain Stockholders of
Synthetic Industries, Inc. dated August 11, 1997. The Crabbe Huson
Group, Inc. does not directly own any shares of Common Stock. It has
shared voting and investment power over 597,300 shares of Common Stock.

(3) 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.

(4) Includes shares of Common Stock subject to options exercisable within 60
days, as follows: Leonard Chill-- 100,243 shares; W. Wayne Freed--
35,289 shares; William Gardner Wright, Jr.-- 35,289 shares; Ralph
Kenner-- 35,289 shares; Robert J. Breyley-- 7,204 shares; Joseph F.
Dana-- 28,906 shares; Lee J. Seidler-- 57,813 shares; William J. Shortt--
19,271 shares; Robert L. Voigt-- 19,271 shares.

-41-
<PAGE> 44
(5) Does not include 2,781,250 shares (other than the 9,632 shares described
in footnote 3 above) as to which Messrs. Chill, Wright, Kenner and Freed
may be deemed to have beneficial ownership by virtue of their indirect
control of the Partnership. See "Certain Relationships and Related
Transactions".

(6) 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.

(7) Does not include (i) an aggregate of 27,240 shares of Common Stock
subject to options exercisable within 60 days that are owned by employees
of the Company other than the executive officers and (ii) an aggregate of
396,559 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.

(8) All of the Selling Stockholders are current or former Limited Partners.
Each of the Selling Stockholders is offering the entire amount of the
Shares owned by such Selling Stockholder prior to the Offering. Please
see Appendix A for a list of the individual Selling Stockholders and the
number of shares of Common Stock offered for the account of each Selling
Stockholder.

-42-
<PAGE> 45
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The General Partner 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. The Partnership owns 2,871,250
shares, or approximately 33%, of the issued and outstanding shares of Common
Stock.

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, Freed, Kenner and
Wright, see "Management--Executive Officers and Directors of the Company."

Pursuant to the Plan, the Company agreed to advance to the Partnership
all of the Partnership's costs and expenses necessary to complete the Plan.
The Partnership has agreed to reimburse the Company by delivering up to 71,287
shares of Common Stock to the Company. If at the time of the final
distribution of the Partnership's shares of Common Stock to the remaining
Limited Partners the aggregate expenses actually incurred is greater than $1.8
million, the Company shall not be entitled to any reimbursement of the
difference between $1.8 million and the actual amount of expenses incurred.
The Company shall bear the costs and expenses, estimated to be
$________________________, associated with this Offering. Underwriting
discounts and commissions in connection with this Offering will be allocated on
a pro rata basis among the Selling Stockholders and the Company in accordance
with the number of shares of Common Stock sold by each Selling Stockholder and
the Company. The above description is qualified in its entirety by reference
to the Agreement and Plan of Withdrawal and Dissolution, a copy of which was
filed as an exhibit to the Company's Registration Statement on Form S-3 (File
No. 333-________), of which this Prospectus is a part.

Lee J. Seidler, a director of the Company, is presently associated with
Bear, Stearns & Co. Inc. ("Bear Stearns") as Managing Director Emeritus and
from time to time receives fees in connection with consulting and referral
services to Bear Stearns, including the Initial Public Offering and the
offering of $170,000,000 aggregate principal amount of 9 1/4% senior
subordinated notes due 2007. Dr. Seidler has received from Bear Stearns in
connection with such services approximately $200,000 since the beginning of the
Company's fiscal year.

Jon P. Beckman, a former executive officer of the Company and an
affiliate of the General Partner, 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 released
the Company from any liability resulting from his employment and has also
agreed not to compete against the Company.

The Company leases office space under a five-year lease with William
Gardner Wright, Jr., one of the Company's executive officers. The term of the
lease expires on September 30, 1998 and the rent is approximately $4,000 per
month, which the Company believes is within prevailing market rates.

Pursuant to a licensing agreement with the Company, W. Wayne Freed, an
executive officer of the Company, receives royalties related to the manufacture
and sale of a certain product for which Mr. Freed owns all of the U.S. and
foreign patents. Under this agreement, Mr. Freed received royalties of $3,079
and $12,269 in fiscal 1995 and 1996, respectively, and will continue to receive
such royalties until 2012 or the earlier termination of the license agreement.

During fiscal 1996 and 1997, the Company paid legal fees totaling
approximately $232,000 and $219,000 respectively, to the law firm of Watson &
Dana. Until May 21, 1997, Mr. Dana, a director of the Company, was a member of
Watson & Dana and a member of the Compensation Committee. Effective May 21,
1997, Mr. Dana became employed as Chief Operating Officer and General Counsel
of the Company.

-43-
<PAGE> 46
THE PLAN OF WITHDRAWAL AND DISSOLUTION

THE WITHDRAWAL ELECTION AND THE OFFERING

The Plan was approved by the Limited Partners on October 24, 1997. The
Plan provided for the distribution by the Partnership of the 5,781,250 shares
of Common Stock then owned by the Partnership in two separate phases: (i) the
withdrawal (the "Withdrawal") by Limited Partners from the Partnership of the
2,928,713 shares of Common Stock (the "Withdrawn Shares") underlying their
partnership interest and the offer and sale of the Withdrawn Shares hereby, and
(ii) the subsequent dissolution of the Partnership through one to three
liquidating distributions (each, a "Distribution"), each 180 days apart, of the
2,781,250 shares of Common Stock remaining in the Partnership after the
Withdrawal (the "Remaining Shares"). All Withdrawn Shares were required to be
included in the Offering. In the event that the Offering is completed only in
part, the unsold Withdrawn Shares will be distributed to the Selling
Stockholders 180 days following the closing of the Offering.

The price at which the Shares will be sold in this Offering will be
determined by a pricing committee (the "Pricing Committee") that will consist
of Leonard Chill, who is both an officer and director of the Company and a
representative of the general partner of the Partnership, and William J.
Shortt and Robert L. Voigt, both of whom are outside directors of the Company.
The Pricing Committee will use its best efforts to obtain the best price for
the Shares being sold, taking into account the recommendation of the
Underwriters, as well as recent market prices for the Common Stock, discounts
from market price normally encountered in comparable underwritten secondary
offerings, information from the Underwriters regarding the recent demand for
the Common Stock, general market conditions and any other factors the Pricing
Committee deems appropriate. The Pricing Committee will have the sole
authority to set the price for the Shares and will have the authority not to
proceed with this Offering if the Underwriters are unable to consummate this
Offering at a public offering price that the Pricing Committee believes, in its
discretion, is reasonable, taking into account the aforementioned factors.

THE DISSOLUTION AND DISTRIBUTION

The Plan provides for the dissolution of the Partnership (the
"Dissolution") by the orderly distribution over time of the Remaining Shares
after (i) the completion of the Withdrawal and (ii) the satisfaction of any
remaining liabilities and expenses of the Partnership. The Dissolution will be
effected by one to three Distributions of the Remaining Shares. The first
Distribution will take place on the 180th day after the completion of the
Offering. The second Distribution, if needed, will occur on the 180th day
following the first Distribution, and the balance of the Remaining Shares, if
any, will be distributed in a third Distribution on the 180th day following the
second Distribution. The number of Remaining Shares to be distributed in the
first and second Distributions will be equal to 25% of the total number of
shares of Common Stock owned by the public (the "Public Shares") at the time of
each such Distribution or, if it is less, the total number of Remaining Shares.
The Public Shares are equal to the total number of shares of Common Stock
outstanding at the time of the relevant Distribution, less the Remaining Shares
not yet distributed. Under certain conditions, the Company has the right under
the Plan to require the General Partner to accelerate the Dissolution and
distribute in a single distribution all the Remaining Shares then held by the
Partnership.

For a complete description of the Plan, please see the Agreement and Plan
of Withdrawal and Dissolution, a copy of which has been filed as an exhibit to
the Company's Registration Statement on Form S-3 (File No. 333-___), of which
this Prospectus is a part.

-44-
<PAGE> 47
DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company currently consists of
25,000,000 shares of Common Stock, par value $1.00 per share, of which
8,656,250 shares are issued and outstanding.

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 are 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 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.

-45-
<PAGE> 48

REGISTRATION RIGHTS

In connection with the Initial Public Offering, the Company and the
Partnership entered into a Registration Rights Agreement pursuant to which the
Company 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 was filed as an exhibit
to the Company's Registration Statement on Form S-3 (File No. 333-______), of
which this Prospectus is a part. The Partnership, however, is subject to a
lock-up agreement with the underwriters of the Initial Public Offering pursuant
to which the Partnership 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 270 days after November 1, 1996, and thereafter, until December
1, 1997, only pursuant to an underwriting public offering.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is BankBoston.

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 and the Selling Stockholders the aggregate number of
shares of Common Stock set forth opposite their names below:

<TABLE>
<CAPTION>
Underwriters Number of Shares
------------ ----------------
<S> <C>
Bear, Stearns & Co. Inc. .............................

Total ......................................... 3,000,000
</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 and the Selling Stockholders
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 public offering, the public offering
price and concessions and reallowances to dealers may be changed by the
Representative.

-46-
<PAGE> 49
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 450,000 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 purchase obligations set forth in the
foregoing table.

The Underwriting Agreement provides that the Company and the Selling
Stockholders 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.

Each of the Selling Stockholders, the Partnership, the Company and its
executive officers, senior management and directors have entered into certain
"lock-up" agreements with the Underwriters with respect to the sale of the
shares of Common Stock. Under these "lock-up" agreements, each of the Selling
Stockholders, the Partnership, the Company and its executive officers, senior
management and directors 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 the Representative for a
period of 180 days after the date of this Prospectus, except with respect to
transfers made by officers, senior managers 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.

In order to facilitate the Offering, certain persons participating in the
Offering may engage in transactions that stabilize, maintain, or otherwise
affect the price of the Common Stock during and after the Offering.
Specifically, the Underwriters may over-allot or otherwise create a short
position in the Common Stock for their own account by selling more shares of
Common Stock than have been sold to them by the Company and the Selling
Stockholders. The Underwriters may elect to cover any such short position by
purchasing shares of Common Stock in the open market or by exercising the
over-allotment option granted to the Underwriters. In addition, such persons
may stabilize or maintain the price of the Common Stock by bidding for or
purchasing shares of Common Stock in the open market and may impose penalty
bids, under which selling concessions allowed to syndicate members or other
broker-dealers participating in the Offering are reclaimed if shares of Common
Stock previously distributed in the Offering are repurchased in connection with
stabilization transactions or otherwise. The effect of these transactions may
be to stabilize or maintain the market price of the Common Stock at a level
above that which might otherwise prevail in the open market. The imposition of
a penalty bid may also affect the price of the Common Stock to the extent that
it discourages resales thereof. No representation is made as to the magnitude
or effect of any such stabilization or other transactions. Such transactions
may be effected on the NNM or otherwise and, if commenced, may be discontinued
at any time.

In connection with the Offering, certain Underwriters (and selling group
members) may engage in passive market making transactions in the Common Stock
on NNM in accordance with Rule 103 of Regulation M under the Exchange Act.
Rule 103 permits, upon the satisfaction of certain conditions, underwriting and
selling group members participating in a distribution that are also registered
NNM market makers in the security being distributed (or a related security) to
engage in limited passive market making transactions during the period when
Regulation M would otherwise prohibit such activity. In general, a passive
market maker may not bid for or purchase a security at a price that exceeds the
highest independent bid for those securities by a person that is not
participating in the distribution and must identify its passive market making
bids on the NNM electronic inter-dealer reporting system. In addition, the net
daily purchases made by a passive market maker generally may not exceed 30% of
such market maker's average daily trading volume in the security for the two
full consecutive calendar months (or any 60 consecutive days ending within 10
days) immediately preceding the date of filing of the Registration Statement of
which this Prospectus forms a part.

-47-
<PAGE> 50

LEGAL MATTERS

Certain legal matters in connection with the Shares will be passed
upon for the Company and the Selling Stockholders by King & Spalding, 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, 1996 and
1995 and for each of the three fiscal years in the period ended September 30,
1996, 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 (the"Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information may
be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, NW, Judiciary Plaza, Washington,
D.C. 20549, and at the Commission's Regional Offices in New York (Seven World
Trade Center, 13th Floor, New York, New York 10048), and Chicago (Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661). Copies
of these materials may be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, NW, 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, NW, Washington, D.C. 20006.

This Prospectus constitutes a part of a registration statement on Form
S-3 (together with all amendments thereto, the "Registration Statement") filed
by the Company with the Commission under the Securities Act. This Prospectus,
which forms a part of the Registration Statement, does not contain all the
information set forth in the Registration Statement, certain parts of which
have been omitted in accordance with the rules and regulations of the
Commission. Reference is hereby made to the Registration Statement and related
exhibits and schedules filed therewith for further information with respect to
the Company and the securities offered hereby. Statements contained herein
concerning the provisions of any contract, agreement or other document are not
necessarily complete and, in each instance, reference is made to the copy of
such document filed or incorporated by reference as an exhibit to the
Registration Statement or otherwise filed by the Company with the Commission
and each such statement is qualified in its entirety by such reference. The
Registration Statement and the exhibits and schedules thereto may be inspected
and copied at the public reference facilities maintained by the Commission at
the addresses set forth above.

-48-
<PAGE> 51
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents that previously were, or are required in the
future to be, filed with the Commission (File No. 33-11479) pursuant to the
Exchange Act are incorporated herein by reference:

(i) the Company's Annual Report on Form 10-K for the year ended
September 30, 1996;

(ii) the Company's Quarterly Reports on Form 10-Q for each of the
quarters ended December 31, 1996, March 31, 1997 and June 30, 1997; and

(iii) all documents filed by the Company pursuant to Sections 13(a),
13(c) 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the Offering.

Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that such statement is modified or replaced by a statement contained
in this Prospectus or in any other subsequently filed document that also is or
is deemed to be incorporated by reference into this Prospectus. Any such
statement so modified or superseded shall not be deemed, except as so modified
or replaced, to constitute a part of this Prospectus. The Company will provide
without charge to each person to whom a copy of this Prospectus has been
delivered, upon the oral or written request of any such person, a copy of any
or all of the documents referred to above that have been or may be incorporated
in this Prospectus by reference, other than exhibits to such documents.
Written or oral requests for such copies should be directed to Joseph
Sinicropi, Chief Financial Officer and Secretary, Synthetic Industries, Inc.,
309 LaFayette Road, Chickamauga, Georgia 30707, telephone (706) 375-3121.

-49-
<PAGE> 52
SYNTHETIC INDUSTRIES, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS:

(1) Consolidated Financial Statements as of September 30, 1996 and 1995
and for each of the three years in the period ended September 30,
1996.

<TABLE>
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
</TABLE>

(2) Unaudited Consolidated Financial Statements as of June 30, 1997 and
1996 and for the three and nine month periods then ended.

<TABLE>
<S> <C>
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . F-17
Consolidated Statements of Operations . . . . . . . . . . . . . F-18
Consolidated Statements of Cash Flows . . . . . . . . . . . . . F-19
Notes to Consolidated Financial Statements . . . . . . . . . . . F-20
</TABLE>

F-1
<PAGE> 53
INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying consolidated balance sheets of
Synthetic Industries, Inc. and its subsidiaries as of September 30, 1996 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, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits 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 misstatements. 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, 1996 and 1995, and the results of their
operations and their cash flows for each of the three years in the period ended
September 30, 1996 in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

New York, New York
November 12, 1996

F-2
<PAGE> 54
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
September 30,
-------------------------
ASSETS 1996 1995
---------- ---------
<S> <C> <C>
CURRENT ASSETS:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 101 $ 108
Accounts receivable, net (Note 4) . . . . . . . . . . . . . . . . . 48,165 47,947
Inventory (Note 5) . . . . . . . . . . . . . . . . . . . . . . . . 39,142 45,597
Other current assets (Note 6) . . . . . . . . . . . . . . . . . . . 14,655 14,708
---------- ---------
TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . . . . . . 102,063 108,360

PROPERTY, PLANT AND EQUIPMENT, net (Note 7) . . . . . . . . . . . . . 137,974 116,729

OTHER ASSETS (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . 84,021 87,211
---------- ---------
$ 324,058 $ 312,300
========== =========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,227 $ 24,021
Accrued expenses and other current liabilities . . . . . . . . . . 9,669 7,378
Income taxes payable (Note 11) . . . . . . . . . . . . . . . . . . 1,407 1,455
Interest payable . . . . . . . . . . . . . . . . . . . . . . . . . 6,024 6,427
Current maturities of long-term debt (Note 9) . . . . . . . . . . . 659 40
---------- ---------
TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . . . . 37,986 39,321

LONG-TERM DEBT (Note 9) . . . . . . . . . . . . . . . . . . . . . . . 194,353 192,048

DEFERRED INCOME TAXES (Note 11) . . . . . . . . . . . . . . . . . . . 25,875 23,175

COMMITMENTS AND CONTINGENCIES (Note 10)

STOCKHOLDERS' EQUITY (Note 3):
Common stock (par value $1.00 per share; authorized, 25,000,000
shares; issued and outstanding, 5,781,250 shares) . . . . . . 5,781 5,781
Additional paid-in capital . . . . . . . . . . . . . . . . . . 63,519 63,519
Cumulative translation adjustments . . . . . . . . . . . . . . 15 29
Deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,471) (11,573)
---------- ---------

TOTAL STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . . . . . 65,844 57,756
---------- ---------

$ 324,058 $ 312,300
========== =========
</TABLE>

See notes to consolidated financial statements.

F-3
<PAGE> 55
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,
------------------------------------------------
1996 1995 1994
-------------- ------------- --------------
<S> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . . $ 299,532 $ 271,427 $ 234,977
-------------- ------------- --------------
Costs and expenses:

Cost of sales . . . . . . . . . . . . . . . . . 208,321 194,706 152,305
Selling expenses . . . . . . . . . . . . . . . 27,488 24,273 21,815
General and administrative expenses . . . . . . 22,657 21,195 17,588
Amortization of excess of purchase price over net
assets acquired and other intangibles . . . . 2,592 2,566 2,499
-------------- -------------- --------------
261,058 242,740 194,207
-------------- -------------- --------------
Operating income . . . . . . . . . . . . . . . . 38,474 28,687 40,770
-------------- -------------- --------------

Other expenses:
Interest expense, net . . . . . . . . . . . . . . 22,773 22,514 20,011
Amortization of deferred financing costs . . . . 699 737 739
-------------- -------------- --------------
23,472 23,251 20,750
-------------- -------------- --------------
Income before provision for income taxes . . . . . 15,002 5,436 20,020

Provision for income taxes (Note 11) . . . . . . . 6,900 3,500 8,600
-------------- -------------- --------------
NET INCOME . . . . . . . . . . . . . . . . . . . . $ 8,102 $ 1,936 $ 11,420
============== ============== ==============
Net income per common share (Note 3) . . . . . . . $ 1.37 $ .33 $ 1.93
=============== ============== ==============
Weighted average shares outstanding . . . . . . . . 5,930,502 5,930,502 5,930,502
============== ============== ==============
</TABLE>

See notes to consolidated financial statements.

F-4
<PAGE> 56
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
Cumulative
Additional paid- translation
Common Stock in capital adjustments Deficit Total
----------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Balance, October 1, 1993 (Note 3) . $ 5,781 $ 63,519 $ 52 $ (24,929) $ 44,423

Net income . . . . . . . . . . . . -- -- -- 11,420 11,420

Foreign currency translation . . . -- -- (26) -- (26)
----------- ----------- ----------- ----------- -----------

Balance, September 30, 1994 . . . . 5,781 63,519 26 (13,509) 55,817

Net income . . . . . . . . . . . . -- -- -- 1,936 1,936

Foreign currency translation . . . -- -- 3 -- 3
----------- ----------- ----------- ----------- -----------
Balance, September 30, 1995 . . . . 5,781 63,519 29 (11,573) 57,756

Net income . . . . . . . . . . . . -- -- -- 8,102 8,102

Foreign currency translation . . . -- -- (14) -- (14)
----------- ----------- ----------- ----------- -----------
Balance, September 30, 1996 . . . . $ 5,781 $ 63,519 $ 15 $ (3,471) $ 65,844
=========== =========== =========== =========== ===========
</TABLE>

See notes to consolidated financial statements.

F-5
<PAGE> 57
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
Year Ended September 30,
-----------------------------------------------
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . . . . . $ 8,102 $ 1,936 $ 11,420
Adjustments to reconcile net income to net cash provided
by (used in) operations:
Depreciation and amortization . . . . . . . . . . . . . . . . 16,299 14,937 12,390
Deferred income taxes . . . . . . . . . . . . . . . . . . . . 3,400 (355) 3,830
Provision for bad debts . . . . . . . . . . . . . . . . . . . 1,024 3,363 217
Loss on disposal of equipment . . . . . . . . . . . . . . . . -- -- 266
Change in assets and liabilities: . . . . . . . . . . . . .
Increase in accounts receivable . . . . . . . . . . . . . . (1,247) (12,212) (2,861)
Decrease (increase) in inventory . . . . . . . . . . . . . 6,451 (13,076) (7,255)
Increase in other current assets . . . . . . . . . . . . . (647) (1,469) (632)
(Decrease) increase in accounts payable . . . . . . . . . . (3,801) 5,254 5,348
Increase in accrued expenses and other current . . . . . .
liabilities . . . . . . . . . . . . . . . . . . . . . 2,291 434 533
(Decrease) increase in income taxes payable . . . . . . . . (48) 973 482
(Decrease) increase in interest payable . . . . . . . . . . (403) 180 224
------------ ------------ ------------
Cash provided by (used in) operating activities . . . 31,421 (35) 23,962
------------ ------------ ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment . . . . . . . . . . . . (29,253) (13,313) (31,866)
------------ ------------ -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under term loan . . . . . . . . . . . . . . . . . 19,500 11,000 --
Repayments under term loan . . . . . . . . . . . . . . . . . (500) (6,000) (6,000)
Net (repayment) borrowings under revolving credit line . . . (20,734) 8,598 13,802
Payment of capital lease obligation and other
long term debt . . . . . . . . . . . . . . . . . . . . . . (342) (36) (31)
Deferred financing costs . . . . . . . . . . . . . . . . . . (101) (221) --
------------ ------------ ------------
Cash (used in) provided by financing activities . . . . . . (2,177) 13,341 7,771
Effect of exchange rate changes on cash . . . . . . . . . . 2 (2) (3)
------------ ------------ -------------
NET DECREASE IN CASH . . . . . . . . . . . . . . . . . . . . . . . (7) (9) (136)
CASH AT BEGINNING OF YEAR . . . . . . . . . . . . . . . . . . . . . 108 117 253
------------ ------------ ------------
CASH AT END OF YEAR . . . . . . . . . . . . . . . . . . . . . . . . $ 101 $ 108 $ 117
============ ============ ============

SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,176 $ 22,334 $ 19,787
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,548 2,882 3,901
SUPPLEMENTAL SCHEDULE OF NONCASH ACTIVITY
Capital lease obligation incurred for purchase of equipment . . . . $ 5,000 $ -- $ --
</TABLE>

See notes to consolidated financial statements.

F-6
<PAGE> 58
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE AMOUNTS)

1. ORGANIZATION

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.
Foreign currency transaction gains and losses are included in results of
operations. Foreign currency realized and unrealized gains and losses for the
years presented were not material.

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:
<TABLE>
<S> <C>
Building and improvements . . . . . . . . . . . . . . . 25 years
Machinery and equipment . . . . . . . . . . . . . . 14 years
</TABLE>

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.

F-7
<PAGE> 59
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Capitalized interest is charged to machinery and equipment and
amortized over the lives of the related assets. Interest capitalized during
fiscal 1996, 1995 and 1994 was $392, $729 and $283, respectively.

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 a Fibermesh(R) trademark and
patents on civil engineering products, which are amortized on a straight-line
basis over 40 and 15 years, respectively.

NET INCOME PER SHARE

Net income per share was computed by dividing net income by the
weighted average number of common shares and common equivalent shares
outstanding during each period, as adjusted for the stock splits. Common
equivalent shares include options calculated using the treasury stock method.
Retroactive restatement has been made to all share and per share amounts for
the 115,741-for-1 stock split effective October 30, 1996 (Note 3).

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.

IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

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 that are expected to be disposed of. SFAS No. 121 is effective for
financial statements for fiscal years beginning after

F-8
<PAGE> 60
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

December 15, 1995. Management believes that the adoption of this standard
will have no effect on consolidated financial position or results of
operations.

STOCK-BASED COMPENSATION

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.

RECLASSIFICATION OF PRIOR FINANCIAL STATEMENTS

Certain reclassifications have been made to previous years' financial
statements to conform with 1996 classifications.

3. RECAPITALIZATION AND INITIAL PUBLIC OFFERING

On July 31, 1996, the board of directors of the Company (the "Board")
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 was 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, became
effective immediately prior to the 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.

On November 1, 1996, the Company sold 2,875,000 shares of Common Stock
in an underwritten public offering. The net proceeds to the Company from the
sale (after payment of underwriting discounts and commissions and expenses)
were approximately $34,000. The net proceeds to the Company will be used to
repay certain outstanding indebtedness. Supplementary pro forma net income per
share, assuming the net proceeds were used to reduce outstanding bank
indebtedness as of the beginning of fiscal 1996, would have been $1.12.

4. ACCOUNTS RECEIVABLE

Accounts receivable are presented net of the allowances for doubtful
accounts of $3,036, $4,053 and $1,201 for fiscal 1996, 1995 and 1994,
respectively. Amounts written off against established allowances were $2,041,
$511 and $217 for the years ended September 30, 1996, 1995 and 1994,
respectively.

The Company grants uncollateralized trade terms to its customers, most
of whom are located in the state of Georgia. As of September 30, 1996 and
1995, $21,916 and $22,903, respectively, of the Company's accounts receivable
balances were due from customers located in this state. Net sales to one
customer represented 18% of consolidated net sales for all three fiscal years
presented.

F-9
<PAGE> 61
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

5. INVENTORY

<TABLE>
<CAPTION>
September 30,
-----------------------

1996 1995
---------- ----------
<S> <C> <C>
Finished goods . . . . . . . $ 22,555 $ 27,867
Work in progress . . . . . . 7,937 5,541

Raw materials . . . . . . . . 8,650 12,189
---------- ----------

$ 39,142 $ 45,597
========== ==========
</TABLE>

6. OTHER CURRENT ASSETS
<TABLE>
<CAPTION>
September 30,
-----------------------

1996 1995
---------- ----------
<S> <C> <C>
Prepaid supplies . . . . . . $ 8,283 $ 7,192
Deferred tax assets (Note 11) 4,765 5,465

Other . . . . . . . . . . . . 1,607 2,051
---------- ----------
$ 14,655 $ 14,708
========== ==========
</TABLE>

7. PROPERTY, PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
September 30,
-----------------------

1996 1995
--------- ---------
<S> <C> <C>
Land . . . . . . . . . . . . . $ 4,458 $ 3,511

Buildings and improvements . . 29,298 23,457

Machinery and equipment and
leasehold improvements . . 179,386 151,921
--------- ---------
213,142 178,889

Accumulated depreciation . . . 75,168 62,160
--------- ---------

$ 137,974 $ 116,729
========= =========
</TABLE>

Depreciation expense on property, plant and equipment was $13,008, $11,634 and
$9,152 in fiscal 1996, 1995 and 1994, respectively.

F-10
<PAGE> 62
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

8. OTHER ASSETS
<TABLE>
<CAPTION>
September 30,
-----------------------
1996 1995
--------- ---------
<S> <C> <C>
Excess of purchase price over
net assets acquired. . . . $ 99,818 $ 99,818

Intangible assets . . . . . . 3,546 3,546

Deferred financing costs . . 12,331 12,230
--------- ---------

115,695 115,594

Accumulated amortization . . 31,674 28,383
--------- ---------

$ 84,021 $ 87,211
========= =========
</TABLE>

The excess of purchase price over net assets acquired arose from the
purchase of the Company's Common Stock. The Company was acquired by Synthetic
Industries L.P., a Delaware limited partnership (the "Partnership") on December
4, 1986. This acquisition was accounted for using the purchase method of
accounting. Accordingly, the purchase price was allocated to the net assets
acquired based on estimates by independent appraisals and other valuations of
fair market value as of December 4, 1986, and resulted in a purchase price in
excess of net assets acquired of $99,818.

Amortization expense was $3,291, $3,303 and $3,238 in fiscal 1996,
1995 and 1994, respectively.

9. LONG-TERM DEBT

Long-term debt consists of the following at September 30:
<TABLE>
<CAPTION>
1996 1995
------------- ------------
<S> <C> <C>
Secured revolving credit facility (a):
Secured revolving credit portion . . . . . . . . $ 3,993 $ 24,727
Term loan portion . . . . . . . . . . . . . . . . 45,000 26,000
12 3/4% senior subordinated debentures (b) . . . . 140,000 140,000
Capital lease obligation (Note 10) . . . . . . . . 4,698 --
Other . . . . . . . . . . . . . . . . . . . . . . . 1,321 1,361
----------- -----------
195,012 192,088
Less current portion . . . . . . . . . . . . . . . 659 40
----------- -----------
Total long-term portion . . . . . . . . . . . . . . $ 194,353 $ 192,048
=========== ===========
</TABLE>

a. THE SECURED REVOLVING CREDIT FACILITY

On October 20, 1995, the Company and its lenders entered into a Fourth
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") was increased to $45,000. The Credit Facility has a
termination date of October 20, 2001, and provides for Term Loan repayments of
$10,000 in 1999 and $17,500 in each of 2000 and 2001.

The revolving credit loan portion of the 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

F-11
<PAGE> 63
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

limitations. The maximum amount available for borrowing under the Revolver is
increased to $40,000, of which $34,115 is available at September 30, 1996.

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 .75% or 1.00% for Revolver or Term Loan advances, respectively (9.00% and
9.25% at September 30, 1996 and 9.50% and 9.75% at September 30, 1995) or (ii)
for Eurodollar borrowings, based on the Interbank Eurodollar rate at the time
of conversion plus 2.50% and 2.75% for Revolver or Term Loan advances,
respectively (8.06% and 8.09% at September 30, 1996 and 8.50% and 8.625% at
September 30, 1995).

The Credit Facility provides for borrowings under letters of credit of
up to $3,000, which borrowings reduce amounts available under the Revolver. At
September 30, 1996, there was $1,892 in letters of credit outstanding under the
Credit Facility. The Company is required to pay a .375% fee on the unused
portion of the commitment and an agency fee of $150 per annum.

The 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 Company's ability to pay dividends on its Common
Stock is restricted by both the Credit Facility and the indenture relating to
the Senior Subordinated Debentures discussed below.

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, 1996 is 107.0% of their
face amount, or $149,800.

Approximate aggregate minimum annual payments due on long-term debt
and the capital lease obligation, for the subsequent five years are as follows:
1997, $659; 1998, $718; 1999, $10,783; 2000, $22,347; 2001, $19,470; and
thereafter, $141,036.

10. COMMITMENTS AND CONTINGENCIES

c. LEASE COMMITMENTS

On May 15, 1996, the Company entered into a five year capital lease
for equipment which provides for payments over a five year period at an
interest rate of 8.42% The Company also leases certain factory and warehouse
buildings and equipment under long-term operating leases expiring through 2009.

F-12
<PAGE> 64
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Future minimum lease payments under noncancellable lease obligations
at September 30, 1996 are as follows:

<TABLE>
<CAPTION>
Capital Operating
Year leases leases
---- ---------------- -----------------
<S> <C> <C>
1997 . . . . . . . . . . . . . . . . . . . . . . . . $ 986 $ 3,786
1998 . . . . . . . . . . . . . . . . . . . . . . . . 986 2,262
1999 . . . . . . . . . . . . . . . . . . . . . . . . 986 1,622
2000 . . . . . . . . . . . . . . . . . . . . . . . . 986 991
2001 . . . . . . . . . . . . . . . . . . . . . . . . 1,993 362
Thereafter . . . . . . . . . . . . . . . . . . . . . -- 817
------------- -------------
Total minimum lease payments . . . . . . . . . . . . $ 5,937 $ 9,840
=============
Less amount representing interest . . . . . . . . . . 1,239
-------------
Present value of net minimum lease payments . . . . . 4,698
Less current maturities of capital lease obligation 614
-------------
Capital lease obligation . . . . . . . . . . . . . . $ 4,084
=============
</TABLE>

Total rental expense for the above operating leases and other
short-term leases for the fiscal years 1996, 1995 and 1994 was $4,499, $3,731
and $4,684, respectively.

d. CAPITAL EXPENDITURES

In fiscal 1997, the Company plans a $40,000 expansion of its
manufacturing facilities, primarily to expand capacity and to continue to
reduce manufacturing costs, subject to prevailing market conditions, of which
$7,084 is committed at September 30, 1996.

e. LITIGATION

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.

11. INCOME TAXES

The sources of income before provision for income taxes are as
follows:

<TABLE>
<CAPTION>
Fiscal Years Ended September 30,
-----------------------------------------------
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
United States . . . . . . . . . . . . . $ 14,083 $ 4,546 $ 19,505
Foreign . . . . . . . . . . . . . . . . 919 890 515
---------- ---------- ----------
Earnings before income taxes . . . . . $ 15,002 $ 5,436 $ 20,020
========== ========== ==========
</TABLE>

F-13
<PAGE> 65
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The provision for income taxes attributable to the amounts shown above
consists of the following:
<TABLE>
<CAPTION>
Year ended September 30,
-----------------------------------------------
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Current:
Federal . . . . . . . . . . . . . . $ 2,600 $ 3,180 $ 3,770
State . . . . . . . . . . . . . . . 600 400 1,000
Foreign . . . . . . . . . . . . . . 300 275 --
---------- ---------- ----------
3,500 3,855 4,770
---------- ---------- ----------
Deferred:
Federal . . . . . . . . . . . . . . 3,200 (218) 3,405
State . . . . . . . . . . . . . . . 200 (137) 425
---------- ---------- ----------
3,400 (355) 3,830
---------- ---------- ----------
$ 6,900 $ 3,500 $ 8,600
========== ========== ==========
</TABLE>

A reconciliation of US income tax computed at the statutory rate and
actual tax expense is as follows:
<TABLE>
<CAPTION>
Year ended September 30,
----------------------------------------------
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Amount computed at statutory rate . . . . . . . . . . . . . $ 5,250 $ 1,900 $ 7,007
State and local taxes -- less applicable federal income tax
benefit . . . . . . . . . . . . . . . . . . . . . . . . 550 270 747
Amortization of goodwill . . . . . . . . . . . . . . . . . 873 873 871
Other nondeductible expenses . . . . . . . . . . . . . . . 115 210 348
Other, net . . . . . . . . . . . . . . . . . . . . . . . . 112 247 (373)
------------ ------------ ------------
$ 6,900 $ 3,500 $ 8,600
============ ============ ============
</TABLE>

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

<TABLE>
<CAPTION>
Year ended September 30,
---------------------------------
1996 1995
-------------- -------------
<S> <C> <C>
Property, plant and equipment . . . . . . . . . . $ 24,819 $ 22,121
Trademarks and patents . . . . . . . . . . . . . 1,056 1,054
-------------- -------------

Total deferred tax liabilities . . . . . . . . . 25,875 23,175
-------------- -------------

Receivables . . . . . . . . . . . . . . . . . . . 996 1,609
Inventory . . . . . . . . . . . . . . . . . . . . 626 628
Accrued expenses . . . . . . . . . . . . . . . . 1,829 1,581
AMT credit carryforward (no expiration date) . . 1,314 1,647
-------------- -------------

Total deferred tax assets . . . . . . . . . . . . 4,765 5,465
-------------- -------------
Net deferred tax liability . . . . . . . . . . . $ 21,110 $ 17,710
============== =============
</TABLE>

The Company's United States income tax returns for fiscal years 1992
and 1993 have been examined and settled without material adjustment.

F-14
<PAGE> 66
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

12. RETIREMENT PROGRAMS

For United States employees, the Company maintains a trusteed
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 1 to 5 years. The Company has elected to match employee
contributions to the Plan on a 50% basis but not to exceed 3% of the employee's
annual compensation. During fiscal years 1996, 1995 and 1994, the Company
contributed $999, $921 and $891, 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.

13. 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 and 1994, stock options for 174,716 and 316,697
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 30, 1996, 79,173 options were
exercisable under the 1994 Plan.

In May 1996, as amended on July 31, 1996, the Company adopted a stock
option plan (the "1996 Plan"), which provides for the grant of incentive stock
options and non-qualified 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
289,062 shares. Options to purchase an aggregate of 21,723 shares have been
granted at an exercise price of $10.72 per share.

The purchase price of the shares of Common Stock subject to options
under the 1994 and 1996 Plans 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 Initial Stock Offerings ("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 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.

F-15
<PAGE> 67
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

14. RELATED PARTY TRANSACTIONS

Synthetic Industries, L.P. (the "Partnership") owns 5,781,250 shares
of the Company's Common Stock, or approximately 67% of the issued and
outstanding shares of Common Stock. Four of the Company's executive officers,
including its chief executive officer, and a former executive officer are sole
stockholders of corporations which indirectly control the sole general partner
of the Partnership.

The Company and the Partnership 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. In connection
with the Initial Public Offering, the Company incurred approximately $300 in
1996 of such registration expenses on behalf of the Partnership.

A former executive officer of the Company and an affiliate of the
Partnership is being retained as a consultant to the Company. Pursuant to a
consulting agreement with the Company, the former executive officer will
receive, until January 31, 2000, or upon earlier termination of his consulting
agreement, $125 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, the former executive officer is
required to provide the Company with 20 hours of consultation per month, has
released the Company from any liability resulting from his employment and has
also agreed not to compete against the Company.

The Company leases office space under a five-year lease with one of
the Company's executive officers. The term of the lease expires on September
30, 1998 and the rent is approximately $48 per year, which the Company believes
is within prevailing market rates.

Pursuant to a licensing agreement with the Company, an executive
officer of the Company receives royalties related to the manufacture and sale
of a certain product for which the executive officer owns all of the U.S. and
foreign patents. Under this agreement, the Company paid royalties of $3 and
$12 to the executive officer in fiscal 1995 and 1996, respectively, and will
continue to pay such royalties until 2012 or the earlier termination of the
license agreement.

During fiscal 1996 and 1995, the Company paid fees of approximately
$232 and $135, respectively, to a law firm in which a director of the Company
was a partner.

F-16
<PAGE> 68
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
June 30, September 30,
ASSETS 1997 1996
------------ -------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 499 $ 101
Accounts receivable, net of allowance for
doubtful accounts of $3,478 and $3,036 . . . . . . . . . . . . . . 57,254 48,165
Inventory (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . 58,470 39,142
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . 14,114 14,655
------------ -------------
TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . . . . . . 130,337 102,063

PROPERTY, PLANT AND EQUIPMENT, net (Note 4) . . . . . . . . . . . . . . 167,111 137,974

OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,617 84,021
------------ -------------
$ 381,065 $ 324,058
============ =============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . $ 29,734 $ 20,227
Accrued expenses and other current liabilities . . . . . . . . . . . 10,851 9,669
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . 15 1,407
Interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . 6,089 6,024
Current maturities of long-term debt (Note 5) . . . . . . . . . . . 703 659
------------ -------------
TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . . . . . 47,392 37,986

LONG-TERM DEBT (Note 5) . . . . . . . . . . . . . . . . . . . . . . . . 209,356 194,353

DEFERRED INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . 25,875 25,875
------------ -------------

STOCKHOLDERS' EQUITY:
Common stock (par value $1.00 per share; authorized, 8,656 5,781
25,000,000 shares; issued and outstanding, 8,656,250 shares and
5,781,250 shares, respectively) (Note 7) . . . . . . . . . . .
Additional paid-in capital (Note 7) . . . . . . . . . . . . . . . . 94,325 63,519
Cumulative translation adjustments . . . . . . . . . . . . . . . . . 142 15
Deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,681) (3,471)
------------ -------------

TOTAL STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . . . . . 98,442 65,844
------------ -------------
$ 381,065 $ 324,058
============ =============
</TABLE>

See notes to consolidated financial statements.

F-17
<PAGE> 69
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,
1997 1996 1997 1996
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . $ 99,112 $ 82,843 $ 245,327 $ 212,060
---------- ---------- ---------- ---------
Costs and expenses:
Cost of sales . . . . . . . . . . . . . . . . 65,762 55,134 166,928 151,221
Selling expenses . . . . . . . . . . . . . . . 8,296 7,307 22,480 19,259
General and administrative expenses . . . . . 6,583 5,233 19,474 16,024
Amortization of excess purchase price over
net assets acquired and other intangibles . 648 648 1,944 1,944
---------- ---------- ---------- ---------

81,289 68,322 210,826 188,448
---------- ---------- ---------- ---------

Operating income . . . . . . . . . . . . 17,823 14,521 34,501 23,612
---------- ---------- ---------- ---------

Other expenses:
Interest expense . . . . . . . . . . . . . . . 4,947 5,863 15,722 17,253
Amortization of deferred financing costs . . . 150 175 489 523
---------- ---------- ---------- ---------

5,097 6,038 16,211 17,776
---------- ---------- ---------- ---------
Income before income tax provision
and extraordinary item . . . . . . . . . . . . 12,726 8,483 18,290 5,836

Income tax provision (Note 6) . . . . . . . . . . 5,050 3,390 7,550 3,050
---------- ---------- ---------- ---------

Income before extraordinary item . . . . . . . . 7,676 5,093 10,740 2,786

Extraordinary item - Loss from early
extinguishment of debt (net of tax
benefit of $7,481) . . . . . . . . . . . . . . - - 11,950 -
---------- ---------- ---------- ---------

NET INCOME (LOSS) . . . . . . . . . . . . . . . . $ 7,676 $ 5,093 $ (1,210) $ 2,786
========== ========== ========== =========

Net income per share before
extraordinary item . . . . . . . . . . . . . . $ 0.86 $ 0.86 $ 1.25 $ 0.47

Extraordinary loss per share . . . . . . . . . . $ - $ - $ (1.39) $ -
---------- ---------- ---------- ---------

Net income (loss) per share . . . . . . . . . . . $ 0.86 $ 0.86 $ (0.14) $ 0.47
========== ========== ========== =========

Weighted average shares outstanding . . . . . . . 8,969,031 5,930,502 8,598,959 5,930,502
========== ========== ========== =========
</TABLE>

See notes to consolidated financial statements.

F-18
<PAGE> 70
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)
(UNAUDITED)

<TABLE>
<CAPTION>
Nine Months Ended June 30,
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1,210) $ 2,786
Adjustments to reconcile net income to net cash provided by
operations:
Extraordinary loss on early extinguishment of debt . . . . . . . . 19,431 -
Depreciation and amortization . . . . . . . . . . . . . . . . . . 13,687 12,241
Provision for bad debts . . . . . . . . . . . . . . . . . . . . . 473 23
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . 597 1,280
Change in operating assets and liabilities, net of acquisition:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . (6,797) (2,885)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . (17,965) 7,929
Other current assets . . . . . . . . . . . . . . . . . . . . . 638 (334)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . 9,507 (421)
Accrued expenses and other current liabilities . . . . . . . . 706 857
Income taxes payable . . . . . . . . . . . . . . . . . . . . . (1,392) 749
Interest payable . . . . . . . . . . . . . . . . . . . . . . . 65 (3,872)
----------- ------------
Net cash provided by operating activities . . . . . . . . . . . . 17,740 18,353

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment . . . . . . . . . . . . . (35,253) (25,439)
Acquisition of business (Note 8) . . . . . . . . . . . . . . . . . . (9,354) -
----------- -----------
Net cash used in investing activities . . . . . . . . . . . . . . (44,607) (25,439)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under term loan . . . . . . . . . . . . . . . . . . . . . - 19,500
Repayments under term loan . . . . . . . . . . . . . . . . . . . . . (20,000) (500)
(Repayments) under revolving credit line . . . . . . . . . . . . . . (1,867) (11,713)
Issuance of 9 1/4% Senior subordinated notes . . . . . . . . . . . . 170,000 -
Redemption of 12 3/4% Senior subordinated debentures . . . . . . . . (132,597) -
Repayment costs on early extinguishment of debt . . . . . . . . . . (15,920) -
Proceeds from underwritten public offering . . . . . . . . . . . . . 33,681 -
Debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . (5,540) (97)
Repayments of capital lease obligation and other long term debt . . (489) (13)
----------- -----------
Net cash provided by financing activities . . . . . . . . . . . . 27,268 7,177

Effect of exchange rate changes on cash . . . . . . . . . . . . . (3) (34)
----------- -----------

NET INCREASE IN CASH . . . . . . . . . . . . . . . . . . . . . . . . . 398 57

CASH AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . . . . . . . 101 108
----------- -----------

CASH AT END OF PERIOD $ 499 $ 165
=========== ===========

SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,657 $ 21,125
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 876 1,387
</TABLE>

See notes to consolidated financial statements.

F-19
<PAGE> 71
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS OF DOLLARS)

(INFORMATION AS OF JUNE 30, 1997 AND FOR THE
PERIODS ENDING JUNE 30, 1997 AND 1996 IS 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, erosion
control, concrete reinforcement and furniture construction fabrics. The
Company manufactures and sells more than 2,000 products in over 65 end-use
markets predominately in North America, Europe and the Far East. Prior to
November 1, 1996, the Company was a wholly owned subsidiary of Synthetic
Industries, L.P. As a result of the underwritten public offering (Note 7) on
November 1, 1996, Synthetic Industries, L.P. owns approximately 67% of the
Company's outstanding common stock as of June 30, 1997.

2. INTERIM CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements as of June 30, 1997 and for the
periods ended June 30, 1997 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, 1997 and 1996, and the results of operations for
the three and nine months then ended have been made on a consistent basis.
Certain information and footnote disclosures included in consolidated financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
management believes that the disclosures herein are adequate to make the
information presented not misleading. 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 consolidated
financial statements of the Company's Annual Report on Form 10-K for the fiscal
year ended September 30, 1996. Operating results for the three and nine months
ended June 30, 1997 may not necessarily be indicative of the results that may
be expected for the full year.

3. INVENTORY
<TABLE>
<CAPTION>
June 30, September 30,
1997 1996
------------------ ------------------
<S> <C> <C>
Finished goods . . . . . . . . . . . . . . . $ 33,200 $ 22,555
Work in process . . . . . . . . . . . . . . . 8,549 7,937
Raw materials . . . . . . . . . . . . . . . . 16,721 8,650
------------------ ------------------
$ 58,470 $ 39,142
================== ==================
</TABLE>

F-20
<PAGE> 72
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

4. PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
June 30, September 30,
1997 1996
-------------- --------------
<S> <C> <C>
Land . . . . . . . . . . . . . . . . . . . $ 4,458 $ 4,458
Buildings and improvements . . . . . . . . 35,525 $ 29,298

Machinery and equipment and leasehold
improvements . . . . . . . . . . . . . . 213,550 179,386
-------------- --------------
253,533 213,142
Accumulated depreciation . . . . . . . . . 86,422 75,168
-------------- --------------
$ 167,111 $ 137,974
============== ==============
</TABLE>

5. LONG-TERM DEBT
<TABLE>
<CAPTION>
June 30, September 30,
1997 1996
-------------- --------------
<S> <C> <C>
Secured revolving credit facility

Secured revolving credit portion . . . . $ 2,126 $ 3,993
Term loan portion . . . . . . . . . . . 25,000 45,000
9 1/4% Senior Subordinated Notes, due 2007 170,000 --
12 3/4% Senior Subordinated Debentures,
due 2002 . . . . . . . . . . . . . . . . 7,403 140,000

Capital lease obligation . . . . . . . . . 4,242 4,698
Other . . . . . . . . . . . . . . . . . . . 1,288 1,321
-------------- --------------
210,059 195,012
Less current portion . . . . . . . . . . . 703 659
-------------- --------------

Total long term portion . . . . . . . . . . $ 209,356 $ 194,353
============== ==============
</TABLE>

On February 11, 1997, the Company issued $170,000 in aggregate
principal amount of 9 1/4% Senior Subordinated Notes due 2007 (the "Notes"),
which represent unsecured obligations of the Company. The Notes are redeemable
at the option of the Company at any time on or after February 15, 2002,
initially at 104.625% of their amount, together with accrued interest, with
declining redemption prices thereafter. Interest on the Notes is payable
semi-annually on February 15 and August 15.

In connection with the issuance of the Notes, the Company redeemed
approximately $133,000 principal amount of its 12 3/4% Senior Subordinated
Debentures due 2002 (the "Debentures") at a redemption price of 111.07% of the
principal amount thereof. In addition, the Company repaid $20,000 of its
outstanding term loan borrowings as of March 5, 1997. In connection with the
early extinguishment of debt, the Company recorded an extraordinary loss of
$11,950 (representing call premium and prepayment fees of $15,920 and write off
of deferred financing costs of $3,511, net of an income tax benefit of $7,481)
during the second quarter of fiscal 1997.

On October 20, 1995, the Company and its lenders entered into the
Fourth Amended and Restated Revolving Credit Agreement (as amended to date, the
"Amended Credit Facility"). The Amended Credit Facility, with a termination
date of October 1, 2001, provided for potential borrowing capacity of up to
$85,000 being comprised of term

F-21
<PAGE> 73
SYNTHETIC INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

loan borrowings of $45,000 and a revolving credit loan portion (the "Revolver")
of $40,000. The term loan balance at June 30, 1997, was $25,000, of which
$10,000 is payable in 1999 and $15,000 is payable in 2000. 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 and reserves. These reserves include the remaining balance due
under the Debentures of $7,400. At June 30, 1997, availability under the
Revolver was $27,477.

The Company is currently in the process of renegotiating the Amended
Credit Facility, primarily to increase borrowing flexibility, reduce interest
costs and extend the term, which is due to expire on October 1, 2001. As part
of the renegotiations, on June 30, 1997, the lenders agreed to reduce the
borrowing rate of the Amended Credit Facility for the term loan and revolver
advances from the Interbank Eurodollar rate plus 2.75% or 2.50% to 2.00% or
1.75%, respectively.

6. INCOME TAXES

The provision for income taxes before extraordinary item in the
consolidated statements of operations reflects the effective tax rate of 40%
and 41% for the three and nine months ended June 30, 1997. This provision
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 consolidated statements of operations.

7. UNDERWRITTEN PUBLIC OFFERING

On November 1, 1996, the Company sold 2,875,000 shares of Common Stock
in an underwritten public offering. The net proceeds to the Company from the
sale (after payment of underwriting discounts, commissions and expenses) were
approximately $34,000. The net proceeds to the Company were used to repay
certain outstanding indebtedness. As a result of its underwritten public
offering, the Company currently has 8,656,250 shares of Common Stock
outstanding. Approximately 67% of the issued and outstanding shares of Common
Stock are owned by Synthetic Industries, L.P.

8. BUSINESS ACQUISITION

On February 27, 1997, the Company acquired certain assets of the
Spartan Technologies division of Spartan Mills for approximately $9,400. The
acquisition has been accounted for using the purchase method of accounting,
and, accordingly, the purchase price has been allocated to the net assets
acquired (accounts receivable, inventory, and property, plant and equipment)
based upon the fair market value (which approximates cost) at the date of
acquisition. The operating results of the acquired business have been included
in the consolidated statements of operations from the date of acquisition.

9. STOCK OPTIONS

In May 1997, the Company issued an additional 130,500 options under
the 1996 Stock Option Plan.

F-22
<PAGE> 74
APPENDIX A

<TABLE>
<CAPTION>
Selling Stockholder Shares Offered Hereby
------------------- ---------------------
<S> <C>

</TABLE>

A-1
<PAGE> 75
================================================================================

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>
Incorporation of Certain Documents By
Reference . . . . . . . . . . . . . . .
Prospectus Summary . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . .
Special Note Regarding Forward-
Looking Statements . . . . . . . . . .
The Company . . . . . . . . . . . . . . . .
The Plan of Withdrawal and Dissolution . .
Use of Proceeds . . . . . . . . . . . . . .
Capitalization . . . . . . . . . . . . . .
Common Stock Price Range and Dividends . .
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 Capital Stock . . . . . . .
Underwriting . . . . . . . . . . . . . . .
Legal Matters . . . . . . . . . . . . . . .
Experts . . . . . . . . . . . . . . . . . .
Available Information . . . . . . . . . . .
Index to Consolidated Financial Statements F-1
</TABLE>

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

3,000,000 SHARES

SYNTHETIC INDUSTRIES, INC.

COMMON STOCK

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

PROSPECTUS

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

BEAR, STEARNS & CO. INC.

,1997

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

<PAGE> 76
PART II.

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. 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 Company.
All amounts are estimates except the registration fee and the NASD filing fee.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee . $ 30,319
NASD filing fee . . . . . . . . . . . . . . . . . . . 10,505
Blue Sky fees and expenses . . . . . . . . . . . . . *
Accounting fees and expenses . . . . . . . . . . . . *
Legal fees and expenses . . . . . . . . . . . . . . . *
Transfer Agent and Registrar Fees . . . . . . . . . . *
Printing expenses . . . . . . . . . . . . . . . . . . *
Miscellaneous . . . . . . . . . . . . . . . . . . . . *
--------

Total . . . . . . . . . . . . . . . . . . . . $ *
========
</TABLE>

- ------------------
* To be completed by amendment.

ITEM 15. 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.

II-1

<PAGE> 77
In accordance with Section 145 of the DGCL, Article VII of the
Registrant's Certificate of Incorporation, as amended and restated (the
"Restated Certificate") provides that the Registrant may indemnify, to the
fullest extent permitted by applicable law in effect from time to time, any
person, and the estate and personal representative of any such person, against
all liability and expense (including attorneys' fees) incurred by reason of the
fact that such person is or was a director, officer, fiduciary, or agent of the
Registrant, or, while serving as a director, officer, fiduciary or agent of the
Registrant, is or was serving at the request of the Registrant as a director,
officer, partner, trustee, employee, fiduciary, or agent of, or in any similar
managerial or fiduciary position of another domestic or foreign corporation or
other individual or entity or of an employee benefit plan to the extent and in
the manner provided in any bylaw, resolution of the directors, resolution of
the stockholders, contract, or otherwise so long as such indemnification is
legally permissible.

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

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

<TABLE>
<S> <C>
1.1 Form of Underwriting Agreement. (To be filed by amendment.)

2.1 Acquisition Agreement dated November 21, 1986 between Synthetic Industries, Inc., Synthetic Industries
Limited, Polyweave Corporation, the shareholders of Synthetic Industries, Inc., Synthetic Industries Limited
and SI Holding Inc., including exhibits thereto.(1)

2.2 Plan and Agreement of Merger dated December 4, 1986.(1)

2.3 Asset Purchase Agreement dated October 12, 1990 between Synthetic Industries, Inc. and Chicopee.(2)

3.1 Amended and Restated Limited Partnership Agreement of Synthetic Industries, L.P. dated as of November 11,
1986 (with all amendments thereto).(18)

3.2 Certificate of Incorporation of Synthetic Industries, Inc. filed with the Secretary of the State of
Delaware.(10)

3.3 Amended and Restated By-Laws of Synthetic Industries, Inc.(10)

4.1 Indenture dated as of December 14, 1992 between Synthetic Industries, Inc. and United States Trust Company of
New York, Trustee, with respect to the 12 3/4% Senior Subordinated Debentures due 2002.(4)

4.2 Supplemental Indenture dated as of October 20, 1995 between Synthetic Industries, Inc. and United States
Trust Company of New York, Trustee, with respect to the 12 3/4% Senior Subordinated Debentures due 2002.(18)

4.3 Supplemental Indenture dated as of February 11, 1997 between Synthetic Industries, Inc. and United States
Trust Company of New York, Trustee, with respect to the 12 3/4% Senior Subordinated Debentures due 2002.(18)

4.4 Indenture dated as of February 11, 1997 between Synthetic Industries, Inc. and United States Trust Company of
New York, Trustee, with respect to the 9 1/4 Senior Subordinated Notes due 2007.(16)

4.5 Registration Rights Agreement, dated as of February 11, 1997, between Synthetic Industries, Inc. and Bear,
Stearns & Co. Inc.(16)

4.6 Registration Rights Agreement, dated as of October 31, 1996, between Synthetic Industries, Inc. and Synthetic
Industries, L.P.(12)
</TABLE>

II-2
<PAGE> 78
<TABLE>
<S> <C>
5.1 Opinion of King & Spalding. (To be filed by amendment.)

10.1 Fourth Amended and Restated Revolving Credit and Security Agreement dated as of October 20, 1995 among
Synthetic Industries, Inc., BankBoston and other Lenders listed on Schedule I thereto, and BankBoston, as
agent on behalf of the Lenders.(9)

10.2 Amendment No.1 to the Fourth Amended and Restated Revolving Credit and Security Agreement dated as of
December 1, 1995.(9)

10.3 Amendment No.(2) to the Fourth Amended and Restated Revolving Credit and Security Agreement dated as of
February 14, 1996.(11)

10.4 Amendment No.3 to the Fourth Amended and Restated Revolving Credit and Security Agreement dated as of March
15, 1996.(9)

10.5 US Patent No. 4,867,614, Reinforced Soil and Method (Exp. December 13, 2003).(2)

10.6 US Patent No. 4,790,691, Fiber Reinforced Soil and Method (Exp. December 13, 2003).(2)

10.7 US Patent No. 5,007,766, Shaped Barrier for Erosion Control and Sediment Collection (Exp. April 16, 2008).(2)

10.8 Lease agreement dated November 22, 1971 between Murray Sobel and Synthetic Industries, Inc. (including all
amendments to date).(1)

10.9 Lease agreement dated February 13, 1969, between Murray Sobel and wife, Marcela S. Sobel, and Joseph F.
Decosimo, Frank M. Thompson and Murray Sobel, Trustees and Synthetic Industries, Inc. (including all
amendments to date).(1)

10.10 Lease agreement dated December 17, 1990 between Chicopee and Synthetic Industries, Inc.(2)

10.11 Lease agreement dated January 17, 1991 between Herchel L. Webster and Allie Ree Webster and Synthetic
Industries, Inc. (the "Lumite Lease").(2)

10.12 Amendment to the Lumite Lease dated October 1, 1992.(6)

10.13 Consulting Agreement dated July 23, 1991 between Texpro Limitada y Cia S.C.A. and Synthetic Industries,
Limited.(2)

10.14 Supply Contract between Eastman Chemical Products, Inc. and Synthetic Industries, Inc. dated December 13,
1991.(7)

10.15 Agreement dated September 6, 1996 between Leonard Chill and Synthetic Industries, Inc.(13)

10.16 Agreement dated September 6, 1996 between W. Wayne Freed and Synthetic Industries, Inc.(13)

10.17 Agreement dated September 6, 1996 between Ralph A. Kenner and Synthetic Industries, Inc.(13)

10.18 Agreement dated September 6, 1996 between William Gardner Wright, Jr. and Synthetic Industries, Inc.(13)

10.19 Agreement dated September 6, 1996 between John M. Long and Synthetic Industries, Inc.(13)
</TABLE>

<PAGE> 79
<TABLE>
<S> <C>
10.20 Agreement dated September 6, 1996 between Charles T. Koerner and Synthetic Industries, Inc.(13)

10.21 Agreement dated September 6, 1996 between Joseph Sinicropi and Synthetic Industries, Inc.(13)

10.22 Agreement dated September 6, 1996 between W.O. Falkenberry and Synthetic Industries, Inc.(13)

10.23 Agreement dated September 6, 1996 between Bobby Callahan and Synthetic Industries, Inc.(13)

10.24 1994 Stock Option Plan for Non-Employee Directors.(8)

10.25 1994 Stock Option Plan.(8)

10.26 1996 Stock Option Plan.(11)

10.27 Incentive Compensation Plan Fiscal Year 1994/1995.(11)

10.28 Incentive Compensation Plan Fiscal Year 1995/1996.(11)

10.29 Amendment No. 4 to the Fourth Amended and Restated Revolving Credit and Security Agreement dated as of
September 27, 1996.(13)

10.30 Amendment No. 5 to the Fourth Amended and Restated Revolving Credit and Security Agreement dated as of
October 28, 1996.(14)

10.31 Amendment No. 6 to the Fourth Amended and Restated Revolving Credit and Security Agreement dated as of
January 29, 1997.(15)

10.32 Amendment No. 7 to the Fourth Amended and Restated Revolving Credit and Security Agreement dated as of April
30, 1997.(20)

10.33 Amendment No. 8 to the Fourth Amended and Restated Revolving Credit and Security Agreement dated as of June
30, 1997.(20)

10.34 Asset Sale Agreement by and between Spartan Mills and Synthetic Industries, Inc. dated as of February 27,
1997.(19)

10.35 Lease Agreement by and between Spartan Mills and Synthetic Industries, Inc. dated as of February 27, 1997.(19)

10.36 Agreement and Plan of Withdrawal and Dissolution.(17)

10.37 Agreement dated May 21, 1997 between Joseph F. Dana and Synthetic Industries, Inc.(19)

21. List of Subsidiaries of Synthetic Industries, Inc.(2)

23.1 Consent of King & Spalding (included in Exhibit 5.1). (To be filed by amendment.)

23.2 Consent of Deloitte & Touche LLP.

24. Powers of attorney (included on signature page of this Registration Statement).
</TABLE>

<PAGE> 80
(1) Filed as an exhibit to the Company's Registration Statement on Form S-1
(33-11479) as filed with the Securities and Exchange Commission on
January 23, 1987 and incorporated herein by reference.

(2) Filed as an exhibit to the Company's Registration Statement on Form S-1
(33-51206) as filed with the Securities and Exchange Commission on August
24, 1992 and incorporated herein by reference.

(3) Filed as an exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1993 and incorporated herein by
reference.

(4) Filed as an exhibit to the Company's Amendment No.3 to the Registration
on Form S-1 (33-51206) as filed with the Securities and Exchange
Commission on December 4, 1992 and incorporated herein by reference.

(5) Filed as an exhibit to the Partnership's Registration Statement on Form
10 (0-21548) as filed with the Securities and Exchange Commission on
April 16, 1993 and incorporated herein by reference.

(6) Filed as an exhibit to the Partnership's Amendment No.1 to the
Registration Statement on Form 10 (0-21548) as filed with the Securities
and Exchange Commission on August 10, 1993 and incorporated herein by
reference.

(7) Pursuant to an order dated October 19, 1992, the Securities and Exchange
Commission granted confidential treatment with respect to certain
portions of this exhibit under Rule 406 of the Securities Act of 1933, as
amended.

(8) Filed as an exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1994 and incorporated herein by
reference.

(9) Filed as an exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1995 and incorporated herein by
reference.

(10) Filed as an exhibit to the Company's Registration Statement on Form 8-A
(0-12357) as filed with the Securities and Exchange Commission on October
24, 1996 and incorporated herein by reference.

(11) Filed as an exhibit to the Company's Registration Statement on Form S-1
(333-09377) as filed with the Securities and Exchange Commission on
August 1, 1996 and incorporated herein by reference.

(12) Filed as an exhibit to Amendment No.1 to the Company's Registration
Statement on Form S-1 (333-09377) as filed with the Securities and
Exchange Commission on September 13, 1996 and incorporated herein by
reference.

(13) Filed as an exhibit to Amendment No.2 to the Company's Registration
Statement on Form S-1 (333-09377) as filed with the Securities and
Exchange Commission on October 2, 1996 and incorporated herein by
reference.

(14) Filed as an exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1996 and incorporated herein by
reference.

(15) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for
the three months ended December 31, 1996 and incorporated herein by
reference.

(16) Filed as an exhibit to the Company's Registration Statement on Form S-4
(File No. 333-23167) as filed with the Securities and Exchange Commission
on March 12, 1997 and incorporated herein by reference.

(17) Filed as Annex A to the joint Proxy Statement and Prospectus forming a
part of Amendment No. 3 to the Company's Registration Statement on Form
S-4 (File No. 333-28817) as filed with the Securities and Exchange
Commission on September 17, 1997.

<PAGE> 81
(18) Filed as an exhibit to Amendment No. 1 to the Company's Registration
Statement on Form S-4 (File No. 333-28817) as filed with the Securities
and Exchange Commission on August 8, 1997.

(19) Filed as an exhibit to Amendment No. 3 to the Company's Registration
Statement on Form S-4 (File No. 333-28817) as filed with the Securities
and Exchange Commission on September 17, 1997.

(20) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for
the three months ended June 30, 1997 and incorporated herein by
reference.

ITEM 17. UNDERTAKINGS.

(1) 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 forgoing provisions described in Item 15
above, 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 by the final adjudication
of such issue.

(2) 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.

(c) The undersigned registrant hereby undertakes that,
for the purposes of determining any liability under the Securities Act, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement 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.

(d) The undersigned registrant hereby undertakes to
deliver or cause to be delivered with the prospectus, to each person to whom
the prospectus is sent or given, the latest annual report to security holders
that is incorporated by reference in the prospectus and furnished pursuant to
and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Exchange
Act; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered, to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.

II-6
<PAGE> 82
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and 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 the 3rd day of October 1997.

SYNTHETIC INDUSTRIES, INC.

By: /s/ LEONARD CHILL
--------------------------------------
Leonard Chill
President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Leonard Chill and Joseph Sinicropi, and
each of them, as such person's true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for such person and in such
person's name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission and any
other regulatory authority, granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in connection therewith, as fully
to all intents and purposes as such person might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or either
of them, or their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as
amended, this 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 October 3, 1997
-------------------------------------- and Director (Principal Executive
Leonard Chill Officer)

/s/ JOSEPH SINICROPI Chief Financial Officer and Secretary
-------------------------------------- (Principal Financial and Accounting
Joseph Sinicropi Officer) October 3, 1997

/s/ JOSEPH F. DANA Chief Operating Officer, General October 3, 1997
-------------------------------------- Counsel and Director
Joseph F. Dana

/s/ LEE J. SEIDLER Director October 3, 1997
--------------------------------------
Lee J. Seidler

/s/ WILLIAM J. SHORTT Director October 3, 1997
--------------------------------------
William J. Shortt

/s/ ROBERT L. VOIGT Director October 3, 1997
--------------------------------------
Robert L. Voigt
</TABLE>

II-7
<PAGE> 83

INDEX TO EXHIBITS

<TABLE>
<S> <C>
1.1 Form of Underwriting Agreement. (To be filed by amendment.)

2.2 Plan and Agreement of Merger dated December 4, 1986.(1)

2.3 Asset Purchase Agreement dated October 12, 1990 between Synthetic Industries, Inc. and Chicopee.(2)

3.1 Amended and Restated Limited Partnership Agreement of Synthetic Industries, L.P. dated as of November 11,
1986 (with all amendments thereto).(18)

3.2 Certificate of Incorporation of Synthetic Industries, Inc. filed with the Secretary of the State of
Delaware.(10)

3.3 Amended and Restated By-Laws of Synthetic Industries, Inc.(10)

4.4 Indenture dated as of February 11, 1997 between Synthetic Industries, Inc. and United States Trust Company of
New York, Trustee, with respect to the 9 1/4 Senior Subordinated Notes due 2007.(16)

4.5 Registration Rights Agreement, dated as of February 11, 1997, between Synthetic Industries, Inc. and Bear,
Stearns & Co. Inc.(16)

4.6 Registration Rights Agreement, dated as of October 31, 1996, between Synthetic Industries, Inc. and Synthetic
Industries, L.P.(12)
</TABLE>

<PAGE> 84
<TABLE>
<S> <C>
5.1 Opinion of King & Spalding. (To be filed by amendment.)