COLLINS & AIKMAN CORP, 10-Q, 2000-11-14

COLLINS & AIKMAN CORP
10-Q, 2000-11-14
CARPETS & RUGS

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<PAGE> 1

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

FORM 10-Q

(Mark One)

[X] Quarterly Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2000
or
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the transition period from ______ to _____

Commission File Number 1-10218

COLLINS & AIKMAN CORPORATION
(Exact name of registrant, as specified in its charter)

Delaware 13-3489233
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)

5755 New King Court
Troy, Michigan 48098
(Address of principal executive offices, including zip code)
(248) 824-2500
(Registrant's telephone number, including area code)

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

As of November 10, 2000, the number of outstanding shares of the Registrant's
common stock, $.01 par value, was 61,978,417 shares.

<PAGE> 2

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

<TABLE>
<CAPTION>
QUARTER ENDED NINE MONTHS ENDED
-------------------------------- --------------------------------
SEPTEMBER 30, SEPTEMBER 25, SEPTEMBER 30, SEPTEMBER 25,
2000 1999 2000 1999
(13 WEEKS) (13 WEEKS) (40 WEEKS) (39 WEEKS)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>

Net sales ........................................... $ 423,001 $ 427,873 $ 1,464,971 $ 1,393,031
Cost of goods sold .................................. 369,836 363,710 1,243,958 1,180,018
----------- ----------- ----------- -----------
Gross profit ........................................ 53,165 64,163 221,013 213,013
Selling, general and administrative expenses ........ 33,413 37,615 114,949 116,692
Restructuring charge ................................ -- 15,293 -- 19,847
----------- ----------- ----------- -----------
Operating income .................................... 19,752 11,255 106,064 76,474

Interest expense, net ............................... 23,208 22,997 72,699 67,821
Loss on sale of receivables ......................... 1,697 1,201 7,503 3,835
Other expense (income) .............................. (550) 1,670 897 2,864
----------- ----------- ----------- -----------

Income (loss) before income taxes ................... (4,603) (14,613) 24,965 1,954
Income tax expense (benefit) ........................ (925) (8,129) 10,524 804
----------- ----------- ----------- -----------

Income (loss) from continuing operations before
extraordinary charge and cumulative effect of a
change in accounting principle .................... (3,678) (6,484) 14,441 1,150
Income from discontinued operations, net of income
taxes of $4,400 ................................... -- -- 6,600 --
----------- ----------- ----------- -----------
Income before extraordinary charge and cumulative
effect of a change in accounting principle ........ (3,678) (6,484) 21,041 1,150
Extraordinary charge, net of income taxes of $457 ... (686) -- (686) --
Cumulative effect of a change in accounting
principle, net of income taxes of $5,083 .......... -- -- -- (8,850)
----------- ----------- ----------- -----------

Net income (loss) ................................... $ (4,364) $ (6,484) $ 20,355 $ (7,700)
=========== =========== =========== ===========
Net income (loss) per basic and diluted common share:
Continuing operations ............................. $ (0.06) $ (0.10) $ 0.23 $ 0.02
Discontinued operations ........................... -- -- 0.11 --
Extraordinary charge .............................. (0.01) -- (0.01) --
Cumulative effect of a change in accounting
principle ...................................... -- -- -- (0.14)
----------- ----------- ----------- -----------

Net income (loss) ................................... $ (0.07) $ (0.10) $ 0.33 $ (0.12)
=========== =========== =========== ===========

Average common shares outstanding:
Basic ............................................. 61,895 61,955 61,888 61,965
=========== =========== =========== ===========
Diluted ........................................... 61,895 61,955 62,457 62,335
=========== =========== =========== ===========
</TABLE>

I-1
<PAGE> 3

COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

<TABLE>
<CAPTION>
(UNAUDITED)
SEPTEMBER 30, DECEMBER 25,
ASSETS 2000 1999
----------- -----------
<S> <C> <C>
Current Assets:
Cash and cash equivalents ................................ $ 31,655 $ 13,980
Accounts and other receivables, net ...................... 204,387 233,819
Inventories .............................................. 139,447 132,625
Other .................................................... 81,525 84,942
----------- -----------
Total current assets ................................... 457,014 465,366

Property, plant and equipment, net .......................... 432,861 443,526
Deferred tax assets ......................................... 80,781 86,235
Goodwill, net ............................................... 246,672 256,362
Other assets ................................................ 78,707 97,401
----------- -----------

$ 1,296,035 $ 1,348,890
=========== ===========

LIABILITIES AND COMMON STOCKHOLDERS' DEFICIT
Current Liabilities:
Short-term borrowings .................................... $ 7,772 $ 3,088
Current maturities of long-term debt ..................... 77,395 27,992
Accounts payable ......................................... 174,761 198,466
Accrued expenses ......................................... 135,088 132,709
----------- -----------

Total current liabilities .............................. 395,016 362,255

Long-term debt .............................................. 791,047 884,550
Other, including post-retirement benefit obligation ......... 253,677 253,206
Commitments and contingencies................................

Common stock (150,000 shares authorized, 70,521 shares
issued and 61,895 shares outstanding at September 30, 2000
and 70,521 shares issued and 61,904 shares outstanding at
December 25, 1999) ....................................... 705 705
Other paid-in capital ....................................... 586,191 585,484
Accumulated deficit ......................................... (620,762) (641,117)
Accumulated other comprehensive loss ........................ (46,851) (33,260)
Treasury stock, at cost (8,626 shares at September 30, 2000
and 8,617 shares at December 25, 1999) ................... (62,988) (62,933)
----------- -----------

Total common stockholders' deficit ..................... (143,705) (151,121)
----------- -----------
$ 1,296,035 $ 1,348,890
=========== ===========
</TABLE>

I-2
<PAGE> 4

COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)

<TABLE>
<CAPTION>
QUARTER ENDED NINE MONTHS ENDED
------------------------------- ------------------------------
SEPTEMBER 30, SEPTEMBER 25, SEPTEMBER 30, SEPTEMBER 25,
2000 1999 2000 1999
(13 WEEKS) (13 WEEKS) (40 WEEKS) (39 WEEKS)
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Income (loss) from continuing operations .................. $ (3,678) $ (6,484) $ 14,441 $ 1,150
Adjustments to derive cash flow from continuing operating
activities:
Impairment of long-lived assets ...................... -- 5,057 -- 5,593
Deferred income tax expense (benefit) ................ (3,484) (8,136) 1,853 (9,367)
Depreciation and amortization ........................ 17,438 17,013 54,692 51,944
Decrease (increase) in accounts and other receivables 11,336 (13,326) 37,802 225
Increase in inventories .............................. (7,144) (13,034) (6,822) (2,651)
Increase (decrease) in accounts payable .............. 5,994 10,975 (23,705) (10,232)
Increase in interest payable ......................... 14,744 13,243 16,246 14,591
Other, net ........................................... (7,245) (14,278) 9,599 (18,785)
--------- --------- --------- ---------

Net cash provided by (used in) continuing operating
activities ....................................... 27,961 (8,970) 104,106 32,468
--------- --------- --------- ---------

Net cash provided by (used in) discontinued
operations ....................................... (2,017) (1,355) 2,229 (5,786)
--------- --------- --------- ---------

INVESTING ACTIVITIES
Additions to property, plant and equipment ................ (19,738) (22,835) (50,310) (55,212)
Sales of property, plant and equipment .................... 1,258 7,319 1,832 9,953
Other, net ................................................ -- -- -- (1,169)
--------- --------- --------- ---------

Net cash used in investing activities .............. (18,480) (15,516) (48,478) (46,428)
--------- --------- --------- ---------

FINANCING ACTIVITIES
Issuance of long-term debt ................................ -- -- -- 100,000
Repayment of long-term debt ............................... (38,592) (5,849) (60,045) (15,335)
Proceeds from (reduction of) participating interests in
accounts receivable ..................................... 8,250 (3,900) (1,570) (6,100)
Net borrowings (repayments) on revolving credit facilities (10,606) 9,779 15,599 (7,602)
Increase on short-term borrowings ......................... 1,643 6,477 5,917 1,205
Dividends paid ............................................ -- -- -- (50,198)
Reissuance (purchase) of treasury stock, net .............. 18 (284) (83) (1,592)
--------- --------- --------- ---------

Net cash provided by (used in) financing activities (39,287) 6,223 (40,182) 20,378
--------- --------- --------- ---------

Net increase (decrease) in cash and cash equivalents ...... (31,823) (19,618) 17,675 632
Cash and cash equivalents at beginning of period .......... 63,478 44,005 13,980 23,755
--------- --------- --------- ---------
Cash and cash equivalents at end of period ................ $ 31,655 $ 24,387 $ 31,655 $ 24,387
========= ========= ========= =========
</TABLE>

I-3
<PAGE> 5

COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

A. ORGANIZATION:

Collins & Aikman Corporation (the "Company") is a Delaware corporation.
As of September 30, 2000, Blackstone Capital Partners L.P. ("Blackstone
Partners") and Wasserstein Perella Partners, L.P. ("WP Partners") and their
respective affiliates collectively owned approximately 87% of the common stock
of the Company (the "Common Stock").

The Company conducts all of its operating activities through its
wholly-owned Collins & Aikman Products Co. ("C&A Products") subsidiary.

B. BASIS OF PRESENTATION:

The condensed consolidated financial statements include the accounts of
the Company and its subsidiaries. In the opinion of management, the accompanying
condensed consolidated financial statements reflect all adjustments (consisting
of only normal recurring adjustments) necessary for a fair presentation of
financial position and results of operations. Certain prior year items have been
reclassified to conform with the fiscal 2000 presentation. Results of operations
for interim periods are not necessarily indicative of results for the full year.

The Company's fiscal year ends on the last Saturday of December. The
2000 fiscal year will consist of 53 weeks. In a 53-week year, the Company's
policy is to include the additional week in the first quarter of the year. As a
result, the quarter ended April 1, 2000 consisted of 14 weeks. The quarters
ended September 30, 2000, July 1, 2000, September 25, 1999, June 26, 1999 and
March 27, 1999 consisted of 13 weeks.

For further information, refer to the consolidated financial statements
and footnotes thereto included in the Collins & Aikman Corporation Annual Report
on Form 10-K for the fiscal year ended December 25, 1999.

C. FOREIGN CURRENCY PROTECTION PROGRAMS:

The primary purpose of the Company's foreign currency hedging
activities is to protect against the volatility associated with intercompany
funding arrangements, third party loans and foreign currency purchase and sale
transactions. Corporate policy prescribes the range of allowable hedging
activity. The Company primarily utilizes forward exchange contracts and
purchased options with durations of generally less than 12 months. The Company
has in place forward exchange contracts denominated in multiple currencies which
will mature during fiscal 2000 and fiscal 2001. These contracts aggregated a
U.S. dollar equivalent of $223.8 million at September 30, 2000. The fair value
of these contracts approximated the contract value at September 30, 2000.

During 2000 and 1999, the Company purchased option contracts giving the
Company the right to purchase U.S. dollars for use by its Canadian operations.
The premiums associated with these contracts are amortized over the contracts'
terms which are one year or less. The total notional amount purchased was $214.2
million with associated premiums of $1.5 million. The total notional amount
outstanding at September 30, 2000 was $57.0 million.

D. INVENTORIES:

Inventory balances are summarized below (in thousands):

SEPTEMBER 30, DECEMBER 25,
2000 1999
-------- --------
Raw materials ... $ 77,934 $ 69,182
Work in process.. 31,916 27,073
Finished goods... 29,597 36,370
-------- --------
$139,447 $132,625
======== ========

I-4
<PAGE> 6

COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

E. GOODWILL:

Goodwill, representing the excess of purchase price over the fair value
of net assets of acquired entities, is being amortized on a straight-line basis
over a period of forty years. Amortization of goodwill applicable to continuing
operations was $1.7 million and $5.3 million for the quarter and nine months
ended September 30, 2000 and $1.4 million and $5.2 million for the quarter and
nine months ended September 25, 1999, respectively. Accumulated amortization at
September 30, 2000 was $30.2 million. The carrying value of goodwill at an
enterprise level is reviewed periodically based on the projected non-discounted
cash flows and pretax income of the entities acquired over the remaining
amortization periods. Should this review indicate that the goodwill balance will
not be recoverable, the Company's carrying value of the goodwill will be
reduced. At September 30, 2000, the Company believes the recorded value of its
goodwill of $246.7 million is fully recoverable.

F. LONG-TERM DEBT:

In addition, the Credit Agreement Facilities include a provision for a
Term Loan C credit facility (the "Term Loan C Facility") of up to $150 million.
On May 13, 1999, the Company closed on the Term Loan C Facility in the principal
amount of $100 million. The Term Loan C Facility is payable in quarterly
installments beginning in December 1999 through final maturity in December 2005.
The Company used approximately $44 million of the proceeds from the Term Loan C
Facility to pay a special dividend to shareholders on May 28, 1999. The
remaining proceeds were used to repay amounts outstanding on the Revolving
Credit Facility and for general corporate purposes.

At September 30, 2000, the Company had outstanding $71.3 million on the
Term Loan A Facility, $119.0 million on the Term Loan B Facility, $97.0 million
on the Term Loan C Facility and $127.7 million under the Revolving Credit
Facility (including $7.7 million borrowed by the Canadian Borrowers).

Indebtedness under the Term Loan A Facility and U.S. dollar-denominated
indebtedness under the Revolving Credit Facility, as amended March 8, 1999,
bears interest at a per annum rate equal to the Company's choice of (i) The
Chase Manhattan Bank's ("Chase's") Alternate Base Rate (which is the highest of
Chase's announced prime rate, the Federal Funds Rate plus .5% and Chase's base
certificate of deposit rate plus 1.00%) plus a margin (the "ABR/Canadian Prime
Rate Margin") ranging from .25% to 1.25% or (ii) the offered rates for
Eurodollar deposits ("LIBOR") of one, two, three, six, nine or twelve months, as
selected by the Company, plus a margin (the "LIBOR/BA Margin") ranging from
1.25% to 2.25%. Margins, which are subject to adjustment based on changes in the
Company's ratio of funded debt to EBITDA (i.e., earnings before interest, taxes,
depreciation, amortization and other non-cash charges), were 1.75% in the case
of the LIBOR/BA Margin and .75% in the case of the ABR/Canadian Prime Rate
Margin on September 30, 2000. Canadian-dollar denominated indebtedness incurred
by the Canadian Borrowers under the Revolving Credit Facility bears interest at
a per annum rate equal to the Canadian Borrowers' choice of (i) the Canadian
Prime Rate (which is the greater of Chase's prime rate for Canadian
dollar-denominated loans in Canada and the Canadian dollar-denominated one month
bankers' acceptance rate plus 1.00%) plus the

I-5
<PAGE> 7

COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

ABR/Canadian Prime Rate Margin or (ii) the bill of exchange rate ("Bankers'
Acceptance" or "BA") denominated in Canadian dollars for one, two, three or six
months plus the LIBOR/BA Margin. Indebtedness under the Term Loan B Facility as
amended March 8, 1999 bears interest at a per annum rate equal to the Company's
choice of (i) Chase's Alternate Base Rate (as described above) plus a margin
ranging from 1.25% to 1.75% (the "Tranche B ABR Margin") or (ii) LIBOR of one,
two, three, or six months, as selected by the Company, plus a margin ranging
from 2.25% to 2.75% (the "Tranche B LIBOR Margin"). The Tranche B ABR Margin and
the Tranche B LIBOR Margin were 1.50% and 2.50%, respectively, at September 30,
2000. Indebtedness under the Term Loan C Facility bears interest at a per annum
rate equal to LIBOR plus 3.25% (the "Tranche C LIBOR Margin") or Chase's
Alternate Base Rate plus 2.25% (the "Tranche C ABR Margin"). The weighted
average rate of interest on the Credit Agreement Facilities at September 30,
2000 was 9.1%.

In addition, under the Credit Agreement Facilities, C&A Products is
generally prohibited from paying dividends or making other distributions to the
Company except to the extent necessary to allow the Company to (w) pay taxes and
ordinary expenses, (x) make permitted repurchases of shares or options, (y) make
permitted investments in finance, foreign or acquired subsidiaries and (z) pay
permitted dividends. The Company is permitted to pay dividends and repurchase
shares of the Company (i) in any fiscal year in an aggregate amount up to $12
million and (ii) if certain financial ratios are satisfied, for the period from
April 28, 1996 through the last day of the Company's most recently ended fiscal
quarter, in an aggregate amount equal to 50% of the Company's cumulative
consolidated net income for that period and, in addition, is permitted to pay
dividends and repurchase shares in amounts representing net proceeds from the
sale of the Company's Imperial Wallcoverings, Inc., subsidiary
("Wallcoverings"). The Company's obligations under the Credit Agreement
Facilities are secured by a pledge of stock of C&A Products and its significant
subsidiaries and certain intercompany indebtedness.

At September 30, 2000, the scheduled maturities of long-term debt are
as follows (in thousands):

Remainder of fiscal year 2000................. $ 7,000
Fiscal year 2001.............................. 77,395
Fiscal year 2002.............................. 32,798
Fiscal year 2003.............................. 28,244
Fiscal year 2004.............................. 181,475
Later years................................... 541,530
--------
$868,442
========
G. RECEIVABLES FACILITY:

On December 27, 1999, the Company entered into a new receivables
facility (the "New Receivables Facility"), replacing the Company's previous
receivables facility (the "Old Receivables Facility") which had expired. The New
Receivables Facility utilizes funding provided by commercial paper conduits
sponsored by three of the Company's lenders under its Credit Agreement
Facilities. Carcorp, a wholly-owned, bankruptcy remote subsidiary of C&A
Products, remains the purchaser of the Sellers' trade receivables, transferring
rights to collections on those receivables to the conduits. The conduits in turn
issue commercial paper which is collateralized by those rights. The liquidity
facilities backing the New Receivables Facility have terms of 364 days,
renewable annually for up to five years.

The total funding available to the Company on a revolving basis under
the New Receivables Facility is up to $171.6 million, depending upon criteria
similar to those in the Old Receivables Facility. On December 27, 1999, the
Company funded $120 million through the New Receivables Facility, leaving
approximately $12 million available, but unutilized. At September 30, 2000,
$114.9 million was funded under the New Receivables Facility, leaving
approximately $.5 million available, but unutilized. The interest rate on sold
interests is equal to the rate paid by the conduits to the holders of the
commercial paper plus a margin of .70% and dealer fees of .05% (7.36% at
inception and 8.04% at September 30, 2000). In addition, the Company pays .25%
on the unused committed portion of the facility. The New Receivables Facility
contains certain other restrictions on Carcorp (including maintenance of $40
million net worth) and on the Sellers (including limitations on liens on
receivables, modifications of the terms of receivables, and change in credit and
collection practices) customary for facilities of this type. The commitments
under the New Receivables Facility are subject to termination prior to their
term upon the occurrence of certain events, including payment defaults, breach
of covenants, including defined interest coverage and leverage ratios,
bankruptcy,

I-6
<PAGE> 8

COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

insufficient eligible receivables to support the outstanding certificates,
default by C&A Products in servicing the receivables and failure of the
receivables to satisfy certain performance criteria.

H. RESTRUCTURING:

On February 10, 1999, the Company announced a comprehensive plan (the
"Reorganization") to reorganize its global automotive carpet, acoustics,
plastics and accessory floormats businesses into two divisions: North American
Automotive Interior Systems, headquartered in the Detroit metropolitan area, and
European Automotive Interior Systems, headquartered in Wiesbaden, Germany. In
addition, the Company subsequently implemented a global account manager
structure for each of the Company's automotive original equipment manufacturer
("OEM") customers. The Company undertook the Reorganization to reduce costs and
improve operating efficiencies through the Company's operations and to more
effectively respond to the OEMs' demand for complete interior trim systems and
more sophisticated components. As part of the Reorganization, the Company also
established the Specialty Automotive Products division, which includes the
Company's automotive fabrics and Dura Convertible Systems businesses. Although
these products have not historically been sold in conjunction with the Company's
other interior trim offerings, the Company's new strategy of leveraging its
acoustic capabilities with its design and styling expertise has changed the
marketing approach for all of the Company's products.

The 1999 Reorganization included the closure of three facilities. The
Homer, Michigan plastics facility was closed in August 1999 and its operations
were relocated to an existing plastics facility. The Cramerton, North Carolina
fabrics facility was sold in September 1999 and the relocation of its operations
to another fabrics facility was completed in 2000. The acoustics facility in
Vastra Frolunda, Sweden, was closed in September 2000 and its operations were
relocated to other facilities in Europe. In addition to these closures, the
Company recognized severance costs for operating personnel at the Company's
plastics operations in the United Kingdom and the Company's fabrics,
convertibles and accessory floormats operations in North America. The Company
also recognized severance costs for management and administrative personnel at
the Company's former North Carolina headquarters and North American Automotive
Interior Systems division. As of September 30, 2000, approximately 1,000
employees had been terminated. When completed, the Reorganization will affect
approximately 1,100 employees. The Company currently expects the Reorganization
plan to be substantially completed by December 2000.

During the quarter ended September 25, 1999, the Company recognized a
pre-tax restructuring charge of $15.3 million, including asset impairments of
$5.1 million. During 1999, the Company recognized a total pre-tax restructuring
charge related to the Reorganization of $33.4 million, including $13.4 million
of asset impairments, $15.0 million of severance costs and $5.0 million related
to the termination of sales commissions contracts at the Company's North
American plastics operations.

The components of the reserves for the restructuring charges are as
follows (in thousands):

<TABLE>
<CAPTION>
Original Changes in Remaining
Reserve Reserve Reserve
-------- -------- --------
<S> <C> <C> <C>
Anticipated severance benefits ......................... $ 15,061 $(13,301) $ 1,760
Anticipated payments related to the termination of sales
commission arrangements .............................. 4,969 (1,669) 3,300
-------- -------- --------
$ 20,030 $(14,970) $ 5,060
======== ======== ========
</TABLE>

I. EMPLOYEE BENEFIT PLANS

During the quarter ended September 30, 2000, the Company recognized a
net $1.0 million curtailment gain related to a reduction in employees
participating in the Collins & Aikman Corporation Supplemental Retirement Income
Plan, a plan whose participation is limited to a select group of key executives.
The gain has been reflected in selling, general and administrative expenses in
the accompanying statements of operations for the quarter and nine months ended
September 30, 2000.

I-7
<PAGE> 9

COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

J. RELATED PARTY TRANSACTIONS:

Under the Amended and Restated Stockholders' Agreement among the
Company, C&A Products, Blackstone Partners and WP Partners, the Company pays
Blackstone Partners and WP Partners, or their respective affiliates, each an
annual monitoring fee of $1.0 million, which is payable in quarterly
installments.

K. INFORMATION ABOUT THE COMPANY'S OPERATIONS:

The Company's continuing operations primarily supply automotive
interior systems - textile and plastic products, acoustics and convertible top
systems - to the global automotive industry.

North American Automotive Interior Systems and European Automotive
Interior Systems include the following product groups: molded floor carpet,
luggage compartment trim, acoustical products, accessory floormats and
plastic-based interior modules, systems and components. The Specialty Automotive
Products division includes automotive fabrics and convertible top systems. The
three divisions also produce other automotive and non-automotive products.

The Company evaluates performance based on profit or loss from
operations before interest expense, foreign exchange gains and losses, loss on
sale of receivables, other income and expense, and income taxes.

Information about the Company's divisions is presented below (in
thousands):

<TABLE>
<CAPTION>
Quarter Ended September 30, 2000 (13 weeks)
-------------------------------------------------------------------------------------
North American European Specialty
Automotive Automotive Automotive
Interior Systems Interior Systems Products Other (a) Total
---------------- ---------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
External revenues ..... $ 266,521 $ 55,801 $ 100,679 $ -- $ 423,001
Inter-segment revenues 6,537 8,712 5,274 (20,523) --
Depreciation and
amortization ..... 9,067 4,662 3,324 385 17,438
Operating income (loss) 17,765 1,670 (453) 770 19,752
Total assets .......... 753,072 215,659 243,697 83,607 1,296,035
Capital expenditures .. 8,525 5,207 5,728 278 19,738

Quarter Ended September 25, 1999 (13 weeks)
-------------------------------------------------------------------------------------
North American European Specialty
Automotive Automotive Automotive
Interior Systems Interior Systems Products Other (a) Total
---------------- ---------------- ---------- ---------- ----------
External revenues ..... $ 260,032 $ 64,412 $ 103,429 $ -- $ 427,873
Inter-segment revenues 21,138 6,724 7,151 (35,013) --
Depreciation and
amortization ..... 9,352 3,645 3,687 329 17,013
Operating income (loss) 15,412 3,060 7,170 (14,387) 11,255
Total assets .......... 805,222 249,077 240,664 106,863 1,401,826
Capital expenditures .. 15,030 4,340 2,471 994 22,835
</TABLE>

I-8
<PAGE> 10

COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

<TABLE>
<CAPTION>
Nine Months Ended September 30, 2000 (40 weeks)
-------------------------------------------------------------------------------------
North American European Specialty
Automotive Automotive Automotive
Interior Systems Interior Systems Products Other (a) Total
---------------- ---------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
External revenues ..... $ 908,588 $ 219,016 $ 337,367 $ -- $1,464,971
Inter-segment revenues 14,954 27,517 26,755 (69,226) --
Depreciation and
amortization ..... 30,636 13,352 9,579 1,125 54,692
Operating income (loss) 77,050 9,027 20,039 (52) 106,064
Total assets .......... 753,072 215,659 243,697 83,607 1,296,035
Capital expenditures .. 25,429 12,897 12,408 (424) 50,310

Nine Months Ended September 25, 1999 (39 weeks)
-------------------------------------------------------------------------------------
North American European Specialty
Automotive Automotive Automotive
Interior Systems Interior Systems Products Other (a) Total
---------------- ---------------- ---------- ---------- ----------
External revenues ..... $ 836,089 $ 223,505 $ 333,437 $ -- $1,393,031
Inter-segment revenues 65,211 21,067 25,285 (111,563) --
Depreciation and
amortization ..... 27,674 12,256 11,227 787 51,944
Operating income (loss) 55,638 6,979 32,649 (18,792) 76,474
Total assets .......... 805,222 249,077 240,664 106,863 1,401,826
Capital expenditures .. 33,509 11,377 6,925 3,401 55,212
</TABLE>

(a) Other includes the Company's discontinued operations, non-operating units
and the effect of eliminating entries.

Sales for the Company's primary product groups are as follows (in
thousands):

<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
------------------------------- ------------------------------
September 30, September 25, September 30, September 25,
2000 1999 2000 1999
(13 weeks) (13 weeks) (40 weeks) (39 weeks)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Molded floor carpet ........... $ 101,795 $ 110,387 $ 346,634 $ 342,475
Luggage compartment trim ...... 16,916 20,957 64,228 63,062
Acoustical products ........... 42,322 44,014 164,712 151,501
Accessory floormats ........... 36,704 37,625 119,387 120,486
Plastic-based interior modules,
systems and components ...... 101,188 91,926 368,205 316,820
Automotive fabrics ............ 76,088 66,461 218,505 199,034
Convertible top systems ....... 14,738 25,464 82,757 95,550
Other ......................... 33,250 31,039 100,543 104,103
---------- ---------- ---------- ----------
Total ......................... $ 423,001 $ 427,873 $1,464,971 $1,393,031
========== ========== ========== ==========
</TABLE>

The Company performs periodic credit evaluations of its customers'
financial condition and, although the Company does not generally require
collateral, it does require cash payments in advance when the assessment of
credit risk associated with a customer is substantially higher than normal.
Receivables generally are due within 45 days of shipment; credit losses have
consistently been within management's expectations and are provided for in the
consolidated financial statements.

I-9
<PAGE> 11

COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Direct and indirect sales to significant customers in excess of ten
percent of consolidated net sales from continuing operations are as follows:

<TABLE>
<CAPTION>
Nine Months Ended
-----------------------------
September 30, September 25,
2000 1999
---- ----
<S> <C> <C>
General Motors Corporation ............................................ 30.9% 31.5%
Ford Motor Company .................................................... 20.7% 19.8%
DaimlerChrysler AG .................................................... 17.5% 19.0%
</TABLE>

Sales for the Company's continuing operations in different geographic
areas are presented below (in thousands):

<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
------------------------------- -------------------------------
September 30, September 25, September 30, September 25,
2000 1999 2000 1999
(13 weeks) (13 weeks) (40 weeks) (39 weeks)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
United States.. $ 263,069 $ 245,209 $ 852,588 $ 795,959
Canada ........ 89,892 92,824 318,071 292,468
Mexico ........ 14,240 25,428 75,297 81,099
United Kingdom. 22,570 26,401 90,365 89,344
Other (a) ..... 33,230 38,011 128,650 134,161
---------- ---------- ---------- ----------
Consolidated .. $ 423,001 $ 427,873 $1,464,971 $1,393,031
========== ========== ========== ==========
</TABLE>

(a) Other includes Sweden, Spain, Belgium, Germany, Austria, France, and
the Netherlands.

Long-lived assets for the Company's continuing operations in different
geographical regions is presented below (in thousands):

September 30, September 25,
2000 1999
-------- --------
United States.. $527,718 $543,043
Canada ........ 85,525 85,726
Mexico ........ 24,912 17,829
United Kingdom. 53,420 62,065
Other (a) ..... 66,665 77,793
-------- --------
Consolidated .. $758,240 $786,456
======== ========

(a) Other includes Sweden, Spain, Belgium, Germany, Austria, France, and
the Netherlands, and the Company's discontinued operations.

L. COMMITMENTS AND CONTINGENCIES:

See "PART II - OTHER INFORMATION, Item 1. Legal Proceedings." The
ultimate outcome of the legal proceedings to which the Company is a party will
not, in the opinion of the Company's management, based on the facts presently
known to it, have a material effect on the Company's consolidated financial
condition or future results of operations.

See also "PART I - FINANCIAL INFORMATION, Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations."

I-10
<PAGE> 12

COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

During the quarter ended July 1, 2000, the Company settled claims for
certain environmental matters related to discontinued operations for a total of
$20 million. Settlement proceeds will be paid to the Company in three
installments. The first installment of $7.5 million was received on June 30,
2000, with the second and third installments of $7.5 million and $5.0 million to
be received in June 2001 and June 2002, respectively. Of the total $20 million
settlement, the Company recorded the present value of the settlement as $7.0
million of additional environmental reserves, based on its assessment of
potential environmental exposures, and $6.6 million, net of income taxes, as
income from discontinued operations.

C&A Products has assigned leases related to real and personal property
of divested businesses. Although C&A Products has obtained releases from the
lessors of certain of these properties, C&A Products remains contingently liable
under most of the leases. C&A Products' future liability for these leases, in
management's opinion, based on the facts presently known to it, will not have a
material effect on the Company's consolidated financial condition or future
results of operations.

M. COMMON STOCKHOLDERS' DEFICIT:

Total comprehensive income (loss) for the quarters ended September 30,
2000 and September 25, 1999 was $(9.0) million and $1.3 million, respectively.
For the nine months ended September 30, 2000 and September 25, 1999,
comprehensive income (loss) was $6.8 million and $(13.6) million, respectively.
Activity in the common stockholders' deficit since December 25, 1999 is as
follows (in thousands):

<TABLE>
<CAPTION>
Current Year Other
Comprehensive Accumulated Accumulated Other Common Paid-In Treasury
Income Total Deficit Comprehensive Loss Stock Capital Stock
------------- --------- ----------- ------------------ --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 25, 1999 ....... $(151,121) $(641,117) $ (33,260) $ 705 $ 585,484 $ (62,933)
Comprehensive income:
Net income ................. $ 20,355 20,355 20,355 -- -- -- --
Other comprehensive income
(loss), net of tax:
Foreign currency
translations adjustments . (13,663) (13,663) -- (13,663) -- -- --
Pension equity adjustment .. 72 72 -- 72 -- -- --
---------
$ 6,764
=========
Compensation expense adjustment . 735 -- -- -- 735 --
Purchase of treasury stock
(26 shares) ................ (141) -- -- -- -- (141)
Exercise of stock options
(17 shares) ................ 58 -- -- -- (28) 86
--------- --------- --------- --------- --------- ---------
Balance at September 30, 2000 ...... $(143,705) $(620,762) $ (46,851) $ 705 $ 586,191 $ (62,988)
========= ========= ========= ========= ========= =========
</TABLE>

The accumulated balances and current period activity for each component
of Accumulated Other Comprehensive Loss are as follows (in thousands):

<TABLE>
<CAPTION>
Foreign Currency Pension Accumulated Other
Translation Equity Comprehensive
Adjustments Adjustment Loss
---------------- ---------- -----------------
<S> <C> <C> <C>
Balance at December 25, 1999.. $(32,203) $ (1,057) $(33,260)
Current period change ........ (13,663) 72 (13,591)
-------- -------- --------
Balance at September 30, 2000. $(45,866) $ (985) $(46,851)
======== ======== ========
</TABLE>

I-11
<PAGE> 13

COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

N. SIGNIFICANT SUBSIDIARY:

The Company conducts all of its operating activities through its
wholly-owned subsidiary, C&A Products. The following represents summarized
consolidated financial information of C&A Products and its subsidiaries for the
following periods (in thousands):

<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
---------------------------- ----------------------------
September 30, September 25, September 30, September 25,
2000 1999 2000 1999
(13 weeks) (13 weeks) (40 weeks) (39 weeks)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales ..................... $ 423,001 $ 427,873 $ 1,464,971 $ 1,393,031
Gross profit .................. 53,165 64,163 221,013 213,013
Income (loss) from continuing
operations .................. (3,700) (6,439) 14,435 1,538
Net income (loss) ............. (4,386) (6,439) 20,349 (7,312)
</TABLE>

September 30, December 25,
2000 1999
----------- -----------
Current assets.......... $ 456,911 $ 465,312
Noncurrent assets....... 839,021 883,524
Current liabilities..... 395,016 362,226
Noncurrent liabilities.. 1,042,140 1,135,174

Separate financial statements of C&A Products are not presented because
they would not be material to the holders of any debt securities of C&A Products
that have been or may be issued, there being no material differences between the
financial statements of C&A Products and the Company. The absence of separate
financial statements of C&A Products is also based upon the fact that any debt
of C&A Products issued, and the assumption that any debt to be issued, under the
Registration Statement on Form S-3 filed by the Company and C&A Products
(Registration No. 33-62665) is or will be fully and unconditionally guaranteed
by the Company.

O. NEWLY ISSUED ACCOUNTING STANDARDS:

In September 2000, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities",
which replaces SFAS No. 125, also titled "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities". SFAS No. 140 provides
accounting and reporting standards for transfers and servicing of financial
assets and extinguishments of liabilities. Those standards are based on
consistent application of a financial-components approach that focuses on
control. After a transfer of financial assets, an entity recognizes the
financial and servicing assets it controls and the liabilities it has incurred,
derecognizes financial assets when control has been surrendered, and
derecognizes liabilities when extinguished. SFAS No. 140 is effective for
recognition and reclassification of collateral and for disclosures relating to
securitization transactions and collateral for fiscal years ending on or after
December 15, 2000. The Company is currently analyzing the impact of SFAS No. 140
on its receivables facility discussed in Note G.

In September 1999, the Financial Accounting Standards Board's ("FASB's")
Emerging Issue Task Force ("EITF") reached a consensus regarding EITF Issue No.
99-5, "Accounting for Pre-Production Costs Related to Long-Term Supply
Arrangements". EITF No. 99-5 requires that design and development costs for
products to be sold under long-term supply arrangements be expensed as incurred,
and costs incurred for molds, dies and other tools that will be used in
producing the products under long-term supply arrangements be capitalized and
amortized over the shorter of the expected useful life of the assets or the term
of the supply arrangement. The consensus can be applied prospectively to costs
incurred after December 31, 1999 or as a cumulative effect of a change in
accounting principle as of the beginning of a company's fiscal year. The Company
adopted the provisions of EITF No. 99-5 on a

I-12
<PAGE> 14

COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

prospective basis on December 26, 1999. The adoption of EITF No. 99-5 did not
have a material effect on the consolidated financial position or the results of
operations of the Company. At September 30, 2000, the Company had assets of
approximately $7.2 million recognized pursuant to agreements that provide for
contractual reimbursement of pre-production design and development costs,
approximately $38.6 million (of which $34.1 million is reimbursable) for molds,
dies and other tools that are customer-owned and approximately $7.1 million for
molds, dies and other tools that the Company owns.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities". SFAS No. 133 establishes accounting and
reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or liability measured at its fair value. SFAS
No. 133 requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses to
offset related results on the hedged item in the income statement, and requires
that a company formally document, designate, and assess the effectiveness of
transactions that receive hedge accounting. In July 1999, the FASB issued SFAS
No. 137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133, an Amendment of FASB
Statement No. 133". Under SFAS No. 137, SFAS No. 133 is now effective for fiscal
years beginning after June 15, 2000. A company may also implement SFAS No. 133
as of the beginning of any fiscal quarter after issuance. SFAS No. 133 cannot be
applied retroactively. On June 15, 2000, the FASB issued SFAS No. 138,
"Accounting for Certain Derivative Instruments and Certain Hedging Activities -
An Amendment of FASB Statement No. 133," which provides additional guidance for
certain derivative instruments and hedging activities addressed in SFAS No. 133.
SFAS No. 138 shall be adopted concurrently with the adoption of SFAS No. 133.

The Company is in the process of implementing the appropriate systems
and processes to adopt these statements effective January, 2001. The statements
provide for the recognition of a cumulative adjustment for an accounting change,
as of the date of adoption. The amount of such adjustment, and the effect of
such statements on the Company's financial position and results of operations
during 2001, will depend in part on future derivative transactions entered into
prior to January 1, 2001, and the fair value of derivatives held as of such
date, and therefore is not determinable at this time. The adoption of SFAS Nos.
133 and 138 could increase volatility in earnings and other comprehensive
income.

In April 1998, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") 98-5, "Reporting on the Costs of
Start-up Activities". SOP 98-5 provides guidance on the financial reporting of
start-up costs and organization costs and requires that all non-governmental
entities expense the costs of start-up activities as these costs are incurred
instead of being capitalized and amortized. The Company adopted SOP 98-5 on
December 27, 1998. The initial impact of adopting SOP 98-5 resulted in a charge
of approximately $8.9 million, net of income taxes of $5.1 million, which has
been reflected as a cumulative effect of a change in accounting principle in the
accompanying consolidated statement of operations for the nine months ended
September 25, 1999.

I-13
<PAGE> 15

COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

RESULTS OF OPERATIONS

The Company's fiscal year ends on the last Saturday of December. The 2000 fiscal
year will consist of 53 weeks. In a 53-week year, the Company's policy is to
include the additional week in the first quarter of the year. As a result, the
quarter ended April 1, 2000 consisted of 14 weeks. The quarters ended September
30, 2000, July 1, 2000, September 25, 1999, June 26, 1999 and March 27, 1999 all
consisted of 13 weeks. Therefore, sales in all divisions and associated costs
and expenses were impacted by the longer reporting period in the first quarter
of fiscal 2000.

NET SALES: Net sales for the third quarter of 2000 decreased 1.1% to $423.0
million, down $4.9 million from the third quarter of 1999. For the nine months
ended September 30, 2000, net sales increased 5.2% to $1,465.0 million compared
to $1,393.0 million for the nine months ended September 25, 1999. Management
estimates that approximately $35.0 million of the year-to-date increase is due
to the inclusion of the additional week in the first quarter of 2000. Net sales
for the North American Interior Systems division during the quarter ended
September 30, 2000 were up approximately 2.5% to $266.5 million. The increase is
primarily attributable to increased sales at the division's plastics operations,
driven by the Cadillac DeVille, partially offset by reduced production of the
Ford Explorer. For the nine months ended September 30, 2000, net sales for the
Company's North American Interior Systems division were up 8.7% to $908.6
million. The year-to-date increase is due to strong production volumes primarily
during the first two quarters of the year and a favorable product mix. Net sales
for the European Automotive Interior Systems division during the quarter ended
September 30, 2000 decreased 13.4% to $55.8 million. For the nine months ended
September 30, 2000, net sales for the Company's European Automotive Interior
Systems division decreased 2.0% to $219.0 million. These decreases are primarily
due to the negative impact of foreign currency translation and a decline in
overall production during the third quarter of 2000. Net sales for the Specialty
Automotive Products division during the quarter ended September 30, 2000
decreased 2.7% to $100.7 million, primarily due to significantly lower volumes
of the Chrysler Sebring convertible, which is undergoing a model changeover. For
the nine months ended September 30, 2000, net sales for the Company's Specialty
Automotive Products division increased 1.2% to $337.4 million primarily due to
production volume increases in the fabrics business, offset by lower convertible
volumes.

Approximately 17% of the Company's year-to-date sales for 2000 were attributable
to products utilized in vehicles built outside North America, compared to 18% in
1999. The Company's North American content per vehicle was approximately $89 for
the nine months ended September 30, 2000, compared to an average of $88 for the
1999 fiscal year. The Company's European content per vehicle was approximately
$15 for the nine months ended September 30, 2000, compared to an average of $15
for the 1999 fiscal year.

GROSS MARGIN: For the third quarter of 2000, gross margin was 12.6%, down from
15.0% in the comparable 1999 period. This decrease is primarily due to the
impact of lower convertible volumes and costs associated with the relocation of
the Company's headliner business from Cramerton, North Carolina to another
fabrics facility. For the nine months ended September 30, 2000, gross margin was
15.1%, down from 15.3% in the comparable 1999 period. This decline is primarily
attributable to unfavorable convertible sales mix and headliner relocation costs
experienced in the third quarter of 2000, partially offset by increases
experienced in the first half of 2000 due to increased operating efficiencies
related to higher volume in North America and Europe, the benefits of the
restructuring program implemented in 1999 and 2000 and improved performance at
the Company's plastics facility in Manchester, Michigan.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Selling, general and
administrative expenses for the third quarter of 2000 decreased 11.2% to $33.4
million. This decrease is primarily attributable to one-time pension-related
actuarial benefits driven by the Company's restructuring program and tighter
expense controls in response to lower production volumes. For the nine months
ended September 30, 2000, selling, general and administrative expenses decreased
1.5% to $114.9 million. The decrease experienced in the third quarter of 2000
was partially offset by costs associated with product development for new
convertible top programs, costs incurred to establish the Company's new Product
Development Division and costs resulting from the establishment of headquarters
operations in Troy, Michigan and Wiesbaden, Germany. In addition, on a
year-to-year basis, selling, general and administrative expenses increased due
to the impact of the additional week in the first quarter of fiscal 2000. As a
percentage of sales, selling, general and administrative expenses were 7.9% and
8.8% for the third quarters of 2000 and 1999, respectively, and 7.8% and 8.4%
for the nine months ended September 30, 2000 and September 25, 1999,
respectively.

RESTRUCTURING CHARGE: During the third quarter of 1999, the Company recognized a
$15.3 million charge, consisting of a $4.4 million loss on the sale of the
Cramerton, North Carolina fabrics facility, a $5.0 million charge relating to
the termination of certain sales commission arrangements, a $0.7 million
impairment loss associated with the Homer,

I-14
<PAGE> 16

COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Michigan plastics facility, which was closed as part of the Reorganization, and
$5.2 million of severance costs associated with employee reductions in
connection with the Reorganization. The Company also recognized a $4.6 million
restructuring charge in the second quarter of 1999, principally representing
severance costs and a $0.5 million impairment loss related to the Homer,
Michigan plastics facility.

INTEREST EXPENSE: Interest expense, net of interest income of $1.1 million and
$0.6 million for the third quarter of 2000 and 1999, respectively, increased
$0.2 million to $23.2 million for the third quarter of 2000. The increase in
interest expense is primarily due to higher average interest rates during the
third quarter of 2000, partially offset by lower interest on the JPS Automotive
11 1/8% Senior Notes due 2001 (the "JPS Automotive Senior Notes"). The Company
repurchased $38 million principal amount of JPS Automotive Senior Notes during
the third quarter of 2000. Interest expense, net of interest income of $2.5
million and $2.0 million for the nine months ended September 30, 2000 and
September 25, 1999, respectively, increased $4.9 million to $72.7 million. The
increase in interest expense on a year-to-date basis is primarily attributed to
higher average interest rates and higher average debt balances than in the
comparative 1999 period. Also, on a year-to-date basis, interest expense
increased due to the impact of the additional week in the first quarter of
fiscal 2000.

LOSS ON SALE OF RECEIVABLES: The Company sells on a continuous basis, through
its Carcorp subsidiary, interests in a pool of accounts receivable. In
connection with the receivables sales, a loss of $1.7 million was recognized
during the third quarter of 2000, compared to a loss of $1.2 million for the
third quarter of 1999. The $0.5 million increase is primarily due to higher
interest rates, increased sales of eligible receivables under the facility and
hedging costs on non-U.S. dollar receivables. Losses of $7.5 million and $3.8
million were recognized for the nine months ended September 30, 2000 and
September 25, 1999, respectively. During the first quarter of 2000, the Company
entered into a new accounts receivable securitization arrangement, resulting in
a one-time expense for initial fees totaling $1.6 million. The remaining
year-to-date increase is due to higher interest rates and increased sales of
eligible receivables. The Company's prior securitization facility expired in
December, 1999.

OTHER EXPENSE (INCOME): The Company recognized other income of $0.6 million in
the third quarter of 2000, compared to other expense of $1.7 million in the
third quarter of 1999. During the third quarter of 2000, the Company recognized
foreign exchange gains on U.S./Canadian dollar hedges and transaction gains on
the Mexican peso. During the third quarter of 1999, the loss is primarily
attributable to amortization of premiums entered into by the Company's Canadian
operations to purchase U.S. dollars. For the nine months ended September 30,
2000, the Company recognized other expense of $0.9 million, compared to other
expense of $2.9 million in the comparable 1999 period. Foreign exchange losses
recognized on the Canadian dollar, Mexican peso and British pound sterling
during the first and second quarters were partially offset by the gains
recognized in the third quarter discussed above.

INCOME TAXES: The Company recognized an income tax benefit of $0.9 million in
the third quarter of 2000 compared to an income tax benefit of $8.1 million in
the third quarter of 1999. For the nine months ended September 30, 2000 the
Company recognized income tax expense of $10.5 million, compared to income tax
expense of $0.8 million in the comparable 1999 period. The Company's effective
tax rate was 20.1% and 55.6% in the third quarters of 2000 and 1999,
respectively, and 42.2% and 41.1% for the nine months ended September 30, 2000
and September 25, 1999, respectively. The percentage decrease in the Company's
reported tax rate for the third quarter of 2000 and the increase in the
Company's reported tax rate for the nine months ended September 30, 2000 are
primarily due to the impact of certain tax credits reported in the third quarter
of 1999, along with the effects of certain state taxes and non-deductible
goodwill, which do not fluctuate with income.

DISCONTINUED OPERATIONS: During the second quarter of fiscal 2000, the Company
settled environmental claims related to discontinued operations for a total of
$20 million. Of this amount, $6.6 million was recorded as income from
discontinued operations, net of income taxes of $4.4 million.

EXTRAORDINARY CHARGE: During the third quarter of 2000, the Company recognized
an extraordinary charge of $0.7 million in connection with the repurchase of $38
million principal amount of JPS Automotive Senior Notes on the market at prices
in excess of carrying values.

CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE: The Company adopted the
provisions of Statement of Position No. 98-5, "Reporting on the Costs of
Start-Up Activities" ("SOP 98-5") at the beginning of 1999. SOP 98-5 provides
guidance on the financial reporting of start-up costs and organization costs and
requires that all nongovernmental entities expense the costs of start-up
activities as these costs are incurred instead of being

I-15
<PAGE> 17

COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

capitalized and amortized. The initial impact of SOP 98-5 resulted in a charge
of $8.9 million, net of income taxes of $5.1 million.

NET INCOME (LOSS): The combined effect of the foregoing resulted in a net loss
of $4.4 million in the third quarter of 2000, compared to a net loss of $6.5
million in the third quarter of 1999. The Company recognized net income of $20.4
million for the nine months ended September 30, 2000 and a net loss of $7.7
million for the nine months ended September 25, 1999.

LIQUIDITY AND CAPITAL RESOURCES

The Company and its subsidiaries had cash and cash equivalents totaling
$31.7 million and $14.0 million at September 30, 2000 and December 25, 1999,
respectively. The Company had a total of $130.4 million of borrowing
availability under its credit arrangements as of September 30, 2000.
Availability as of September 30, 2000 has been reduced by outstanding letters of
credit of $17.3 million. The total was comprised of $105.1 million under the
revolving credit facility (including $52.3 million available to the Canadian
Borrowers, as hereinafter defined), and approximately $24.8 million under bank
demand lines of credit in Austria and Canada and a line of credit for certain
other European locations, and $.5 million available under the Receivables
Facility.

On May 28, 1998, the Company entered into new credit facilities
consisting of: (i) a senior secured term loan facility in the principal amount
of $100 million payable in quarterly installments until final maturity on
December 31, 2003 (the "Term Loan A Facility"); (ii) a senior secured term loan
facility in the principal amount of $125 million payable in quarterly
installments until final maturity on June 30, 2005 (the "Term Loan B Facility"
and, together with the Term Loan A Facility and the Term Loan C Facility, as
hereinafter defined, the "Term Loan Facilities"); and (iii) a senior secured
revolving credit facility in an aggregate principal amount of up to $250 million
terminating on December 31, 2003, of which $60 million (or the equivalent
thereof in Canadian dollars) is available to two of the Company's Canadian
subsidiaries (the "Canadian Borrowers"), and of which up to $50 million is
available as a letter of credit facility (the "Revolving Credit Facility" and
together with the Term Loan Facilities, the "Credit Agreement Facilities"). On
May 13, 1999, the Company closed on a senior term loan facility in the principal
amount of $100 million, payable in quarterly installments beginning in December
1999 through final maturity in December 2005 (the "Term Loan C Facility"). The
proceeds from the Term Loan C Facility were used to pay a $44.0 million special
dividend in May, 1999, repay amounts outstanding under the Company's Revolving
Credit Facility and for general corporate purposes.

At September 30, 2000, the Company had outstanding $71.3 million under
the Term Loan A Facility, $119.0 million under the Term Loan B Facility, $97.0
million under the Term Loan C Facility, and $127.7 million under the Revolving
Credit Facility (including $7.7 million borrowed by the Canadian Borrowers).

The Credit Agreement Facilities, which are guaranteed by the Company
and its U.S. subsidiaries (subject to certain exceptions), contain restrictive
covenants including maintenance of interest coverage and leverage ratios and
various other restrictive covenants which are customary for such facilities.
Effective March 8, 1999, the Company, in view of the decreased sales of
automotive fabrics and the General Motors strike in 1998, obtained an amendment
to the Credit Agreement Facilities primarily in order to modify the covenants
relating to interest coverage and leverage ratios throughout the existing terms
of the Credit Agreement Facilities. The amendment resulted generally in an
increase in the interest rates charged under the Credit Agreement Facilities.
For additional discussion of the Credit Agreement Facilities and related
restrictive covenants, see Note F to the Condensed Consolidated Financial
Statements and Note 10 to the Consolidated Financial Statements included in the
Company's Annual Report on Form 10-K for the year ended December 25, 1999 (the
"10-K").

In June 1996, the Company's wholly-owned subsidiary, C&A Products,
issued at face value $400 million principal amount of 11 1/2% Senior
Subordinated Notes due 2006 (the "Subordinated Notes"), which are guaranteed by
the Company. The Subordinated Notes indenture contains restrictive covenants
(including, among others, limitations on the incurrence of indebtedness, asset
dispositions and transactions with affiliates) which are customary for such
securities. These covenants are also subject to a number of significant
exceptions. The Company does not currently meet the Subordinated Notes
indenture's general test for the incurrence of indebtedness, and does not expect
to meet such test during the remainder of 2000. However, the Company expects all
its borrowing needs for the foreseeable future to be allowed under exceptions
for permitted indebtedness in the indenture. For additional discussion of the
Subordinated Notes, see Note 10 to the Consolidated Financial Statements
included in the 10-K.

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COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

At September 30, 2000, JPS Automotive had approximately $48.4 million
of indebtedness outstanding (including a premium of $0.3 million) related to the
JPS Automotive 11 1/8% Senior Notes due 2001 (the "JPS Automotive Senior
Notes"). During the quarter, $38.0 million principal amount of the JPS
Automotive Senior Notes were repurchased by JPS Automotive on the open market
and retired. The Company is operating JPS Automotive as a restricted subsidiary
under the Credit Agreement Facilities and the indenture governing the
Subordinated Notes. For additional discussion of the JPS Automotive Senior
Notes, see Note 10 to the Consolidated Financial Statements included in the
10-K.

On December 27, 1999, the Company entered into a new receivables
facility (the "New Receivables Facility"), replacing the Company's previous
receivables facility (the "Old Receivables Facility"). The New Receivables
Facility utilizes funding provided by commercial paper conduits sponsored by
three of the Company's lenders under its Credit Agreement Facilities. Carcorp
remains the purchaser of the Sellers' trade receivables, transferring rights to
collections on those receivables to the conduits. The conduits in turn issue
commercial paper, which is collateralized by those rights. The liquidity
facilities backing the New Receivables Facility have terms of 364 days,
renewable annually for up to five years.

The Company has equipment lease agreements with several lessors which,
subject to specific approval, provide availability of funding for operating
leases and sale-leasebacks as allowed in its other financing agreements. In the
quarter ended September 30, 2000, the Company made lease payments relating to
continuing operations of approximately $.1 million for machinery and equipment
sold and leased back under this master lease. The Company expects lease payments
for continuing operations under this master lease to be approximately $3.2
million during the remainder of fiscal 2000.

The Company's principal sources of funds are cash generated from
continuing operating activities, borrowings under the Credit Agreement
Facilities and the sale of receivables under the New Receivables Facility. Net
cash provided by the continuing operating activities of the Company was $28.0
million for the quarter ended September 30, 2000, compared to net cash used of
$9.0 million in the quarter ended September 25, 1999. Net cash provided by
continuing operating activities of the Company was $104.1 million for the nine
months ended September 30, 2000 compared to $32.5 million for the nine months
ended September 25, 1999. The increase in cash provided by continuing operating
activities for the quarter ended September 30, 2000, is primarily due to a
decrease in accounts receivable resulting from the timing of customer payments.
The increase in cash provided by operating activities for the nine months ended
September 30, 2000, is primarily due to the increase in income from continuing
operations, improved collections of accounts receivable resulting from a
compensation program implemented in 1999 which is based in part upon maximizing
cash flow and increasing asset utilization and the timing of customer payments,
the release of cash collateral (reflected in Other, net in the accompanying
consolidated statement of cash flows for the nine months ended September 30,
2000) associated with the Old Receivables Facility when it was replaced in the
first quarter of fiscal 2000, the decrease in tooling balances due to increased
billings partially offset by an increase in inventory related to program
launches in the fabrics and convertibles businesses.

The Company's principal uses of funds from operating activities and
borrowings for the next several years are expected to be to fund interest and
principal payments on its indebtedness, net working capital increases, income
tax payments, costs associated with the Company's previously divested businesses
and capital expenditures. At September 30, 2000, the Company had total
outstanding indebtedness of $868.4 million (excluding short-term borrowings and
approximately $17.3 million of outstanding letters of credit) at a weighted
average interest rate of 10.3% per annum.

The Company's Board of Directors authorized the expenditure of up to
$1.4 million in 2000 to repurchase shares of the Company's Common Stock at
management's discretion. The Company believes it has sufficient liquidity under
its existing credit arrangements to effect the repurchase program. The Company
spent approximately $140 thousand to repurchase shares during the nine months
ended September 30, 2000 and $1.8 million during the nine months ended September
25, 1999.

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COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Cash interest paid was $9.2 million and $9.7 million for the quarters
ended September 30, 2000 and September 25, 1999, respectively. Cash interest
paid was $57.6 million and $53.9 million for the nine months ended September 30,
2000 and September 25, 1999, respectively.

Due to the variable interest rates under the Credit Agreement
Facilities and the New Receivables Facility, the Company is sensitive to changes
in interest rates. Based upon amounts outstanding at September 30, 2000 a .5%
increase in each of LIBOR and Canadian bankers' acceptance rates (6.62% and
6.54%, respectively, at September 30, 2000) would impact interest costs by
approximately $2.1 million annually on the Credit Agreement Facilities and $0.6
million annually on the New Receivables Facility.

The current maturities of long-term debt primarily consist of the JPS
Automotive Senior Notes, the current portion of the Credit Agreement Facilities,
vendor financing, an industrial revenue bond and other miscellaneous debt. The
maturities of long-term debt of the Company's continuing operations during the
remainder of 2000 and for 2001, 2002, 2003 and 2004 are $7.0 million, $77.4
million, $32.8 million, $28.2 million and $181.5 million, respectively. The JPS
Automotive Senior Notes will mature in June, 2001. The Company plans to satisfy
the JPS Automotive Senior Notes obligation primarily with cash generated from
operations with a portion being refinanced. In addition, the Credit Agreement
Facilities provide for mandatory prepayments of the Term Loan Facilities with
certain excess cash flow of the Company, net cash proceeds of certain asset
sales or other dispositions by the Company, net cash proceeds of certain
sale/leaseback transactions and net cash proceeds of certain issuances of debt
obligations. The indenture governing the Subordinated Notes provides that in the
event of certain asset dispositions, C&A Products must apply net proceeds (to
the extent not reinvested in the business) first to repay Senior Indebtedness
(as defined, which includes the Credit Agreement Facilities) and then, to the
extent of remaining net proceeds, to make an offer to purchase outstanding
Subordinated Notes at 100% of their principal amount plus accrued interest. C&A
Products must also make an offer to purchase outstanding Subordinated Notes at
101% of their principal amount plus accrued interest if a Change in Control (as
defined) of the Company occurs. In addition, the indenture governing the JPS
Automotive Senior Notes requires JPS Automotive to apply the net proceeds from
the sale of assets of JPS Automotive to offer to purchase JPS Automotive Senior
Notes, to the extent not applied within 270 days of such asset sale to an
investment in capital expenditures or other long term tangible assets of JPS
Automotive, to permanently reduce senior indebtedness of JPS Automotive or to
purchase JPS Automotive Senior Notes in the open market.

The Company makes capital expenditures on a recurring basis for
replacements and improvements. As of September 30, 2000, the Company's
continuing operations had approximately $7.9 million in outstanding capital
expenditure commitments. The Company currently anticipates that its capital
expenditures for continuing operations for fiscal 2000 will be in the mid $60 to
$70 million range, a portion of which may be financed through leasing
arrangements. The Company's capital expenditures in future years will depend
upon demand for the Company's products and changes in technology.

The Company is sensitive to price movements in its raw materials supply
base. During the third quarter of 2000, oil prices have significantly increased.
Prices for most of the Company's other primary raw materials remained constant
with price levels at December 25, 1999. While the Company may not be able to
pass on future raw materials price increases to its customers, it believes that
a significant portion of the increased cost can be offset by continued results
of its value engineering/value analysis in conjunction with its major customers
and by continued reductions in the cost of off-quality products and processes.

The Company has significant obligations relating to postretirement,
casualty, environmental, lease and other liabilities of discontinued operations.
In connection with the sale and acquisition of certain businesses, the Company
has indemnified the purchasers and sellers for certain environmental
liabilities, lease obligations and other matters. In addition, the Company is
contingently liable with respect to certain lease and other obligations assumed
by certain purchasers and may be required to honor such obligations if such
purchasers are unable or unwilling to do so. On January 5, 2000, Imperial Home
Decor Group, Inc., which purchased Wallcoverings in March 1998, filed voluntary
petitions for protection under Chapter 11 of the U.S. Bankruptcy Code. The
Company is currently assessing the impact of that bankruptcy filing. Management
currently anticipates that the net cash requirements of its discontinued
operations will be approximately $5.7 million for the remainder of fiscal 2000.
However, because the requirements of the Company's discontinued operations are
largely a function of contingencies, it is possible that the actual net cash
requirements of the Company's discontinued operations could differ materially
from management's estimates. Management believes that the

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COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Company's cash needs relating to discontinued operations can be provided by
operating activities from continuing operations and by borrowings under its
credit facilities.

TAX MATTERS

At December 25, 1999, the Company had outstanding net operating loss
carryforwards ("NOLs") of approximately $268.1 million for Federal income tax
purposes. Substantially all of these NOLs expire over the period from 2008 to
2019. The Company also has unused Federal tax credits of approximately $18.9
million, $6.7 million of which expire during the period 2000 to 2019.

Future sales of common stock by the Company or its principal
shareholders, or changes in the composition of its principal shareholders, could
constitute a "change in control" that would result in annual limitations on the
Company's use of its NOLs and unused tax credits. Management cannot predict
whether such a "change in control" will occur. If such a "change in control"
were to occur, the resulting annual limitations on the use of NOLs and tax
credits would depend on the value of the equity of the Company and the amount of
"built-in gain" or "built-in loss" in the Company's assets at the time of the
"change in control", which cannot be known at this time.

Management has reviewed the Company's operating results for recent
years as well as the outlook for its continuing businesses in concluding it is
more likely than not that the net deferred tax assets of $86.0 million at
September 30, 2000 will be realized. A major goal of the Reorganization is to
lower the overall cost structure of the Company and thereby increase
profitability. These factors along with the timing of the reversal of its
temporary differences and the expiration dates of its NOLs were also considered
in reaching this conclusion. The Company's ability to generate future taxable
income is dependent on numerous factors, including general economic conditions,
the state of the automotive industry and other factors beyond management's
control. Therefore, there can be no assurance that the Company will meet its
expectation of future taxable income.

The valuation allowance at September 30, 2000 provides for certain
deferred tax assets that in management's assessment may not be realized due to
tax limitations on the use of such amounts or that relate to tax attributes that
are subject to uncertainty due to the long-term nature of their realization.

ENVIRONMENTAL MATTERS

The Company is subject to Federal, state and local environmental laws
and regulations that (i) affect ongoing operations and may increase capital
costs and operating expenses and (ii) impose liability for the costs of
investigation and remediation and otherwise relate to on-site and off-site
contamination. The Company's management believes that it has obtained, and is in
material compliance with, all material environmental permits and approvals
necessary to conduct its various businesses. Environmental compliance costs for
continuing businesses currently are accounted for as normal operating expenses
or capital expenditures of such business units, except for certain costs
incurred at acquired locations. Environmental compliance costs relating to
conditions existing at the time the locations were acquired are generally
charged to reserves established in purchase accounting. In the opinion of
management, based on the facts presently known to it, such environmental
compliance costs will not have a material adverse effect on the Company's
consolidated financial condition or future results of operations.

The Company is legally or contractually responsible or alleged to be
responsible for the investigation and remediation of contamination at various
sites. It also has received notices that it is a potentially responsible party
("PRP") in a number of proceedings. The Company may be named as a PRP at other
sites in the future, including with respect to divested and acquired businesses.
The Company is currently engaged in investigation or remediation at certain
sites. In estimating the total cost of investigation and remediation, the
Company has considered, among other things, the Company's prior experience in
remediating contaminated sites, remediation efforts by other parties, data
released by the United States Environmental Protection Agency, the professional
judgment of the Company's environmental experts, outside environmental
specialists and other experts, and the likelihood that other parties which have
been named as PRPs will have the financial resources to fulfill their
obligations at sites where they and the Company may be jointly and severally
liable. Under the theory of joint and several liability, the Company could be
liable for the full costs of investigation and remediation even if additional
parties are found to be responsible under the applicable laws. It is difficult
to estimate the total cost of investigation and remediation due to various
factors including incomplete information regarding particular sites and other
PRPs, uncertainty regarding the extent of environmental problems and the
Company's share, if any, of liability for such problems, the selection of
alternative compliance

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<PAGE> 21

COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

approaches, the complexity of environmental laws and regulations and changes in
cleanup standards and techniques. When it has been possible to provide
reasonable estimates of the Company's liability with respect to environmental
sites, provisions have been made in accordance with generally accepted
accounting principles. As of September 30, 2000, excluding sites at which the
Company's participation is anticipated to be de minimis or otherwise
insignificant or where the Company is being indemnified by a third party for the
liability, there are 23 sites where the Company is participating in the
investigation or remediation of the site, either directly or through financial
contribution, and 11 additional sites where the Company is alleged to be
responsible for costs of investigation or remediation. As of September 30, 2000,
the Company's estimate of its liability for these 34 sites, is approximately
$30.1 million. As of September 30, 2000, the Company has established reserves of
approximately $38.5 million for the estimated future costs related to all of its
known environmental sites. In the opinion of management, based on the facts
presently known to it, the environmental costs and contingencies will not have a
material adverse effect on the Company's consolidated financial condition or
future results of operations. However, there can be no assurance that the
Company has identified or properly assessed all potential environmental
liability arising from the activities or properties of the Company, its present
and former subsidiaries and their corporate predecessors.

SAFE HARBOR STATEMENT

This Report on Form 10-Q contains statements which, to the extent they
are not historical facts, constitute forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 (the "Safe Harbor Acts"). All forward-looking
statements involve risks and uncertainties. The forward-looking statements in
this Report on Form 10-Q are intended to be subject to the safe harbor
protection provided by the Safe Harbor Acts.

Risks and uncertainties that could cause actual results to vary
materially from those anticipated in the forward-looking statements included in
this Report on Form 10-Q include general economic conditions in the markets in
which the Company operates and industry-based factors such as possible declines
in the North American and European automobile and light truck builds, labor
strikes at the Company's major customers, changes in consumer preferences,
dependence on significant automotive customers, the level of competition in the
automotive supply industry, pricing pressure from automotive customers and, as
well as factors such as the substantial leverage of the Company and its
subsidiaries, limitations imposed by the Company's debt facilities, changes made
in connection with the integration of operations acquired by the Company and the
implementation of the global reorganization program. The Company's divisions may
also be affected by changes in the popularity of particular vehicle models or
particular interior trim packages or the loss of programs on particular vehicle
models and risks associated with conducting business in foreign countries. For a
discussion of certain of these and other important factors which may affect the
Company's operations, products and markets, see the Company's Securities and
Exchange Commission filings, including without limitation "ITEM 1. BUSINESS" and
"ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS" in the 10-K and above in this Form 10-Q and also see the
Company's other filings with the Securities and Exchange Commission.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

For the period ended September 30, 2000, the Company did not experience
any material changes from the quantitative and qualitative disclosures about
market risk presented in the 10-K.

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<PAGE> 22

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

There have been no material developments in legal proceedings involving
the Company or its subsidiaries since those reported in the Company's Report on
Form 10-K for fiscal year ended December 25, 1999.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) EXHIBITS.

Please note that in the following description of exhibits, the title of
any document entered into, or filing made, prior to July 7, 1994 reflects the
name of the entity a party thereto or filing, as the case may be, at such time.
Accordingly, documents and filings described below may refer to Collins & Aikman
Holdings Corporation, Collins & Aikman Group, Inc. or Wickes Companies, Inc., if
such documents and filings were made prior to July 7, 1994.

EXHIBIT
NUMBER DESCRIPTION
------- -----------
3(i).1 - Restated Certificate of Incorporation of Collins & Aikman
Corporation and Amendment thereto is hereby incorporated by
reference to Exhibit 3.1 of Collins & Aikman Corporation's Report
on Form 10-Q for the fiscal quarter ended June 26, 1999.

3(i).2 - Certificate of Elimination of Cumulative Exchangeable Redeemable
Preferred Stock of Collins & Aikman Corporation is hereby
incorporated by reference to Exhibit 3.3 of Collins & Aikman
Corporation's Report on Form 10-Q for the fiscal quarter ended
October 28, 1995.

3(ii) - By-laws of Collins & Aikman Corporation, as amended, are hereby
incorporated by reference to Exhibit 3.2 of Collins & Aikman
Corporation's Report on Form 10-K for the fiscal year ended
January 27, 1996.

Collins & Aikman Corporation agrees to furnish to the Commission
upon request in accordance with Item 601 (b)(4) (iii) (A) of
Regulation S-K copies of instruments defining the rights of
holders of long-term debt of Collins & Aikman Corporation or any
of its subsidiaries, which debt does not exceed 10% of the total
assets of Collins & Aikman Corporation and its subsidiaries on a
consolidated basis.

10.1 - Employment Agreement dated as of March 29, 2000 between Collins &
Aikman Products Co. and an executive officer is hereby
incorporated by reference to Exhibit 10.1 of Collins & Aikman
Corporation's Report on Form 10-Q for the fiscal quarter ended
April 1, 2000.

10.2 - Change in control agreement dated as of April 2000, between
Collins & Aikman Corporation and an executive officer is hereby
incorporated by reference to Exhibit 10.2 of Collins & Aikman
Corporation's Report on Form 10-Q for the fiscal quarter ended
July 1, 2000.

10.3 - Employment agreement dated as of April 1, 2000, between Collins &
Aikman Products Co. and an executive officer is hereby
incorporated by reference to Exhibit 10.3 of Collins & Aikman
Corporation's Report on Form 10-Q for the fiscal quarter ended
July 1, 2000.

10.4 - Change in control agreement dated as of April 1, 2000, between
Collins & Aikman Products Co. and an executive officer is hereby
incorporated by reference to Exhibit 10.4 of Collins & Aikman
Corporation's Report on Form 10-Q for the fiscal quarter ended
July 1, 2000.

10.5 - Service contract between Collins & Aikman Products GmbH and an
executive officer.

10.6 - Employment agreement dated as of August 1, 2000, between Collins &
Aikman Products Co. and an executive officer.

II-1
<PAGE> 23

10.7 - Change in control agreement dated as of August 1, 2000, between
Collins & Aikman Corporation and an executive officer.

10.8 - Employment agreement dated as of August 1, 2000, between Collins &
Aikman Products Co. and an executive officer.

10.9 - Change in control agreement dated as of August 1, 2000, between
Collins & Aikman Corporation and an executive officer.

10.10 - Settlement agreement dated as of April 27, 2000, between Collins &
Aikman Products Co. and an executive officer.

10.11 - Letter agreement dated as of July 13, 2000, between Collins &
Aikman Corporation and an executive officer.

10.12 - Letter agreement dated as of April 7, 2000, between Collins &
Aikman Corporation and an executive officer.

10.13 - Collins & Aikman Products Co. 2000 Executive Incentive
Compensation Plan is hereby incorporated by reference to Exhibit
10.5 of Collins & Aikman Corporation's Report on Form 10-Q for the
fiscal quarter ended July 1, 2000.

10.14 - 2000 Employee Stock Option Plan is hereby incorporated by
reference to Exhibit 10.6 of Collins & Aikman Corporation's Report
on Form 10-Q for the fiscal quarter ended July 1, 2000.

11 - Computation of Earnings Per Share.

27 - Financial Data Schedule.

(b) REPORTS ON FORM 8-K

During the quarter for which this Report on Form 10-Q is being filed, the
Company filed no reports on Form 8-K.

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<PAGE> 24

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Dated: November 14, 2000

COLLINS & AIKMAN CORPORATION
(Registrant)

By: /s/ Rajesh K. Shah
---------------------------------------------
Rajesh K. Shah
Chief Financial Officer and
Executive Vice President

(On behalf of the Registrant and as Principal
Financial and Chief Accounting Officer)