Dyersburg Corp, et al. – ‘S-4/A’ on 10/24/97

As of:  Friday, 10/24/97   ·   Accession #:  950144-97-11192   ·   File #s:  333-36273, -01, -02, -03, -04, -05, -06, -07, -08, -09, -10, -11, -12

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Pre-Effective Amendment to Registration of Securities Issued in a Business-Combination Transaction   —   Form S-4
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-4/A       Dyersburg Corp. Form S-4/A                           141    716K 
 2: EX-23.1     Consent of Ind. Auditors(Dyersburg)                    1      9K 
 3: EX-23.2     Consent of Independent Auditors(Aih Inc.)              1      8K 

S-4/A   —   Dyersburg Corp. Form S-4/A
Document Table of Contents

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 24, 1997

                                                      REGISTRATION NO. 333-36273

================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------- 

AMENDMENT NO. 1 

TO

FORM S-4
REGISTRATION STATEMENT
UNDER 
THE SECURITIES ACT OF 1933
--------------------- 

DYERSBURG CORPORATION 
(Exact name of Registrant as specified in its charter)

                                                                [Download Table]
                                                                                  
           TENNESSEE                         2257                   62-1363247    
(State or other jurisdiction of  (Primary Standard Industrial    (I.R.S. Employer 
 incorporation or organization)  Classification Code Number)   Identification No.)

1315 PHILLIPS STREET
DYERSBURG, TENNESSEE 38024
(901) 285-2323
(Address, including zip code, and telephone number, including area code, of 
Registrant's principal executive offices) 

SEE TABLE OF ADDITIONAL REGISTRANTS 
--------------------- 

WILLIAM S. SHROPSHIRE, JR.
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER, SECRETARY AND TREASURER
DYERSBURG CORPORATION 
1315 PHILLIPS STREET
DYERSBURG, TENNESSEE 38024
(901) 285-2323
(Name, Address, including zip code, and telephone number, including area code,
of agent for service) 
--------------------- 

Copies of all communications to:

                                                                [Download Table]
                          
     J. PAGE DAVIDSON     
  BASS, BERRY & SIMS PLC  
2700 FIRST AMERICAN CENTER
NASHVILLE, TENNESSEE 37238
      (615) 742-6200      

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

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

If the securities being registered on this form are being offered in  
connection with the formation of a holding company and there is compliance with 
General Instruction G, 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(d)
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.  [ ] ________________________                            
--------------------- 

    THIS REGISTRATION STATEMENT SHALL HEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR ON SUCH DATE AS 
THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(A), MAY DETERMINE.            

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

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TABLE OF ADDITIONAL REGISTRANTS(1)

                                                        [Enlarge/Download Table]

                                                       STATE OR OTHER   PRIMARY STANDARD      I.R.S.    
                                                      JURISDICTION OF      INDUSTRIAL        EMPLOYER   
                                                      INCORPORATION OR   CLASSIFICATION   IDENTIFICATION
EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER    ORGANIZATION      CODE NUMBER         NUMBER    
----------------------------------------------------  ----------------  ----------------  --------------
                                                                                                        
Dyersburg Fabrics Inc...............................  Tennessee               2257          62-0188460  
Dyersburg Fabrics Limited Partnership, I............  Tennessee               2257          62-1630540  
DFIC, Inc...........................................  Delaware                2257          51-0372183  
IQUE, Inc...........................................  Tennessee               2257          62-1641872  
IQUEIC, Inc.........................................  Delaware                2257          51-0374534  
IQUE Limited Partnership, I.........................  Tennessee               2257          62-1641874  
United Knitting Inc.................................  Tennessee               2257          62-1149522  
UKIC, Inc...........................................  Delaware                2257          51-0372181  
United Knitting Limited Partnership, I..............  Tennessee               2257          62-1630542  
AIH Inc.............................................  Delaware                2257          51-0369266  
Alamac Knit Fabrics, Inc............................  Delaware                2257          56-1830964  
Alamac Enterprises Inc..............................  Delaware                2257          51-0369389  

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

(1) The address, including zip code, and telephone number, including area code, 
   of the additional Registrants' principal executive offices is 1315 Phillips
   Street, Dyersburg, Tennessee, 38024, (901) 285-2323, except for DFIC, Inc.,
UKIC, Inc. and IQUEIC, Inc., whose address and telephone number is 900  
Market Street, Suite 200, Wilmington, DE 19801, (302) 421-7361.         

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[DYERSBURG CORPORATION LOGO]

PROSPECTUS                                                                      

OFFER TO EXCHANGE 
UP TO $125,000,000 OF 
9 3/4% SENIOR SUBORDINATED NOTES DUE 2007, SERIES B 
FOR ANY AND ALL OF THE OUTSTANDING
9 3/4% SENIOR SUBORDINATED NOTES DUE 2007 
OF
DYERSBURG CORPORATION 

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,

ON NOVEMBER 26, 1997, UNLESS EXTENDED.

THE 9 3/4% SENIOR SUBORDINATED NOTES DUE 2007, SERIES B 

WILL BE FULLY AND UNCONDITIONALLY GUARANTEED, JOINTLY AND SEVERALLY,

ON A SENIOR SUBORDINATED BASIS BY ALL OF THE COMPANY'S SUBSIDIARIES.

Dyersburg Corporation, a Tennessee corporation (the "Company"), hereby  
offers, upon the terms and subject to the conditions set forth in this          
Prospectus and the accompanying letter of transmittal (the "Letter of           
Transmittal" and, together with this Prospectus, the "Exchange Offer"), to      
exchange an aggregate of up to $125,000,000 principal amount of 9 3/4% Senior   
Subordinated Notes due 2007, Series B (the "Exchange Notes"), which have been   
registered under the Securities Act of 1933, as amended (the "Securities Act"), 
for an identical face amount of the issued and outstanding 9 3/4% Senior        
Subordinated Notes due 2007 (individually as the "144A Notes," "IAI Notes" and  
"Reg S Notes"; collectively as the "Series A Notes"; and, together with the     
Exchange Notes, the "Notes") of the Company from the Holders (as defined herein)
thereof in integral multiples of $1,000. As of the date of this Prospectus,     
there is $125,000,000 in aggregate principal amount of the Series A Notes       
outstanding. The terms of the Exchange Notes are identical in all material      
respects to the Series A Notes, except that the Exchange Notes have been        
registered under the Securities Act, and therefore will not bear legends        
restricting their transfer described in the Registration Rights Agreement (as   
defined herein), which provisions generally will terminate as to all of the     
Notes upon the consummation of the Exchange Offer. The Exchange Notes will be   
obligations of the Company evidencing the same indebtedness as the Series A     
Notes, and will be entitled to the benefits of the same Indenture (as defined   
herein). See "The Exchange Offer."                                              

  Interest on the Exchange Notes will be payable semi-annually in arrears on
March 1 and September 1 of each year, commencing on March 1, 1998. The Exchange 
Notes will mature on September 1, 2007. The Exchange Notes are redeemable at any
time on or after September 1, 2002 at the option of the Company, in whole or in 
part, at the redemption prices set forth herein, together with accrued and      
unpaid interest, if any, to the date of redemption. Upon the occurrence of a    
Change of Control (as defined herein), each holder of the Exchange Notes may    
require the Company to purchase all or a portion of such holder's Exchange Notes
at a purchase price equal to 101% of the principal amount thereof, together with
accrued and unpaid interest, if any, to the date of purchase. See "Description  
of the Exchange Notes -- Repurchase at the Option of Holders."                  

   The Exchange Notes will be unsecured senior subordinated obligations of the
Company and, as such, will be subordinated in right of payment to all existing  
and future senior indebtedness of the Company. The Exchange Notes will rank pari
passu in right of payment with all other existing and future senior subordinated
indebtedness, if any, of the Company, and senior in right of payment to all     
existing and future subordinated indebtedness, if any, of the Company. The      
Exchange Notes will be guaranteed, jointly and severally, on a senior           
subordinated basis (the "Guarantees") by all of the Company's subsidiaries (the 
"Guarantors" and, together with the Company, the "Issuers"). The Guarantees will
be unsecured senior subordinated obligations of the Guarantors and will be      
subordinated to all existing and future Senior Debt (as defined herein) of the  
Guarantors. See "Description of the Exchange Notes -- Subsidiary Guarantees." As
of July 5, 1997, on a pro forma basis after giving effect to the Transactions   
(as defined herein), the Company and the Guarantors would have had approximately
$86.9 million in aggregate principal amount of Senior Debt (as defined)         
outstanding.                                                                    
                                             (cover page continued on next page)

SEE "RISK FACTORS," BEGINNING ON PAGE 10, FOR A DISCUSSION OF CERTAIN 
FACTORS THAT SHOULD BE CONSIDERED BY PARTICIPANTS IN THE EXCHANGE OFFER.        
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. 

 UNTIL JANUARY 22, 1998 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT     
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.    

The Date of this Prospectus is October 24, 1997.

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    The Company will accept for exchange any and all validly tendered Series A
Notes on or prior to the Expiration Date (as defined herein). Tenders of Series 
A Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on 
the Expiration Date; otherwise such tenders are irrevocable. The Exchange Offer 
is not conditioned upon any minimum principal amount of Series A Notes being    
tendered for exchange. For certain conditions to the Exchange Offer, see "The   
Exchange Offer -- Conditions."                                                  

The Series A Notes were offered and sold on August 27, 1997 in a      
transaction not registered under the Securities Act in reliance upon an         
exemption from the registration requirements thereof. In general, the Series A  
Notes may not be offered or sold unless registered under the Securities Act,    
except pursuant to an exemption from, or in a transaction not subject to, the   
Securities Act.                                                                 

 The Exchange Notes are being offered hereby in order to satisfy certain
obligations of the Company contained in the Registration Rights Agreement. The  
Company has agreed to pay the expenses of the Exchange Offer. Based on          
interpretations by the staff of the Securities and Exchange Commission (the     
"Commission") set forth in no-action letters issued to third parties, the       
Company believes that the Exchange Notes issued pursuant to the Exchange Offer  
in exchange for Series A Notes may be offered for resale, resold or otherwise   
transferred by any person in whose name Series A Notes are registered on the    
books of the Company or any other person who has obtained a properly completed  
bond power from the registered holder (a "Holder") thereof (other than any such 
Holder that is an "affiliate" of the Company within the meaning of Rule 405     
promulgated under the Securities Act) without compliance with the registration  
and prospectus delivery provisions of the Securities Act, provided that such    
Exchange Notes are acquired in the ordinary course of such Holder's business and
such Holder does not intend to participate and has no arrangement or            
understanding with any person to participate in the distribution of such        
Exchange Notes. In some cases, certain broker-dealers may be required to deliver
a prospectus in connection with the resale of such Exchange Notes.              

  This Prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with any resale of Exchange Notes  
received in exchange for such Series A Notes where such Series A Notes were     
acquired by such broker-dealer for its own account as a result of market-making 
activities or other trading activities (other than Series A Notes acquired      
directly from the Company). The Company has agreed that it will make this       
Prospectus available to any broker-dealer for use in connection with any such   
resale.                                                                         

Prior to this Exchange Offer, there has been no public market for the 
Notes. If a market for the Exchange Notes should develop, the Exchange Notes    
could trade at a discount from their principal amount. The Company does not     
intend to list the Exchange Notes on any securities exchange nor does the       
Company intend to apply for quotation of the Exchange Notes on the NASDAQ       
National Market or other quotation system. The Initial Purchasers (as defined   
herein) have indicated to the Company that they intend to make a market in the  
Notes, but are not obligated to do so and such market-making activities may be  
discontinued at any time. As a result, no assurance can be given that an active 
trading market for the Exchange Notes will develop.                             

     The Exchange Notes issued pursuant to this Exchange Offer will be issued in
the form of a Global Exchange Note (as defined herein), which will be deposited 
with, or on behalf of, The Depository Trust Company (the "Depository" or "DTC") 
and registered in its name or in the name of Cede & Co., its nominee. Beneficial
interests in the Global Exchange Note representing the Exchange Notes will be   
shown on, and transfers thereof will be effected through, records maintained by 
DTC and its participants. Notwithstanding the foregoing, Series A Notes held in 
certificated form will be exchanged solely for Certificated Exchange Notes (as  
defined herein). After the initial issuance of the Global Exchange Note,        
Certificated Exchange Notes will be issued in exchange for the Global Exchange  
Note only on the terms set forth in the Indenture. See "Description of the      
Exchange Notes -- Book-Entry, Delivery and Form."                               

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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. The reports, proxy statements and other information filed by the    
Company with the Commission can be inspected and copied at the public reference 
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,   
Washington, D.C. 20549, and should be available at the Commission's Regional    
Offices at 7 World Trade Center, 13th Floor, New York, New York 10048 and 500   
West Madison Street, Suite 1400, Chicago, Illinois 60621 and at the offices of  
the New York Stock Exchange, 20 Broad Street, New York, New York 10005. Copies  
of such material can also be obtained from the Public Reference Section of the  
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed      
rates. In addition, the Commission maintains a Web site (http://www.sec.gov)    
that contains reports, proxy and information statements and other information   
regarding registrants that file electronically with the Commission.             

While any Series A Notes remain outstanding, the Company will make    
available, upon request, to any Holder and any prospective purchaser of Series A
Notes the information required pursuant to Rule 144A(d)(4) under the Securities 
Act during any period in which the Company is not subject to Section 13 or 15(d)
of the Exchange Act. Any such request should be directed to the Treasurer of the
Company at 1315 Phillips Street, Dyersburg, Tennessee 38024 (telephone number   
(901) 285-2323).                                                                

INCORPORATION OF DOCUMENTS BY REFERENCE 

The following documents are incorporated herein by reference:         

  1. The Company's Annual Report on Form 10-K for the year ended
September 28, 1996;                                                   

          2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
    January 4, 1997, April 5, 1997 and July 5, 1997, as amended, September 23,
1997; and                                                             

      3. The Company's Current Reports on Form 8-K dated April 17, 1997,
July 18, 1997, July 30, 1997 and September 2, 1997.                   

    All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the consummation of the        
Exchange Offer, shall be deemed to be incorporated by reference herein.         

Any statement contained in a document incorporated or deemed to be    
incorporated by reference herein shall be deemed to be modified or superseded   
for purposes of this Prospectus to the extent that a statement contained herein 
modifies or supersedes such statement. Any such statement so modified or        
superseded shall not be deemed, except as so modified or superseded, to         
constitute a part of this Prospectus.                                           

 UNTIL JANUARY 22, 1998 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT     
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.    
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN   
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR           
SUBSCRIPTIONS.                                                                  

     THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (EXCLUDING EXHIBITS TO SUCH       
DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE      
THEREIN) ARE AVAILABLE UPON WRITTEN OR ORAL REQUEST WITHOUT CHARGE BY EACH      
PERSON TO WHOM THIS PROSPECTUS IS DELIVERED FROM THE TREASURER OF THE COMPANY,  
1315 PHILLIPS STREET, DYERSBURG, TENNESSEE 38024 (TELEPHONE NUMBER (901)        
285-2323). IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST     
SHOULD BE MADE BY NOVEMBER 19, 1997 (FIVE BUSINESS DAYS PRIOR TO THE DATE ON    
WHICH A FINAL INVESTMENT DECISION MUST BE MADE).                                

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PROSPECTUS SUMMARY

  The following is a summary of certain information contained elsewhere in
this Prospectus. The following summary information is qualified in its entirety 
by reference to, and should be read in conjunction with, the more detailed      
information and the historical and pro forma financial statements and notes     
thereto appearing elsewhere in this Prospectus. References herein to the        
"Company" or "Dyersburg" refer to Dyersburg Corporation and its consolidated    
subsidiaries, and references herein to "Alamac" refer to AIH Inc. and its       
consolidated subsidiaries. Unless the context otherwise requires, all references
to a "fiscal" year of the Company refer to the fiscal year ended or ending on   
the Saturday closest to September 30 of such year.                              

THE COMPANY 

Dyersburg is a leading manufacturer of knit fleece, jersey and stretch
fabrics sold principally to domestic apparel producers. The Company's fleece    
fabrics are used to produce (i) outerwear apparel suitable for outdoor          
recreational activities, as well as casual sportswear, (ii) children's and      
women's sportswear, including sweatshirts and sweatpants, (iii) infant blanket  
sleepers and (iv) blankets and throws. The Company's jersey fabrics are used to 
produce a broad range of women's and children's lightweight apparel, including  
tops and shorts. The Company's stretch fabrics are used to produce a variety of 
activewear, including dancewear, swimwear, biking and running garments,         
recreational and casual sportswear and intimate apparel. The Company's          
manufacturing operations are vertically integrated, beginning with the          
conversion of fiber into yarn and knitting, dyeing and finishing the fabric in a
wide range of styles and colors. The Company's fabrics are used in apparel      
marketed by leading brands such as Calvin Klein, Columbia, Health-Tex, Liz      
Claiborne, Osh Kosh B'Gosh, Patagonia, Polo, Tommy Hilfiger and William Carter; 
and sold to catalog merchants and specialty stores such as L.L. Bean and Eddie  
Bauer, department stores and national chains. For the twelve months ended July  
5, 1997, the Company had net sales of $217.5 million and EBITDA (as defined     
herein) of $37.4 million.                                                       

 Dyersburg was formed in 1929 and, through the early 1990s, marketed its
fabrics to apparel manufacturers that supplied children's and women's apparel.  
In 1992, the Company began implementing a strategy of broadening its line of    
higher margin, value-added knit fabrics, including outerwear fleece and stretch 
fabrics, and targeting manufacturers of brand name apparel, catalog merchants,  
specialty stores, department stores and national chains. To support this shift  
in strategy, over the past several years the Company has substantially upgraded 
its manufacturing operations and has significantly increased its marketing,     
research and development and customer service capabilities.                     

Concurrently with the sale of the Series A Notes, Dyersburg acquired  
Alamac, a subsidiary of WestPoint Stevens Inc. ("WestPoint Stevens") (the       
"Acquisition"). Formed in 1946, Alamac is a leading manufacturer of interlock,  
jersey, pique and other knit fabrics sold primarily to domestic apparel         
producers. Alamac's interlock fabrics are used to produce men's, women's and    
children's turtlenecks and women's sportswear. Alamac's pique fabrics are used  
to produce a variety of casual wear, including golf and polo shirts. Similar to 
the Company's manufacturing operations, Alamac's manufacturing operations are   
vertically integrated. The Company believes the Acquisition will (i) expand its 
product line to include a complete assortment of circular knit fabrics, (ii)    
broaden its customer base, (iii) increase the Company's customer service        
capabilities, (iv) produce cost savings, (v) reduce the seasonality of the      
Company's sales and (vi) better position the Company to exploit industry trends,
such as the shift to casual dress. For the twelve months ended July 5, 1997,    
after giving pro forma effect to the Transactions, the Company would have had   
net sales of $453.3 million and EBITDA of $59.1 million. See "Unaudited Pro     
Forma Condensed Consolidated Financial Statements."                             
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BUSINESS STRATEGY 

The fundamental elements of the Company's business strategy include:  

Emphasizing Value-Added Fabrics.  Dyersburg's primary strategy is to  
develop higher margin, value-added knit fabrics targeting manufacturers of brand
name apparel, catalog merchants, specialty stores, department stores and        
national chains. The Company's value-added fabrics enable it to provide its     
customers with distinctive aesthetic and performance features, such as a broad  
variety of surface finishes, high comfort and durability and low shrinkage. As a
result of their better performance and technical design characteristics, these  
products generally have higher margins than the Company's traditional fabrics.  
To support the development, manufacture and sale of these products, the Company 
has significantly increased the resources devoted to research and development   
and marketing activities and has made significant investments in its            
manufacturing operations.                                                       

 Increasing Manufacturing Efficiencies.  The Company has invested in its
manufacturing operations to provide for the flexible production of its broad    
line of value-added fabrics, minimize off-quality production and reduce         
production costs. As a result of these investments, the Company has experienced 
a 20% increase in net sales per average number of employees from $122,000 per   
employee during fiscal 1994 to $146,000 per employee during the twelve months   
ended July 5, 1997, and a 26% reduction in the production of irregular and      
second-quality fabrics. Further, manufacturing efficiencies have enabled the    
Company to increase on-time deliveries from 83% in fiscal 1996 to 92% for the   
twelve months ended July 5, 1997.                                               

Offering High Levels of Customer Service.  The Company is committed to
being an industry leader in providing superior customer service. Key elements   
include electronic order execution, inventory management support and timely and 
complete order delivery. In addition, the Company is pursuing the management of 
complete garment production for customers through the formation of strategic    
alliances with contract apparel manufacturers.                                  

     Pursuing Strategic Acquisitions and Alliances.  Dyersburg continually seeks
strategic acquisitions and alliances that will enable it to add complementary   
product offerings and provide new customers and channels of distribution for the
Company's products. For example, in 1994 the Company acquired United Knitting,  
Inc. ("United Knitting"), which added stretch fabrics and lightweight lining    
fabrics to the Company's product line. In the first nine months of fiscal 1997, 
19.6% of the Company's net sales was generated from the sale of fabrics produced
by United Knitting. In addition to the Acquisition, the Company is currently    
pursuing other strategic initiatives. See "Recent Developments."                

THE ACQUISITION 

     On August 27, 1997, the Company acquired all of the capital stock of Alamac
pursuant to the terms of a Stock Purchase Agreement dated as of July 15, 1997   
with WestPoint Stevens (the "Stock Purchase Agreement"). The cash purchase price
(the "Purchase Price") paid in the Acquisition was $126.0 million, subject to   
adjustment for changes in working capital and certain other items related to    
pension assets and liabilities subsequent to December 31, 1996. Prior to        
consummation of the Acquisition, Alamac transferred all of its cash and assets  
related to its Whitmire, South Carolina spinning plant to WestPoint Stevens and,
accordingly, such assets were not acquired in the Acquisition. In addition,     
Alamac sold its accounts receivable and, as a result, the Company did not       
acquire Alamac's accounts receivable. Accordingly, the Company estimated that it
would be required to finance approximately $40.0 to $45.0 million of additional 
working capital. The Company used the net proceeds from the offering of Series A
Notes (the "Offering"), together with borrowings under a $160.0 million         
revolving credit and term loan agreement (the "New Credit Facility"), to finance
the Purchase Price and working capital needs, repay amounts outstanding under   
the Company's existing credit facility and certain other indebtedness and pay   
related fees and expenses. See "Use of Proceeds" and "Description of New Credit 
Facility." The Acquisition, such financings and the application of the net      
proceeds therefrom are herein collectively referred to as the "Transactions."   

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    The Company operates Alamac as a discrete division. The Company intends to
integrate Alamac's sales and marketing personnel and other resources with the   
Company's existing operations to establish coordinated product development,     
marketing and customer service across its product lines for its combined        
customer base. The Company also intends to consolidate general and              
administrative activities, where appropriate, to eliminate redundancies and     
exploit economies of scale. In addition, the Company intends to invest in       
Alamac's manufacturing operations to improve Alamac's manufacturing             
productivity.                                                                   

The Company believes that the Acquisition will enhance its competitive
position and business prospects based primarily on the following benefits:      

Expanded Product Line and Customer Base.  The Acquisition will        
significantly expand the Company's line of value-added fabrics, including the   
addition of patterns, yarn-dyed fabrics and knit collars. Yarn-dyed fabrics can 
be produced in an unlimited variety of stripes and patterns, enabling Alamac to 
produce fabrics used in a broad line of value-added products not produced by the
Company, including golf and polo shirts and uniforms. Alamac's fabrics are sold 
to a number of customers not currently served by the Company, particularly for  
use in menswear products. The Company believes the expanded customer base and   
the increased breadth of its product offerings following the Acquisition will   
create opportunities for the combined sales forces of the Company and Alamac to 
market to new customers and substantial cross-selling opportunities to market to
existing customers.                                                             

   Cost Savings.  The Company believes it can achieve operating cost savings
at Alamac by eliminating certain duplicative functions and achieving            
efficiencies in administration and sales and marketing. The Company also        
believes it can realize additional manufacturing efficiencies by upgrading      
Alamac's manufacturing operations. The Company believes these improvements will 
significantly increase Alamac's manufacturing flexibility and productivity while
reducing operating costs.                                                       

Raw Material Purchasing Leverage.  As a result of the Acquisition, the
Company will more than double its purchases of polyester fiber. The Company     
believes this purchasing leverage will enhance the Company's ability to obtain  
this raw material at more favorable prices.                                     

Reduced Seasonality of the Company's Sales.  The Company's sales have 
historically had a seasonal pattern, with approximately 63.0% of its sales in   
fiscal 1996 occurring during its third and fourth fiscal quarters. The          
Acquisition will reduce this seasonality as Alamac's product offerings do not   
result in any significant seasonality in its business. After giving pro forma   
effect to the Acquisition, net sales for each of the four fiscal quarters in    
fiscal 1996 would have been 20.7%, 23.4%, 29.3% and 26.6%, respectively, of     
total net sales in such year.                                                   

 Greater Critical Mass.  The Acquisition will significantly increase the
Company's revenue base. After giving pro forma effect to the Acquisition, the   
Company's net sales for the twelve months ended July 5, 1997 would have been    
$453.3 million. The Company believes that its increased size, marketing         
resources, production capacity and product offerings will create additional     
marketing and other growth opportunities.                                       

RECENT DEVELOPMENTS 

    On May 5, 1997, Polysindo Hong Kong Limited, a Hong Kong corporation under
common control with P.T. Polysindo Eka Perkasa and PT. Texmaco Jaya             
(collectively, "Texmaco"), acquired from certain shareholders of the Company    
3,000,000 shares, or approximately 22.8%, of the Company's outstanding common   
stock. Texmaco is a vertically integrated polyester chemical and textile        
manufacturer based in Jakarta, Indonesia. For the year ended December 31, 1996, 
Texmaco had operating revenue of $588.1 million. Management believes that       
Texmaco's investment in the Company will enhance the Company's manufacturing    
expertise, potential customer base and distribution capabilities, especially in 
the growing Asian markets where Dyersburg currently does not have a presence.   
For example, the Company and Texmaco are discussing the possibility of a joint  
venture in Indonesia to manufacture outerwear fleece for distribution in Asia;  
however, there can be no assurance that any such joint venture will be formed.  
See "Risk Factors -- Relationship with Texmaco."                                
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THE OFFERING

THE SERIES A NOTES.........  The Series A Notes were sold by the Company in the 
                            Offering on August 27, 1997, and were subsequently
                          resold to (i) Qualified Institutional Buyers (as
                         defined herein) pursuant to Rule 144A under the
                  Securities Act, (ii) other institutional
                    "accredited investors" (as defined in Rule
                         501(a)(1), (2), (3) or (7) under the Securities
                   Act) that executed and delivered a letter
                           containing certain representations and agreements
                            or, (iii) outside the United States in reliance on
                           Regulation S under the Securities Act in a manner
                            exempt from registration under the Securities Act.

REGISTRATION RIGHTS                                                             
AGREEMENT..................  In connection with the Offering, the Company       
                         entered into the Registration Rights Agreement,
                            which grants Holders of the Series A Notes certain
                        exchange and registration rights. The Exchange
                        Offer is intended to satisfy such exchange and
                             registration rights, which generally terminate upon
                 the consummation of the Exchange Offer.

THE EXCHANGE OFFER

SECURITIES OFFERED.........  $125,000,000 in aggregate principal amount of      
                           9 3/4% Senior Subordinated Notes due 2007, Series
B.                    

THE EXCHANGE OFFER.........  $1,000 principal amount of the Exchange Notes in   
                             exchange for each $1,000 principal amount of Series
                         A Notes. As of the date hereof, $125,000,000 in
                         aggregate principal amount of Series A Notes is
                          outstanding. The Company will issue the Exchange
                   Notes to Holders on or promptly after the
                          Expiration Date. The terms of the Exchange Notes
                     are substantially identical in all material
                             respects (including principal amount, interest rate
                          and maturity) to the terms of the Series A Notes
                         for which they may be exchanged pursuant to the
                            Exchange Offer, except that the Exchange Notes are
                            freely transferable by holders thereof (other than
                         as provided herein), and are not subject to any
                   covenant regarding registration under the
                         Securities Act. See "The Exchange Offer." Other
                           than compliance with applicable federal and state
                             securities laws, including the requirement that the
                             Registration Statement be declared effective by the
                            Commission, there are no material federal or state
                        regulatory requirements to be complied with in
             connection with the Exchange Offer.

INTEREST PAYMENTS..........  The Exchange Notes will bear interest from August  
                        27, 1997, the date of issuance of the Series A
                            Notes, or the most recent interest payment date to
                        which interest on such Series A Notes has been
                           paid, whichever is later. Accordingly, Holders of
                            Series A Notes that are accepted for exchange will
                             not receive interest on such Series A Notes that is
                            accrued but unpaid at the time of tender, but such
                        interest will be payable on the first interest
                 payment date after the Expiration Date.

MINIMUM CONDITION..........  The Exchange Offer is not conditioned upon any     
                        minimum aggregate principal amount of Series A
            Notes being tendered for exchange.

EXPIRATION DATE............  5:00 p.m., New York City time, on November 26, 1997
                         unless the Exchange Offer is extended, in which
                          case the term "Expiration Date" means the latest
                      date and time to which the Exchange Offer is
extended.             

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EXCHANGE DATE..............  The date of acceptance for exchange of the Series A
                            Notes will be the first business day following the
Expiration Date.      

WITHDRAWAL RIGHTS..........  Tenders may be withdrawn at any time prior to 5:00 
                           p.m., New York City time, on the Expiration Date.
                            See "The Exchange Offer -- Withdrawal of Tenders."

ACCEPTANCE OF SERIES A                                                          
NOTES AND DELIVERY OF                                                           
EXCHANGE NOTES...........  The Company will accept for exchange any and all 
                          Series A Notes that are properly tendered in the
                          Exchange Offer prior to 5:00 p.m., New York City
                          time, on the Expiration Date. The Exchange Notes
                       issued pursuant to the Exchange Offer will be
                           delivered promptly following the Expiration Date.
                          See "The Exchange Offer -- Terms of the Exchange
Offer."               

CONDITIONS TO THE EXCHANGE                                                      
 OFFER....................  The Exchange Offer is subject to certain customary
                             conditions, which may be waived by the Company. See
             "The Exchange Offer -- Conditions."

PROCEDURES FOR TENDERING                                                        
 SERIES A NOTES...........  To tender pursuant to the Exchange Offer, a Holder
                       must complete, sign and date the accompanying
                             Letter of Transmittal, or a facsimile thereof, have
                          the signatures therein guaranteed if required by
                             instruction 4 of the Letter of Transmittal and mail
                             or otherwise deliver such Letter of Transmittal, or
                          such facsimile, together with the Series A Notes
                     and any other required documentation to the
                           Exchange Agent (as defined herein) at the address
                            set forth herein prior to 5:00 p.m., New York City
                         time, on the Expiration Date. See "The Exchange
                         Offer -- Procedures for Tendering" and "Plan of
                   Distribution." By executing the Letter of
                        Transmittal, each Holder will represent to the
                             Company that, among other things, the Holder or the
                          person receiving such Exchange Notes, whether or
                         not such person is the Holder, is acquiring the
                           Exchange Notes in the ordinary course of business
                        and that neither the Holder nor any such other
                  person intends to participate or has any
                         arrangement or understanding with any person to
                          participate in the distribution of such Exchange
                    Notes. In lieu of physical delivery of the
                             certificates representing Series A Notes, tendering
                             Holders may transfer Series A Notes pursuant to the
                        procedure for book-entry transfer as set forth
                     under "The Exchange Offer -- Procedures for
Tendering."           

SPECIAL PROCEDURES FOR                                                          
BENEFICIAL OWNERS..........  Any beneficial owner whose Series A Notes are      
                        registered in the name of a broker, commercial
                             bank, trust company or other nominee and who wishes
                             to tender in the Exchange Offer should contact such
                      registered holder promptly and instruct such
                        registered holder to tender on such beneficial
                            owner's behalf. If such beneficial owner wishes to
                            tender on such beneficial owner's own behalf, such
                        beneficial owner must, prior to completing and
                            executing the Letter of Transmittal and delivering
                     the Series A Notes, either make appropriate
                            arrangements to register ownership of the Series A
                           Notes in such beneficial owner's name or obtain a
                           properly completed bond power from the registered
                          holder. The transfer of registered ownership may
                   take considerable time. See "The Exchange
             Offer -- Procedures for Tendering."
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GUARANTEED DELIVERY                                                             
PROCEDURES.................  Holders of Series A Notes who wish to tender their 
                         Series A Notes and whose Series A Notes are not
                           immediately available or who cannot deliver their
                          Series A Notes, the Letter of Transmittal or any
                   other documents required by the Letter of
                           Transmittal to the Exchange Agent (or comply with
                            the requirements for book-entry transfer) prior to
                        the Expiration Date must tender their Series A
                    Notes according to the guaranteed delivery
                        procedures set forth in "The Exchange Offer --
          Guaranteed Delivery Procedures."

FEDERAL INCOME TAX                                                              
CONSEQUENCES.............  The issuance of the Exchange Notes to Holders    
                            pursuant to the terms set forth in this Prospectus
                            will not constitute an exchange for federal income
                           tax purposes. Consequently, no gain or loss would
                      be recognized by Holders upon receipt of the
                         Exchange Notes. See "Certain Federal Income Tax
              Consequences of the Exchange Offer."

USE OF PROCEEDS............  There will be no proceeds to the Company from the  
                             exchange of Series A Notes pursuant to the Exchange
Offer.                

EXCHANGE AGENT.............  State Street Bank and Trust Company is serving as  
                             exchange agent (the "Exchange Agent") in connection
                    with the Exchange Offer. See "The Exchange
   Offer -- Exchange Agent."
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SUMMARY OF TERMS OF THE EXCHANGE NOTES

     The form and terms of the Exchange Notes are the same as the form and terms
of the Series A Notes (which they replace) except that (i) the Exchange Notes   
have been registered under the Securities Act and, therefore, will not bear     
legends restricting the transfer thereof, and (ii) the holders of Exchange Notes
generally will not be entitled to further registration rights under the         
Registration Rights Agreement, which rights generally will be satisfied when the
Exchange Offer is consummated. The Exchange Notes will evidence the same debt as
the Series A Notes and will be entitled to the benefits of the indenture        
pursuant to which the Series A Notes were issued (the "Indenture"). See         
"Description of the Exchange Notes."                                            

SECURITIES OFFERED.........  $125,000,000 in aggregate principal amount of      
                           9 3/4% Senior Subordinated Notes due 2007, Series
B.                    

MATURITY...................  September 1, 2007.                                 

INTEREST...................  The Exchange Notes will bear interest at the rate  
                       of 9 3/4% per annum, payable semi-annually in
                          arrears on March 1 and September 1 of each year,
      commencing on March 1, 1998.

GUARANTEES.................  The Exchange Notes will be guaranteed by all of the
                          Company's present and future domestic Restricted
Subsidiaries.         

RANKING....................  The Exchange Notes will be general unsecured       
                             obligations of the Company and will be subordinated
                        in right of payment to all existing and future
                         Senior Debt of the Company. As of July 5, 1997,
                            after giving pro forma effect to the Transactions,
                        the Company would have had approximately $86.9
                             million of Senior Debt outstanding, including $79.0
                         million of outstanding borrowings under the New
                         Credit Facility. In addition, the Company would
                         have had $41.8 million of additional borrowings
                  available under the New Credit Facility.

OPTIONAL REDEMPTION........  Except as set forth below, the Exchange Notes will 
                        not be redeemable at the option of the Company
                     prior to September 1, 2002. Thereafter, the
                             Exchange Notes will be subject to redemption at any
                           time at the option of the Company, in whole or in
                          part, at the redemption prices set forth herein,
                         plus accrued and unpaid interest and Liquidated
                             Damages, if any, thereon to the redemption date. In
                           addition, at any time prior to September 1, 2000,
                            the Company may redeem up to an aggregate of $25.0
                            million in principal amount of Exchange Notes at a
                            redemption price equal to 109.75% of the principal
                          amount thereof, plus accrued and unpaid interest
                        and Liquidated Damages, if any, thereon to the
                            redemption date, with the net cash proceeds of one
                         or more public offerings of common stock of the
                           Company, provided that at least $100.0 million in
                    principal amount of Exchange Notes remains
                     outstanding immediately following each such
redemption.           

CHANGE OF CONTROL..........  In the event of a Change of Control, the Company   
                             will be required to make an offer to each holder of
                         Exchange Notes to repurchase all or any part of
                            such holder's Exchange Notes at a repurchase price
                             equal to 101% of the principal amount thereof, plus
                             accrued and unpaid interest and Liquidated Damages,
                 if any, thereon to the repurchase date.

COVENANTS..................  The Indenture contains certain covenants that,     
                      among other things, limit the ability of the
                          Company and its Restricted Subsidiaries to incur
                   additional Indebtedness (as defined), pay
                             dividends, repurchase Equity Interests (as defined)
                         or make other Restricted Payments (as defined),
                            create Liens (as defined), enter into transactions
with Affiliates (as   
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                             defined), sell assets or enter into certain mergers
                     and consolidations. See "Description of the
Exchange Notes."      

EXCHANGE OFFER,                                                                 
REGISTRATION RIGHTS........  In the event that any changes in law or the        
                        applicable interpretations of the staff of the
                            Commission do not permit the Issuers to effect the
                  Exchange Offer, or if the Exchange Offer
                          Registration Statement is not declared effective
                       within 90 days or consummated within 120 days
                             following the original issue of the Series A Notes,
                   or upon the request of any of the Initial
                            Purchasers, or if any holder of the Series A Notes
                           is not permitted by applicable law to participate
                           in the Exchange Offer or elects to participate in
                       the Exchange Offer but does not receive fully
                          tradable Exchange Notes pursuant to the Exchange
                           Offer, the Issuers will use their best efforts to
                           cause a shelf registration statement with respect
                         to the resale of the Series A Notes (the "Shelf
                             Registration Statement") to become effective within
                             120 days following the original issue of the Series
                          A Notes (or within 30 days of the request of any
                  Initial Purchaser) and to keep the Shelf
                        Registration Statement effective for up to two
                    years from the date the Shelf Registration
                            Statement is declared effective by the Commission.

                      The interest rate on the Notes is subject to
                             increase under certain circumstances if the Issuers
                            are not in compliance with their obligations under
                             the Registration Rights Agreement. See "Description
                       of the Exchange Notes -- Registration Rights;
Liquidated Damages."  

LACK OF PRIOR MARKET FOR                                                        
THE EXCHANGE NOTES.........  The Exchange Notes will be new securities for which
                           there is currently no established trading market.
                             The Company does not intend to apply for listing of
                       the Exchange Notes on any national securities
                            exchange or for quotation of the Exchange Notes on
                            any automated dealer quotation system. The Company
                         has been advised by the Initial Purchasers that
                       they presently intend to make a market in the
                    Exchange Notes, although they are under no
                             obligation to do so and may discontinue any market-
                       making activities at any time without notice.
                          Accordingly, no assurance can be given as to the
                          liquidity of the trading market for the Exchange
                       Notes or that an active public market for the
                           Exchange Notes will develop. If an active trading
                             market for the Exchange Notes does not develop, the
                          market price and liquidity of the Exchange Notes
                          may be adversely affected. If the Exchange Notes
                             are traded, they may trade at a discount from their
                         initial offering price, depending on prevailing
                            interest rates, the market for similar securities,
                          the performance of the Company and certain other
                         factors. See "Risk Factors -- Absence of Public
         Market for the Exchange Notes."

RISK FACTORS

See "Risk Factors," beginning on page 10, for a discussion of certain 
factors that should be considered by holders of Series A Notes before deciding  
to tender Series A Notes in the Exchange Offer.                                 
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SUMMARY FINANCIAL DATA

     The following table sets forth summary financial data for each of the three
fiscal years in the period ended September 28, 1996, for the nine months ended  
June 29, 1996 and as of and for the nine and twelve months ended July 5, 1997.  
The historical data for each of the three fiscal years in the period ended      
September 28, 1996 have been derived from audited financial statements of the   
Company which are included herein. The historical data for the nine months ended
June 29, 1996 and as of and for the nine and twelve months ended July 5, 1997   
have been derived from unaudited financial statements of the Company which, in  
the opinion of management, include all adjustments, consisting only of normal   
recurring adjustments, necessary for a fair presentation of the information. The
historical data for the nine months ended July 5, 1997 do not purport to be     
indicative of results to be expected for the full fiscal year. The pro forma    
data have been derived from the historical financial statements of the Company  
and Alamac and give pro forma effect to the Transactions as if they had occurred
on October 1, 1995, in the case of the statement of operations, other and       
operating data, and July 5, 1997, in the case of the balance sheet data. The    
following information is qualified by reference to, and should be read in       
conjunction with, "Capitalization," "Unaudited Pro Forma Condensed Consolidated 
Financial Statements," "Management's Discussion and Analysis of Financial       
Condition and Results of Operations" and the historical financial statements of 
the Company and Alamac and related notes thereto included elsewhere herein.     

                                                        [Enlarge/Download Table]

                                                                                                              PRO FORMA            
                                                                                                    ------------------------------ 
                                                                                          TWELVE                 NINE      TWELVE  
                                  FISCAL YEAR ENDED                 NINE MONTHS ENDED     MONTHS                MONTHS     MONTHS  
                      ------------------------------------------   -------------------    ENDED                 ENDED      ENDED   
                      OCTOBER 1,   SEPTEMBER 30,   SEPTEMBER 28,   JUNE 29,   JULY 5,    JULY 5,     FISCAL    JULY 5,    JULY 5,  
                         1994          1995            1996          1996       1997       1997       1996       1997       1997   
                      ----------   -------------   -------------   --------   --------   --------   --------   --------   -------- 
                                                     (DOLLARS IN THOUSANDS, EXCEPT OPERATING DATA)                                 
                                                                                                                                   
STATEMENT OF                                                                                                                       
  OPERATIONS DATA:                                                                                                                 
Net sales...........   $180,520      $199,413        $195,866      $136,574   $158,214   $217,506   $417,885   $341,942   $453,314 
Cost of sales.......    139,754       159,245         152,884       108,290    120,677    165,271    351,413    282,211    373,682 
Gross profit........     40,766        40,168          42,982        28,284     37,537     52,235     66,472     59,731     79,632 
Selling, general and                                                                                                               
  administrative                                                                                                                   
  expenses..........     16,223        17,447          20,707        14,418     18,538     24,827     36,091     28,558     38,773 
Operating income....     24,543        22,721          22,275        13,866     18,999     27,408     30,381     31,173     40,859 
OTHER DATA:                                                                                                                        
EBITDA (1)..........   $ 33,173      $ 32,722        $ 31,848      $ 21,117   $ 26,717   $ 37,448   $ 48,013   $ 45,068   $ 59,126 
Depreciation and                                                                                                                   
  amortization......     10,533        12,030          11,602         8,773      9,228     12,057     19,661     15,405     20,284 
Capital                                                                                                                            
  expenditures......     14,278        12,816          11,778        10,777      5,685      6,686     16,776      9,804     11,319 
Ratio of EBITDA to                                                                                                                 
  interest expense                                                                                                                 
  (2)...............                                                                                     2.0x       2.6x       2.5x
OPERATING DATA:                                                                                                                    
Net sales per                                                                                                                      
  average number of                                                                                                                
  employees (in                                                                                                                    
  thousands)........   $    122      $    131        $    135      $     94   $    106   $    146                                  
Average number of                                                                                                                  
  employees.........      1,476         1,520           1,456         1,451      1,499      1,491                                  
Average selling                                                                                                                    
  price per pound of                                                                                                               
  fabric sold.......   $   3.54      $   3.79        $   4.03      $   4.01   $   4.27   $   4.21                                  
Total pounds of                                                                                                                    
  fabric (in                                                                                                                       
  millions).........       51.0          52.6            48.6          34.0       36.7       51.3                                  

                                                                [Download Table]

                                                              AS OF JULY 5, 1997 
                                                             --------------------
                                                              ACTUAL    PRO FORMA
                                                             --------   ---------
                                                                 (DOLLARS IN     
                                                                  THOUSANDS)     
                                                                                 
BALANCE SHEET DATA:                                                              
Working capital............................................. $ 57,346   $ 71,361 
Property, plant and equipment, net..........................   65,685    149,656 
Total assets................................................  205,367    356,395 
Long-term obligations (including current portion)...........   75,837    211,895 
Shareholders' equity........................................   96,189     95,389 

------------------------------                                                  
(1) EBITDA represents income before interest and amortization of debt costs,    
federal and state income taxes, depreciation and amortization and       
   extraordinary items. In fiscal 1995, EBITDA also excludes the write-down of
fixed assets. EBITDA is generally considered to provide information     
 regarding a company's ability to service and/or incur debt. EBITDA should
    not be considered in isolation or as a substitute for net income, cash flows
  from operations or other consolidated income or cash flow data prepared in
   accordance with generally accepted accounting principles or as a measure of
a company's profitability or liquidity.                                 
(2) Interest expense includes the amortization of debt costs.                   

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RISK FACTORS

In addition to the other information set forth and incorporated by    
reference herein, Holders of Series A Notes should carefully consider the       
following information in evaluating the Company and its business before deciding
to tender the Series A Notes in the Exchange Offer. The information contained   
and incorporated by reference herein contains forward-looking statements that   
involve a number of risks and uncertainties. A number of factors, including     
those discussed below, could cause results to differ materially from those      
anticipated by such forward-looking statements. In addition, such               
forward-looking statements are necessarily dependent upon assumptions, estimates
and data that may be incorrect or imprecise. Accordingly, any forward-looking   
statements included or incorporated by reference herein do not purport to be    
predictions of future events or circumstances and may not be realized.          
Forward-looking statements can be identified by, among other things, the use of 
forward-looking terminology such as "believes," "expects," "may," "will,"       
"should," "seeks," "pro forma" or "anticipates," or the negative thereof, or    
other variations thereon or comparable terminology, or by discussions of        
strategy or intentions. The risk factors set forth below are generally          
applicable to the Series A Notes as well as the Exchange Notes.                 

SUBSTANTIAL LEVERAGE                                                            

     The Company has substantial indebtedness and, as a result, significant debt
service obligations. As of July 5, 1997, after giving pro forma effect to the   
Transactions, the Company would have had approximately $211.9 million of        
long-term indebtedness (including current portion, but excluding an estimated   
$40.0 to $45.0 million anticipated to be required to finance working capital    
needs following the Acquisition), which would have represented 69.0% of its     
total capitalization, and would have had approximately $41.8 million of         
additional borrowings available under the New Credit Facility. See              
"Capitalization." In addition, the Indenture and the Company's other debt       
instruments allow the Company to incur additional indebtedness under certain    
circumstances. The Company's ability to make payments with respect to the       
Exchange Notes and to satisfy its other debt obligations will depend on its     
future operating performance, which will be affected by prevailing economic     
conditions and financial, business and other factors, certain of which are      
beyond the Company's control.                                                   

 Upon the issuance of the Series A Notes, the Company's interest expense
increased compared to prior years. The Company believes, based on current       
circumstances, that the Company's cash flow, together with available borrowings 
under the New Credit Facility, will be sufficient to permit the Company to meet 
its operating expenses and to service its debt requirements as they become due  
for the foreseeable future. Significant assumptions underlie this belief,       
including, among other things, that the Company will succeed in implementing its
business strategy and that there will be no material adverse developments in the
business, liquidity or capital requirements of the Company. If the Company is   
unable to service its indebtedness, it will be required to adopt alternative    
strategies, which may include actions such as reducing or delaying capital      
expenditures, selling assets, restructuring or refinancing its indebtedness or  
seeking additional equity capital. There can be no assurance that any of these  
strategies could be effected on satisfactory terms.                             

The degree to which the Company is leveraged could have important     
consequences to holders of the Exchange Notes, including: (i) the Company's     
ability to obtain additional financing in the future for working capital,       
capital expenditures, acquisitions or general corporate purposes may be         
impaired, (ii) a substantial portion of the Company's cash flows from operations
may be dedicated to the payment of principal and interest on its indebtedness,  
thereby reducing the funds available to the Company for its operations, (iii)   
certain of the Company's indebtedness contain financial and other restrictive   
covenants, including those restricting the incurrence of additional             
indebtedness, the creation of liens, the payment of dividends, sales of assets  
and minimum net worth requirements, (iv) certain of the Company's borrowings are
and will continue to be at variable rates of interest which exposes the Company 
to the risk of greater interest rates and (v) the Company may be more leveraged 
than certain of its competitors, which may place the Company at a relative      
competitive disadvantage and make the Company more vulnerable to changes in the 
industry and changing economic conditions. As a result of the Company's level of
indebtedness, its financial capacity to respond to market conditions,           
extraordinary capital needs and other factors may be limited.                   

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RESTRICTIONS IMPOSED BY TERMS OF INDEBTEDNESS                                   

  The Indenture governing the terms of the Exchange Notes contains certain
covenants limiting, subject to certain exceptions, the incurrence of additional 
indebtedness, the payment of dividends, the redemption of capital stock, the    
making of certain investments, the issuance of capital stock of subsidiaries,   
the creation of liens and other restrictions affecting the Company's            
subsidiaries, the issuance of guarantees, transactions with affiliates, asset   
sales and certain mergers and consolidations. A breach of any of these covenants
could result in an event of default under the Indenture. In addition, the New   
Credit Facility and the instruments governing the Company's other indebtedness  
contain other more restrictive covenants and require the Company to satisfy     
certain financial tests. The Company's ability to comply with such covenants and
to satisfy such financial tests may be affected by events beyond its control. A 
breach of any of these covenants could result in an event of default under the  
New Credit Facility. In the event of a default under the New Credit Facility,   
the lenders thereunder could elect to declare all amounts borrowed, together    
with accrued interest, to be immediately due and payable, and the lenders under 
the New Credit Facility could terminate all commitments thereunder. In addition,
a default under the New Credit Facility or the instruments governing the        
Company's other indebtedness could constitute a cross-default under the         
Indenture and any instruments governing the Company's other indebtedness, and a 
default under the Indenture could constitute a cross-default under the New      
Credit Facility and any instruments governing the Company's other indebtedness. 
In the event of a default under the New Credit Facility or other Senior Debt of 
the Company, the subordination provisions of the Indenture may restrict payments
with respect to the Exchange Notes. See " -- Subordination," "Description of the
Exchange Notes -- Certain Covenants" and "Description of New Credit Facility."  

SUBORDINATION                                                                   

The payment of principal of and interest on, and any premium or other 
amounts owing in respect of, the Exchange Notes is subordinate to the prior     
payment in full of all existing and future Senior Debt of the Company, including
all amounts owing under the New Credit Facility. As of July 5, 1997, after      
giving pro forma effect to the Transactions, the aggregate amount of such Senior
Debt of the Company would have been $86.9 million, including secured debt       
outstanding under the New Credit Facility. Similarly, the payment of amounts due
under guarantees of the Exchange Notes is subordinate to the prior payment in   
full of all existing and future Senior Debt of the Guarantors, including all    
amounts owing pursuant to the Guarantors' guarantees of amounts outstanding     
under the New Credit Facility. Consequently, in the event of a bankruptcy,      
liquidation, dissolution, reorganization or similar proceeding with respect to  
the Company or any of the Guarantors, assets of the Company or such Guarantor,  
as the case may be, will be available to pay obligations under the Exchange     
Notes or the Guarantee of such Guarantor, as the case may be, only after all of 
its Senior Debt has been paid in full, and there can be no assurance that there 
will be sufficient assets to pay amounts due on all or any of the Exchange Notes
or Guarantees, as the case may be. In addition, under certain circumstances, the
Company and the Guarantors may be prohibited by the Indenture from paying       
amounts due in respect of the Exchange Notes or the Guarantees, or from         
purchasing, redeeming or otherwise acquiring Exchange Notes, if a payment or    
non-payment default exists with respect to certain Senior Debt. See "Description
of the Exchange Notes -- Subordination" and "Description of the Exchange        
Notes -- Subsidiary Guarantees."                                                

RISKS RELATING TO THE ACQUISITION                                               

The Acquisition significantly increased the size of the Company's     
operations, which will substantially increase the demands placed upon the       
Company's management, including demands resulting from the need to integrate the
accounting systems, management information systems and other operations of      
Alamac with those of the Company. Successful integration of Alamac's operations 
will depend primarily on the Company's ability to manage effectively Alamac's   
manufacturing operations and to eliminate redundancies and excess costs. The    
success of the Company's integration of Alamac may depend on the retention of   
certain current Alamac management. Although the Company intends to retain such  
employees, there can be no assurance that such individuals will remain with the 
Company following the Acquisition. The integration of Alamac may result in      
unforeseen difficulties that require a disproportionate amount of management's  
attention and the                                                               

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Company's resources. There can be no assurance that the Company will be able to 
integrate effectively the operations of Alamac. Failure to integrate effectively
the operations of the acquired business with those of the Company would have a  
material adverse effect on the Company.                                         

Additionally, the Company's strategy includes pursuing strategic      
acquisitions that complement the Company's existing product offerings. Any such 
acquisition will also involve risks, including the possible increase in the     
Company's indebtedness, the possible inability to integrate the operations of   
the acquired business, the expenses incurred in connection with the acquisition,
the diversion of management's attention from other business concerns and the    
potential loss of key employees of the acquired business. There can be no       
assurance that the Company will be able to make any such acquisitions or, if    
made, that the Company will be able to integrate effectively the operations of  
the acquired business.                                                          

CYCLICAL AND COMPETITIVE NATURE OF TEXTILE INDUSTRY                             

    Demand for textile products, including those offered by the Company, tends
to fluctuate with the general business cycle of the United States economy. In   
addition, the popularity, supply and demand for particular textile products may 
change significantly from year to year based on prevailing fashion trends and   
other factors. These factors have contributed to fluctuations in the sales and  
profitability of certain textile products and in the Company's results of       
operations. A decline in the demand for textile products, an increase in the    
supply of textile products due to expansion of capacity within the domestic or  
foreign textile industry, changes in fashion trends or deteriorating economic   
conditions could have a material adverse effect on the Company's results of     
operations and financial condition.                                             

The textile industry is highly competitive. The Company's competitors 
include large, vertically integrated textile companies and numerous smaller     
companies. Increases in domestic capacity and imports of foreign-made textile   
and apparel products are a source of significant competition. Competition in the
form of imported textile and apparel products, pricing strategies of domestic   
competitors and the proliferation of newly styled fabrics competing for fashion 
acceptance have been factors affecting the Company's business environment. The  
primary competitive factors in the textile industry are product styling and     
differentiation, quality, price, manufacturing flexibility, delivery time and   
customer service. The importance of these factors is determined by the needs of 
particular customers and the characteristics of particular products. The failure
of the Company to compete effectively with respect to any of these key factors  
or to keep pace with rapidly changing markets could have a material adverse     
effect on the Company's business. See "Business -- Competition."                

 The Company's sales growth and improved operating performance in recent
periods is attributable in part to increased sales of value-added knit fabrics  
that have produced higher profit margins than the Company's traditional lines of
products. The Company's future success will depend in part on its ability to    
continue to develop new products. There can be no assurance that the Company    
will be successful in developing or marketing such products or broadening its   
customer base. See "Business -- Products."                                      

RAW MATERIAL PRICE VOLATILITY                                                   

    The costs of the Company's raw materials fluctuate significantly from time
to time due to cyclical price fluctuations, changes in supply and demand, market
disturbances and changes in the prices of petroleum (the principal raw material 
in the production of acrylic and polyester) and cotton. While the Company       
continually strives to reduce its raw material costs, such efforts may not      
always be sufficient to offset price increases in these raw materials. Moreover,
no assurance can be given that the Company will be able to pass any cost        
increases on to its customers. In an effort to minimize the effects of raw      
material price volatility, the Company contractually commits to purchases up to 
nine months in advance. The Company has not historically engaged in hedging     
transactions with respect to raw materials purchases but may do so in the       
future. Failure to engage in such hedging transactions may result in increased  
raw material price volatility. There can be no assurance that, in the event the 
Company engages in hedging transactions with respect to raw materials purchases 
in the future, such transactions would ameliorate raw material price volatility 
or that such transactions would not result in trading losses. Although the      
Company believes that sources of its principal raw materials will continue to be
adequate to meet requirements and that alternative sources are available, it is 
possible that                                                                   

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events beyond its control could have an adverse effect on the cost or           
availability of fiber supplies. See "Business -- Raw Materials."                

DEPENDENCE ON MANAGEMENT                                                        

  The Company is dependent upon the services of its executive officers for
management of the Company. The loss or interruption of the continued full-time  
services of certain of these executives could have a material adverse effect on 
the Company, and there can be no assurance that the Company would be able to    
find replacements with equivalent skills or experience. The success of the      
Company's integration of Alamac may depend on the retention of certain current  
Alamac management. Although the Company intends to retain such employees, there 
can be no assurance that such individuals will remain with the Company following
the Acquisition.                                                                

RELATIONSHIP WITH TEXMACO                                                       

   On May 5, 1997, Texmaco acquired from certain shareholders of the Company
3,000,000 shares, or approximately 22.8%, of the Company's outstanding common   
stock. In connection with such purchase, Texmaco stated its intention to acquire
additional shares of the Company's common stock so that it would own a majority 
of the common stock prior to November 5, 1998. On April 8, 1997, the Company and
Texmaco entered into an agreement pursuant to which, among other things, Texmaco
has certain preemptive rights to acquire equity securities of the Company and   
has the right to designate three persons to serve on the Company's Board of     
Directors. By virtue of its ownership in the Company and representation on the  
Company's Board of Directors, Texmaco will be in a position to exert substantial
influence on the business policies of the Company. The acquisition of a         
controlling interest in the Company by Texmaco would not constitute a Change of 
Control under the terms of the Indenture.                                       

Texmaco has stated that it acquired the shares of common stock for the
purpose of forming a business relationship with the Company. The Company and    
Texmaco are discussing the possible formation of a joint venture to manufacture 
outerwear fleece fabric in Indonesia for distribution in Asia. There is         
currently no agreement as to the terms of the Company's participation in such a 
joint venture, including any capital contribution required of the Company. Any  
capital contribution by the Company may increase its indebtedness under the New 
Credit Facility or otherwise. There can be no assurance that the joint venture  
will be formed, and the Company is unable to predict the effect of any such     
joint venture or other business relationship with Texmaco on the Company's      
results of operations or liquidity.                                             

GOVERNMENT POLICY; IMPORT REGULATIONS                                           

The domestic textile market is subject to various U.S. governmental   
policies affecting raw material costs and product supply. In addition, the      
policies of foreign governments may, directly or indirectly, affect the domestic
market. Because U.S. textile companies are generally prohibited from importing  
cotton, the Company must purchase its cotton in the domestic market. From time  
to time prior to 1991, price imbalances between world and domestic cotton prices
existed. A series of U.S. legislative initiatives has resulted in the reduction 
of the Company's effective cotton costs to near world levels. Because the       
availability and cost of cotton are affected by U.S. agricultural policies, the 
Company may experience increased cotton costs that cannot be entirely passed on 
to its customers.                                                               

     The extent of import protection afforded by the U.S. government to domestic
textile producers has been, and is likely to remain, subject to considerable    
domestic political deliberation. In view of the labor cost advantages and the   
number of foreign producers of textile products that compete with certain of the
Company's products, substantial elimination of import protection for domestic   
textile manufacturers could have a material adverse effect on the Company's     
business. In January 1995, a new multilateral trade organization, the World     
Trade Organization ("WTO"), was formed by the members of the General Agreement  
on Tariffs and Trade ("GATT") to replace GATT. This new body has set forth the  
mechanisms by which world trade in textiles and clothing will be progressively  
liberalized with the elimination of quotas and the reduction of duties. The     
implementation began in January 1995 with the phasing out of quotas and the     

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reduction of duties to take place over a ten-year period. The selection of      
products at each phase is made by each importing country and must be drawn from 
each of the four main textile groups: yarns, fabrics, made-up textiles and      
apparel. As it implements the WTO mechanisms, the U.S. government is negotiating
bilateral trade agreements with developing countries (which are generally       
exporters of textile products) that are members of the WTO to get them to reduce
their tariffs on imports of textiles and apparel. The elimination of quotas and 
the reduction of tariffs under the WTO may result in increased imports of       
certain textile products and apparel into North America. These factors could    
make the Company's products less competitive against low cost imports from third
world countries. See "Business -- Competition."                                 

    The North American Free Trade Agreement ("NAFTA") among Canada, Mexico and
the United States, which became effective January 1, 1994, has created the      
world's largest free-trade zone. The agreement contains safeguards that were    
sought by the U.S. textile industry, including a rule of origin requirement that
products be processed in one of the three countries in order to benefit from    
NAFTA. NAFTA will phase out all trade restrictions and tariffs on textiles and  
apparel among the three countries. There can be no assurance that the removal of
these barriers to trade will not have a material adverse effect on the Company's
results of operations and financial condition. The Company also competes with   
companies from non-NAFTA countries. Governmental or regulatory changes with     
respect to non-NAFTA competitors could expose the Company to increased          
competition. See "Business -- Competition."                                     

RISK OF ENVIRONMENTAL LIABILITY; OTHER GOVERNMENTAL REGULATIONS                 

  The Company is subject to federal, state and local laws, regulations and
ordinances that (i) govern activities or operations that may have adverse       
environmental effects, such as discharges to air and water, as well as storing, 
handling and disposal practices for solid and hazardous wastes and (ii) impose  
liability for the costs of cleaning up, and certain damages resulting from,     
sites of past spills, disposals or other releases of hazardous materials        
(together, "Environmental Laws"). In particular, under applicable Environmental 
Laws, the Company may be responsible for remediation of environmental conditions
and may be subject to associated liabilities (including liabilities resulting   
from lawsuits brought by private litigants) relating to its facilities and the  
land on which its facilities are situated, regardless of whether the Company    
leases or owns the facilities or land in question and regardless of whether such
environmental conditions were created by the Company or by a prior owner or     
tenant. Each of the facilities of Alamac acquired in connection with the        
Acquisition also is subject to such Environmental Laws. In connection with the  
Acquisition, the Company conducted an environmental investigation of Alamac's   
facilities. As a result of such investigation, the Company identified           
environmental contamination at the Alamac facilities that will require          
remediation activities. The Company estimates that the cost of such remediation 
activities will range from approximately $3.5 million to $5.0 million. Pursuant 
to the Stock Purchase Agreement, WestPoint Stevens agreed to pay 75% of any     
losses occurring within three years of the closing of the Acquisition for       
matters identified in the Company's environmental investigation or arising as a 
result of a breach of WestPoint Stevens' representations and warranties in      
respect of environmental matters up to $10.0 million and 67% of such losses in  
excess of $10.0 million and up to $20.0 million. WestPoint Stevens will not be  
obligated to indemnify the Company for any such losses in excess of $20.0       
million. In addition, WestPoint Stevens agreed to indemnify the Company without 
regard to time or dollar limitation for losses resulting from third-party claims
relating to the identified environmental contamination. See "The Acquisition."  
No assurance can be given that the costs to remediate any environmental         
contamination will not exceed the estimated range or that WestPoint Stevens will
have sufficient liquidity to satisfy any claim for indemnification made by the  
Company. In addition, there can be no assurance that any failure to comply, or  
compliance in the future, with such Environmental Laws will not have a material 
adverse effect on the Company's business, financial condition or results of     
operations. See "Business -- Governmental Regulation."                          

 The operations of the Company are also governed by laws and regulations
relating to workplace safety and worker health which, among other things,       
establish cotton dust, formaldehyde, asbestos and noise standards and regulate  
the use of hazardous chemicals in the workplace. There can be no assurance that 
compliance with the foregoing environmental or health and safety laws and       
regulations will not adversely affect the Company's operations. The Company     
cannot predict what environmental or health and safety legislation or           
regulations will be enacted in the future or how existing or future laws or     
regulations will be                                                             

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enforced, administered or interpreted, nor can it predict the amount of future  
expenditures which may be required in order to comply with any such             
environmental or health and safety laws or regulations. See                     
"Business -- Governmental Regulation."                                          

POTENTIAL FAILURE TO MAKE PAYMENT UPON A CHANGE OF CONTROL                      

 Upon the occurrence of a Change of Control, each holder of the Exchange
Notes may require the Company to purchase all or a portion of such holder's     
Exchange Notes at a purchase price of 101% of the principal amount of the       
Exchange Notes, together with accrued and unpaid interest and Liquidated        
Damages, if any, to the date of purchase. In such circumstances, the Company may
be required to (i) repay all or a portion of the outstanding principal of, and  
pay any accrued interest on, its Senior Debt, including indebtedness under the  
New Credit Facility or (ii) obtain any requisite consent from its lenders to    
permit the repurchase of the Exchange Notes. If the Company is unable to repay  
all of such indebtedness or is unable to obtain the necessary consents, the     
Company may be unable to offer to repurchase the Exchange Notes, which would    
constitute an Event of Default under the Indenture. There can be no assurance   
that the Company will have sufficient funds available at the time of any Change 
of Control to make any debt payment (including repurchases of the Exchange      
Notes) as described above or that the Company would be able to refinance its    
outstanding indebtedness in order to permit it to repurchase the Exchange Notes 
or, if such refinancing were to occur, that such financing would be on terms    
favorable to the Company. See "Description of the Exchange Notes -- Repurchase  
at the Option of Holders -- Change of Control."                                 

     The events that constitute a Change of Control under the Indenture may also
be events of default under the New Credit Facility or other Senior Debt of the  
Company. Such events may permit the holders under such debt instruments to      
reduce the borrowing base thereunder or accelerate the debt and, if the debt is 
not paid, to enforce security interests on, or commence litigation that could   
ultimately result in a sale of, substantially all the assets of the Company,    
thereby limiting the Company's ability to raise cash to repurchase the Exchange 
Notes and to receive the benefit of the Change of Control provisions by the     
holders of the Exchange Notes.                                                  

ABSENCE OF PUBLIC MARKET FOR THE EXCHANGE NOTES                                 

    The Exchange Notes are being offered to the holders of the Series A Notes.
The Series A Notes were offered and sold in August 1997 (i) to "Qualified       
Institutional Buyers" (as defined in Rule 144A under the Securities Act), (ii)  
to other institutional "accredited investors" (as defined in Rule 501(a)(1),    
(2), (3) or (7) under the Securities Act) and (iii) outside the United States in
reliance on Regulation S under the Securities Act and are eligible for trading  
in the Private Offering, Resales and Trading through Automated Linkages         
("PORTAL") market.                                                              

The Exchange Notes will be a new class of securities for which there  
currently is no established trading market. Although the Exchange Notes will    
generally be permitted to be resold or otherwise transferred by nonaffiliates of
the Company without compliance with the registration requirements under the     
Securities Act, the Company does not intend to apply for listing of the Exchange
Notes on any national securities exchange or for quotation of the Exchange Notes
on any automated dealer quotation system. Although the Initial Purchasers have  
informed the Company that they currently intend to make a market in the Exchange
Notes, the Initial Purchasers are not obligated to do so, and any such          
market-making may be discontinued at any time without notice. The liquidity of  
any market for the Exchange Notes will depend upon the number of holders of the 
Exchange Notes, the interest of securities dealers in making a market in the    
Exchange Notes and other factors. Accordingly, there can be no assurance as to  
the development or liquidity of any market for the Exchange Notes. If an active 
trading market for the Exchange Notes does not develop, the market price and    
liquidity of the Exchange Notes may be adversely affected. If the Exchange Notes
are traded, they may trade at a discount from their initial offering price,     
depending upon prevailing interest rates, the market for similar securities, the
performance of the Company and certain other factors. The liquidity of, and     
trading markets for, the Exchange Notes may also be adversely affected by       
general declines in the market for non-investment grade debt. Such declines may 
adversely affect the liquidity of, and trading markets for, the Exchange Notes  
independent of the financial performance of, or prospects for, the Company.     

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EXCHANGE OFFER PROCEDURES                                                       

    Issuance of the Exchange Notes for Series A Notes pursuant to the Exchange
Offer will be made only after timely receipt by the Exchange Agent of such      
Series A Notes, a properly completed, duly executed Letter of Transmittal and   
all other required documents. Therefore, Holders desiring to tender their Series
A Notes in exchange for Exchange Notes should allow sufficient time to ensure   
timely delivery. The Company is under no duty to give notification of defects or
irregularities with respect to the tenders of Series A Notes for exchange. Any  
Series A Notes that are not tendered or are tendered but not accepted will,     
following the consummation of the Exchange Offer, continue to be subject to the 
existing restrictions upon transfer thereof and, upon consummation of the       
Exchange Offer, the registration rights under the Registration Rights Agreement 
generally will terminate. In addition, any Holder who tenders pursuant to the   
Exchange Offer for the purpose of participating in a distribution of the        
Exchange Notes may be deemed to have received restricted securities and, if so, 
will be required to comply with the registration and prospectus delivery        
requirements of the Securities Act in connection with any resale. Each          
broker-dealer that receives Exchange Notes for its own account in exchange for  
Series A Notes, where such Series A Notes were acquired by such broker-dealer as
a result of market-making activities or other trading activities, must          
acknowledge that it will deliver a prospectus in connection with any resale of  
such Exchange Notes. See "The Exchange Offer."                                  

RESTRICTIONS ON TRANSFER                                                        

The Series A Notes were offered and sold by the Company in a private  
offering exempt from registration pursuant to the Securities Act and have been  
resold pursuant to Rule 144A, Rule 501(a)(1), (2), (3) or (7) or Regulation S or
other exemptions under the Securities Act. As a result, the Series A Notes may  
not be reoffered or resold by purchasers except pursuant to an effective        
registration statement under the Securities Act or pursuant to an applicable    
exemption from such registration, and the Series A Notes are legended to        
restrict transfer as aforesaid. Each Holder (other than any Holder who is an    
affiliate or promoter of the Company) who duly exchanges Series A Notes for     
Exchange Notes in the Exchange Offer will receive Exchange Notes that are freely
transferable under the Securities Act. Holders who participate in the Exchange  
Offer should be aware, however, that if they accept the Exchange Offer for the  
purpose of engaging in a distribution, the Exchange Notes may not be publicly   
reoffered or resold without complying with the registration and prospectus      
delivery requirements of the Securities Act. As a result, each Holder accepting 
the Exchange Offer will be deemed to have represented, by its acceptance of the 
Exchange Offer, that it acquired the Exchange Notes in the ordinary course of   
business and that it is not engaged in, and does not intend to engage in, a     
distribution of the Exchange Notes. If existing Commission interpretations      
permitting free transferability of the Exchange Notes following the Exchange    
Offer are changed prior to consummation of the Exchange Offer, the Company will 
use its best efforts to register the Series A Notes for resale under the        
Securities Act. See "Prospectus Summary -- The Exchange Offer" and "Description 
of the Exchange Notes -- Registration Rights; Liquidated Damages."              

   The Series A Notes currently may be sold pursuant to the restrictions set
forth in Rule 144A, Rule 501(a) (1), (2), (3) or (7) or Regulation S under the  
Securities Act or pursuant to another available exemption under the Securities  
Act without registration under the Securities Act. To the extent that Series A  
Notes are tendered and accepted in the Exchange Offer, the trading market for   
the untendered and tendered but unaccepted Series A Notes could be adversely    
affected.                                                                       

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THE ACQUISITION 

 On August 27, 1997, the Company acquired all of the outstanding capital
stock of Alamac. The Purchase Price paid in the Acquisition was $126.0 million, 
subject to adjustment for changes in working capital and certain other items    
related to pension assets and liabilities subsequent to December 31, 1996. Prior
to consummation of the Acquisition, Alamac transferred all of its cash and      
assets related to its Whitmire, South Carolina spinning plant to WestPoint      
Stevens and, accordingly, such assets were not acquired in the Acquisition. In  
addition, Alamac sold its accounts receivable to WestPoint Stevens, who then    
sold them to a related-party financing source and, as a result, the Company did 
not acquire Alamac's accounts receivable. Accordingly, the Company estimates    
that it will be required to finance approximately $40.0 to $45.0 million of     
additional working capital.                                                     

The Stock Purchase Agreement contained customary representations,     
warranties and covenants. Each of the Company and WestPoint Stevens agreed to   
indemnify the other and their respective affiliates for breaches of             
representations and warranties contained in the Stock Purchase Agreement,       
provided that claims with respect thereto (other than environmental and tax     
claims) are asserted on or before 15 months from the closing date; provided,    
however, that the representations and warranties with respect to environmental  
matters survive for a period of three years following the closing and those with
respect to taxes survive for the applicable statute of limitations. The         
obligation of WestPoint Stevens to indemnify the Company (other than for        
environmental and tax claims) is subject to indemnifiable losses exceeding $1.75
million and then only for indemnifiable losses up to an aggregate of $10.0      
million. With respect to environmental matters, the Company conducted an        
environmental investigation of Alamac's facilities. As a result of such         
investigation, the Company identified environmental contamination at the Alamac 
facilities that will require remediation activities. The Company estimates that 
the cost of such remediation activities will range from approximately $3.5      
million to $5.0 million. WestPoint Stevens has agreed, for a period of three    
years following the closing, to pay 75% of any losses for matters identified in 
such environmental investigation or arising as a result of a breach of its      
representations and warranties in respect of environmental matters up to $10.0  
million and 67% of such losses in excess of $10.0 million and up to $20.0       
million. WestPoint Stevens will not be obligated to indemnify the Company for   
any such losses in excess of $20.0 million. In addition, WestPoint Stevens has  
agreed to indemnify the Company without regard to time or dollar limitation for 
losses resulting from third-party claims relating to the identified             
environmental contamination. See "Risk Factors -- Risk of Environmental         
Liability; Other Governmental Regulations."                                     

     Pursuant to the Stock Purchase Agreement, the Company and WestPoint Stevens
entered into an Interim Services Agreement pursuant to which WestPoint Stevens  
provides certain information, credit, accounts receivable, accounts payable,    
purchasing and other corporate services for a period of up to nine months       
following the closing.                                                          

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THE EXCHANGE OFFER

     The following discussion sets forth or summarizes what the Company believes
are the material terms of the Exchange Offer, including those set forth in the  
Letter of Transmittal distributed with this Prospectus. This summary is         
qualified in its entirety by reference to the full text of the documents        
underlying the Exchange Offer, copies of which are filed as exhibits to the     
Registration Statement of which this Prospectus is a part, and are incorporated 
by reference herein.                                                            

PURPOSE AND EFFECT OF THE EXCHANGE OFFER                                        

    In connection with the sale of the Series A Notes pursuant to the Purchase
Agreement, dated August 20, 1997 (the "Purchase Agreement"), between the Company
and Bear, Stearns & Co. Inc. and Prudential Securities Incorporated (the        
"Initial Purchasers"), the Initial Purchasers became entitled to the benefits of
the Registration Rights Agreement, dated as of August 27, 1997, between the     
Company and the Initial Purchasers (the "Registration Rights Agreement").       

Under the Registration Rights Agreement, the Company must use its best
efforts to (a) file a registration statement in connection with a registered    
exchange offer within 30 days after August 27, 1997, the date the Series A Notes
were issued (the "Issue Date"), (b) use reasonable best efforts to cause such   
registration statement to become effective under the Securities Act within 90   
days of the Issue Date, (c) use reasonable best efforts to keep such            
registration statement effective until the closing of the Exchange Offer and (d)
cause such registered Exchange Offer to be consummated within 120 days after the
Issue Date. Within the applicable time periods, the Company will endeavor to    
register under the Securities Act all of the Exchange Notes pursuant to a       
registration statement under which the Company will offer each Holder of Series 
A Notes the opportunity to exchange any and all of the outstanding Series A     
Notes held by such Holder for Exchange Notes in an aggregate principal amount   
equal to the aggregate principal amount of Series A Notes tendered for exchange 
by such Holder. Subject to limited exceptions, the Exchange Offer being made    
hereby, if commenced and consummated within such applicable time periods, will  
satisfy those requirements under the Registration Rights Agreement. In such     
event, the Series A Notes would remain outstanding and would continue to accrue 
interest, but would not retain any rights under the Registration Rights         
Agreement. Holders of Series A Notes seeking liquidity in their investment would
have to rely on exemptions to registration requirements under the securities    
laws, including the Securities Act. A copy of the Registration Rights Agreement 
has been filed as an exhibit to the Registration Statement of which this        
Prospectus is a part. The term "Holder" with respect to the Exchange Offer means
any person in whose name the Series A Notes are registered on the books of the  
Company or any other person who has obtained a properly completed bond power    
from the registered holder.                                                     

     Because the Exchange Offer is for any and all Series A Notes, the principal
amount of Series A Notes tendered and exchanged in the Exchange Offer will      
reduce the principal amount of Series A Notes outstanding. Following the        
consummation of the Exchange Offer, Holders who do not tender their Series A    
Notes generally will not have any further registration rights under the         
Registration Rights Agreement, and such Series A Notes will continue to be      
subject to certain restrictions on transfer. Accordingly, the liquidity of the  
market for such Series A Notes could be adversely affected. The Series A Notes  
are currently eligible for sale pursuant to Rule 144A, Rule 501(a)(1), (2), (3) 
or (7) or Regulation S through the PORTAL Market. Because the Company           
anticipates that most Holders of Series A Notes will elect to exchange such     
Series A Notes for Exchange Notes due to the absence of restrictions on the     
resale of Exchange Notes under the Securities Act, the Company anticipates that 
the liquidity of the market for any Series A Notes remaining after the          
consummation of the Exchange Offer may be substantially limited. See            
"Description of the Exchange Notes -- Registration Rights; Liquidated Damages." 

TERMS OF THE EXCHANGE OFFER                                                     

   Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal, the Company will accept all      
Series A Notes properly tendered and not withdrawn prior to 5:00 p.m., New York 
City time, on the Expiration Date. The Company will issue $1,000 principal      
amount of                                                                       

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Exchange Notes in exchange for each $1,000 principal amount of outstanding      
Series A Notes accepted in the Exchange Offer. Holders may tender some or all of
their Series A Notes pursuant to the Exchange Offer.                            

     The form and terms of the Exchange Notes are the same as the form and terms
of the Series A Notes except that (i) the Exchange Notes have been registered   
under the Securities Act and hence will not bear legends restricting the        
transfer thereof, and (ii) the holders of Exchange Notes generally will not be  
entitled to certain rights under the Registration Rights Agreement, which rights
generally will terminate upon consummation of the Exchange Offer. The Exchange  
Notes will evidence the same debt as the Series A Notes and will be entitled to 
the benefits of the Indenture.                                                  

   Holders of Series A Notes do not have any appraisal or dissenters' rights
in connection with the Exchange Offer.                                          

The Company shall be deemed to have accepted validly tendered Series A
Notes when, as and if the Company has given oral or written notice thereof to   
the Exchange Agent. The Exchange Agent will act as agent for the tendering      
Holders of Series A Notes for the purposes of receiving the Exchange Notes from 
the Company and delivering Exchange Notes to such Holders.                      

    If any tendered Series A Notes are not accepted for exchange because of an
invalid tender or the occurrence of certain other events set forth herein,      
certificates for any such unaccepted Series A Notes will be returned, without   
expense, to the tendering Holder thereof as promptly as practicable after the   
Expiration Date.                                                                

  Holders of Series A Notes who tender pursuant to the Exchange Offer will
not be required to pay brokerage commissions or fees or, subject to the         
instructions in the Letter of Transmittal, transfer taxes with respect to the   
exchange of Series A Notes pursuant to the Exchange Offer. The Company will pay 
all charges and expenses, other than certain applicable taxes, in connection    
with the Exchange Offer. See "-- Fees and Expenses."                            

EXPIRATION DATE; EXTENSIONS; AMENDMENTS                                         

 The Exchange Offer shall remain open for acceptance for a period of not
less than 30 days after notice is mailed to Holders (the "Exchange Period"). The
Expiration Date will be 5:00 p.m., New York City time, on November 26, 1997,    
unless the Company, in its sole discretion, extends the Exchange Offer, in which
case the Expiration Date will be the latest business day to which the Exchange  
Offer is extended.                                                              

In order to extend the Expiration Date, the Company will notify the   
Exchange Agent of any extension by oral or written notice and will mail to the  
record Holders an announcement thereof, each prior to 9:00 a.m., New York City  
time, on the next business day after the previously scheduled Expiration Date.  
Such announcement may state that the Company is extending the Exchange Offer for
a specified period of time.                                                     

   The Company reserves the right (i) to delay accepting any Series A Notes,
to extend the Exchange Offer or to terminate the Exchange Offer and not accept  
Series A Notes not previously accepted if any of the conditions set forth under 
"-- Conditions" shall have occurred and shall not have been waived by the       
Company, by giving oral or written notice of such delay, extension or           
termination to the Exchange Agent, or (ii) to amend the terms of the Exchange   
Offer in any manner. Any such delay in acceptance, extension, termination or    
amendment will be followed as promptly as practicable by oral or written notice 
thereof. If the Exchange Offer is amended in a manner determined by the Company 
to constitute a material change, the Company will promptly disclose such        
amendment in a manner reasonably calculated to inform the Holders of such       
amendment, and the Company will extend the Exchange Offer for a period of five  
to ten business days, depending upon the significance of the amendment and the  
manner of disclosure to Holders, if the Exchange Offer would otherwise expire   
during such five to ten business day period.                                    

    Without limiting the manner in which the Company may choose to make public
announcement of any extension, amendment or termination of the Exchange Offer,  
the Company shall have no obligation to publish, advertise or otherwise         
communicate any such public announcement, other than by making a timely release 
to the Dow Jones News Service.                                                  

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INTEREST ON THE EXCHANGE NOTES                                                  

     Interest on the Exchange Notes is payable semi-annually in arrears on March
1 and September 1 of each year at the rate of 9 3/4% per annum. The Exchange    
Notes will bear interest from August 27, 1997, the date of issuance of the      
Series A Notes, or the most recent interest payment date to which interest on   
such Series A Notes has been paid, whichever is later. Accordingly, Holders of  
Series A Notes that are accepted for exchange will not receive interest that is 
accrued but unpaid on the Series A Notes at the time of tender, but such        
interest will be payable in respect of the Exchange Notes delivered in exchange 
for such Series A Notes on the first interest payment date after the Expiration 
Date.                                                                           

PROCEDURES FOR TENDERING                                                        

    Only a Holder of Series A Notes may tender such Series A Notes pursuant to
the Exchange Offer. To tender pursuant to the Exchange Offer, a Holder must     
complete, sign and date the Letter of Transmittal, or a facsimile thereof, have 
the signatures thereon guaranteed if required by instruction 4 of the Letter of 
Transmittal, and mail or otherwise deliver such Letter of Transmittal or such   
facsimile, together with the Series A Notes and any other required documents, to
the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration    
Date. Delivery of the Series A Notes may be made by book-entry transfer in      
accordance with the procedures described below. Confirmation of such book-entry 
transfer must be received by the Exchange Agent prior to the Expiration Date.   

    The tender by a Holder of Series A Notes and the acceptance thereof by the
Company will constitute an agreement between such Holder and the Company in     
accordance with the terms and subject to the conditions set forth herein and in 
the Letter of Transmittal.                                                      

    THE METHOD OF DELIVERY OF SERIES A NOTES AND THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK  
OF THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE  
AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE  
ALLOWED TO ASSURE TIMELY DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION   
DATE. NO LETTER OF TRANSMITTAL OR SERIES A NOTES SHOULD BE SENT TO THE COMPANY. 
HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST  
COMPANIES OR NOMINEES TO EFFECT SUCH TENDER FOR SUCH HOLDERS.                   

  Any beneficial Holder whose Series A Notes are registered in the name of
such Holder's broker, dealer, commercial bank, trust company or other nominee   
and who wishes to tender should contact such registered holder promptly and     
instruct such registered holder to tender on his behalf. If such beneficial     
Holder wishes to tender on such beneficial Holder's behalf, such beneficial     
Holder must, prior to completing and executing the Letter of Transmittal and    
delivering his Series A Notes, either make appropriate arrangements to register 
ownership of the Series A Notes in such Holder's name or obtain a properly      
completed bond power from the registered holder. The transfer of record         
ownership may take considerable time.                                           

 Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by a member firm of a registered national       
securities exchange or of the National Association of Securities Dealers, Inc.  
or a commercial bank or trust company having an office or correspondent in the  
United States or an "eligible guarantor institution" within the meaning of Rule 
17Ad-15 under the Exchange Act (an "Eligible Institution") unless the Series A  
Notes tendered pursuant thereto are tendered (i) by a registered Holder who has 
not completed the box entitled "Special Registration Instructions" or "Special  
Delivery Instructions" on the Letter of Transmittal or (ii) for the account of  
an Eligible Institution. In the event that signatures on a Letter of Transmittal
or a notice of withdrawal, as the case may be, are required to be guaranteed,   
such guarantee must be by an Eligible Institution.                              

If the Letter of Transmittal is signed by a person other than the     
registered Holder of any Series A Notes listed therein, such Series A Notes must
be endorsed or accompanied by appropriate bond powers and a proxy               

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which authorizes such person to tender the Series A Notes on behalf of the      
registered Holder, in each case signed as the name of the registered Holder or  
Holders appears on the Series A Notes with the signature thereon guaranteed by  
an Eligible Institution.                                                        

If the Letter of Transmittal or any Series A Notes or bond powers are 
signed by trustees, executors, administrators, guardians, attorneys-in-fact,    
officers of corporations or others acting in a fiduciary or representative      
capacity, such persons should so indicate when signing, and unless waived by the
Company, evidence satisfactory to the Company of their authority to so act must 
be submitted with the Letter of Transmittal.                                    

The Company understands that the Exchange Agent will make a request   
promptly after the date of this Prospectus to establish accounts with respect to
the Series A Notes at the DTC for the purpose of facilitating the Exchange      
Offer, and subject to the establishment thereof, any financial institution that 
is a participant in the DTC may make book-entry delivery of the Series A Notes  
by causing the DTC to transfer such Series A Notes into the Exchange Agent's    
account with respect to the Series A Notes in accordance with the DTC's         
procedures for such transfer. Although delivery of the Series A Notes may be    
effected through book-entry transfer into the Exchange Agent's account at the   
DTC, a Letter of Transmittal properly completed and duly executed with any      
required signature guarantee and all other required documents must in each case 
be transmitted to and received or confirmed by the Exchange Agent at its address
set forth below on or prior to the Expiration Date, or, if the guaranteed       
delivery procedures described below are complied with, within the time period   
provided under such procedures. Delivery of documents to the DTC does not       
constitute delivery to the Exchange Agent.                                      

All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Series A Notes and withdrawal of the tendered  
Series A Notes will be determined by the Company in its sole discretion, which  
determination will be final and binding. The Company reserves the absolute right
to reject any and all Series A Notes not properly tendered or any Series A Notes
the Company's acceptance of which would, in the opinion of counsel for the      
Company, be unlawful. The Company also reserves the right to waive any          
irregularities or conditions of tender as to particular Series A Notes. The     
Company's interpretation of the terms and conditions of the Exchange Offer      
(including, the instructions in the Letter of Transmittal) will be final and    
binding on all parties. Unless waived, any defects or irregularities in         
connection with tenders of Series A Notes must be cured within such time as the 
Company shall determine. Neither the Company, the Exchange Agent nor any other  
person shall be under any duty to give notification of defects or irregularities
with respect to tenders of Series A Notes, nor shall any of them incur any      
liability for failure to give such notification. Tenders of Series A Notes will 
not be deemed to have been made until such irregularities have been cured or    
waived. Any Series A Notes received by the Exchange Agent that are not properly 
tendered and as to which the defects or irregularities have not been cured or   
waived will be returned without cost to such Holder by the Exchange Agent to the
tendering Holders of Series A Notes, unless otherwise provided in the Letter of 
Transmittal, as soon as practicable following the Expiration Date.              

GUARANTEED DELIVERY PROCEDURES                                                  

Holders who wish to tender their Series A Notes and (i) whose Series A
Notes are not immediately available, or (ii) who cannot deliver their Series A  
Notes, the Letter of Transmittal or any other required documents to the Exchange
Agent (or comply with the procedures for book-entry transfer) prior to the      
Expiration Date, may effect a tender if:                                        

a. the tender is made through an Eligible Institution;      

          b. prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of 
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
     setting forth the name and address of the Holder of the Series A Notes, the
  certificate or registration number or numbers of such Series A Notes and
     the principal amount of Series A Notes tendered, stating that the tender is
    being made thereby, and guaranteeing that, within five business days after
the Expiration Date, the Letter of Transmittal (or facsimile thereof) 
together with the certificate(s) representing the Series A Notes to be
tendered in proper form for transfer (or a confirmation of book-      

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    entry transfer of such Series A Notes into the Exchange Agent's account at
the Depository) and any other documents required by the Letter of     
     Transmittal will be deposited by the Eligible Institution with the Exchange
Agent; and                                                            

     c. such properly completed and executed Letter of Transmittal (or
facsimile thereof), together with the certificate(s) representing all 
   tendered Series A Notes in proper form for transfer (or a confirmation of
book-entry transfer of such Series A Notes into the Exchange Agent's  
   account at the Depository) and all other documents required by the Letter
     of Transmittal are received by the Exchange Agent within five business days
after the Expiration Date.                                            

WITHDRAWAL OF TENDERS                                                           

Except as otherwise provided herein, tenders of Series A Notes may be 
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration 
Date.                                                                           

  To withdraw a tender of Series A Notes pursuant to the Exchange Offer, a
written or facsimile transmission notice of withdrawal must be received by the  
Exchange Agent at the address set forth herein prior to 5:00 p.m., New York City
time, on the Expiration Date. Any such notice of withdrawal must (i) specify the
name of the person having deposited the Series A Notes to be withdrawn (the     
"Depositor"), (ii) identify the Series A Notes to be withdrawn (including the   
certificate or registration number(s) and principal amount of such Series A     
Notes, or, in the case of notes transferred by book-entry transfer, the name and
number of the account at the DTC to be credited), (iii) be signed by the        
Depositor in the same manner as the original signature on the Letter of         
Transmittal by which such Series A Notes were tendered (including any required  
signature guarantees) or be accompanied by documents of transfer sufficient to  
have the Trustee (as defined herein) with respect to the Series A Notes register
the transfer of such Series A Notes into the name of the Depositor withdrawing  
the tender, (iv) specify the name in which any such Series A Notes are to be    
registered, if different from that of the Depositor and (v) include a statement 
that such Holder is withdrawing such Holder's election to have such Series A    
Notes exchanged. All questions as to the validity, form and eligibility         
(including time of receipt) of such withdrawal notices will be determined by the
Company, whose determination shall be final and binding on all parties. Any     
Series A Notes so withdrawn will be deemed not to have been validly tendered for
purposes of the Exchange Offer, and no Exchange Notes will be issued with       
respect thereto unless the Series A Notes so withdrawn are validly retendered.  
Any Series A Notes which have been tendered but which are not accepted for      
payment will be returned to the Holder thereof without cost to such Holder as   
soon as practicable after withdrawal, rejection of tender or termination of the 
Exchange Offer. Properly withdrawn Series A Notes may be retendered by following
one of the procedures described under "-- Procedures for Tendering" at any time 
prior to the Expiration Date.                                                   

CONDITIONS                                                                      

     Notwithstanding any other term of the Exchange Offer, the Company shall not
be required to accept for exchange, or to exchange Exchange Notes for, any      
Series A Notes, and may terminate or amend the Exchange Offer as provided herein
before the acceptance of such Series A Notes, if:                               

         (i) any law, statute, rule, regulation or interpretation by the staff
     of the Commission is proposed, adopted or enacted, which, in the reasonable
     judgment of the Company, might materially impair the ability of the Company
  to proceed with the Exchange Offer or materially impair the contemplated
benefits of the Exchange Offer to the Company; or                     

          (ii) any governmental approval has not been obtained, which approval
the Company shall, in its reasonable judgment, deem necessary for the 
consummation of the Exchange Offer as contemplated hereby.            

If the Company determines in its reasonable judgment that any of the  
conditions are not satisfied, the Company may (i) refuse to accept any Series A 
Notes and return all tendered Series A Notes to the tendering Holders, (ii)     
extend the Exchange Offer and retain all Series A Notes tendered prior to the   
expiration of the Exchange Offer subject, however, to the rights of Holders to  
withdraw such Series A Notes (see                                               

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"-- Withdrawal of Tenders") or (iii) waive such unsatisfied conditions with     
respect to the Exchange Offer and accept all properly tendered Series A Notes   
which have not been withdrawn. If such waiver constitutes a material change to  
the Exchange Offer, the Company will promptly disclose such waiver by means of a
prospectus supplement that will be distributed to the registered Holders, and,  
depending upon the significance of the waiver and the manner of disclosure to   
the registered Holders, the Company will extend the Exchange Offer for a period 
of five to ten business days if the Exchange Offer would otherwise expire during
such five to ten business-day period.                                           

EXCHANGE AGENT                                                                  

  State Street Bank and Trust Company has been appointed as Exchange Agent
for the Exchange Offer. Questions and requests for assistance and requests for  
additional copies of this Prospectus or of the Letter of Transmittal should be  
directed to the Exchange Agent addressed as follows:                            

                                                        [Enlarge/Download Table]
                                                                                        
           By Mail             By Facsimile Transmission:  By Hand or Overnight Courier:
(registered or certified mail        (617) 664-5395                                     
        recommended):                                          State Street Bank and    
                                                                   Trust Company        
    State Street Bank and                                   Corporate Trust Department, 
        Trust Company            To Confirm by Telephone             4th floor          
 Corporate Trust Department     or for Information Call:      Two International Place   
        P.O. Box 778                 (617) 664-5587              Boston, MA 02110       
    Boston, MA 02102-0078                                                               

FEES AND EXPENSES                                                               

   The expenses of soliciting tenders pursuant to the Exchange Offer will be
borne by the Company. The principal solicitation for tenders pursuant to the    
Exchange Offer is being made by mail; however, additional solicitations may be  
made by telegraph, telephone or in person by officers and regular employees of  
the Company and its affiliates.                                                 

The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or other      
persons soliciting acceptances of the Exchange Offer. The Company, however, will
pay the Exchange Agent reasonable and customary fees for its services and will  
reimburse the Exchange Agent for its reasonable out-of-pocket expenses in       
connection therewith and pay other registration expenses, including fees and    
expenses of the Trustee, filing fees, blue sky fees and printing and            
distribution expenses.                                                          

     The Company will pay all transfer taxes, if any, applicable to the exchange
of Series A Notes pursuant to the Exchange Offer. If, however, certificates     
representing Exchange Notes or Series A Notes for principal amounts not tendered
or accepted for exchange are to be delivered to, or are to be registered or     
issued in the name of, any person other than the registered holder of the Series
A Notes tendered, or if tendered Series A Notes are registered in the name of   
any person other than the person signing the Letter of Transmittal, or if a     
transfer tax is imposed for any reason other than the exchange of Series A Notes
pursuant to the Exchange Offer, then the amount of any such transfer taxes      
(whether imposed on the registered holder or any other persons) will be payable 
by the tendering Holder. If satisfactory evidence of payment of such taxes or   
exemption therefrom is not submitted with the Letter of Transmittal, the amount 
of such transfer taxes will be billed directly to such tendering Holder.        

ACCOUNTING TREATMENT                                                            

The Exchange Notes will be recorded at the same carrying value as the 
Series A Notes, which is the aggregate principal amount of the Series A Notes,  
as reflected in the Company's accounting records on the date of exchange.       
Accordingly, no gain or loss for accounting purposes will be recognized in      
connection with the Exchange Offer. The cost of the Exchange Offer will be      
deferred and amortized over the term of the Exchange Notes.                     

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RESALE OF THE EXCHANGE NOTES                                                    

 Under existing Commission interpretations, the Exchange Notes would, in
general, be freely transferable after the Exchange Offer by any holder of such  
Exchange Notes (other than any such holder which is an "affiliate" of the       
Company within the meaning of Rule 405 of the Securities Act) without compliance
with the registration and prospectus delivery provisions of the Securities Act, 
provided that such Exchange Notes acquired pursuant to the Exchange Offer are   
obtained in the ordinary course of such holder's business, and such holder does 
not intend to participate, and has no arrangement or understanding to           
participate, in the distribution of such Exchange Notes. Any holder who tenders 
pursuant to the Exchange Offer with the intention to participate, or for the    
purpose of participating, in a distribution of the Exchange Notes may not rely  
on the position of the staff of the Commission enunciated in Exxon Capital      
Holdings Corporation (available May 13, 1988) or Morgan Stanley & Co.,          
Incorporated (available June 5, 1991) or similar interpretive letters, but      
rather must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction. In        
addition, any such resale transaction should be covered by an effective         
registration statement containing the selling security holders information      
required by Item 507 of Regulation S-K of the Securities Act.                   

Each broker-dealer that receives Exchange Notes for its own account in
exchange for Series A Notes, where such Series A Notes were acquired by such    
broker-dealer as a result of market-making activities or other trading          
activities, may be a statutory underwriter and must acknowledge that it will    
deliver a prospectus in connection with any resale of such Exchange Notes. The  
Company has agreed to make available a prospectus meeting the requirements of   
the Securities Act to any such broker-dealer for use in connection with any     
resale of any Exchange Notes acquired in the Exchange Offer. A broker-dealer    
which delivers such a prospectus to purchasers in connection with such resales  
will be subject to certain of the civil liability provisions under the          
Securities Act and will be bound by the provisions of the Registration Rights   
Agreement (including certain indemnification rights and obligations).           

    By tendering pursuant to the Exchange Offer, each Holder will represent to
the Company, among other things, that (i) the Exchange Notes acquired pursuant  
to the Exchange Offer are being obtained in the ordinary course of its business,
(ii) neither the holder nor any such other person has an arrangement or         
understanding with any person to participate in the distribution of the Exchange
Notes, and (iii) the holder and any such other person acknowledge that if they  
participate in the Exchange Offer for the purpose of distributing the Exchange  
Notes (a) they must, in the absence of an exemption therefrom, comply with the  
registration and prospectus delivery requirements of the Securities Act in      
connection with any resale of the Exchange Notes and cannot rely on the         
no-action letters referenced above and (b) failure to comply with such          
requirements in such instance could result in such holder incurring liability   
under the Securities Act for which such holder is not indemnified by the        
Company. Further, by tendering in the Exchange Offer, each holder that may be   
deemed an "affiliate" (as defined in Rule 405 of the Securities Act) of the     
Company will represent to the Company that such holder understands and          
acknowledges that the Exchange Notes may not be offered for resale, resold or   
otherwise transferred by that Holder without registration under the Securities  
Act or an exemption therefrom.                                                  

   As set forth above, affiliates of the Company are not entitled to rely on
the foregoing interpretations of the staff of the Commission with respect to    
resales of the Exchange Notes without compliance with the registration and      
prospectus delivery requirements of the Securities Act.                         

CONSEQUENCES OF FAILURE TO EXCHANGE                                             

 As a result of the making of this Exchange Offer, the Company will have
fulfilled one of its obligations under the Registration Rights Agreement, and   
Holders of Series A Notes who do not tender their Series A Notes generally will 
not have any further registration rights under the Registration Rights Agreement
or otherwise. Accordingly, any Holder that does not exchange such Holder's      
Series A Notes for Exchange Notes will continue to hold the untendered Series A 
Notes and will be entitled to all the rights and limitations applicable thereto 
under the Indenture, except to the extent that such rights or limitations, by   
their terms, terminate or cease to have further effectiveness as a result of the
Exchange Offer.                                                                 

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  The Series A Notes that are not exchanged for Exchange Notes pursuant to
the Exchange Offer will remain restricted securities. Accordingly, such Series A
Notes may be resold only (i) to the Company (upon redemption thereof or         
otherwise), (ii) pursuant to an effective registration statement under the      
Securities Act, (iii) so long as the 144A Notes are eligible for resale pursuant
to Rule 144A under the Securities Act, to a Qualified Institutional Buyer in a  
transaction meeting the requirements of Rule 144A, (iv) outside the United      
States to a foreign person pursuant to the exemption from the registration      
requirements of the Securities Act provided by Regulation S thereunder, (v)     
pursuant to an exemption from registration under the Securities Act provided by 
Rule 144 thereunder (if available) or so long as the IAI Notes are eligible for 
resale pursuant to Rule 501(a)(1), (2), (3) or (7) or (vi) to an Accredited     
Investor in a transaction exempt from the registration requirements of the      
Securities Act, in each case in accordance with any applicable securities laws  
of any state of the United States or other applicable jurisdiction. See "Risk   
Factors -- Restrictions on Transfer."                                           

OTHER                                                                           

Participation in the Exchange Offer is voluntary, and Holders should  
carefully consider whether to accept. Holders are urged to consult their        
financial and tax advisors in making their own decision on what action to take. 

     The Company may in the future seek to acquire untendered Series A Notes, to
the extent permitted by applicable law, in open market or privately negotiated  
transactions, through subsequent exchange offers or otherwise. The Company has  
no present plans to acquire any Series A Notes that are not tendered in the     
Exchange Offer or to file a registration statement to permit resales of any     
untendered Series A Notes.                                                      

In any state where the Exchange Offer does not fall under a statutory 
exemption to the blue sky rules, the Company has filed the appropriate          
registrations and notices, and has made the appropriate requests, to permit the 
Exchange Offer to be made in such state.                                        

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CERTAIN FEDERAL INCOME TAX CONSEQUENCES 
OF THE EXCHANGE OFFER 

   The following discussion is based upon current provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), existing and proposed Treasury   
Department regulations (the "Regulations") and existing administrative          
interpretations and court decisions. There can be no assurance that the Internal
Revenue Service (the "IRS") will not take a contrary view, and no ruling from   
the IRS has been or will be sought. Legislative, judicial or administrative     
changes or interpretations may be forthcoming that could alter or modify the    
statements and conditions set forth herein. Any such changes or interpretations 
may or may not be retroactive and could affect the tax consequences to Holders. 
Certain Holders of the Series A Notes (including insurance companies, tax-exempt
organizations, financial institutions, broker-dealers, foreign corporations and 
persons who are not citizens or residents of the United States) may be subject  
to special rules not discussed below. Each Holder of Series A Notes should      
consult his, her or its own tax advisor as to the particular tax consequences of
exchanging such Holder's Series A Notes for Exchange Notes, including the       
applicability and effect of any state, local or foreign tax laws.               

The issuance of the Exchange Notes to Holders of the Series A Notes   
pursuant to the terms set forth in this Prospectus will not constitute an       
exchange for United States federal income tax purposes because such exchange    
does not represent a significant modification of the debt instruments.          
Consequently, no gain or loss would be recognized by Holders of the Series A    
Notes upon receipt of the Exchange Notes, and ownership of the Exchange Notes   
will be considered a continuation of ownership of the Series A Notes. For       
purposes of determining gain or loss upon the subsequent sale or exchange of the
Exchange Notes, a Holder's basis in the Exchange Notes should be the same as    
such Holder's basis in the Series A Notes exchanged therefor. A Holder's holding
period for the Exchange Notes should include the Holder's holding period for the
Series A Notes exchanged therefor. The issue price, original issue discount     
inclusion and other tax characteristics of the Exchange Notes should be         
identical to the issue price, original issue discount inclusion and other tax   
characteristics of the Series A Notes exchanged therefor.                       

See also "Description of Certain Federal Income Tax Consequences of an
Investment in the Exchange Notes."                                              

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USE OF PROCEEDS 

There will be no proceeds to the Company from the exchange of Series A
Notes pursuant to the Exchange Offer. The net proceeds from the Offering were   
approximately $121.5 million, after deducting the discount to the Initial       
Purchasers and offering expenses. The Company used the net proceeds, together   
with borrowings under the New Credit Facility, to finance the Transactions.     

   The following table sets forth the estimated sources and uses of funds in
connection with the Transactions (assuming consummation of the Transactions on  
July 5, 1997):                                                                  

                                                                [Download Table]

                                                                     AMOUNT        
                                                             ----------------------
                                                             (DOLLARS IN THOUSANDS)
                                                                                   
SOURCES OF FUNDS:                                                                  
  New Credit Facility (1):                                                         
     Revolving credit agreement (2).........................        $ 28,995       
     Term loan..............................................          50,000       
     Series A Notes.........................................         125,000       
                                                                    --------       
       Total sources........................................        $203,995       
                                                                    ========       
USE OF FUNDS:                                                                      
  Acquisition Purchase Price (2)............................        $126,000       
  Repayment of the Company's existing credit facility (3)...          43,380       
  Repayment of the Company's senior notes due 2005 (4)......          25,700       
  Fees and expenses (5).....................................           8,915       
                                                                    --------       
       Total uses...........................................        $203,995       
                                                                    ========       

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

(1) The New Credit Facility consists of a five-year revolving credit facility   
providing up to $110.0 million of availability (the "Revolver") and a   
    five-year $50.0 million term loan facility (the "Term Loan"). Advances under
the Revolver are based on a borrowing base formula of inventory and     
receivables. The Term Loan has a scheduled amortization of $7.5 million 
during each of the first and second years following the closing; $10.0  
million during the third year following the closing; and $12.5 million  
    during the fourth and fifth years following the closing. See "Description of
New Credit Facility."                                                   
(2) Does not include an estimated $40.0 to $45.0 million anticipated to be      
required to finance working capital needs and does not reflect any      
post-closing Purchase Price adjustment. See "The Acquisition."          
(3) Represents borrowings outstanding as of July 5, 1997 plus $0.443 million in 
accrued interest. This indebtedness was incurred for working capital    
  purposes and matures on July 16, 1998. Borrowings under this facility bear
 interest as of July 5, 1997 at a weighted average rate of 7.3% per annum.
See Note 4 of Notes to the Company's Consolidated Financial Statements. 
(4) Represents senior notes of the Company outstanding as of July 5, 1997 plus  
 $0.7 million in accrued interest. The senior notes bear interest at 6.78%
per annum and require annual principal payments of $3,125,000 from 1998 
through 2005.                                                           
(5) Includes estimated fees and expenses incurred in connection with the        
Transactions.                                                           

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CAPITALIZATION

The following table sets forth the consolidated capitalization of the 
Company as of July 5, 1997 and as adjusted to give effect to the Transactions.  
This table should be read in conjunction with "Unaudited Pro Forma Condensed    
Consolidated Financial Statements," "Management's Discussion and Analysis of    
Financial Condition and Results of Operations" and the historical financial     
statements of the Company and Alamac and related notes thereto included         
elsewhere herein.                                                               

                                                                [Download Table]

                                                                  JULY 5, 1997      
                                                             ---------------------- 
                                                              ACTUAL    AS ADJUSTED 
                                                             --------   ----------- 
                                                             (DOLLARS IN THOUSANDS) 
                                                                                    
Long-term debt:                                                                     
  Existing credit facility.................................. $ 42,937    $     --   
  New Credit Facility (1):                                                          
     Revolving credit agreement.............................       --      28,995(2)
     Term loan..............................................       --      50,000   
  Senior notes due 2005.....................................   25,000          --   
  Industrial revenue bonds..................................    7,900       7,900   
  Series A Notes............................................       --     125,000   
                                                             --------    --------   
          Total long-term debt, including current portion...   75,837     211,895   
                                                             --------    --------   
Shareholders' equity:                                                               
  Common stock, $0.01 par value; 40,000,000 shares                                  
     authorized; 13,139,658 shares issued and outstanding...      131         131   
  Additional paid-in capital................................   41,355      41,355   
  Retained earnings.........................................   54,703      53,903(3)
                                                             --------    --------   
     Total shareholders' equity.............................   96,189      95,389   
                                                             --------    --------   
          Total capitalization.............................. $172,026    $307,284   
                                                             ========    ========   

---------------                                                                 
(1) The New Credit Facility consists of a five-year Revolver providing up to    
$110.0 million of availability and a five-year $50.0 million Term Loan. 
Advances under the Revolver are based on a borrowing base formula of    
inventory and receivables. The Term Loan has a scheduled amortization of
$7.5 million during each of the first and second years following the    
closing; $10.0 million during the third year following the closing; and 
  $12.5 million during the fourth and fifth years following the closing. See
"Description of New Credit Facility."                                   
(2) Does not include an estimated $40.0 to $45.0 million anticipated to be      
required to finance working capital needs and does not reflect any      
post-closing Purchase Price adjustment. See "The Acquisition."          
(3) Includes an extraordinary loss of $0.8 million, net of tax benefit of $0.5  
million, associated with the commitment fee paid for unused bridge loan 
financing which was expensed by the Company at the time the Transactions
were consummated.                                                       

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SELECTED FINANCIAL DATA 

     The following selected financial data as of and for each fiscal year in the
five-year period ended September 28, 1996 have been derived from the            
consolidated financial statements of the Company, which financial statements    
have been audited by Ernst & Young LLP, independent auditors. The financial     
statements of the Company as of September 30, 1995 and September 28, 1996 and   
for each of the three years in the period ended September 28, 1996, are included
elsewhere in this Prospectus. The following selected financial data as of and   
for the nine months ended June 29, 1996 and July 5, 1997 have been derived from 
the unaudited consolidated financial statements of the Company, which, in the   
opinion of management, include all adjustments (consisting of only normal       
recurring adjustments) necessary for a fair presentation of the information set 
forth therein. Due to the seasonality of operations, and other factors, the     
results of operations for the nine months ended July 5, 1997 are not indicative 
of the results that may be expected for the full year. The following information
should 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 and related notes thereto included elsewhere in this  
Prospectus.                                                                     

                                                        [Enlarge/Download Table]

                                                               FISCAL YEAR ENDED                             NINE MONTHS ENDED  
                                      --------------------------------------------------------------------  ------------------- 
                                      OCTOBER 3,   OCTOBER 2,   OCTOBER 1,   SEPTEMBER 30,   SEPTEMBER 28,  JUNE 29,   JULY 5,  
                                       1992 (1)       1993       1994 (2)        1995            1996         1996       1997   
                                      ----------   ----------   ----------   -------------   -------------  --------   -------- 
                                                            (DOLLARS IN THOUSANDS, EXCEPT OPERATING DATA)                       
                                                                                                                                
STATEMENT OF OPERATIONS DATA:                                                                                                   
Net sales............................  $151,497     $151,283     $180,520      $199,413        $195,866     $136,574   $158,214 
Cost of sales........................   111,704      114,279      139,754       159,245         152,884      108,290    120,677 
                                       --------     --------     --------      --------        --------     --------   -------- 
Gross profit.........................    39,793       37,004       40,766        40,168          42,982       28,284     37,537 
Selling, general and administrative                                                                                             
  expenses...........................    13,771       13,400       16,223        17,447          20,707       14,418     18,538 
                                       --------     --------     --------      --------        --------     --------   -------- 
Operating income.....................    26,022       23,604       24,543        22,721          22,275       13,866     18,999 
Goodwill amortization................     1,444        1,444        1,721         1,857           1,857        1,393      1,400 
Interest and amortization of debt                                                                                               
  costs..............................    10,235        4,314        4,978         6,169           6,164        4,590      4,465 
Write-down of fixed assets...........        --           --           --         2,153              --           --         -- 
                                       --------     --------     --------      --------        --------     --------   -------- 
Income before income taxes and                                                                                                  
  extraordinary item.................    14,343       17,846       17,844        12,542          14,254        7,883     13,134 
Federal and state income taxes.......     6,619        7,738        7,496         5,982           5,854        3,278      5,188 
Extraordinary item -- debt                                                                                                      
  retirement.........................    (2,238)        (472)          --            --              --           --         -- 
                                       --------     --------     --------      --------        --------     --------   -------- 
Net income...........................  $  5,486     $  9,636     $ 10,348      $  6,560        $  8,400     $  4,605   $  7,946 
                                       ========     ========     ========      ========        ========     ========   ======== 
OTHER DATA:                                                                                                                     
EBITDA (3)...........................  $ 33,194     $ 31,552     $ 33,173      $ 32,722        $ 31,848     $ 21,117   $ 26,717 
Depreciation and amortization........     9,070        9,588       10,533        12,030          11,602        8,773      9,228 
Capital expenditures.................    10,256        6,632       14,278        12,816          11,778       10,777      5,685 
Ratio of earnings to fixed charges                                                                                              
  (4)................................       2.4x         4.7x         4.2x          2.8x            3.0x         2.5x       3.4x
OPERATING DATA:                                                                                                                 
Net sales per average number of                                                                                                 
  employees (in thousands)...........  $    127     $    127     $    122      $    131        $    135     $     94   $    106 
Average number of employees..........     1,190        1,196        1,476         1,520           1,456        1,451      1,499 
Average selling price per pound of                                                                                              
  fabric sold........................  $   3.25     $   3.21     $   3.54      $   3.79        $   4.03     $   4.01   $   4.27 
Total pounds of fabric sold (in                                                                                                 
  millions)..........................      46.7         47.2         51.0          52.6            48.6         34.0       36.7 

                                                        [Enlarge/Download Table]

                                                                                AS OF                                           
                                      ------------------------------------------------------------------------------------------
                                      OCTOBER 3,   OCTOBER 2,   OCTOBER 1,   SEPTEMBER 30,   SEPTEMBER 28,   JUNE 29,   JULY 5, 
                                         1992         1993         1994          1995            1996          1996       1997  
                                      ----------   ----------   ----------   -------------   -------------   --------   --------
                                                                        (DOLLARS IN THOUSANDS)                                  
                                                                                                                                
BALANCE SHEET DATA:                                                                                                             
Working capital......................  $ 26,294     $ 33,747     $ 47,219      $ 45,227        $ 52,083      $ 60,920   $ 57,346
Property, plant and equipment, net...    55,472       54,112       65,460        65,834          67,758        69,098     65,685
Total assets.........................   145,322      148,040      194,192       188,872         195,007       209,194    205,367
Long-term obligations................    70,400       64,900       87,276        76,800          80,950        93,339     75,837
Shareholders' equity.................    55,700       65,161       80,266        86,258          88,742        87,903     96,189

------------------------------                                                  
(1) Each of the fiscal years presented is a 52-week period, except for fiscal   
1992, which is a 53-week period.                                        
(2) Includes the results of operations of United Knitting effective with its    
acquisition by the Company on January 19, 1994.                         
(3) EBITDA represents income before interest and amortization of debt costs,    
federal and state income taxes, depreciation and amortization and       
   extraordinary items. In fiscal 1995, EBITDA also excludes the write-down of
fixed assets. EBITDA is generally considered to provide information     
 regarding a company's ability to service and/or incur debt. EBITDA should
    not be considered in isolation or as a substitute for net income, cash flows
  from operations or other consolidated income or cash flow data prepared in
   accordance with generally accepted accounting principles or as a measure of
a company's profitability or liquidity.                                 
(4) For purposes of calculating the ratio of earnings to fixed charges, earnings
consist of income before extraordinary item and federal and state income
taxes, plus fixed charges. Fixed charges consist of interest and        
    amortization of debt costs plus that portion of rental payments on operating
leases deemed representative of the interest factor.                    

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

   The following unaudited pro forma condensed consolidated balance sheet as
of July 5, 1997 and the unaudited pro forma condensed consolidated statements of
operations for the fiscal year ended September 28, 1996 and the nine and twelve 
months ended July 5, 1997 (the "Pro Forma Financial Statements") are derived    
from (i) the Company's consolidated balance sheet as of July 5, 1997 and its    
consolidated income statements for the fiscal year ended September 28, 1996 and 
the nine and twelve months ended July 5, 1997, and (ii) the balance sheet of    
Alamac as of June 30, 1997 and its statements of operations for the year ended  
December 31, 1996 and the nine and twelve months ended June 30, 1997.           

     The Pro Forma Financial Statements give effect to (i) the Acquisition, (ii)
the Offering, (iii) the borrowings under the New Credit Facility and (iv) the   
application of the net proceeds from the Offering and the borrowings under the  
New Credit Facility to finance the Acquisition and repay amounts outstanding    
under existing debt agreements as described in "Use of Proceeds." The Pro Forma 
Financial Statements give effect to the Transactions as if they had occurred on 
July 5, 1997 in the case of the balance sheet, and on October 1, 1995 in the    
case of the statements of operations.                                           

    The pro forma adjustments are based upon available information and certain
assumptions that the Company believes are reasonable. The Pro Forma Financial   
Statements do not purport to represent what the Company's results of operations 
or financial position would actually have been had the Transactions in fact     
occurred on such dates or to project results of operations for or at any future 
period or date. The Pro Forma Financial Statements should be read in conjunction
with "Capitalization," "Management's Discussion and Analysis of Financial       
Condition and Results of Operations" and the financial statements of the Company
and Alamac and the notes thereto included elsewhere in this Prospectus.         

The Acquisition will be accounted for under the purchase method of    
accounting. The total purchase price for the Acquisition will be allocated to   
the assets and liabilities acquired based upon their relative fair values at the
closing of the Acquisition, based upon valuation and other studies which are not
yet complete. The allocation of the purchase price reflected herein is subject  
to revision when additional information from the valuations and studies become  
available. However, the Company does not expect that the effects of the final   
allocation will differ materially from those set forth herein.                  

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DYERSBURG CORPORATION 
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 28, 1996 

(IN THOUSANDS, EXCEPT PER SHARE DATA) 

                                                        [Enlarge/Download Table]

                                        DYERSBURG                                                         
                                       CORPORATION              ALAMAC                                    
                                       YEAR ENDED             YEAR ENDED        PRO FORMA     PRO FORMA   
                                  SEPTEMBER 28, 1996(A)  DECEMBER 31, 1996(A)  ADJUSTMENTS   CONSOLIDATED 
                                  ---------------------  --------------------  -----------   ------------ 
                                                                                                          
Net sales.......................        $195,866               $222,019                        $417,885   
Cost of sales...................         152,884                196,518         $  2,011(b)     351,413   
Selling, general and                                                                                      
  administrative expenses.......          20,707                 17,495           (2,111)(c)     36,091   
Goodwill amortization...........           1,857                     --              577(d)       2,434   
Interest and amortization of                                                                              
  debt costs....................           6,164                  8,678            8,787(e)      23,629   
                                        --------               --------         --------       --------   
                                         181,612                222,691            9,264        413,567   
                                        --------               --------         --------       --------   
Income (loss) before income                                                                               
  taxes.........................          14,254                   (672)          (9,264)         4,318   
Federal and state income taxes                                                                            
  (benefit).....................           5,854                   (385)          (3,335)(f)      2,134   
                                        --------               --------         --------       --------   
Net income (loss)...............        $  8,400               $   (287)        $ (5,929)      $  2,184(h)
                                        ========               ========         ========       ========   
Net income per share............        $   0.62                                               $   0.16   
Weighted average common shares                                                                            
  outstanding...................          13,643                                                 13,643   

Other data:                                                                                               
     EBITDA(g)..................        $ 31,848                                               $ 48,013   
     Ratio of EBITDA to interest                                                                          
       expense..................                                                                   2.0x   

See accompanying notes to unaudited pro forma condensed consolidated statements 
of operations.

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DYERSBURG CORPORATION 
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED JULY 5, 1997

(IN THOUSANDS, EXCEPT PER SHARE DATA) 

                                                        [Enlarge/Download Table]

                                             DYERSBURG                                                  
                                            CORPORATION        ALAMAC                                   
                                            NINE MONTHS     NINE MONTHS                                 
                                               ENDED           ENDED         PRO FORMA      PRO FORMA   
                                            JULY 5, 1997  JUNE 30, 1997(A)  ADJUSTMENTS    CONSOLIDATED 
                                            ------------  ----------------  -----------    ------------ 
                                                                                                        
Net sales..................................   $158,214        $183,728                       $341,942   
Cost of sales..............................    120,677         160,026        $ 1,508(b)      282,211   
Selling, general and administrative                                                                     
  expenses.................................     18,538          11,560         (1,540)(c)      28,558   
Goodwill amortization......................      1,400              --            433(d)        1,833   
Interest and amortization of debt costs....      4,465           6,692          6,267(e)       17,424   
                                              --------        --------        -------        --------   
                                               145,080         178,278          6,668         330,026   
                                              --------        --------        -------        --------   
Income before income taxes.................     13,134           5,450         (6,668)         11,916   
Federal and state income taxes.............      5,188           1,907         (2,400)(f)       4,695   
                                              --------        --------        -------        --------   
Net income.................................   $  7,946        $  3,543        $(4,268)       $  7,221(h)
                                              ========        ========        =======        ========   
Net income per share.......................   $   0.60                                       $   0.55   
Weighted average common shares                                                                          
  outstanding..............................     13,135                                         13,135   
Other data:                                                                                             
  EBITDA (g)...............................   $ 26,717                                       $ 45,068   
  Ratio of EBITDA to interest expense......                                                       2.6x  

See accompanying notes to unaudited pro forma condensed consolidated statements 
of operations.

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DYERSBURG CORPORATION 
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
TWELVE MONTHS ENDED JULY 5, 1997

(IN THOUSANDS, EXCEPT PER SHARE DATA) 

                                                        [Enlarge/Download Table]

                                               DYERSBURG          ALAMAC                                  
                                              CORPORATION     TWELVE MONTHS                               
                                             TWELVE MONTHS        ENDED                                   
                                                 ENDED           JUNE 30,       PRO FORMA     PRO FORMA   
                                            JULY 5, 1997(A)      1997(A)       ADJUSTMENTS   CONSOLIDATED 
                                            ---------------  ----------------  -----------   ------------ 
                                                                                                          
Net sales..................................    $217,506          $235,808                      $453,314   
Cost of sales..............................     165,271           206,400        $ 2,011(b)     373,682   
Selling, general and administrative                                                                       
  expenses.................................      24,827            16,034         (2,088)(c)     38,773   
Goodwill amortization......................       1,864                --            577(d)       2,441   
Interest and amortization of debt costs....       6,039             8,820          8,494(e)      23,353   
                                               --------          --------        -------       --------   
                                                198,001           231,254          8,994        438,249   
                                               --------          --------        -------       --------   
Income before income taxes.................      19,505             4,554         (8,994)        15,065   
Federal and state income taxes.............       7,764             1,537         (3,238)(f)      6,063   
                                               --------          --------        -------       --------   
Net income.................................    $ 11,741          $  3,017        $(5,756)      $  9,002(h)
                                               ========          ========        =======       ========   

Net income per share.......................    $   0.89                                        $   0.68   
Weighted average common shares                                                                            
  outstanding..............................      13,253                                          13,253   

Other data:                                                                                               
  EBITDA(g)................................    $ 37,448                                        $ 59,126   
  Ratio of EBITDA to interest expense......                                                        2.5x   

See accompanying notes to unaudited pro forma condensed consolidated statements 
of operations.

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DYERSBURG CORPORATION 
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED 
STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)

(a) The Company's statement of operations for the twelve months ended July 5,   
 1997 and Alamac's statements of operations for the nine and twelve months
   ended June 30, 1997 represent a compilation of statements of operations for
 each quarterly period in such nine and twelve-month periods. As a result,
such statements of operations include estimates inherent in preparing   
  interim financial statements. The operating results of the Company for the
three months ended September 28, 1996 have been included in both the pro
    forma statements of operations for the year ended September 28, 1996 and the
 twelve months ended July 5, 1997. Net sales and net income of the Company
for the three months ended September 28, 1996 were $59,292 and $3,795,  
respectively. The operating results of Alamac for the three months ended
 September 30, 1996 have been included in both the pro forma statements of
    operations for the year ended September 28, 1996 and the twelve months ended
 July 5, 1997. Net sales and net loss of Alamac for the three months ended
September 30, 1996 were $52,080 and $526, respectively. The operating   
results of Alamac for the three months ended December 31, 1996 have been
included in the pro forma statements of operations for the year ended   
  September 28, 1996, and the nine and twelve months ended July 5, 1997. Net
   sales and net income of Alamac for the three months ended December 31, 1996
were $55,935 and $905, respectively.                                    

(b) The assets of Alamac's Whitmire, South Carolina spinning plant were         
  transferred to WestPoint Stevens prior to the Acquisition. The increase in
cost of goods sold reflects the estimated incremental cost of purchasing
   yarn from third-party vendors at market rates compared to the Whitmire cost
 of production included in the historical Alamac statements of operations.

(c) Reflects the elimination of certain management and other fees allocated to  
Alamac by WestPoint Stevens for services which will not be incurred by  
 Alamac under the Company's ownership. In addition to these management and
other allocated fees, the Company has identified anticipated annual cost
  savings (which are not included in pro forma adjustments) of approximately
 $3,000 in selling, general and administrative expenses. The Company is in
  the process of developing formal plans to achieve these estimated savings.
As management continues to gain additional information and formulate its
transition strategy, other areas of potential cost savings may be       
    identified. However, there can be no assurance that any of these anticipated
   savings can be achieved or that the effects of any such savings will not be
offset by unexpected, unforeseen increases in other costs.              

(d) Reflects the increased goodwill amortization expense based upon the         
preliminary purchase price allocation of the Acquisition, using the     
straight-line method over a 40-year life.                               

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DYERSBURG CORPORATION 
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED 
STATEMENTS OF OPERATIONS -- (CONTINUED) 
(DOLLARS IN THOUSANDS)

(e) Reflects the pro forma adjustment to interest expense with respect to the   
following:                                                              

                                                        [Enlarge/Download Table]

                                                                                          TWELVE   
                                                        FISCAL YEAR      NINE MONTHS      MONTHS   
                                                           ENDED            ENDED         ENDED    
                                                     SEPTEMBER 28, 1996  JULY 5, 1997  JULY 5, 1997
                                                     ------------------  ------------  ------------
                                                                                                   
Interest expense and amortization of deferred debt                                                 
  costs incurred under the New Credit Facility at a                                                
  LIBOR-based rate, assumed to be 8.0%, based on                                                   
  the pro forma estimated average outstanding                                                      
  balance of $129,000, $121,200 and $122,300 for                                                   
  each of the pro forma periods,                                                                   
  respectively(1)(2)...............................       $10,679           $ 7,753      $10,425   
Interest expense and amortization of deferred debt                                                 
  costs incurred in connection with the $125,000 of                                                
  Series A Notes...................................        12,545             9,409       12,545   
Elimination of the Company's historical interest                                                   
  expense and fees associated with the existing                                                    
  credit facility and senior notes assumed to be                                                   
  repaid from the proceeds of the New Credit                                                       
  Facility and the Series A Notes..................        (5,540)           (3,871)      (5,281)  
Elimination of Alamac historical interest                                                          
  expense..........................................        (8,897)           (7,024)      (9,195)  
                                                          -------           -------      -------   
  Net increase in interest expense.................       $ 8,787           $ 6,267      $ 8,494   
                                                          =======           =======      =======   

---------                                                                       

(1) Includes interest on assumed outstanding borrowings in all periods
         presented of $42,500 to fund working capital. See note (e) of the notes
to unaudited pro forma condensed consolidated balance sheet.  
(2) A  1/8% increase in the assumed interest rate on the New Credit   
         Facility would increase interest expense by $161, $114 and $153 for the
     year ended September 28, 1996, and the nine and twelve months ended
July 5, 1997, respectively.                                   

(f) Reflects the income tax effect of the pro forma adjustments at the statutory
rate of 36%.                                                            

(g) EBITDA represents income before interest and amortization of debt costs,    
    federal and state income taxes, and depreciation and amortization. EBITDA is
    generally considered to provide information regarding a company's ability to
  service and/or incur debt. EBITDA should not be considered in isolation or
as a substitute for net income, cash flows from operations, or other    
   consolidated income or cash flow data prepared in accordance with generally
   accepted accounting principles or as a measure of a company's profitability
or liquidity.                                                           

(h) Excludes the non-recurring extraordinary loss of $800, net of tax benefit   
of $450, associated with the commitment fee paid for unused bridge loan 
financing which will be expensed by the Company at the time the         
Transactions are consummated.                                           

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DYERSBURG CORPORATION 
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JULY 5, 1997

(DOLLARS IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                          DYERSBURG       ALAMAC                                    
                                         CORPORATION     JUNE 30,      PRO FORMA         PRO FORMA  
                                         JULY 5, 1997      1997       ADJUSTMENTS       CONSOLIDATED
                                         ------------  -------------  -----------       ------------
                                                                                                    
ASSETS                                                                                              
Current assets:                                                                                     
  Cash..................................   $  1,677      $  2,135      $ (2,135)(a)       $  1,677  
  Accounts receivable, net..............     48,522            --                           48,522  
  Inventories...........................     30,456        32,785        (1,516)(a)         62,998  
                                                                          1,273(c)                  
  Prepaid expenses and other............        846         4,846        (3,506)(a)          5,589  
                                                                          3,403(c)                  
                                           --------      --------      --------           --------  
Total current assets....................     81,501        39,766        (2,481)           118,786  
Property, plant and equipment, net......     65,685       102,233       (18,262)(a)        149,656  
Goodwill................................     57,697            --        23,072(c)          80,769  
Deferred debt costs and other...........        484            --         6,700(b)           7,184  
                                           --------      --------      --------           --------  
Total assets............................   $205,367      $141,999      $  9,029           $356,395  
                                           ========      ========      ========           ========  

LIABILITIES AND SHAREHOLDERS' EQUITY                                                                
Current liabilities:                                                                                
  Trade accounts payable................   $ 12,173      $  6,853                         $ 19,026  
  Accrued expenses......................     11,982         6,098      $ (1,143)(b)         20,899  
                                                                          4,412(c)                  
                                                                           (450)(b)(d)              
  Deferred income taxes.................         --         2,456        (2,456)(c)             --  
  Current portion of long-term                                                                      
     obligations........................         --            --         7,500(b)           7,500  
                                           --------      --------      --------           --------  
Total current liabilities...............     24,155        15,407         7,863             47,425  
Deferred income taxes and other.........      9,186        20,551       (20,551)(c)          9,186  
Long-term obligations...................     75,837        80,735       (80,735)(a)        204,395  
                                                                        203,995(b)(e)               
                                                                        (67,937)(b)                 
                                                                         (7,500)(b)                 
                                           --------      --------      --------           --------  
Total liabilities.......................    109,178       116,693        35,135            261,006  

Shareholders' equity:                                                                               
  Common stock..........................        131            --                              131  
  Additional paid-in capital............     41,355            --                           41,355  
  Retained earnings.....................     54,703            --          (800)(b)(d)      53,903  
  Net equity of Alamac..................         --        25,306        55,316(a)              --  
                                                                        (80,622)(c)                 
                                           --------      --------      --------           --------  
Total shareholders' equity..............     96,189        25,306       (26,106)            95,389  
                                           --------      --------      --------           --------  
Total liabilities and shareholders'                                                                 
  equity................................   $205,367      $141,999      $  9,029           $356,395  
                                           ========      ========      ========           ========  

See accompanying notes to unaudited pro forma condensed consolidated balance
sheet.

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DYERSBURG CORPORATION 
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET 
(DOLLARS IN THOUSANDS)

(a) Reflects the transfer of certain assets and liabilities, including the      
Whitmire, South Carolina spinning plant, to WestPoint Stevens or its    
affiliates prior to the Acquisition.                                    

(b) Reflects the financing of the Acquisition and certain other financing       
transactions as follows:                                                

                                                                [Download Table]
                                                                       
Proceeds from the Series A Notes............................  $125,000 
Initial borrowings under New Credit Facility................    78,995 
                                                              -------- 
Gross proceeds..............................................   203,995 
Repayment of existing credit facility.......................   (42,937)
Repayment of existing senior notes..........................   (25,000)
Payment of accrued interest.................................    (1,143)
Debt costs..................................................    (6,700)
Other costs.................................................    (1,250)
                                                              -------- 
          Net proceeds after refinancing....................  $126,965 
                                                              ======== 

       At the close of the Transactions, the current portion of the New Credit
Facility will be $7,500.                                        

(c) The Acquisition will be accounted for under the purchase method of          
accounting pursuant to which the purchase price will be allocated to the
   acquired assets and liabilities based upon their relative fair values as of
the closing date. The preliminary allocation of the purchase price      
($126,000, plus acquisition costs of $965) is summarized below:         

                                                                [Download Table]
                                                                       
Inventory...................................................  $ 32,542 
Prepaid expenses and other..................................     4,743 
Property, plant and equipment...............................    83,971 
Goodwill....................................................    23,072 
Accounts payable............................................    (6,853)
Accrued liabilities.........................................   (10,510)
                                                              -------- 
          Net purchase price................................  $126,965 
                                                              ======== 

The Stock Purchase Agreement contemplates a post-closing adjustment to
adjust the purchase price for changes in working capital and certain  
    pension obligations, as defined, between December 31, 1996 and the closing
 date. No working capital or pension adjustment has been included in the
above purchase price allocation.                                      

(d) Reflects the extraordinary loss of $800, net of tax benefit of $450,        
associated with the commitment fee paid for unused bridge loan financing
which will be expensed by the Company at the time the Transactions are  
consummated.                                                            

(e) Historically, Alamac accounts receivable have been sold to WestPoint        
Stevens, who then sold them to a related-party financing source.        
   Accordingly, the Company estimates that, in addition to the purchase price,
it will be required to finance approximately $40,000 to $45,000 of      
additional working capital following the Acquisition. These estimated   
 borrowings to fund working capital are not reflected in the unaudited pro
forma condensed consolidated balance sheet as of July 5, 1997.          

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

OVERVIEW                                                                        

Dyersburg is a leading manufacturer of knit fleece, jersey and stretch
fabrics sold principally to domestic apparel producers. The Company's fleece    
fabrics are used to produce (i) outerwear apparel suitable for outdoor          
recreational activities, as well as casual sportswear, (ii) children's and      
women's sportswear, including sweatshirts and sweatpants, (iii) infant blanket  
sleepers and (iv) blankets and throws. The Company's jersey fabrics are used to 
produce a broad range of women's and children's lightweight apparel, including  
tops and shorts. The Company's stretch fabrics are used to produce a variety of 
activewear, including dancewear, swimwear, biking and running garments,         
recreational and casual sportswear, and intimate apparel.                       

 In 1992, in response to declining market prices for the Company's basic
fleece and jersey fabrics, the Company initiated a strategy to expand its       
product assortment by developing and marketing higher margin, value-added       
products. Therefore, results of operations have been impacted, in part, by      
management's strategies to improve product mix, modernize and enhance           
manufacturing operations and expand marketing, sales and customer service       
resources. Results of operations also have been impacted by consumer demand for 
apparel products, industry trends toward more casual dress, raw material costs  
and government legislation. See "Business."                                     

Since 1993, the Company has introduced several new products, including
outerwear fleece, stretch fabrics and higher cotton content jersey and fleece   
fabrics. These products constituted 56.6% of net sales for the twelve months    
ending July 5, 1997. The Company developed its outerwear fleece and higher      
cotton content fabrics internally and acquired its stretch fabric product line  
through the acquisition of United Knitting in January 1994. The Company intends 
to continue expanding its sales of these products and to continue developing    
additional value-added products.                                                

     The Company's manufacturing operations are vertically integrated, beginning
with the conversion of fiber into yarn and knitting, dyeing and finishing the   
fabric in a wide range of styles and colors. The Company also purchases certain 
yarns to supplement its yarn production capacity and to produce specialty       
fabrics, including stretch fabrics. Over the past several years, the Company has
substantially upgraded its manufacturing operations. The major components of the
modernization program included upgrading yarn spinning and dyeing equipment,    
automating the Company's distribution facilities and installing napping and     
shearing equipment to produce outerwear fleece products. As a result of the     
capital investment program, net sales per average number of employees (a        
standard industry measure for productivity) have increased from $122,000 in     
fiscal 1994 to $146,000 for the twelve months ended July 5, 1997. Further, over 
this period, the Company's cost of goods sold before raw materials costs        
expressed as a percentage of net sales decreased from 34.9% to 33.2% of net     
sales.                                                                          

    The Company's results of operations are impacted, in part, by fluctuations
in the market prices for raw materials, including polyester, cotton and acrylic,
and the ability to adjust the selling prices of finished fabrics (which depends 
principally on consumer demand for apparel). According to industry sources, from
1994 through July 1997, the spot market prices per pound for polyester ranged   
from $0.66 to $0.96, for cotton ranged from $0.55 to $1.07 and for acrylic      
ranged from $0.95 to $1.10, while market prices for knit apparel remained       
relatively constant. For the twelve months ended July 5, 1997, the raw materials
cost component of cost of goods sold represented 42.8% of net sales, compared   
with 42.5%, 47.4% and 44.4%, respectively, for fiscal 1994, fiscal 1995 and     
fiscal 1996.                                                                    

     Beginning in fiscal 1995, the Company implemented a strategy to augment its
marketing, sales and customer service capabilities by hiring additional key     
management personnel and authorizing increased budgets for these operations.    
These investments increased selling, general and administrative expenses as a   
percentage of sales during fiscal 1996 and the nine months ended July 5, 1997,  
as the business strategies were developed and implemented. The Company expects  
to realize further improvement in operating margin as these resources help      
produce higher sales volume. Management believes that the marketing, sales and  
customer service resources in place can support substantially higher sales      
volume.                                                                         

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RESULTS OF OPERATIONS                                                           

 The Company's fiscal year ends on the Saturday closest to September 30.
Results for fiscal 1994 include the operations of United Knitting from January  
19, 1994, the date of its acquisition by the Company.                           

  The table below sets forth for the periods indicated statement of income
data expressed as a percentage of net sales:                                    

                                                        [Enlarge/Download Table]

                                                     FISCAL YEAR              NINE MONTHS ENDED      
                                               -----------------------   ----------------------------
                                               1994     1995     1996    JUNE 29, 1996   JULY 5, 1997
                                               -----    -----    -----   -------------   ------------
                                                                                                     
Net sales..................................... 100.0%   100.0%   100.0%      100.0%         100.0%   
Cost of sales.................................  77.4     79.9     78.1        79.3           76.3    
                                               -----    -----    -----       -----          -----    
Gross profit..................................  22.6     20.1     21.9        20.7           23.7    
Selling, general and administrative                                                                  
  expenses....................................   9.0      8.7     10.6        10.5           11.7    
                                               -----    -----    -----       -----          -----    
Operating income..............................  13.6     11.4     11.3        10.2           12.0    
Goodwill amortization.........................   1.0      0.9      0.9         1.0            0.9    
Interest and amortization of debt costs.......   2.8      3.1      3.1         3.4            2.8    
Write-down of fixed assets....................    --      1.1       --          --             --    
Federal and state income taxes................   4.2      3.0      3.0         2.4            3.3    
                                               -----    -----    -----       -----          -----    
Net income....................................   5.6%     3.3%     4.3%        3.4%           5.0%   
                                               =====    =====    =====       =====          =====    

Nine Months Ended July 5, 1997 Compared to Nine Months Ended June 29, 1996  

  Net Sales.  Net sales for the first nine months of fiscal 1997 increased
15.8% to $158.2 million from $136.6 million in the first nine months of fiscal  
1996. The increase resulted primarily from an increase in sales of the Company's
value-added outerwear fleece fabrics, which increased by approximately 57%, and 
sales of infant blanket sleepers, which increased by approximately 49%. These   
increases were partially offset by decreased sales of active-wear acrylic and   
active-wear cotton fabrics.                                                     

Gross Profit.  Gross profit in the first nine months of fiscal 1997   
increased to 23.7% of net sales from 20.7% in the comparable period of the prior
year. This increase resulted primarily from the shift in the Company's product  
mix to higher margin, value-added fabrics, particularly outerwear fleece        
fabrics, lower raw material costs and lower production costs as a result of the 
Company's plant modernization program.                                          

Selling, General and Administrative Expenses.  Selling, general and   
administrative expenses in the first nine months of fiscal 1997 increased 28.5% 
to $18.5 million from $14.4 million in the comparable period in fiscal 1996 and 
increased as a percentage of net sales to 11.7% in the first nine months of     
fiscal 1997 from 10.5% in the first nine months of fiscal 1996. These increases 
were primarily due to a $2.2 million increase in incentive compensation, profit 
sharing and sales bonus expense resulting from the Company's increased          
profitability and a $1.1 million increase in bad debt expense resulting from    
increased reserves attributable to specific customer accounts. Before giving    
effect to these items, selling, general and administrative expenses as a        
percentage of net sales declined in the first nine months of fiscal 1997        
compared to the first nine months of fiscal 1996.                               

     Interest and Amortization of Debt Costs.  Interest and amortization of debt
costs for the first nine months of fiscal 1997 of $4.5 million were relatively  
unchanged from the comparable period in fiscal 1996.                            

 Federal and State Income Taxes.  Federal and state income taxes of $5.2
million for the first nine months of fiscal 1997 and $3.3 million for the       
comparable period in fiscal 1996 were higher than the federal statutory rate due
to state income taxes and the non-deductibility of goodwill amortization. The   
effective tax rate declined to 39.5% in the first nine months of fiscal 1997    
primarily due to a legal restructuring implemented by the Company in fiscal 1996
which resulted in a reduction in certain state taxes. The impact of the         
restructuring is expected to continue into future periods.                      

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Fiscal 1996 Compared to Fiscal 1995                                         

    Net Sales.  Net sales in fiscal 1996 decreased 1.8% to $195.9 million from
$199.4 million in fiscal 1995. This decrease resulted primarily from a decreased
demand for jersey and sleeper fabrics, partially offset by an increase in sales 
of outerwear fleece fabrics.                                                    

    Gross Profit.  Gross profit in fiscal 1996 increased to 21.9% of net sales
from 20.1% in fiscal 1995 as a result of a shift in the Company's product mix to
higher margin, value-added fabrics, and lower production costs as a result of   
the Company's plant modernization program.                                      

Selling, General and Administrative Expenses.  Selling, general and   
administrative expenses in fiscal 1996 increased 18.7% to $20.7 million from    
$17.4 million in fiscal 1995 and increased as a percentage of net sales to 10.6%
in fiscal 1996 from 8.7% in fiscal 1995. This increase resulted primarily from  
implementation of the Company's strategy to augment its marketing, sales and    
customer service capabilities and, to a lesser degree, increased promotions.    

     Interest and Amortization of Debt Costs.  Interest and amortization of debt
costs for fiscal 1996 were unchanged from fiscal 1995 at $6.2 million. Average  
outstanding debt and interest rates were substantially the same for both fiscal 
years.                                                                          

 Federal and State Income Taxes.  Federal and state income taxes of $5.9
million for fiscal 1996 and $6.0 million for fiscal 1995 were higher than the   
federal statutory rate due to state income taxes and the non-deductibility of   
goodwill amortization. The effective tax rate declined from 47.7% in fiscal 1995
to 41.1% in fiscal 1996, primarily due to a legal restructuring implemented by  
the Company at mid-year which resulted in a reduction in certain state taxes.   

Fiscal 1995 Compared to Fiscal 1994                                         

     Net Sales.  Net sales in fiscal 1995 increased 10.5% to $199.4 million from
$180.5 million in fiscal 1994. A majority of the increase was due to a shift in 
sales toward higher priced cotton and outerwear fleece products. The remainder  
of the increase was primarily attributable to the inclusion of the results of   
operations of United Knitting for the full twelve-month period in fiscal 1995.  
Gross margin declined from 22.6% in fiscal 1994 to 20.1% in fiscal 1995. The    
decline in gross margin resulted from significant increases in raw material     
costs which the Company was unable to fully recover through price increases.    

Selling, General and Administrative Expenses.  Selling, general and   
administrative expenses decreased as a percentage of net sales to 8.7% in fiscal
1995 from 9.0% in fiscal 1994. The decline relative to net sales resulted from  
reduced incentive compensation payments and a lower contribution to the         
Company's profit sharing plans, which was partially offset by higher commissions
and sales-related expenses.                                                     

    During the fourth quarter of fiscal 1995, the Company committed to replace
certain yarn manufacturing equipment with more modern and efficient machinery.  
The write-down of the book value of existing equipment, net of proceeds from its
sale, resulted in a $2.2 million charge to operations.                          

     Interest and Amortization of Debt Costs.  Interest and amortization of debt
costs for fiscal 1995 were $6.2 million compared to $5.0 million in fiscal 1994.
This increase resulted primarily from higher average interest rates. The average
balance on long-term debt outstanding for fiscal 1995 was approximately the same
as that of fiscal 1994.                                                         

LIQUIDITY AND CAPITAL RESOURCES                                                 

The Company's primary capital requirements are for working capital,   
servicing the Company's indebtedness and capital expenditures. Management       
believes that cash generated from operations, together with borrowings available
under the New Credit Facility, will be sufficient to meet the Company's working 
capital and capital expenditure needs in the foreseeable future.                

Net cash provided by operating activities totaled $15.2 million, $23.3
million, $13.6 million and $12.6 million in fiscal 1994, fiscal 1995, fiscal    
1996 and the first nine months of fiscal 1997, respectively. These cash         

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flows have been supplemented primarily by borrowings under the Company's        
existing credit facility. The average balances outstanding and the average      
interest rates paid for fiscal 1994, fiscal 1995, fiscal 1996 and the first nine
months of fiscal 1997 were approximately $46.8 million, $51.7 million, $50.9    
million, and $44.1 million, respectively, and 5.4%, 7.1%, 7.2% and 7.3%,        
respectively. At July 5, 1997, the Company had $19.4 million of unused available
bank lines of credit.                                                           

     Working capital at July 5, 1997 was $57.3 million compared to $60.9 million
at June 29, 1996. The Company's current ratio was 3.37:1 and its debt-to-capital
ratio was 44.1% at July 5, 1997, compared to 4.37:1 and 47.7% at September 28,  
1996 and 4.18:1 and 51.5% at June 29, 1996.                                     

  During fiscal 1996 and the first nine months of fiscal 1997, the Company
had capital expenditures of $11.8 million and $5.7 million, respectively.       
Capital expenditures for the fourth quarter of fiscal 1997 are anticipated to be
approximately $5.3 million, the majority of which will be used to construct a   
new warehouse facility. In addition, the Company intends to implement a         
multi-year capital expenditure program at Alamac. The Company estimates that it 
will have aggregate capital expenditures in fiscal 1998 of approximately $24.0  
million.                                                                        

     In connection with the Acquisition, the Company consummated the offering of
Series A Notes and entered into the New Credit Facility. The New Credit Facility
consists of a five-year Revolver providing up to $110.0 million of availability 
and a five-year $50.0 million Term Loan. Advances under the Revolver are based  
on a borrowing base formula of inventory and receivables. Interest will accrue  
on borrowings under the Revolver and the Term Loan at the Company's option at   
either LIBOR plus 0.75% to 2.75% based on certain financial ratios (8.47% at    
July 5, 1997) or the senior lender's prime rate (8.50% at July 5, 1997). The    
Term Loan has a scheduled amortization of $7.5 million during each of the first 
and second years following the closing; $10.0 million during the third year     
following the closing; and $12.5 million during each of the fourth and fifth    
years following the closing. In addition, the Company is required to use the    
proceeds from any equity offerings, asset sales and 50% of Excess Cash Flow (as 
defined in the New Credit Facility) to repay amounts outstanding under the Term 
Loan. The New Credit Facility is secured by a security interest in substantially
all of the Company's assets. The New Credit Facility contains customary         
covenants, including requirements to maintain certain financial ratios. As of   
July 5, 1997, after giving pro forma effect to the Transactions, the Company    
would have had borrowings of $79.0 million outstanding under the New Credit     
Facility (excluding an estimated $40.0 to $45.0 million anticipated to be       
required to finance working capital needs following the Acquisition) and $41.8  
million of available borrowings thereunder. See "Use of Proceeds" and           
"Description of New Credit Facility."                                           

SEASONALITY                                                                     

  The Company's business has a seasonal pattern with the majority of sales
occurring during the third and fourth fiscal quarters. The following table sets 
forth the net sales and percentage of net sales for the Company by fiscal       
quarter for the last two fiscal years.                                          

                                                        [Enlarge/Download Table]

                                                                FISCAL              FISCAL      
                                                                 1995                1996       
                                                           ----------------    ---------------- 
                                                                  (DOLLARS IN THOUSANDS)        
                                                                                                
First Quarter (October-December).......................... $ 40,679    20.4%   $ 30,088    15.4%
Second Quarter (January-March)............................   48,370    24.2      42,344    21.6 
Third Quarter (April-June)................................   57,022    28.6      64,142    32.7 
Fourth Quarter (July-September)...........................   53,342    26.8      59,292    30.3 
                                                           --------   -----    --------   ----- 
                                                           $199,413   100.0%   $195,866   100.0%
                                                           ========   =====    ========   ===== 

     Due to this seasonal pattern of the Company's sales, inventories are lowest
at the end of the fiscal year and gradually increase over the following six     
months in anticipation of the peak selling period. Receivables tend to decline  
during the first fiscal quarter and are at their lowest point during December   
through February. The net result is increased working capital requirements from 
January through late in the fourth quarter. The Company anticipates that the    
Acquisition will reduce this seasonal pattern as Alamac's product offerings do  

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not result in any significant seasonality in its business. After giving pro     
forma effect to the Acquisition, net sales for each of the four fiscal quarters 
in fiscal 1996 would have been 20.7%, 23.4%, 29.3% and 26.6%, respectively, of  
total net sales in such year.                                                   

INFLATION                                                                       

Similar to other textile and apparel manufacturers, the Company is    
dependent on the prices and supplies of certain principal raw materials         
including polyester, cotton and acrylic fibers. During fiscal 1996, raw material
prices for polyester and acrylic stabilized after significant increases in      
fiscal 1995, while prices for cotton continued to increase. To date in fiscal   
1997, there has been a reduction in raw material prices. The long-term impact of
subsequent raw material price fluctuations on the Company's performance is,     
however, uncertain and could be material.                                       

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BUSINESS

GENERAL                                                                         

Dyersburg is a leading manufacturer of knit fleece, jersey and stretch
fabrics sold principally to domestic apparel producers. The Company's fleece    
fabrics are used to produce (i) outerwear apparel suitable for outdoor          
recreational activities, as well as casual sportswear, (ii) children's and      
women's sportswear, including sweatshirts and sweatpants, (iii) infant blanket  
sleepers and (iv) blankets and throws. The Company's jersey fabrics are used to 
produce a broad range of women's and children's lightweight apparel, including  
tops and shorts. The Company's stretch fabrics are used to produce a variety of 
activewear, including dancewear, swimwear, biking and running garments,         
recreational and casual sportswear, and intimate apparel. The Company's         
manufacturing operations are vertically integrated, beginning with the          
conversion of fiber into yarn and knitting, dyeing and finishing the fabric in a
wide range of styles and colors. The Company's fabrics are used in apparel      
marketed by leading brands such as Calvin Klein, Columbia, Health-Tex, Liz      
Claiborne, Osh Kosh B'Gosh, Patagonia, Polo, Tommy Hilfiger and William Carter; 
sold to catalog merchants and specialty stores such as L.L. Bean and Eddie      
Bauer, department stores and national chains. For the 12 months ended July 5,   
1997, the Company had net sales of $217.5 million and EBITDA of $37.4 million.  

   The Company acquired Alamac, a subsidiary of WestPoint Stevens. Formed in
1946, Alamac is a leading manufacturer of interlock, jersey, pique and other    
knit fabrics sold primarily to domestic apparel producers. Alamac's interlock   
fabrics are used to produce men's, women's and children's turtlenecks and       
women's sportswear. Alamac's pique fabrics are used to produce a variety of     
casual wear, including golf and polo shirts. Similar to the Company's           
manufacturing operations, Alamac's manufacturing operations are vertically      
integrated. The Company believes the Acquisition will (i) expand its product    
line to include a complete assortment of circular knit fabrics, (ii) broaden its
customer base, (iii) increase the Company's customer service capabilities, (iv) 
produce cost savings, (v) reduce the seasonality of the Company's sales and (vi)
better position the Company to exploit industry trends, such as the shift to    
casual dress. For the twelve months ended July 5, 1997, after giving pro forma  
effect to the Acquisition, the Company would have had net sales of $453.3       
million and EBITDA of $59.1 million. See "Unaudited Pro Forma Condensed         
Consolidated Financial Statements."                                             

BUSINESS STRATEGY                                                               

   The Company was formed in 1929 and, through the early 1990s, marketed its
fabrics to apparel manufacturers that supplied children's and women's apparel.  
In 1992, the Company began implementing a strategy of broadening its line of    
higher margin, value-added knit fabrics, including outerwear fleece and stretch 
fabrics, and targeting manufacturers of brand name apparel, catalog merchants,  
specialty stores, department stores and national chains. To support this shift  
in strategy, over the past several years the Company has substantially upgraded 
its manufacturing operations and has significantly increased its investment in  
marketing, research and development and customer service capabilities. The      
fundamental elements of the Company's strategy include:                         

Emphasizing Value-Added Fabrics.  The Company's primary strategy is to
develop higher margin, value-added knit fabrics targeting manufacturers of brand
name apparel, catalog merchants, specialty stores, department stores and        
national chains. The Company's value-added fabrics enable Dyersburg to provide  
its customers with distinctive aesthetic and performance features, such as a    
broad variety of surface finishes, high comfort and durability and low          
shrinkage. As a result of their better performance and technical design         
characteristics, these products generally have higher margins than the Company's
traditional fabrics. To support the development, manufacture and sale of these  
products, the Company has significantly increased the resources devoted to      
research and development and marketing activities and has made significant      
investments in its manufacturing operations.                                    

 Increasing Manufacturing Efficiencies.  The Company has invested in its
manufacturing operations to provide for the flexible production of its broad    
line of value-added fabrics, minimize off-quality production and reduce         
production costs. As a result of these investments, the Company has experienced 
a 20% increase in net                                                           

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sales per average number of employees from $122,000 per employee during fiscal  
1994 to $146,000 per employee during the twelve months ended July 5, 1997, and a
26% reduction in the production of irregular and second-quality fabrics.        
Further, manufacturing efficiencies have enabled the Company to increase on-time
deliveries from 83% in fiscal 1996 to 92% for the twelve months ended July 5,   
1997.                                                                           

Offering High Levels of Customer Service.  The Company is committed to
being an industry leader in providing superior customer service. Key elements   
include electronic order execution, inventory management support and timely and 
complete order delivery. In addition, the Company is pursuing the management of 
complete garment production for customers through the formation of strategic    
alliances with contract apparel manufacturers.                                  

 Pursuing Strategic Acquisitions and Alliances.  The Company continually
seeks strategic acquisitions and alliances that will enable the Company to add  
complementary product offerings and provide new customers and channels of       
distribution for the Company's products. For example, in 1994 the Company       
acquired United Knitting, which added stretch fabrics and lightweight lining    
fabrics to the Company's product line. In the first nine months of fiscal 1997, 
19.6% of the Company's net sales was generated from the sale of fabrics produced
by United Knitting. In addition to the Acquisition, the Company is currently    
pursuing other strategic initiatives.                                           

THE ACQUISITION                                                                 

On August 27, 1997, the Company acquired all of the capital stock of  
Alamac. The Purchase Price was $126.0 million, subject to adjustment for changes
in working capital and certain other items related to pension assets and        
liabilities subsequent to December 31, 1996. Prior to consummation of the       
Acquisition, Alamac transferred all of its cash and assets related to its       
Whitmire, South Carolina spinning plant to WestPoint Stevens and, accordingly,  
such assets were not acquired in the Acquisition. In addition, Alamac sold its  
accounts receivable to WestPoint Stevens, who then sold them to a related-party 
financing source and, as a result, the Company did not acquire Alamac's accounts
receivable. Accordingly, the Company estimates that it will be required to      
finance approximately $40.0 to $45.0 million of additional working capital. The 
Company used the net proceeds from the Offering, together with borrowings under 
the New Credit Facility, to finance the Purchase Price and working capital      
needs, repay amounts outstanding under the Company's existing credit facility   
and certain other indebtedness and pay related fees and expenses. See "Use of   
Proceeds" and "Description of New Credit Facility."                             

   The Company operates Alamac as a discrete division. The Company's intends
to integrate Alamac's sales and marketing personnel and other resources with the
Company's existing operations to establish coordinated product development,     
marketing and customer service across its product lines for its combined        
customer base. The Company also intends to consolidate general and              
administrative activities, where appropriate, to eliminate redundancies and     
exploit economies of scale. In addition, the Company intends to invest in       
Alamac's manufacturing operations to improve Alamac's manufacturing             
productivity.                                                                   

The Company believes that the Acquisition will enhance its competitive
position and business prospects based primarily on the following benefits:      

Expanded Product Line and Customer Base.  The Acquisition will        
significantly expand the Company's line of value-added fabrics, including the   
addition of patterns, yarn-dyed fabrics and knit collars. Yarn-dyed fabrics can 
be produced in an unlimited variety of stripes and patterns, enabling Alamac to 
produce fabrics used in a broad line of value-added products not produced by the
Company, including golf and polo shirts and uniforms. Alamac's fabrics are sold 
to a number of customers not currently served by the Company, particularly for  
use in menswear products. The Company believes the expanded customer base and   
the increased breadth of its product offerings following the Acquisition will   
create opportunities for the combined sales forces of the Company and Alamac to 
market to new customers and substantial cross-selling opportunities to market to
existing customers.                                                             

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   Cost Savings.  The Company believes it can achieve operating cost savings
at Alamac by eliminating certain duplicative functions and achieving            
efficiencies in administration and sales and marketing. The Company also        
believes it can realize additional manufacturing efficiencies by upgrading      
Alamac's manufacturing operations. The Company believes these improvements will 
significantly increase Alamac's manufacturing flexibility and productivity while
reducing operating costs.                                                       

Raw Material Purchasing Leverage.  As a result of the Acquisition, the
Company will more than double its purchases of polyester fiber. The Company     
believes this purchasing leverage will enhance the Company's ability to obtain  
this raw material at more favorable prices.                                     

Reduced Seasonality of the Company's Sales.  The Company's sales have 
historically had a pronounced seasonal pattern with approximately 63.0% of its  
sales in fiscal 1996 occurring during its third and fourth fiscal quarters. The 
Acquisition will reduce this seasonality as Alamac's product offerings do not   
result in any significant seasonality in its business. After giving pro forma   
effect to the Acquisition, net sales for each of the four fiscal quarters in    
fiscal 1996, would have been 20.7%, 23.4%, 29.3% and 26.6 %, respectively, of   
total net sales in such year.                                                   

 Greater Critical Mass.  The Acquisition will significantly increase the
Company's revenue base. After giving pro forma effect to the Acquisition, the   
Company's net sales for the twelve months ended July 5, 1997 would have been    
$453.3 million. The Company believes that its increased size, marketing         
resources, production capacity and product offerings will create additional     
marketing and other growth opportunities.                                       

INDUSTRY OVERVIEW                                                               

Based on information provided by the American Apparel Manufacturers   
Association (the "AAMA"), management estimates that wholesale volume of knit    
apparel sold by domestic apparel producers to retailers was $8.5 billion in     
1996, $8.4 billion in 1995, $7.9 billion in 1994 and $7.5 billion in 1993,      
representing a compound annual growth rate of 4.3%. The Company attributes the  
growth in knit fabric and knit apparel principally to (i) more casual dressing  
in and away from the workplace resulting from increasingly casual lifestyles and
(ii) the trade shift from apparel production in Asia to production in North     
America, including Mexico and the Caribbean Basin.                              

  Trend Toward Casual Dress.  The Company believes that there is a growing
trend in the United States toward casual dress. An increasing number of         
companies continue to institute casual dress policies, such as "casual Fridays."
In addition, the Company believes that the number of people who work at home is 
increasing and that outside of the workplace, people's social activities are    
focusing on a more casual lifestyle. According to a study compiled by The NPD   
Group, Inc., an independent market research firm, the retail dollar volume for  
men's casual business attire grew 12% between 1993 and 1995 and sales of women's
casual business attire increased 7% in the same period in comparison to total   
apparel sales which grew less than 7% during the period. In 1995, casual attire 
accounted for an estimated 58% of men's and 61% of women's retail clothing      
dollar volume.                                                                  

    Expansion of North American Apparel Production.  According to the AAMA, in
1996 Canada, Mexico and the Caribbean Basin countries accounted for $10.5       
billion in apparel imports to the United States, compared with $6.7 billion in  
1994, representing a 56.7% increase. Conversely, apparel imports to the United  
States by China, Taiwan, Korea and Hong Kong declined from $12.1 billion in 1994
to $11.0 billion in 1996. The increase in North American apparel production can 
be attributed to the beneficial impact of trade policy, including NAFTA and the 
Caribbean Basin Initiative (the "CBI"). Management believes that these          
initiatives, which include incentives to use fabric made in the United States,  
have made apparel assembled in the qualifying countries more price competitive  
for domestic apparel marketers and retailers. Further, management believes that 
garments produced under these initiatives contain more domestic knit fabric than
apparel imported from outside the region.                                       

   Vendor Managed Inventory and Merchandising Programs.  Management believes
that retailers and leading branded apparel producers are consolidating suppliers
to achieve economies of scale and heightened customer service. To minimize the  
costs and risks associated with carrying inventories, retailers are demanding   

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that their key suppliers offer inventory management, including quick            
replenishment of core styles and electronic order execution, as well as         
point-of-sale merchandising support. Management believes that the Company's     
breadth of product assortment, flexible production, investments in technology   
and critical mass position the Company to increase its market share as major    
retailers and apparel producers continue to consolidate and focus their supplier
relationships.                                                                  

Apparel Production by Fabric Suppliers.  Certain apparel retailers are
employing strategies to minimize the cycle time from product development to     
finished product delivery, thereby minimizing inventory risks and responding    
more effectively to shifts in consumer demand. Certain fabric suppliers have    
also begun integrating forward into the development, production and             
merchandising of finished garments for key customers, either through owned or   
contracted garment assembly operations. The Company believes that the           
Acquisition and the resulting breadth of high-quality products, flexible        
production capabilities and critical mass position it to manage the production  
of finished apparel for key customers.                                          

PRODUCTS                                                                        

     The Company's products are divided into three principal categories: fleece,
jersey and stretch.                                                             

Fleece.  The principal use of the Company's fleece fabrics is in      
manufacturing outerwear, children's and women's activewear and infant blanket   
sleepers. The Company's fleece fabrics are made of acrylic, polyester, cotton or
blends of these fibers. The fabric is dyed and undergoes a series of finishing  
and abrading processes by which a surface is brushed or "napped" to give the    
fabric the "hand" or feel associated with fleece.                               

        Outerwear Fleece.  In 1992, the Company introduced a new line of
 outerwear fleece designed for use in recreational and casual sportswear
apparel products. In 1993, this product line was complemented by the  
     introduction of Dyersburg E.C.O. outerwear fleece made of yarn using fibers
   from recycled plastics. The Company's variety of outerwear fleece fabrics
has grown significantly, with new fabric weights, blends, fiber       
configurations and finishes that promote functionality. The Company's 
     outerwear fleece products are engineered for water repellency, wickability,
     moisture vapor transport and warmth. The Company's branded outerwear fleece
products have grown to include Kinderfleece targeted to children's    
   outerwear, Citifleece targeted to adult outwear, Dyersburg E.C.O. Lite, a
  lighter weight E.C.O. product, and Chamee(TM), a new microdenier product
line. Garments manufactured from these products are primarily sold to 
catalog merchants and specialty retailers.                            

     Other Fleece Products.  Fleece fabrics sold to the children's
     activewear market, principally sweatshirts and sweatpants, are made of 100%
   acrylic fibers or polyester/cotton blends. Acrylic's low cost, ability to
   be dyed brighter colors and low shrinkage are of particular importance to
   the children's activewear market. Fleece fabrics sold to manufacturers of
  women's activewear are primarily made either of 50% polyester/50% cotton
   blends or polyester/cotton blends with a higher cotton content. In recent
years, there has been increased use in activewear apparel of          
polyester/cotton blends, which management believes is attributable to 
increased consumer demand for natural fibers, as well as the greater  
    receptivity of these fabrics to printing compared to 100% acrylic fabrics.
     Polyester/cotton blends are also typically softer and less likely to "pill"
    than 100% synthetics, while still offering less fabric shrinkage than 100%
cotton products.                                                      

      The Company's remaining major fleece fabric product categories are
fabrics used to manufacture infant blanket sleepers and for home      
furnishings. The demand for infant blanket sleepers is primarily      
  attributable to its fire retardant characteristics. The Company's Maison
Fleece brand blankets and throws are made from the Company's outerwear
fleece fabrics for sale to the growing home furnishings market.       

  Jersey.  The Company markets a line of jersey fabrics for use in a broad
range of women's and children's lightweight apparel, principally tops and       
shorts. Jersey is a flat-knit fabric, which is typically made from a            
polyester/cotton blend or from 100% cotton fibers and, unlike fleece, is not    
surface-finished. Jersey fabrics are also generally lighter in weight than      
fleece.                                                                         

Stretch.  Stretch fabrics consist of custom formulations of cotton,   
spandex, nylon and other synthetic yarns designed for comfort, performance and  
styling. To produce a variety of shades and patterns, stretch                   

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fabrics may be knit from dyed yarns, dyed as cloth, sold to independent printers
for printing or garment-dyed by the customer. These fabrics are used in a       
variety of fashion and activewear products, including dancewear, swimwear,      
biking and running garments, recreational and casual sportswear and intimate    
apparel. The majority of these fabrics are used by leading manufacturers to     
produce higher-priced branded sportswear products. A new stretch product,       
Synsation, was introduced in late 1996 aimed at the swimwear market.            

The following table sets forth certain information with respect to the
Company's product offerings by type of fabric:                                  

                                                        [Enlarge/Download Table]

                                                          COMPANY        PERCENTAGE OF 
                                 DESCRIPTION               BRANDS        NET SALES (1) 
                          -------------------------  ------------------  --------------
                                                                                       
FLEECE:                                                                                
  Outerwear fleece....... Double-sided plush fleece  Dyersburg                22.4%    
                          engineered for warmth and  E.C.O.(TM)                        
                          light weight for use in a  Dyersport(R)                      
                          variety of outdoor         Citifleece(TM)                    
                          recreational activities    Kinderfleece(TM)                  
                          and casual sportswear                                        
  Other fleece products:                                                               
     Cotton activewear... Cotton rich fleeces for    Pareto(TM)               15.7%    
                          use in sweats and other                                      
                          activewear                                                   
     Sleepers............ Flame resistant fleece     TuffPuff(TM)             10.8%    
                          used in infant blanket                                       
                          sleepers                                                     
     Acrylic              Color rich acrylic         FleeceForce(R)                    
       activewear........ fabrics                                              8.4%    
     Home furnishings.... Plush fleece blankets and  Maison Fleece(TM)         2.8%    
                          throws                                                       
JERSEY................... Cotton and                                          10.9%    
                          cotton/polyester blends                                      
                          for tops, T-shirts and                                       
                          children's wear                                              
STRETCH.................. Lycra(TM) based circular   Synsation(TM)            16.5%    
                          knits for use in                                             
                          dancewear, swimwear,                                         
                          biking and running                                           
                          garments, recreational                                       
                          and casual sportswear and                                    
                          intimate apparel                                             
OTHER.................... Variety of cotton,                                  12.5%    
                          polyester and acrylic                                        
                          fabrics for use in                                           
                          hosiery, bags and                                            
                          miscellaneous trim                                           
                          products                                                     

------------------------------                                                  
(1) Represents percentage of the Company's net sales for the twelve months ended
July 5, 1997.                                                           

    Alamac produces a broad line of knit fabrics that can be generally divided
as follows:                                                                     

Interlock.  Interlock is made from 100% cotton ring spun, and         
cotton/polyester blends. Interlock is used primarily in men's, women's and      
children's turtlenecks and women's sportswear. Interlock, which the Company     
currently does not produce, is considered one of the leading base fabrications  
for domestic knit fabric production. The Company believes that the addition of  
this product line will present significant cross-selling opportunities.         

     Jersey.  Alamac's jersey products are similar to the Company's and are used
primarily in tops, T-shirts and shorts. Unlike the Company, Alamac produces     
jersey fabric in tubular as well as open width form.                            

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    Rib.  Rib is a stretch fabric, used primarily in tops. The stretch results
from the fabric construction, rather than the use of spandex. Rib continues to  
be an important fashion fabric for branded and mass merchant womenswear, and    
another important addition to the Company's product offerings.                  

Pique.  Pique is a textured knit and is the predominant fabric used in
men's golf shirts. Fabric for knit collars and cuffs manufactured by Alamac are 
the other significant ingredients necessary to participate in the golfwear      
category.                                                                       

Fleece.  Alamac has a much smaller line of fleece products than the   
Company; however, Alamac is able to produce fleece in tubular form, which is    
advantageous to certain children's manufacturers.                               

     Yarn-dyed products made up more than 20% of the total pounds of fabric sold
by Alamac during fiscal 1996. Yarn-dyed fabric is knit using colored yarns,     
allowing for stripes and patterns, as opposed to piece dye (dyeing fabric after 
it has been knit), which makes each fabric a solid color. Yarn-dyeing is        
important in golf shirts and career apparel, specifically for customers in the  
fast food industry. Yarn-dye can be performed on many different product         
constructions, including jersey, rib, interlock and pique. Many of the fabrics  
manufactured by Alamac are also engineered for career apparel and uniforms to   
incorporate the protective elements needed for the job function. Examples are   
anti-microbial finishes to protect against the spread of bacteria; soil release 
to protect against food spills; and durable finishes to add to the lifetime of  
garments that are subjected to repeated industrial launderings.                 

MANUFACTURING                                                                   

 To support the Company's strategy of broadening its line of value-added
fabrics and to increase its manufacturing efficiencies and reduce manufacturing 
costs, the Company has invested significantly in its manufacturing operations.  
The Company has updated its yarn manufacturing facilities resulting in a        
reduction in the production of off-quality yarns and a decrease in the labor    
component of its manufacturing costs. The Company's dyeing and finishing        
operations have also been significantly expanded and redesigned to accommodate  
the growing sales of outerwear fleeces and performance cottons. As a result of  
its plant modernization program, the Company has improved its ability to produce
high quality, competitively priced fabrics and to be versatile and flexible with
respect to the weight, gauge and composition of its fabrics. The Company's yarn 
spinning, knitting, dyeing and finishing equipment can be used with a variety of
fibers and blends to meet shifts in consumer demand.                            

 Knitted fabrics are made almost entirely from yarns containing acrylic,
cotton or polyester fibers or blends of these materials. These fibers are       
blended, if required, carded to disentangle locks and straighten individual     
fibers and drawn to produce continuous untwisted strands called "slivers." The  
slivers are spun, drawn and twisted to produce yarn. The Company produces the   
majority of its yarns, but also purchases yarn from a number of vendors. The    
Company maintains several sources for branded and non-branded spandex and       
synthetic blend yarns. Alamac produces a significant portion of its yarns, but  
purchases a majority of its yarn from a number of vendors. The yarn is          
subsequently knit into fabric known as "greige" or undyed fabric. After knitting
is completed, the greige fabric is dyed in computer-controlled, pressurized     
dyeing machines. Fabric dyeing is the most time-consuming operation in fleece   
fabric manufacturing, with dyeing cycles ranging from four to twelve hours,     
depending on the fabric and color dyed. Efficiency and quality controls         
implemented as part of the plant modernization program and new equipment have   
increased the Company's ability to match colors and reduce energy costs and are 
expected to reduce the time consumed in the dyeing process, as well as the      
overall production time for the Company's fabrics. Alamac is able to dye its    
yarns, as well as fabric, which allows it to produce fabrics in an unlimited    
variety of stripes and patterns.                                                

   The Company finishes fleece fabric surfaces by napping or utilizing other
processes. Fabrics are napped by being fed through machines that fluff one side 
of the fabric with rotating wire brushes, and then finished to produce the      
distinctive pile and feel of fleece through Company-developed processes that    
polish, raise and shear the fibers. Jersey fabric is a smooth, flat-knit fabric 
that is dyed but is not surface-finished. The Company also produces pile        
finished fleece fabrics, where a special knit construction produces an unusually
long nap. This deep "pile" can be "tumbled" in rotary dryers to create a pilled 
or "sherpa" look; embossed, where patterns are cut into the pile; or sheared,   
where the fibers are uniformly cut to form a very dense,                        

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compact fabric with a smooth surface. In addition, with a special knit          
construction, fabrics produced with any of these finishing techniques can be    
napped on both sides. The Company also offers fabrics, both fleece and jersey,  
that are mechanically compacted to reduce the wash shrinkage of garments.       

    The Company has two manufacturing facilities in Dyersburg and one facility
in each of Trenton and Cleveland, Tennessee. The original Dyersburg facility    
spins 100% synthetic (acrylic or polyester) and 50% polyester/50% cotton yarns. 
The Trenton facility spins 100% cotton yarns as well as cotton/synthetic blends.
These yarns are used along with yarns purchased from outside sources to knit    
fleece and jersey fabrics at the Dyersburg knitting facility prior to dyeing and
finishing. The Company's facility in Cleveland, Tennessee uses the Company's    
yarn as well as purchased yarn from outside sources to knit, dye and finish     
stretch and lining fabrics. The Company currently operates three shifts per day,
seven days a week at each of its facilities.                                    

Alamac has four manufacturing facilities in Lumberton, Elizabethtown, 
Clinton and Hamilton, North Carolina. The Clinton facility produces             
approximately 60% of Alamac's cotton and polyester needs with the remaining     
requirements obtained from outside vendors. All yarn dyeing requirements are    
produced at the Elizabethtown facility and shipped to the Lumberton and Hamilton
facilities where yarns are knitted into fabrics and finished. Alamac currently  
operates three shifts per day, seven days a week at each of its facilities.     

  Although the capacity at the Company's and Alamac's facilities varies by
product mix, the Company does not believe that material additional capacity     
could be added without additional capital investments in equipment. Management  
believes that the Company has the space to accommodate investment in equipment, 
and equipment is available for purchase by the Company.                         

SALES AND MARKETING                                                             

The Company maintains sales offices in New York, Chicago, Portland and
Seattle. To support the Company's product expansion strategy, the Company has   
significantly increased its resources devoted to sales, marketing and customer  
service and has increased the number of its sales representatives from 13 at the
end of fiscal 1992 to 24 at July 5, 1997. The Company also utilizes a network of
independent sales agents coordinated through its marketing organization in New  
York. In addition to calling on the Company's customers, the Company's sales    
representatives attempt to create additional demand for the Company's products  
by marketing directly to brand name clothing designers and retailers.           

  Alamac maintains sales offices in New York, Atlanta and Los Angeles. Its
sales representatives are organized by end use area. Alamac also maintains a    
resource center at its Elizabethtown facility where customers have access to a  
designer, six fully electronic knitting machines and Alamac's color and fabric  
libraries to facilitate the design and development of apparel lines.            

INVENTORY MANAGEMENT                                                            

The Company's customers typically negotiate their purchases from the  
Company through informal purchase orders that specify their anticipated fabric  
needs over periods as long as five months. The orders are revocable and serve   
primarily to outline the customers' intentions over a specified term and permit 
the Company to "block out" its production schedule. Although orders are subject 
to cancellation by customers at any time before the Company receives color      
specifications from the customers, fabric produced for canceled orders can      
ordinarily be used to fill other orders. Because these informal purchase orders 
are cancelable, the Company has no appreciable long-term backlog.               

   In order to facilitate its ability to respond quickly to customer demands
and due to the seasonal nature of the Company's business, the Company puts      
substantial efforts into management of its inventory. Based in part upon the    
volume of informal customer purchase orders, the Company builds an inventory of 
uncolored and basic color fabrics (such as blacks, whites and gray heathers)    
during the Company's off-peak season. As customers determine their precise      
needs, they provide the Company with firm orders for fabrics with specific      
dyeing and finishing requirements. The Company's build-up of inventory, together
with its modern dyeing and distribution facilities, permits the Company to      
quickly color, finish and ship fabric during the peak demand season. In         
addition, the Company's ability to manage its inventory and to efficiently dye  
and distribute its                                                              

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fabrics also enables the Company to produce and ship fabrics not contained in   
inventory. As a result of these efforts, together with the result of the        
Company's plant modernization program, the Company has established a policy of  
accepting orders with as little as a three-week lead time after color           
specification.                                                                  

RESEARCH AND DEVELOPMENT                                                        

   The Company's research and development activities are coordinated through
the Company's marketing department and are directed toward maintaining and      
improving the quality of the Company's products and the development of new      
value-added products such as Dyersburg E.C.O., Synsation, Kinderfleece,         
Citifleece and Maison Fleece to meet the changing needs of the knit fabric      
market. Emphasis is placed on physical characteristics that provide competitive 
differentiations between fabrics including "hand" or feel, warmth, fade         
resistance and shrinkage reduction. The Company's research and development      
activities are also focused on providing innovative stretch fabrics that will   
meet the evolving needs of its customers, while developing new products to gain 
entry in other markets. The Company was instrumental in developing products from
DuPont Lycra(R) spandex and DuPont Supplex(R) nylon to provide customers with   
new types of performance fabrics that exhibit unique properties.                

COMPETITION                                                                     

The textile industry is extremely competitive and includes numerous   
companies, no one of which is dominant in the industry. The Company and its     
competitors market their products nationwide, as domestic shipping costs are not
a significant competitive factor. The Company's primary competition comes from  
suppliers of knit fabric. The Company also competes with vertically integrated  
apparel manufacturers that produce the fabric used in their apparel products and
with foreign manufacturers. The primary competitive factors in the textile      
industry are product styling and differentiation, quality, customer service and 
price. The importance of these factors is determined by the need of particular  
customers and the characteristics of particular products. See "Risk             
Factors -- Cyclical and Competitive Nature of Textile Industry."                

 Increases in domestic capacity and imports of foreign-made textiles and
apparel products are a significant source of competition for many domestic      
textile manufacturers. The U.S. government attempts to regulate the growth of   
certain textile and apparel imports by establishing quotas on imports from      
countries that historically account for significant shares of U.S. imports.     
Despite these efforts, imported apparel represents a significant portion of the 
U.S. apparel market, although the rate of import growth has slowed in recent    
years.                                                                          

     The extent of import protection afforded by the U.S. government to domestic
textile producers has been, and is likely to remain, subject to considerable    
domestic political deliberation and foreign considerations. In January 1995, a  
new multilateral trade organization, the WTO, was formed by the members of GATT 
to replace GATT. This new body has set forth the mechanisms by which world trade
in textiles and clothing will be progressively liberalized with the elimination 
of quotas and the reduction of duties. The implementation began in January 1995 
with the phasing-out of quotas and the reduction of duties to take place over a 
ten-year period. The selection of products at each phase is made by each        
importing country and must be drawn from each of the four main textile groups:  
yarns, fabrics, made-up textiles and apparel. As it implements the WTO          
mechanisms, the U.S. government is negotiating bilateral trade agreements with  
developing countries (which generally are exporters of textile products) that   
are members of the WTO for purposes of reducing their tariffs on imports of     
textiles and apparel. The elimination of quotas and the reduction of tariffs    
under the WTO may result in increased imports of certain textile products and   
apparel into North America. These factors could make the Company's products less
competitive against low cost imports from third world countries.                

NAFTA, which became effective on January 1, 1994, created the world's 
largest free-trade zone. The agreement contains safeguards sought by the U.S.   
textile industry, including a rule of origin requirement that products be       
processed in one of the three countries in order to benefit from NAFTA. NAFTA   
will phase out all trade restrictions and tariffs on textiles and apparel among 
the three countries. In addition, NAFTA requires merchandise to be made from    
yarns and fabrics originating in North America in order to avoid trade          
restrictions. Thus, not only must apparel be made from North American fabric,   
but the fabric must be constructed from North American spun yarn. Although      
management believes that the Company has                                        

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benefitted from NAFTA, there can be no assurance that the removal of these      
barriers to trade will not have a material adverse effect on the Company's      
business.                                                                       

LITIGATION                                                                      

   The Company is a party to litigation incidental to its business from time
to time. The Company is not currently a party to any litigation that management 
believes, if determined adversely to the Company, would have a material adverse 
effect on the Company. The Company believes Alamac is not currently a party to  
any litigation that, if determined adversely to Alamac, would have a material   
adverse effect on the Company.                                                  

GOVERNMENTAL REGULATION                                                         

The Company and Alamac are subject to various federal, state and local
environmental laws and regulations limiting the discharge, storage, handling and
disposal of a variety of substances and wastes used in or resulting from its    
operations and potential remediation obligations thereunder, particularly the   
Federal Water Pollution Control Act, the Clean Air Act, the Resource            
Conservation and Recovery Act (including amendments relating to underground     
tanks) and the Comprehensive Environmental Response, Compensation and Liability 
Act, commonly referred to as "Superfund" or "CERCLA." The Company has obtained, 
and believes it is in compliance in all material respects with, all material    
permits required to be issued by federal, state or local law in connection with 
the operation of the Company's business as described herein. The Company        
believes Alamac has obtained, and believes it is in compliance in all material  
respects with, all material permits required to be issued by federal, state or  
local law in connection with the operation of Alamac's business as described    
herein.                                                                         

The operations of the Company and Alamac also are governed by laws and
regulations relating to workplace safety and worker health, principally the     
Occupational Safety and Health Act and regulations thereunder which, among other
things, establish cotton dust, formaldehyde, asbestos and noise standards and   
regulate the use of hazardous chemicals in the workplace. Alamac uses resins    
containing formaldehyde in processing some of its products. Although the Company
does not use asbestos in the manufacture of its products, some of its facilities
contain some structural asbestos that management believes is all properly       
contained.                                                                      

   Many of the manufacturing facilities owned by the Company and Alamac have
been in operation for several decades. Historical waste disposal and hazardous  
substance releases and storage practices may have resulted in on-site and       
off-site remediation liability for which the Company or Alamac, respectively,   
would be responsible. In addition, certain wastewater treatment facilities and  
air emission sources may have to be upgraded to meet more stringent             
environmental requirements in the future. Although the Company cannot with      
certainty assess at this time the impact of future emission standards or        
enforcement practices under the foregoing environmental laws and regulations    
and, in particular, under the 1990 Clean Air Act, upon its operations or capital
expenditure requirements, the Company believes that it is currently in          
compliance in all material respects with applicable environmental and health and
safety laws and regulations. The Company is aware of certain environmental      
contamination at the Alamac facilities. The Company estimates that the cost to  
remediate such contamination will range from approximately $3.5 million to $5.0 
million. Pursuant to the Stock Purchase Agreement, WestPoint Stevens has agreed 
to indemnify the Company for a portion of such costs. See "Risks Factors -- Risk
of Environmental Liability; Other Governmental Regulations."                    

EMPLOYEES                                                                       

     At July 5, 1997, the Company employed approximately 1,500 people in hourly,
salaried, supervisory, management and administrative positions. At June 30,     
1997, Alamac employed approximately 2,350 people in hourly, salaried,           
supervisory, management and administrative positions. No labor union represents 
any of the Company's or Alamac's employees, and the Company believes its        
relationship with its employees to be good.                                     

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PROPERTIES                                                                      

     The Company's business is conducted primarily through facilities located in
Dyersburg, Trenton and Cleveland, Tennessee. Each of these facilities and the   
property on which they are located are owned by the Company. The Company leases 
selling offices in New York, New York; Chicago, Illinois; Seattle, Washington;  
and Portland, Oregon. The New York office contains approximately 13,000 square  
feet. The Chicago, Seattle and Portland offices have approximately 700, 700 and 
120 square feet, respectively. The Company also leases approximately 1,000      
square feet of office space in Cleveland, Tennessee, for IQUE's corporate       
office.                                                                         

   The primary Dyersburg facility was built in 1929 with 275,000 square feet
of floor space. After several expansions, it now contains approximately 888,000 
square feet of plant space situated on 30 acres of land. The knitting facility  
(completed December 1993) encompasses approximately 155,000 square feet situated
on approximately 30 acres in the Dyersburg Industrial Park. The floor space is  
distributed as follows: 683,000 square feet for manufacturing, 273,000 square   
feet for warehousing and distribution, 28,000 square feet for offices and 60,000
square feet for maintenance shops and boiler space. A new warehouse facility    
containing approximately 213,000 square feet will be completed before the end of
calendar year 1997.                                                             

The Trenton facility was built in the 1930s with approximately 94,000 
square feet of floor space and has been expanded to approximately 188,000 square
feet. The floor space is distributed as follows: approximately 98,000 square    
feet for manufacturing, approximately 61,000 square feet for warehousing,       
approximately 24,000 square feet for office space and approximately 5,000 square
feet for maintenance and boiler space.                                          

   The Cleveland facility was built in 1986 with approximately 70,000 square
feet of floor space followed by a 38,000 square foot expansion in 1991. A 45,000
square foot addition (primarily warehouse, distribution and laboratory          
facilities) was completed in December 1994. A new 19,200 square foot expansion  
is expected to be completed in 1998.                                            

Alamac's business is conducted primarily through facilities located in
Clinton, Elizabethtown, Hamilton and Lumberton, North Carolina. Each of these   
facilities and the property on which they are located are owned by Alamac.      
Alamac also leases selling offices in New York, Atlanta and Los Angeles.        

   The Clinton facility was built in 1965 and contains approximately 367,000
square feet situated on approximately 48 acres of land. The Elizabethtown       
facility was built in 1971 and contains approximately 193,000 square feet       
situated on approximately 148 acres of land. The Hamilton facility was built in 
1961 and contains approximately 383,000 square feet situated on approximately   
106 acres of land. The Lumberton facility was built in 1962 and contains        
approximately 414,000 square feet situated on approximately 198 acres of land.  

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS                                                

The following table sets forth certain information regarding executive
officers and directors of the Company.                                          

                                                        [Enlarge/Download Table]

NAME                                       AGE                       POSITION                     
----                                       ---                       --------                     
                                                                                                  
T. Eugene McBride......................... 54   Chief Executive Officer and Chairman              
Jerome M. Wiggins......................... 57   President and Chief Operating Officer, Director   
Janice L. Whitlock........................ 46   President -- Marketing                            
William S. Shropshire, Jr................. 40   Executive Vice President, Chief Financial Officer,
                                                  Secretary and Treasurer                         
Stephen J. Dauer.......................... 56   Sr. Vice President -- Sales                       
Paul L. Hallock........................... 49   Vice President -- Finance, Assistant              
                                                Secretary -- Treasurer                            
Jerry W. Miller........................... 46   President -- United Knitting                      
Jerry W. Patton........................... 50   Vice President -- Administration                  
Margaret Schenck.......................... 48   Vice President -- Operations/Customer Development,
                                                  United Knitting                                 
Marvin B. Crow............................ 64   Director                                          
Patricia Hilsberg......................... 46   Director                                          
L.R. Jalenak, Jr.......................... 67   Director                                          
Julius Lasnick............................ 67   Director                                          
P. Manohar................................ 44   Director                                          
Ravi Shankar.............................. 34   Director                                          
Mickey Ganot.............................. 46   Director                                          

    The Company's Charter provides that the Board of Directors is divided into
three classes: Class I, Class II and Class III. Each class is as nearly equal in
number as possible. Unless a director has been appointed to fill a vacancy or to
fill a position that was created by increasing the number of directors, each    
director serves for a term ending at the third annual shareholders' meeting     
following the annual meeting at which such director was elected. Each director  
serves until such director's successor is elected and qualified or until such   
director's earlier death, resignation or removal. Under Tennessee law, because  
they were appointed to fill vacancies by the Board of Directors, Messrs.        
Manohar, Shankar and Ganot must stand for reelection at the next annual meeting 
of shareholders to fill the remaining term of their respective class.           

 The following is additional information with respect to the above-named
executive officers and directors.                                               

Mr. McBride joined the Company in September 1988 as Executive Vice    
President and was named President and Chief Operating Officer in January 1989.  
He was named Chief Executive Officer in September 1990 and Chairman of the Board
of Directors in July 1995. Prior to joining the Company, Mr. McBride was Vice   
President -- Operations at Panill Knitting from 1986 to 1988 and Vice           
President -- Manufacturing at Buster Brown Apparel from 1980 to 1986.           

    Mr. Wiggins was elected President and Chief Operating Officer in July 1997
and previously served as President -- Operations since January 1996. Mr. Wiggins
became a director of the Company in 1992. He joined the Company in August 1989  
as Vice President and Chief Financial Officer, Treasurer and Secretary. Prior to
joining the Company in 1989, he was Vice President of Finance and Chief         
Financial Officer of V.F. Corporation, an apparel manufacturer.                 

Ms. Whitlock, President -- Marketing since December 1995, joined the  
Company in September 1994 as Vice President of Merchandising. Previously, she   
was Vice President of Merchandising at Flynt Fabrics and Burlington Industries. 

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Mr. Shropshire, a certified public accountant, joined the Company as  
Executive Vice President, Chief Financial Officer, Secretary and Treasurer in   
October 1996. For the previous five years, he was Chief Financial Officer and   
Senior Vice President for Charter Bancshares, Inc.                              

 Mr. Dauer became the Sr. Vice President -- Sales in January 1996, after
joining the Company as Vice President -- Marketing in June 1984. He had         
previously been employed since 1966 by Burlington Industries and, in 1980,      
became Vice President of Sales and Marketing -- Women's Apparel in that         
company's Knitted Fabric Division.                                              

Mr. Hallock joined the Company in April 1977. He was named Assistant  
Secretary in October 1978, Assistant Secretary -- Treasurer in October 1981 and 
Vice President -- Finance in March 1987.                                        

   Mr. Miller joined the Company in August 1993 as Director of Manufacturing
and was named Vice President of Manufacturing in May 1994. He was named         
President of United Knitting in June 1997. Before joining the Company, he was   
Director of Manufacturing with Sara Lee Products, which included textiles and   
apparel manufacturing.                                                          

    Mr. Patton joined the Company in 1966 in the production area. He was named
MIS Director in May 1990. In September 1994, he was named Vice President -- MIS.
Since January 1996, Mr. Patton has been Vice President -- Administration.       

 Ms. Schenck has been Vice President -- Operations/Customer Development,
United Knitting, since January 1994, when United Knitting was acquired by the   
Company. For more than five years prior to that time, she was Vice              
President -- Operations/Customer Service at United Knitting.                    

     Mr. Crow became a director of the Company in 1990. He has been President of
KBO Enterprises since April 1988. He is also a director of National Spinning    
Co., Inc., Ameritex Yarn Corporation and The Bibb Company.                      

Ms. Hilsberg became a director in 1996. She was named Executive Vice  
President -- Merchandising of Bernard Chaus in June 1995. She served as         
Executive Vice President -- Merchandising of Evan Picone from November 1991     
until May 1993.                                                                 

Mr. Jalenak became a director of the Company in 1992. He retired in   
December 1993 from the position of Chairman of the Board of Cleo Inc., a Gibson 
Greetings company manufacturing giftwrap, greeting cards and related products,  
which he held since June 1990. Previously, he served as President and Chief     
Executive Officer of Cleo Inc. for over ten years. He is also a director of     
Perrigo Company and Lufkin Industries and is an independent trustee and chairman
of First Funds, a family of mutual funds managed by First Tennessee Bank.       

   Mr. Lasnick became a director of the Company in 1992. He retired in April
1993 from the position of President -- Manufacturing of Springs Industries,     
Inc., a textile company, which he held since 1991. From 1986 to April 1993 he   
also served as Executive Vice President and a director of Spring Industries,    
Inc. He is also a director of National Spinning Co., Inc. and Sandlapper        
Fabrics, Inc.                                                                   

Mr. Manohar became a director of the Company in July 1997. He has been
Group Executive Vice President/Finance of Texmaco Group since 1989. Prior to    
that time, he held Finance Executive positions in various companies of the      
Texmaco Group and with SRF Ltd., an Indian textile company. Mr. Manohar was     
appointed to the Board of Directors as a designee of Texmaco. See               
"Summary -- Recent Developments."                                               

  Mr. Shankar became a director of the Company in July 1997. He has been a
Vice President of Operations in Texmaco's Textiles division and Director of     
Texmaco Perkasa Engineering since 1987. Mr. Shankar was appointed to the Board  
of Directors as a designee of Texmaco. See "Summary -- Recent Developments."    

  Mr. Ganot became a director of the Company in July 1997. He has been the
Director of Global Marketing of Texmaco since 1993. Prior to joining Texmaco, he
served as Corporate Vice President Manufacturing and Operations of Liz          
Claiborne. Mr. Ganot was appointed to the Board of Directors as a designee of   
Texmaco. See "Summary -- Recent Developments."                                  

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  The following table sets forth certain information regarding certain key
Alamac employees:                                                               

                                                        [Enlarge/Download Table]

NAME                                  AGE                          POSITION                        
----                                  ---                          --------                        
                                                                                                   
Ronald Hester........................ 53   President                                               
Dick Liberatore...................... 50   Vice President Sales, East Coast and International Sales
Don Pugatch.......................... 46   Vice President Sales, Southeast                         
Sue Dalton........................... 41   Vice President Sales, West Coast                        
Ron Giacone.......................... 50   Vice President Merchandising and Retail Accounts        
Jimmy Dail........................... 53   Division Controller                                     
Mark Cabral.......................... 44   General Manager -- Fabric Production                    

    Mr. Hester joined Alamac in 1963. Prior to becoming President in 1990, Mr.
Hester served as General Manager, Vice President of Manufacturing, Plant        
Manager, Assistant Plant Manager, Department Manager, Shift Supervisor and      
Production Operator.                                                            

Mr. Liberatore joined Alamac in 1977. Prior to becoming Vice President
Sales, East Coast and International Sales in 1989, Mr. Liberatore served as     
Director of Sales, Merchandise Manager, Sales Manager and Sales Representative. 

    Mr. Pugatch joined Alamac in 1975. Prior to becoming Vice President Sales,
Southeast in 1983, Mr. Pugatch served as Regional Manager, Merchandise Manager  
and Sales Representative.                                                       

Ms. Dalton re-joined Alamac in 1996. Prior to becoming Vice President 
Sales, West Coast, she was associated with Malden Mills. Previously, Ms. Dalton 
served Alamac as Sales Manager and Sales Representative.                        

Mr. Giacone joined Alamac in 1978. Prior to becoming Vice President   
Merchandising and Retail Accounts in 1989, Mr. Giacone served as Vice President 
of Retail Accounts, Director of Sales Administration, Director of Business      
Administration, Director of Sales Services, Assistant to the Vice President of  
Marketing, Merchandise Manager and Sales Manager.                               

  Mr. Dail joined Alamac in 1971. Prior to becoming Division Controller in
1990, Mr. Dail served as Assistant Controller, Accounting Manager, Cost         
Accounting Manager, Production Planning Coordinator and Inventory Analyst.      

Mr. Cabral joined Alamac in 1975. Prior to becoming General           
Manager -- Fabric Production in 1989, Mr. Cabral served as Plant Manager,       
Assistant Plant Manager, Technical Assistant, Production Control Manager and    
Project Engineer.                                                               

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SUMMARY COMPENSATION TABLE                                                      

    The following table provides information as to annual, long-term and other
compensation paid by the Company to the Company's Chief Executive Officer and to
each of the other four most highly compensated executive officers of the Company
for services rendered in all capacities to the Company and its subsidiaries for 
the fiscal years indicated (each, a "Named Executive Officer").                 

                                                        [Enlarge/Download Table]

                                                                             LONG-TERM                    
                                                                            COMPENSATION                  
                                                      ANNUAL COMPENSATION      AWARDS                     
NAME AND PRINCIPAL                          FISCAL    --------------------  ------------      ALL OTHER   
POSITIONS                                    YEAR      SALARY      BONUS     OPTIONS(#)    COMPENSATION(1)
------------------                          ------    ---------   --------  ------------   ---------------
                                                                                                          
T. Eugene McBride,.........................  1996      $259,386    $96,950      25,414(2)       $15,446   
  Chairman and Chief                         1995       250,008     50,000          --           15,771   
  Executive Officer                          1994       243,756     79,832      24,000           17,513   
James E. Herring(3)........................  1996      $241,329    $97,781      66,751(2)       $ 8,311   
                                             1995       240,104         --          --            9,355   
                                             1994(4)    182,365     92,142     135,000(5)        17,956   
Jerome M. Wiggins,.........................  1996      $186,258    $65,012      16,492(2)       $12,731   
  President and Chief                        1995       172,008     27,500          --           13,486   
  Operating Officer                          1994       161,760     45,984      11,000           11,886   
Janice L. Whitlock,........................  1996      $181,678    $61,287      34,981(6)       $14,228   
  President -- Marketing                     1995       165,000     41,158          --           10,776   
                                             1994         3,438        N/A      25,000              N/A   
Stephen J. Dauer,..........................  1996      $174,000    $52,612       9,311(2)       $13,784   
  Sr. Vice President -- Sales                1995       173,004     41,948          --           14,089   
                                             1994       168,762     49,706       9,000           16,975   

------------------------------                                                  
(1) Includes contributions by the Company in fiscal 1996 to the Dyersburg       
   Fabrics Inc. Profit Sharing Plan and to the Company's Deferred Compensation
  Plan and premiums paid by the Company for term life insurance provided for
  the benefit of the Named Executive Officers, all as reflected in the table
below.                                                                  

                                                        [Enlarge/Download Table]

                                                                                    GROUP TERM LIFE
                                             PROFIT SHARING  DEFERRED COMPENSATION     INSURANCE   
NAME                                              PLAN               PLAN              PREMIUMS    
----                                         --------------  ---------------------  ---------------
                                                                                                   
T. Eugene McBride...........................     $8,710             $5,296              $1,440     
James E. Herring............................      7,650                 --                 661     
Jerome M. Wiggins...........................      8,710              3,877                 144     
Janice L. Whitlock..........................      8,710              4,472               1,046     
Stephen J. Dauer............................      8,710              4,072               1,002     

(2) Reflects number of options repriced in fiscal 1996.                         
(3) Mr. Herring served as President of the Company's IQUE subsidiary until his  
resignation in July 1997.                                               
(4) For services rendered beginning January 19, 1994, the date of the Company's 
acquisition of United Knitting.                                         
(5) Options issued under the Company's 1992 Stock Plan in connection with the   
acquisition of United Knitting.                                         
(6) Includes 16,981 options repriced in fiscal 1996.                            

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PRINCIPAL SHAREHOLDERS

    The only outstanding voting securities of the Company are shares of common
stock, which are entitled to one vote per share. At July 5, 1997, there were    
issued and outstanding 13,139,658 shares of common stock.                       

The following table sets forth information, as of June 30, 1997, with 
respect to all shareholders known by the Company to be beneficial owners of more
than five percent of its outstanding shares of common stock. It also shows      
beneficial ownership for each director and executive officer. Except as noted   
below, each person has sole voting and investment power with respect to the     
shares shown as of such date.                                                   

                                                        [Enlarge/Download Table]

                                                              AMOUNT AND NATURE OF    PERCENTAGE 
NAME                                                         BENEFICIAL OWNERSHIP(1)  OUTSTANDING
----                                                         -----------------------  -----------
                                                                                                 
Stephen J. Dauer............................................          156,412(2)          1.2%   
T. Eugene McBride...........................................          205,000             1.6    
Janice L. Whitlock..........................................            6,792               *    
Jerome M. Wiggins...........................................          217,733             1.7    
William S. Shropshire, Jr...................................              500               *    
Paul L. Hallock.............................................          145,687(3)          1.1    
Jerry W. Patton.............................................           46,010               *    
Jerry W. Miller.............................................           10,214               *    
Margaret Schenck............................................           56,434               *    
Julius Lasnick..............................................            9,000               *    
L.R. Jalenak, Jr............................................           18,500               *    
Marvin B. Crow..............................................            8,000               *    
Patricia Hilsberg...........................................            5,000               *    
P. Manohar..................................................               --(4)            *    
Ravi Shankar................................................               --(4)            *    
Mickey Ganot................................................               --(4)            *    
Marimutu Sinivisan..........................................               --(5)            *    
Texmaco.....................................................        3,000,000            22.8    
All executive officers and directors as a group (16                                              
  persons)..................................................          885,282(6)          6.7    

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

*  Denotes less than one percent                                              
(1) Includes the following shares subject to options that are exercisable within
60 days of June 30, 1997: Stephen J. Dauer -- 6,386; T. Eugene          
    McBride -- 17,499; Janice L. Whitlock -- 6,792; Jerome M. Wiggins -- 11,895;
Paul L. Hallock -- 3,186; Jerry Patton -- 2,885; Jerry Miller -- 7,714; 
Margaret Schenck -- 17,401; Julius Lasnick -- 7,000; L. R. Jalenak,     
Jr. -- 9,000; Marvin B. Crow -- 7,000; and Patricia Hilsberg -- 5,000.  
(2) Includes 300 shares owned by Mr. Dauer's wife.                              
(3) Includes 4,000 shares held as custodian for Mr. Hallock's children.         

(4) Excludes shares held by Texmaco which may be deemed to be beneficially owned
because such person is a Texmaco designee to the Company's Board of     
 Directors pursuant to its agreement with the Company dated April 8, 1997.
See "Risk Factors -- Relationship with Texmaco."                        

(5) Excludes shares held by Texmaco which may be deemed to be beneficially owned
because such person is a controlling person of Texmaco.                 
(6) Excludes shares held by Texmaco which may be deemed to be beneficially owned
by Messrs. Manohar, Shankar and Ganot.                                  

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DESCRIPTION OF NEW CREDIT FACILITY

Concurrently with the closing of the Acquisition and the Offering, the
Company and certain of its subsidiaries entered into the New Credit Facility    
with one or more financial institutions (the "Lenders") for which SunTrust Bank,
Atlanta ("SunTrust") is administrative and collateral agent and SunTrust's      
affiliate acts as arranger. The Company and all existing and future material    
subsidiaries of the Company guarantee the indebtedness under the New Credit     
Facility. The following is a summary of the material terms and conditions of the
New Credit Facility and is subject to the detailed provisions of the New Credit 
Facility and various related documents entered into in connection with the New  
Credit Facility. A copy of the New Credit Facility is available upon request    
from the Company.                                                               

General.  The New Credit Facility consists of a five-year Revolver    
providing up to $110.0 million of availability and a five-year $50.0 million    
Term Loan. The Term Loan provides for scheduled quarterly principal amortization
such that $7.5 million of principal is paid during each of the first and second 
years following the closing; $10.0 million during the third year following the  
closing; and $12.5 million during each of the fourth and fifth years following  
the closing. The Revolver is available in multiple drawings from time to time on
and following the closing, subject to certain limitations, including a          
requirement that amounts outstanding under the Revolver (including certain      
letters of credit) will at all times be less than a Borrowing Base based on 50% 
of the Company's Eligible Inventory and 85% of the Company's Eligible           
Receivables (as such terms are defined in the New Credit Facility), and amounts 
borrowed and repaid may be reborrowed until the fifth anniversary of the closing
date (the "Final Maturity Date"). The Revolver also includes a subfacility for  
up to $5.0 million of revolving swing loans to be provided by SunTrust (the     
"Swing Loans"), which, to the extent made, will reduce the availability of the  
Revolver. Up to $12.0 million of the amount available under the Revolver may be 
used for letters of credit supporting obligations of the Company and its        
subsidiaries, which will also reduce the availability under the Revolver.       
Advances under the Revolver will be used to finance the working capital and     
general corporate requirements of the Company and its subsidiaries, including   
the financing of Alamac's working capital needs.                                

    Interest Rates; Fees.  Amounts outstanding under the Revolver and the Term
Loan bear interest, at the Company's option, at either LIBOR (adjusted for any  
reserves) plus a specified margin ranging from 0.75% to 2.75% (based on the     
ratio of the Company's Total Adjusted Funded Debt to its EBITDAR (as such terms 
are defined in the New Credit Facility) (the "Total Debt/EBITDAR Ratio")) for   
interest periods of one, two, three or six months, or the base rate, which is   
the higher of SunTrust's prime lending rate and the overnight federal funds rate
plus 0.50% plus a margin of 0.25% if the Company's Total Debt/EBITDAR Ratio     
exceeds a specified level. Swing Loans may bear interest at a negotiated rate   
for a short-term period agreed to with SunTrust or the base rate, as described  
above.                                                                          

  Interest on the amounts outstanding under the Revolver and the Term Loan
bearing interest at the base rate is payable quarterly in arrears on the last   
day of each quarter. Interest on amounts outstanding under the Revolver and Term
Loan bearing interest based on LIBOR is payable in arrears at the end of the    
applicable interest period and every three months where the applicable period   
exceeds three months.                                                           

 The Company pays a commitment fee on the unused portion of the Revolver
which is payable quarterly in arrears. The amount of the commitment fee will be 
determined based on the Total Debt/EBITDAR Ratio and will range from 0.15% to   
0.50% per annum. The New Credit Facility also provides for payment of fees with 
respect to letters of credit issued or deemed issued thereunder.                

     Mandatory Prepayments.  The Term Loan is subject to the following mandatory
prepayments: (i) 100% of the net cash proceeds of an equity issuance by the     
Company, (ii) 50% of annual Excess Cash Flow (as defined in the New Credit      
Facility) and (iii) 100% of net cash proceeds from Asset Sales (as defined in   
the New Credit Facility), subject to certain exceptions contained therein. The  
New Credit Facility prohibits asset sales altogether.                           

     Collateral.  All amounts owing under the New Credit Facility are secured by
security interests in substantially all of the assets of the Company and its    
subsidiaries.                                                                   

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  Covenants.  The Company and each of its existing and future subsidiaries
are subject to certain affirmative and negative covenants contained in the New  
Credit Facility, including without limitation covenants that restrict, subject  
to specified exceptions, (i) the incurrence of additional indebtedness and other
obligations and the granting of additional liens; (ii) mergers, acquisitions,   
investments and acquisitions and dispositions of assets; (iii) the incurrence of
capitalized lease obligations; (iv) dividends; (v) prepayments or repurchase of 
other indebtedness and amendments to certain agreements governing indebtedness, 
including the Indenture and the Exchange Notes; (vi) engaging in transactions   
with affiliates and formation of subsidiaries; (vii) the use of proceeds; and   
(viii) changes of lines of business. There are also covenants relating to       
compliance with ERISA and environmental and other laws, payment of taxes,       
maintenance of corporate existence and rights, maintenance of insurance and     
financial reporting. Certain of these covenants are more restrictive than those 
set forth in the Indenture. In addition, the New Credit Facility requires the   
Company to maintain compliance with certain specified financial covenants,      
including covenants relating to minimum net worth, minimum interest coverage    
ratio, minimum fixed charge coverage ratio and maximum Total Debt/EBITDAR Ratio.
The New Credit Facility prohibits prepayment or defeasance of the Exchange      
Notes.                                                                          

  Events of Default.  The New Credit Facility includes customary events of
default, including, without limitation, a bankruptcy, a Change of Control (as   
defined in the New Credit Facility) of the Company or its subsidiaries, the     
invalidity of guarantees or security documents under the New Credit Facility and
cross-default to other indebtedness of the Company and its subsidiaries. The    
occurrence of any such events of default could result in acceleration of the    
Company's obligations under the New Credit Facility and foreclosure on the      
collateral securing such obligations, which could have a material adverse effect
on holders of the Exchange Notes.                                               

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DESCRIPTION OF THE EXCHANGE NOTES 

GENERAL                                                                         

 The Exchange Notes will be issued pursuant to the Indenture between the
Company and State Street Bank & Trust Company, as trustee (the "Trustee"). Upon 
the effectiveness of the Registration Statement of which this Prospectus forms a
part, the Indenture will be subject to and governed by the Trust Indenture Act  
of 1939 (the "Trust Indenture Act"). The terms of the Exchange Notes include    
those stated in the Indenture and those made part of the Indenture by reference 
to the Trust Indenture Act. The Exchange Notes are subject to all such terms,   
and holders of Exchange Notes are referred to the Indenture and the Trust       
Indenture Act for a statement thereof. The following summary of the material    
provisions of the Indenture does not purport to be complete and is qualified in 
its entirety by reference to the Indenture, including the definitions therein of
certain terms used below. Copies of the Indenture will be made available as set 
forth under "-- Additional Information." The definitions of certain terms used  
in the following summary are set forth below under "-- Certain Definitions." For
purposes of this "Description of the Exchange Notes," the term "Company" refers 
only to Dyersburg Corporation and not to any of its Subsidiaries.               

     The Exchange Notes will be general unsecured obligations of the Company and
will be subordinated in right of payment to all existing and future Senior Debt 
of the Company. As of July 5, 1997, after giving pro forma effect to the        
offering of Series A Notes and the Acquisition, the Company would have had      
approximately $86.9 million of Senior Debt outstanding, including $79.0 million 
of outstanding borrowings under the New Credit Facility. In addition, certain of
the Company's Restricted Subsidiaries would have had $41.8 million of additional
borrowings available under the New Credit Facility. The Indenture permits the   
Company and its Restricted Subsidiaries to incur additional indebtedness,       
including additional Senior Debt, subject to certain restrictions. See          
"-- Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred   
Stock."                                                                         

   The operations of the Company are conducted through its Subsidiaries and,
therefore, the Company is dependent upon the cash flow of its Subsidiaries to   
meet its obligations, including its obligations under the Exchange Notes. The   
Exchange Notes will be effectively subordinated to all Indebtedness and other   
liabilities and commitments (including trade payables and lease obligations) of 
the Company's Subsidiaries. Any right of the Company to receive assets of any of
its Subsidiaries upon the latter's liquidation or reorganization (and the       
consequent right of the holders of the Exchange Notes to participate in those   
assets) will be effectively subordinated to the claims of that Subsidiary's     
creditors, except to the extent that the Company is itself recognized as a      
creditor of such Subsidiary, in which case the claims of the Company would still
be subordinate to any security interest in the assets of such Subsidiary and any
indebtedness of such Subsidiary senior to that held by the Company. As of July  
5, 1997, after giving pro forma effect to the Offering and the Acquisition, the 
Company's Subsidiaries would have had approximately $86.9 million of            
Indebtedness and $56.6 million of trade payables and other liabilities          
outstanding. See "Risk Factors -- Subordination."                               

 All of the Company's Subsidiaries are Restricted Subsidiaries. However,
under certain circumstances, the Company will be able to designate current or   
future Subsidiaries as Unrestricted Subsidiaries. Unrestricted Subsidiaries will
not be subject to many of the restrictive covenants set forth in the Indenture. 
The Company's payment obligations under the Exchange Notes will be guaranteed,  
on a senior subordinated basis, by all of the Company's existing Restricted     
Subsidiaries and all Domestic Restricted Subsidiaries created or acquired by the
Company in the future. See "-- Subsidiary Guarantees."                          

PRINCIPAL, MATURITY AND INTEREST                                                

    The Exchange Notes will be limited in aggregate principal amount to $125.0
million and will mature on September 1, 2007. Interest on the Exchange Notes    
will accrue at the rate of 9 3/4% per annum and will be payable semi-annually in
arrears on March 1 and September 1 of each year, commencing on March 1, 1998, to
holders of record on the immediately preceding February 15 and August 15.       
Interest on the Exchange Notes will accrue from the most recent date to which   
interest has been paid or, if no interest has been paid,                        

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from the date of original issuance. Interest will be computed on the basis of a 
360-day year comprised of twelve 30-day months. Principal of and premium,       
interest and Liquidated Damages, if any, on the Exchange Notes will be payable  
at the office or agency of the Company maintained for such purpose or, at the   
option of the Company, payment of interest and Liquidated Damages may be made by
check mailed to the holders of the Exchange Notes at their respective addresses 
set forth in the register of holders of Exchange Notes; provided that all       
payments of principal, premium, interest and Liquidated Damages with respect to 
Exchange Notes the holders of which have given wire transfer instructions to the
Company will be required to be made by wire transfer of immediately available   
funds to the accounts specified by the holders thereof. Until otherwise         
designated by the Company, the Company's office or agency will be the office of 
the Trustee maintained for such purpose. The Exchange Notes will be issued in   
denominations of $1,000 and integral multiples thereof.                         

SUBORDINATION                                                                   

   The payment of principal of and premium, interest and Liquidated Damages,
if any, on the Exchange Notes is subordinate in right of payment, as set forth  
in the Indenture, to the prior payment in full of all Senior Debt of the        
Company, whether outstanding on the Closing Date or thereafter incurred.        

  The Indenture provides that in the event of any insolvency or bankruptcy
case or proceeding, or any receivership, liquidation, reorganization or other   
similar case or proceeding in connection therewith, relating to the Company or  
its assets, or any liquidation, dissolution or other winding-up of the Company, 
whether voluntary or involuntary, and whether or not involving insolvency or    
bankruptcy, or any assignment for the benefit of creditors or marshalling of    
assets or liabilities of the Company, the holders of Senior Debt must be paid in
full in cash or Cash Equivalents with respect to all Obligations due in respect 
of such Senior Debt before any direct or indirect payment or distribution       
(excluding distributions of certain Permitted Junior Securities) is made on     
account of the principal of, or premium, if any, or interest on, the Exchange   
Notes or on account of the purchase, redemption, defeasance or other acquisition
of, or in respect of, the Exchange Notes (other than payments previously made   
pursuant to the provisions described below under "-- Legal Defeasance and       
Covenant Defeasance").                                                          

Upon the occurrence and during the continuance of any default in the  
payment of any Obligation with respect to any Designated Senior Debt, when the  
same becomes due (whether due to lapse of time or at maturity, whether by       
acceleration or otherwise), and after receipt by the Trustee and the Company    
from representatives of holders of such Designated Senior Debt of written notice
of such default, no direct or indirect payment (other than payments previously  
made pursuant to the provisions described under "-- Legal Defeasance and        
Covenant Defeasance") by or on behalf of the Company of any kind or character   
(excluding distributions of certain Permitted Junior Securities) may be made on 
account of the principal of, premium, if any, or interest on, or the purchase,  
redemption, defeasance or other acquisition of, the Exchange Notes unless and   
until such default had been cured or waived or has ceased to exist or such      
Designated Senior Debt shall have been discharged or paid in full in cash or    
Cash Equivalents.                                                               

  In addition, upon the occurrence and during the continuance of any other
default in respect of any Designated Senior Debt pursuant to which the maturity 
thereof may be accelerated (a "Non-payment Default") and upon the earlier to    
occur of (a) the receipt by the Trustee from the representatives of holders of  
such Designated Senior Debt of a written notice of such Non-payment Default (a  
"Payment Blockage Notice") or (b) if such Non-payment Default results from the  
acceleration of the Exchange Notes, the date of such acceleration, no payment   
(other than payments previously made pursuant to the provisions described under 
"-- Legal Defeasance and Covenant Defeasance") or distribution of any assets of 
the Company of any kind or character (excluding distributions of certain        
Permitted Junior Securities) may be made by the Company on account of the       
principal of, premium, if any, or interest on, or the purchase, redemption,     
defeasance or other acquisition of, the Exchange Notes for the period specified 
below (the "Payment Blockage Period").                                          

    The Payment Blockage Period shall commence upon the receipt of the Payment
Blockage Notice by the Trustee from the representatives of holders of Designated
Senior Debt or the date of the acceleration referred                            

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to in clause (b) of the preceding paragraph, as the case may be, and shall end  
on the earliest to occur of the following events (a) 179 days has elapsed since 
the receipt of such Payment Blockage Notice or the date of such acceleration    
(provided such Designated Senior Debt shall not theretofore have been           
accelerated), (b) such default is cured or waived or ceases to exist or such    
Designated Senior Debt is discharged or paid in full in cash or Cash Equivalents
(provided that no other Non-payment Default has occurred and is then continuing 
after giving effect to such cure or waiver), or (c) such Payment Blockage Period
shall have been terminated by written notice to the Company or the Trustee from 
the representatives of holders of Designated Senior Debt initiating such Payment
Blockage Period, after which the Company shall promptly resume making any and   
all required payments in respect of the Exchange Notes. No Non-payment Default  
with respect to Designated Senior Debt that existed or was continuing on the    
date of the commencement of any Payment Blockage Period with respect to the     
Designated Senior Debt initiating such Payment Blockage Period will be, or can  
be, made the basis of the commencement of a second Payment Blockage Period,     
unless such default has been cured for a period of not less than 30 consecutive 
days. In no event will a Payment Blockage Period extend beyond 179 days from the
receipt by the Trustee of the Payment Blockage Notice or the date of the        
acceleration initiating such Payment Blockage Period (provided that such        
Designated Senior Debt shall not theretofore have been accelerated), and there  
must be at least a 186 consecutive day period in each 365-day period during     
which no Payment Blockage Period is in effect.                                  

    The Indenture further requires that the Company promptly notify holders of
Senior Debt if payment of the Exchange Notes is accelerated because of an Event 
of Default.                                                                     

   As a result of the subordination provisions described above, in the event
of a liquidation or insolvency, holders of Exchange Notes may recover less      
ratably than creditors of the Company who are holders of Senior Debt. As of July
5, 1997, after giving pro forma effect to the Offering and the Acquisition, the 
Company would have had approximately $86.9 million of Senior Debt outstanding.  
The Company will be able to incur additional Senior Debt in the future, subject 
to certain limitations. See "-- Certain Covenants -- Incurrence of Indebtedness 
and Issuance of Preferred Stock."                                               

SUBSIDIARY GUARANTEES                                                           

   The Company's payment obligations under the Exchange Notes are guaranteed
by all of the Company's existing Restricted Subsidiaries. In addition, the      
Company is obligated to cause each of its Domestic Restricted Subsidiaries      
created or acquired after the Closing Date to execute a Guarantee of the        
Exchange Notes in accordance with the terms of the Indenture. The Guarantee of  
each Guarantor is subordinated in right of payment to all existing and future   
Senior Debt of such Guarantor to the same extent as the Exchange Notes are      
subordinated to Senior Debt of the Company. See "-- Subordination." As of July  
5, 1997, after giving pro forma effect to the Offering and the Acquisition, the 
Guarantors would have had approximately $86.9 million of Senior Debt            
outstanding. The Indenture permits the Company's Subsidiaries to incur          
additional indebtedness, including additional Senior Debt, subject, in the case 
of the Company's Restricted Subsidiaries, to certain restrictions. See          
"-- Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred   
Stock."                                                                         

    The Indenture provides that in the event of a sale or other disposition of
all of the assets of any Guarantor, by way of merger, consolidation or otherwise
(other than with another Guarantor), or a sale or other disposition of all of   
the capital stock of any Guarantor (other than to another Guarantor), or in the 
case the Company designates a Guarantor to be an Unrestricted Subsidiary in     
accordance with the Indenture, then such Guarantor will be released and relieved
of any obligations under its guarantee; provided that the Net Proceeds of any   
such sale or other disposition are applied in accordance with the applicable    
provisions of the Indenture. See "-- Repurchase at the Option of                
Holders -- Asset Sales."                                                        

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OPTIONAL REDEMPTION                                                             

    The Exchange Notes will not be redeemable at the Company's option prior to
September 1, 2002. Thereafter, the Exchange Notes will be subject to redemption 
at any time at the option of the Company, in whole or in part, upon not less    
than 30 nor more than 60 days' notice, at the redemption prices (expressed as   
percentages of principal amount) set forth below, plus accrued and unpaid       
interest and Liquidated Damages, if any, thereon to the applicable redemption   
date, if redeemed during the twelve-month period beginning on September 1 of the
years indicated below:                                                          

                                                                [Download Table]

YEAR                                                          PERCENTAGE
----                                                          ----------
                                                                        
2002........................................................    104.875%
2003........................................................    103.250 
2004........................................................    101.625 
2005 and thereafter.........................................    100.000%

    Notwithstanding the foregoing, prior to September 1, 2000, the Company may
redeem up to an aggregate of $25.0 million in principal amount of Exchange Notes
at a redemption price of 109.75% of the principal amount thereof, plus accrued  
and unpaid interest and Liquidated Damages, if any, thereon to the redemption   
date, with the net cash proceeds of one or more public offerings of common stock
of the Company; provided that (i) at least $100.0 million in principal amount of
the Exchange Notes remain outstanding immediately after the occurrence of such  
redemption, and (ii) such redemption shall occur within 90 days of the date of  
the consummation of each such public offering.                                  

SELECTION AND NOTICE                                                            

If less than all of the Exchange Notes are to be redeemed at any time,
selection of Exchange Notes for redemption will be made by the Trustee in       
compliance with the requirements of the principal national securities exchange, 
if any, on which the Exchange Notes are listed, or, if the Exchange Notes are   
not so listed, on a pro rata basis, by lot or by such method as the Trustee     
shall deem fair and appropriate; provided that no Exchange Notes of $1,000 or   
less shall be redeemed in part. Notices of redemption shall be mailed by first  
class mail at least 30 but not more than 60 days before the redemption date to  
each holder of Exchange Notes to be redeemed at its registered address. Notices 
of redemption may not be conditional. If any Exchange Note is to be redeemed in 
part only, the notice of redemption that relates to such Exchange Note shall    
state the portion of the principal amount thereof to be redeemed. A new Exchange
Note in principal amount equal to the unredeemed portion thereof will be issued 
in the name of the holder thereof upon cancellation of the original Exchange    
Note. Exchange Notes called for redemption become due on the date fixed for     
redemption. On and after the redemption date, interest ceases to accrue on      
Exchange Notes or portions of them called for redemption.                       

MANDATORY REDEMPTION                                                            

   Except as set forth below under "-- Repurchase at the Option of Holders,"
the Company is not required to make mandatory redemption or sinking fund        
payments with respect to the Exchange Notes.                                    

REPURCHASE AT THE OPTION OF HOLDERS                                             

Change of Control                                                           

   Upon the occurrence of a Change of Control, the Company will be obligated
to make an offer (a "Change of Control Offer") to each holder of Exchange Notes 
to repurchase all or any part (equal to $1,000 or an integral multiple thereof) 
of such holder's Exchange Notes at an offer price in cash equal to 101% of the  
principal amount thereof, plus accrued and unpaid interest and Liquidated       
Damages, if any, thereon to the date of purchase (the "Change of Control        
Payment"). Within 30 days following a Change of Control, the Company will mail a
notice to each holder describing the transaction or transactions that constitute
the Change of Control and offering to repurchase Exchange Notes on the date     
specified in such notice, which date shall be no earlier than 30 days and no    
later than 60 days from the date such notice is mailed (the "Change of          

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Control Payment Date"), pursuant to the procedures required by the Indenture and
described in such notice. The Company will comply with the requirements of Rule 
14e-1 under the Exchange Act and any other securities laws and regulations      
thereunder to the extent such laws and regulations are applicable in connection 
with the repurchase of the Exchange Notes as a result of a Change of Control.   

On the Change of Control Payment Date, the Company will, to the extent
lawful, (i) accept for payment all Exchange Notes or portions thereof properly  
tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying  
Agent an amount equal to the Change of Control Payment in respect of all        
Exchange Notes or portions thereof so tendered and (iii) deliver or cause to be 
delivered to the Trustee the Exchange Notes so accepted together with an        
Officers' Certificate stating the aggregate principal amount of Exchange Notes  
or portions thereof being purchased by the Company. The Paying Agent will       
promptly mail to each Holder of Exchange Notes so tendered the Change of Control
Payment for such Exchange Notes, and the Trustee will promptly authenticate and 
mail (or cause to be transferred by book entry) to each holder a new Exchange   
Note equal in principal amount to any unpurchased portion of the Exchange Notes 
surrendered, if any; provided that each such new Exchange Note will be in a     
principal amount of $1,000 or an integral multiple thereof. The Indenture       
provides that, prior to complying with the provisions of this covenant, but in  
any event within 90 days following a Change of Control, the Company will either 
repay all outstanding Senior Debt or obtain the requisite consents, if any,     
under all agreements governing outstanding Senior Debt to permit the repurchase 
of Exchange Notes required by this covenant. The Company will publicly announce 
the results of the Change of Control Offer on or as soon as practicable after   
the Change of Control Payment Date.                                             

     The Change of Control provisions described above will be applicable whether
or not any other provisions of the Indenture are applicable. Except as described
above with respect to a Change of Control, the Indenture does not contain       
provisions that permit the holders of the Exchange Notes to require that the    
Company repurchase or redeem the Exchange Notes in the event of a takeover,     
recapitalization or similar transaction.                                        

  The New Credit Facility prohibits, and future credit agreements or other
agreements relating to Senior Debt to which the Company becomes a party may     
prohibit, the Company from purchasing any Exchange Notes following a Change of  
Control and/or provide that certain change of control events with respect to the
Company would constitute a default thereunder. In the event a Change of Control 
occurs at a time when the Company is prohibited from purchasing Exchange Notes, 
the Company could seek the consent of its lenders to the purchase of Exchange   
Notes or could attempt to refinance the borrowings that contain such            
prohibition. If the Company does not obtain such a consent or repay such        
borrowings, the Company will remain prohibited from purchasing Exchange Notes.  
The Company's failure to purchase tendered Exchange Notes following a Change of 
Control would constitute an Event of Default under the Indenture which would, in
turn, constitute a default under the New Credit Facility. In such circumstances,
the subordination provisions in the Indenture would likely restrict payments to 
the holders of Exchange Notes. See "-- Subordination" and "Description of New   
Credit Facility."                                                               

The Company will not be required to make a Change of Control Offer    
following a Change of Control if a third party makes the Change of Control Offer
in the manner, at the times and otherwise in compliance with the requirements   
set forth in the Indenture applicable to a Change of Control Offer made by the  
Company and purchases all Exchange Notes validly tendered and not withdrawn     
under such Change of Control Offer.                                             

Asset Sales                                                                 

   The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the      
Company or such Restricted Subsidiary, as the case may be, receives             
consideration at the time of such Asset Sale at least equal to the fair market  
value (evidenced by a resolution of the Board of Directors set forth in an      
Officers' Certificate delivered to the Trustee) of the assets or Equity         
Interests in Subsidiaries issued or sold or otherwise disposed of and (ii) at   
least 75% of the consideration therefor received by the Company or such         
Restricted Subsidiary is in the form of cash; provided that the amount of (a)   
any liabilities (as shown on the Company's or such Restricted Subsidiary's most 
recent balance sheet) of the Company or such Restricted Subsidiary (other than  
contingent liabilities and liabilities that are by their terms subordinated to  
the Exchange Notes or any guarantee thereof) that are assumed by the            

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transferee of any such assets pursuant to a customary novation agreement that   
releases the Company or such Restricted Subsidiary from further liability and   
(b) any securities, notes or other obligations received by the Company or such  
Restricted Subsidiary from such transferee that are immediately converted by the
Company or such Restricted Subsidiary into cash (to the extent of the cash      
received) shall be deemed to be cash for purposes of this provision.            

    Within 270 days of the receipt of any Net Proceeds from an Asset Sale, the
Company or such Restricted Subsidiary may apply such Net Proceeds, at its       
option, (i) to repay Senior Debt or (ii) to the acquisition of a controlling    
interest in another business, the making of a capital expenditure or the        
acquisition of other long-term assets. Pending the final application of any such
Net Proceeds, the Company may temporarily reduce Senior Debt or otherwise invest
such Net Proceeds in any manner that is not prohibited by the Indenture. Any Net
Proceeds from Asset Sales that are not applied or invested as provided in the   
first sentence of this paragraph will be deemed to constitute "Excess Proceeds."
When the aggregate amount of Excess Proceeds exceeds $5.0 million, the Company  
will be required to make an offer to all holders of Exchange Notes (an "Asset   
Sale Offer") to purchase the maximum principal amount of Exchange Notes that may
be purchased out of the Excess Proceeds at an offer price in cash in an amount  
equal to 100% of the principal amount thereof, plus accrued and unpaid interest 
and Liquidated Damages, if any, thereon to the date of purchase, in accordance  
with the procedures set forth in the Indenture. To the extent that the aggregate
amount of Exchange Notes tendered pursuant to an Asset Sale Offer is less than  
the Excess Proceeds, the Company may use any remaining Excess Proceeds for      
general corporate purposes. If the aggregate principal amount of Exchange Notes 
surrendered by holders thereof exceeds the amount of Excess Proceeds, the       
Trustee shall select the Exchange Notes to be purchased on a pro rata basis.    
Upon completion of an Asset Sale Offer, the amount of Excess Proceeds shall be  
reset at zero.                                                                  

CERTAIN COVENANTS                                                               

Restricted Payments                                                         

   The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly: (i) declare or pay   
any dividend or make any other payment or distribution on account of the        
Company's Equity Interests (including, without limitation, any payment in       
connection with any merger or consolidation involving the Company) or to any    
direct or indirect holders of the Company's Equity Interests in their capacity  
as such (other than dividends or distributions (a) payable in Equity Interests  
(other than Disqualified Stock) of the Company or (b) to the Company or any     
Wholly Owned Restricted Subsidiary of the Company); (ii) purchase, redeem or    
otherwise acquire or retire for value (including without limitation, in         
connection with any merger or consolidation involving the Company) any Equity   
Interests of the Company or any direct or indirect parent of the Company (other 
than any such Equity Interests owned by the Company or any Wholly Owned         
Restricted Subsidiary of the Company); (iii) make any payment on or with respect
to, or purchase, redeem, defease or otherwise acquire or retire for value any   
Indebtedness of the Company or any Restricted Subsidiary that is subordinated to
the Exchange Notes or any Guarantee thereof, except a payment of interest or    
principal at Stated Maturity; or (iv) make any Restricted Investment (all such  
payments and other actions set forth in clauses (i) through (iv) above being    
collectively referred to as "Restricted Payments"), unless, at the time of and  
after giving effect to such Restricted Payment:                                 

 (a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;                   

     (b) the Company would, at the time of such Restricted Payment and
 after giving pro forma effect thereto as if such Restricted Payment had
     been made at the beginning of the applicable four-quarter period, have been
  permitted to incur at least $1.00 of additional Indebtedness pursuant to
  the Fixed Charge Coverage Ratio test set forth in the first paragraph of
   the covenant described below under caption "-- Incurrence of Indebtedness
and Issuance of Preferred Stock;" and                                 

          (c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted      
Subsidiaries after the Closing Date (excluding Restricted             

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Payments permitted by clause (ii) through (v) of the next succeeding  
    paragraph), is less than the sum of (i) 50% of the cumulative Consolidated
   Net Income of the Company for the period (taken as one accounting period)
     from the beginning of the first fiscal quarter commencing after the Closing
 Date to the end of the Company's most recently ended fiscal quarter for
which internal financial statements are available at the time of such 
    Restricted Payment (or, if such Consolidated Net Income for such period is
    a deficit, less 100% of such deficit), plus (ii) 100% of (A) the aggregate
    net cash proceeds received by the Company from the issue or sale since the
  Closing Date of Equity Interests of the Company (other than Disqualified
  Stock), other than Equity Interests sold to a Subsidiary of the Company,
and (B) the amount by which Indebtedness or Disqualified Stock of the 
    Company and its Restricted Subsidiaries is reduced on the balance sheet of
    the Company upon the conversion or exchange (other than by a Subsidiary of
 the Company) subsequent to the Closing Date of any such Indebtedness or
    Disqualified Stock for Equity Interests (other than Disqualified Stock) of
   the Company, plus (iii) 50% of any dividends received by the Company or a
Wholly Owned Restricted Subsidiary after the Closing Date from an     
   Unrestricted Subsidiary of the Company, to the extent that such dividends
   were not otherwise included in Consolidated Net Income of the Company for
such period, plus (iv) $5.0 million.                                  

    The foregoing provisions will not prohibit (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at the date of         
declaration such payment would have complied with the provisions of the         
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other     
acquisition of any subordinated Indebtedness or Equity Interests of the Company 
or any Restricted Subsidiary in exchange for, or out of the net cash proceeds of
the substantially concurrent sale (other than to a Subsidiary of the Company)   
of, other Equity Interests of the Company (other than any Disqualified Stock);  
provided that the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement, defeasance or other acquisition shall  
be excluded from clause (c)(ii) of the preceding paragraph; (iii) the           
defeasance, redemption, repurchase or other acquisition of subordinated         
Indebtedness with the net cash proceeds from an incurrence of Permitted         
Refinancing Indebtedness; (iv) the repurchase, redemption or other acquisition  
or retirement for value of any Equity Interests of the Company or any Restricted
Subsidiary of the Company held by any member of the Company's (or any of its    
Restricted Subsidiaries') management or board of directors pursuant to any      
management equity subscription agreement, stock option agreement or other       
similar agreement; provided that the aggregate price paid for all such          
repurchased, redeemed, acquired or retired Equity Interests shall not exceed    
$250,000 in any twelve-month period and no Default or Event of Default shall    
have occurred and be continuing immediately after such transaction; and (v) the 
payment of dividends on the Company's common stock in an amount not to exceed   
$0.01 per share per fiscal quarter of the Company.                              

   The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted          
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair    
market value of any non-cash Restricted Payment shall be determined in good     
faith by the Board of Directors whose resolution with respect thereto shall be  
delivered to the Trustee. Not later than 90 days following the end of each      
fiscal quarter of the Company, the Company shall deliver to the Trustee an      
Officers' Certificate setting forth the Restricted Payments made by the Company 
during such quarter stating that such Restricted Payments were permitted and    
setting forth the basis upon which the calculations required by the covenant    
"Restricted Payments" were computed; provided, however, that no such Officers'  
Certificate need be delivered with respect to any quarter in which no Restricted
Payments, other than the payment of up to $0.01 per share dividend on the       
Company's common stock, were made.                                              

 The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For      
purposes of making such determination, all outstanding Investments by the       
Company and its Restricted Subsidiaries (except to the extent repaid in cash) in
the Subsidiary so designated will be deemed to be Restricted Payments at the    
time of such designation and will reduce the amount available for Restricted    
Payments under the first paragraph of this covenant. All such outstanding       
Investments will be deemed to constitute Investments in an amount equal to the  
greatest of (i) the net book value of such Investments at the time of such      
designation, (ii) the fair market value of such Investments at the time of such 
designation and (iii) the original fair market value of such Investments at the 

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time they were made. Such designation will only be permitted if such Restricted 
Payment would be permitted at such time and if such Restricted Subsidiary       
otherwise meets the definition of an Unrestricted Subsidiary.                   

  Any such designation by the Board of Directors shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the Board Resolution     
giving effect to such designation and an Officers' Certificate certifying that  
such designation complied with the foregoing conditions. If, at any time, any   
Unrestricted Subsidiary would fail to meet the definition of an Unrestricted    
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for      
purposes of the Indenture and any Indebtedness of such Subsidiary shall be      
deemed to be incurred by a Restricted Subsidiary of the Company as of such date 
(and, if such Indebtedness is not permitted to be incurred as of such date under
the covenant described under the caption "-- Incurrence of Indebtedness and     
Issuance of Preferred Stock," the Company shall be in default of such covenant).
The Board of Directors of the Company may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that such designation shall  
be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the 
Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (i) such Indebtedness is permitted under 
the covenant described under the caption "-- Certain Covenants -- Incurrence of 
Indebtedness and Issuance of Preferred Stock," calculated on a pro forma basis  
as if such designation had occurred at the beginning of the four-quarter        
reference period, and (ii) no Default or Event of Default would be in existence 
following such designation.                                                     

Incurrence of Indebtedness and Issuance of Preferred Stock                  

   The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,            
contingently or otherwise, with respect to (collectively, "incur") any          
Indebtedness (including Acquired Debt) and that the Company will not permit any 
of its Subsidiaries to issue any shares of preferred stock; provided, however,  
that the Company and the Guarantors may incur Indebtedness (including Acquired  
Debt) and the Guarantors may issue preferred stock if the Fixed Charge Coverage 
Ratio for the Company's most recently ended four full fiscal quarters for which 
internal financial statements are available immediately preceding the date on   
which such additional Indebtedness is incurred or such preferred stock is issued
would have been at least 2.0 to 1, determined on a pro forma basis (including a 
pro forma application of the net proceeds therefrom), as if the additional      
Indebtedness had been incurred or the preferred stock had been issued at the    
beginning of such four-quarter period.                                          

  The provisions of the first paragraph of this covenant will not apply to
the incurrence of any of the following (collectively, "Permitted Debt"):        

       (i) the incurrence by the Company or its Restricted Subsidiaries of
  Indebtedness under the New Credit Facility in an aggregate amount not to
  exceed at any one time outstanding the sum of (a) $50.0 million less the
aggregate amount of all Net Proceeds of Asset Sales applied to repay  
   Indebtedness outstanding under the New Credit Facility pursuant to clause
(i) of the second paragraph of the covenant described above under the 
   caption " -- Asset Sales" (but the amount available under this subsection
 (a) shall not be reduced to less than zero) plus (b) the greater of (1)
$110.0 million and (2) the sum of (A) 85% of the Company's accounts   
receivable as shown on the Company's most recent consolidated balance 
    sheet, plus (B) 50% of the Company's inventories as shown on the Company's
most recent consolidated balance sheet;                               

         (ii) the incurrence by the Company and its Restricted Subsidiaries of
Indebtedness represented by the Exchange Notes, any Guarantee of the  
Exchange Notes and the Indenture;                                     

          (iii) the incurrence by the Company and its Restricted Subsidiaries of
the Existing Indebtedness;                                            

         (iv) the incurrence by the Company and the Guarantors of Indebtedness
   represented by Capital Lease Obligations, mortgage financings or purchase
   money obligations, in each case incurred for the purpose of financing all
     or any part of the purchase price or cost of construction or improvement of
  property, plant or equipment used in the business of the Company or such
  Guarantor, in an aggregate amount not to exceed $5.0 million at any time
outstanding;                                                          

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(v) the incurrence by the Company or any of its Restricted  
    Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
     net proceeds of which are used to refund, refinance or replace Indebtedness
 that was permitted to be incurred by the first paragraph, or by clauses
(ii) through (x) of the second paragraph of this covenant;            

        (vi) the incurrence of Indebtedness between or among the Company and
  any of its Wholly Owned Restricted Subsidiaries; provided, however, that
     any subsequent issuance or transfer of Equity Interests that results in any
     such Indebtedness being held by a Person other than the Company or a Wholly
 Owned Restricted Subsidiary, and any sale or other transfer of any such
   Indebtedness to a Person that is not either the Company or a Wholly Owned
Restricted Subsidiary, shall be deemed, in each case, to constitute an
incurrence of such Indebtedness by the Company or such Restricted     
Subsidiary, as the case may be;                                       

(vii) the incurrence by the Company or any of its Restricted
   Subsidiaries of Hedging Obligations that are (a) incurred for the purpose
  of fixing or hedging interest rate risk with respect to any Indebtedness
  that is permitted by the terms of the Indenture to be outstanding or (b)
  incurred for the purpose of fixing or hedging currency exchange rates or
prices of commodities used in the business of the Company and its     
Restricted Subsidiaries;                                              

 (viii) the incurrence by the Company or any of its Restricted
Subsidiaries of obligations relating to letters of credit to support  
workers compensation obligations, bankers acceptances and performance 
bonds, surety bonds and performance guarantees of the Company or such 
Restricted Subsidiary, in each case incurred in the ordinary course of
business;                                                             

          (ix) the incurrence by the Company or any Guarantor of Indebtedness in
an amount not to exceed $20.0 million at any one time outstanding; and

(x) the guarantee by the Company or any of the Guarantors of
     Indebtedness that was permitted to be incurred by another provision of this
covenant.                                                             

 For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness meets the criteria of more than one of the         
categories of Permitted Debt described in clauses (i) through (x) above or is   
entitled to be incurred pursuant to the first paragraph of this covenant, the   
Company shall, in its sole discretion, classify such item of Indebtedness in any
manner that complies with this covenant, and such item of Indebtedness will be  
treated as having been incurred pursuant to only one of such clauses or pursuant
to the first paragraph hereof. Accrual of interest, the accretion of accredit   
value and the payment of interest in the form of additional Indebtedness will   
not be deemed to be an incurrence of Indebtedness for purposes of this covenant.

Liens                                                                       

   The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume
or suffer to exist any Lien securing Indebtedness or trade payables on any asset
now owned or hereafter acquired, or any income or profits therefrom or assign or
convey any right to receive income therefrom, except Permitted Liens.           

Dividend and Other Payment Restrictions Affecting Subsidiaries              

   The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create or otherwise  
cause or suffer to exist or become effective any encumbrance or restriction on  
the ability of any Restricted Subsidiary to (i)(a) pay dividends or make any    
other distributions to the Company or any of its Restricted Subsidiaries (1) on 
its Capital Stock or (2) with respect to any other interest or participation in,
or measured by, its profits, or (b) pay any indebtedness owed to the Company or 
any of its Restricted Subsidiaries, (ii) make loans or advances to the Company  
or any of its Restricted Subsidiaries or (iii) transfer any of its properties or
assets to the Company or any of its Restricted Subsidiaries, except for such    
encumbrances or restrictions existing under or by reason of (a) Existing        

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Indebtedness as in effect on the Closing Date, (b) the New Credit Facility as in
effect as of the Closing Date, and any amendments, modifications, restatements, 
renewals, increases, supplements, refundings, replacements or refinancings      
thereof, provided that such amendments, modifications, restatements, renewals,  
increases, supplements, refundings, replacements or refinancings are no more    
restrictive with respect to such dividend and other payment restrictions        
affecting Restricted Subsidiaries than those contained in the New Credit        
Facility as in effect on the Closing Date, (c) the Indenture and the Exchange   
Notes, (d) applicable law, (e) any instrument governing Indebtedness or Capital 
Stock of a Person acquired by the Company or any of its Restricted Subsidiaries 
as in effect at the time of such acquisition (except to the extent such         
Indebtedness was incurred in connection with or in contemplation of such        
acquisition), which encumbrance or restriction is not applicable to any Person, 
or the properties or assets of any Person, other than the Person, or the        
property or assets of the Person, so acquired, provided that, in the case of    
Indebtedness, such Indebtedness was permitted by the terms of the Indenture to  
be incurred, (f) by reason of customary non-assignment provisions in leases     
entered into in the ordinary course of business and consistent with past        
practices, (g) purchase money obligations for property acquired in the ordinary 
course of business that impose restrictions of the nature described in clause   
(iii) above on the property so acquired, or (h) Permitted Refinancing           
Indebtedness, provided that the restrictions contained in the agreements        
governing such Permitted Refinancing Indebtedness are no more restrictive than  
those contained in the agreements governing the Indebtedness being refinanced.  

Merger, Consolidation or Sale of Assets                                     

The Indenture provides that neither the Company nor any Restricted    
Subsidiary may consolidate or merge with or into (whether or not the Company or 
such Restricted Subsidiary, as the case may be, is the surviving corporation),  
or sell, assign, transfer, lease, convey or otherwise dispose of all or         
substantially all of its properties or assets in one or more related            
transactions, to another corporation, Person or entity unless (i) the Company or
such Restricted Subsidiary, as the case may be, is the surviving corporation or 
the entity or the Person formed by or surviving any such consolidation or merger
(if other than the Company or such Restricted Subsidiary) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been    
made is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia; (ii) the entity or Person formed 
by or surviving any such consolidation or merger (if other than the Company or  
such Restricted Subsidiary) or the entity or Person to which such sale,         
assignment, transfer, lease, conveyance or other disposition shall have been    
made assumes all the obligations of the Company or such Restricted Subsidiary,  
as the case may be, under the Exchange Notes or such Restricted Subsidiary's    
Guarantee thereof and the Indenture pursuant to a supplemental indenture in a   
form reasonably satisfactory to the Trustee; (iii) immediately after such       
transaction no Default or Event of Default exists; and (iv) except in the case  
of a merger of the Company with or into a Wholly Owned Restricted Subsidiary of 
the Company, the Company or the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,     
assignment, transfer, lease, conveyance or other disposition shall have been    
made (a) will have Consolidated Net Worth immediately after the transaction     
equal to or greater than the Consolidated Net Worth of the Company immediately  
preceding the transaction and (b) will, at the time of such transaction and     
after giving pro forma effect thereto as if such transaction had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at least 
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio    
test set forth in the first paragraph of the covenant described above under the 
caption "-- Incurrence of Indebtedness and Issuance of Preferred Stock."        

Transactions with Affiliates                                                

   The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer
or otherwise dispose of any of its properties or assets to, or purchase any     
property or assets from, or enter into or make or amend any transaction,        
contract, agreement, understanding, loan, advance or guarantee with, or for the 
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),  
unless (i) such Affiliate Transaction is on terms that are no less favorable to 
the Company or such Restricted Subsidiary than those that would have been       
obtained in a comparable transaction by the Company or such Restricted          
Subsidiary with an unrelated Person and (ii) the Company delivers to the        

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Trustee (a) with respect to any Affiliate Transaction or series of related      
Affiliate Transactions involving aggregate consideration in excess of $3.0      
million, a resolution of the Board of Directors set forth in an Officers'       
Certificate certifying that such Affiliate Transaction complies with clause (i) 
above and that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors and (b) with respect to any     
Affiliate Transaction or series of related Affiliate Transactions involving     
aggregate consideration in excess of $10.0 million, other than the purchase or  
sale of inventory from or to Texmaco in the ordinary course of business, an     
opinion as to the fairness to the holders of such Affiliate Transaction from a  
financial point of view issued by an accounting, appraisal or investment banking
firm of national standing.                                                      

The foregoing provisions will not prohibit (i) any transaction with an
employee of the Company (in his or her capacity as such) entered into in the    
ordinary course of business, including entering into employment agreements,     
indemnification agreements and compensation and employee benefit plans; (ii)    
transactions between or among the Company and/or its Restricted Subsidiaries;   
and (iii) any Restricted Payment that is permitted by the provisions of the     
Indenture described above under the caption "-- Restricted Payments."           

Limitation on Other Senior Subordinated Debt                                

The Indenture provides that neither the Company nor any Restricted    
Subsidiary will incur any Indebtedness that is subordinate or junior in right of
payment to any Senior Debt of the Company or such Restricted Subsidiary, as the 
case may be, and senior in any respect in right of payment to the Exchange Notes
or such Restricted Subsidiary's Guarantee thereof.                              

Additional Subsidiary Guarantees                                            

   The Indenture provides that if the Company or any of the Guarantors shall
acquire or create a Domestic Restricted Subsidiary after the Closing Date, or   
any Unrestricted Subsidiary shall cease to be an Unrestricted Subsidiary and    
become a Domestic Restricted Subsidiary, then such Subsidiary shall execute a   
guarantee of the notes and deliver an opinion of counsel, in accordance with the
terms of the Indenture.                                                         

Payments for Consent                                                        

   The Indenture provides that neither the Company nor any of its Restricted
Subsidiaries will, directly or indirectly, pay or cause to be paid any          
consideration, whether by way of interest, fee or otherwise, to any holder of   
any Exchange Notes for or as an inducement to any consent, waiver or amendment  
of any of the terms or provisions of the Indenture or the Exchange Notes unless 
such consideration is offered to be paid or is paid to all holders of the       
Exchange Notes that consent, waive or agree to amend in the time frame set forth
in the solicitation documents relating to such consent, waiver or agreement.    

Reports                                                                     

The Indenture provides that, whether or not required by the rules and 
regulations of the Commission, so long as any Exchange Notes are outstanding,   
the Company will furnish to the holders of Exchange Notes (i) all quarterly and 
annual financial information that would be required to be contained in a filing 
with the Commission on Forms 10-Q and 10-K if the Company were required to file 
such Forms, including a "Management's Discussion and Analysis of Financial      
Condition and Results of Operations" that describes the financial condition and 
results of operations of the Company and its consolidated Subsidiaries (showing 
in reasonable detail, either on the face of the financial statements or in the  
footnotes thereto and in Management's Discussion and Analysis of Financial      
Condition and Results of Operations, the financial condition and results of     
operations of the Company and its Restricted Subsidiaries separate from the     
financial information and results of operations of the Unrestricted Subsidiaries
of the Company) and, with respect to the annual information only, a report      
thereon by the Company's certified independent accountants and (ii) all current 
reports that would be required to be filed with the Commission on Form 8-K if   
the Company were required to file such reports. In addition, whether or not     
required by the rules and regulations of the Commission, the Company will file a
copy of all such information and reports with the Commission for public         

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availability (unless the Commission will not accept such a filing) and make such
information available to securities analysts and prospective investors upon     
request.                                                                        

EVENTS OF DEFAULT AND REMEDIES                                                  

   The Indenture provides that each of the following constitutes an Event of
Default: (i) default for 30 days in the payment when due of interest on, or     
Liquidated Damages, if any, with respect to, the Exchange Notes (whether or not 
prohibited by the subordination provisions of the Indenture), (ii) default in   
payment when due of the principal of or premium, if any, on the Exchange Notes  
(whether or not prohibited by the subordination provisions of the Indenture);   
(iii) failure by the Company to comply with the provisions described under the  
captions "-- Change of Control," "-- Asset Sales," "-- Restricted Payments,"    
"-- Incurrence of Indebtedness and Issuance of Preferred Stock" or "-- Merger,  
Consolidation or Sale of Assets;" (iv) failure by the Company for 30 days after 
written notice by the Trustee or the holders of at least 25% in principal amount
of the then outstanding Exchange Notes to comply with any of its other          
agreements in the Indenture or the Exchange Notes; (v) default under any        
mortgage, indenture or instrument under which there may be issued or by which   
there may be secured or evidenced any Indebtedness for money borrowed by the    
Company or any of its Restricted Subsidiaries (or the payment of which is       
guaranteed by the Company or any of its Restricted Subsidiaries), whether such  
Indebtedness or guarantee now exists or is created after the Closing Date, which
default (a) is caused by a failure to pay principal of or premium, if any, or   
interest on such Indebtedness at final maturity (a "Payment Default") or (b)    
results in the acceleration of such Indebtedness prior to its express maturity  
and, in each case, the principal amount of any such Indebtedness, together with 
the principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates    
$5.0 million or more; (vi) failure by the Company or any of its Restricted      
Subsidiaries to pay final judgments aggregating in excess of $5.0 million and   
either (a) any creditor commences enforcement proceedings upon any such judgment
or (b) such judgments are not paid, discharged or stayed for a period of 60     
days; (vii) except as permitted by the Indenture, any guarantee of the Exchange 
Notes shall be held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or any Restricted     
Subsidiary, or any Person acting on behalf of any Restricted Subsidiary, shall  
deny or disaffirm its obligations under its guarantee; and (viii) certain events
of bankruptcy or insolvency with respect to the Company or any of its Restricted
Subsidiaries.                                                                   

If any Event of Default occurs and is continuing, the Trustee or the  
holders of at least 25% in principal amount of the then outstanding Exchange    
Notes may declare all the Exchange Notes to be due and payable immediately.     
Notwithstanding the foregoing, in the case of an Event of Default arising from  
certain events of bankruptcy or insolvency, with respect to the Company, any    
Significant Subsidiary or any group of Restricted Subsidiaries that, taken      
together, would constitute a Significant Subsidiary, all outstanding Exchange   
Notes will become due and payable without further action or notice. Holders of  
the Exchange Notes may not enforce the Indenture or the Exchange Notes except as
provided in the Indenture. Subject to certain limitations, holders of a majority
in principal amount of the then outstanding Exchange Notes may direct the       
Trustee in its exercise of any trust or power. The Trustee may withhold from    
holders of the Exchange Notes notice of any continuing Default or Event of      
Default (except a Default or Event of Default relating to the payment of        
principal or interest) if it determines that withholding notice is in their     
interest.                                                                       

In the case of any Event of Default occurring solely by reason of any 
willful action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would    
have had to pay if the Company then had elected to redeem the Exchange Notes    
pursuant to the optional redemption provisions of the Indenture, an equivalent  
premium shall also become and be immediately due and payable to the extent      
permitted by law upon the acceleration of the Exchange Notes. If an Event of    
Default occurs prior to September 1, 2002 solely by reason of any willful action
(or inaction) taken (or not taken) by or on behalf of the Company with the      
intention of avoiding the prohibition on redemption of the Exchange Notes prior 
to such date, then the premium specified in the Indenture shall also become     
immediately due and payable to the extent permitted by law upon the acceleration
of the Exchange Notes.                                                          

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 The holders of a majority in aggregate principal amount of the Exchange
Notes then outstanding by notice to the Trustee may on behalf of the holders of 
all of the Exchange Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of Default
in the payment of interest on, or the principal of, the Exchange Notes.         

The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon       
becoming aware of any Default or Event of Default, to deliver to the Trustee a  
statement specifying such Default or Event of Default.                          

NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES, INCORPORATORS AND      
STOCKHOLDERS                                                                    

    No director, officer, employee, incorporator or stockholder of the Company
or any Restricted Subsidiary (other than the Company and its Restricted         
Subsidiaries), as such, shall have any liability for any obligations of the     
Company or such Restricted Subsidiary under the Exchange Notes, any Guarantee   
thereof, the Indenture or for any claim based on, in respect of, or by reason   
of, such obligations or their creation. Each holder of Exchange Notes by        
accepting an Exchange Note waives and releases all such liability. The waiver   
and release are part of the consideration for issuance of the Exchange Notes.   
Such waiver may not be effective to waive liabilities under the federal         
securities laws and it is the view of the Commission that such a waiver is      
against public policy.                                                          

LEGAL DEFEASANCE AND COVENANT DEFEASANCE                                        

  The Company may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding Exchange Notes ("Legal   
Defeasance") except for (i) the rights of holders of outstanding Exchange Notes 
to receive payments in respect of the principal of and premium, interest and    
Liquidated Damages, if any, on the Exchange Notes when such payments are due    
from the trust referred to below, (ii) the Company's obligations with respect to
the Exchange Notes concerning issuing temporary Exchange Notes, registration of 
Exchange Notes, mutilated, destroyed, lost or stolen Exchange Notes and the     
maintenance of an office or agency for payment and money for security payments  
held in trust, (iii) the rights, powers, trusts, duties and immunities of the   
Trustee, and the Company's obligations in connection therewith and (iv) the     
Legal Defeasance provisions of the Indenture. In addition, the Company may, at  
its option and at any time, elect to have the obligations of the Company        
released with respect to certain covenants that are described in the Indenture  
("Covenant Defeasance") and thereafter any omission to comply with such         
obligations shall not constitute a Default or Event of Default with respect to  
the Exchange Notes. In the event Covenant Defeasance occurs, certain events (not
including non-payment, bankruptcy, receivership, rehabilitation and insolvency  
events) described under " -- Events of Default and Remedies" will no longer     
constitute an Event of Default with respect to the Exchange Notes.              

  In order to exercise either Legal Defeasance or Covenant Defeasance, (i)
the Company must irrevocably deposit with the Trustee, in trust, for the benefit
of the holders of the Exchange Notes, cash in U.S. dollars, non-callable        
Government Securities, or a combination thereof, in such amounts as will be     
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of and premium, interest and Liquidated       
Damages, if any, on the outstanding Exchange Notes on the stated maturity or on 
the applicable redemption date, as the case may be, and the Company must specify
whether the Exchange Notes are being defeased to maturity or to a particular    
redemption date; (ii) in the case of Legal Defeasance, the Company shall have   
delivered to the Trustee an opinion of counsel in the United States reasonably  
acceptable to the Trustee confirming that (a) the Company has received from, or 
there has been published by, the Internal Revenue Service a ruling or (b) since 
the Closing Date, there has been a change in the applicable federal income tax  
law, in either case to the effect that, and based thereon such opinion of       
counsel shall confirm that, the holders of the outstanding Exchange Notes will  
not recognize income, gain or loss for federal income tax purposes as a result  
of such Legal Defeasance and will be subject to federal income tax on the same  
amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred; (iii) in the case of Covenant           
Defeasance, the Company shall have delivered to the Trustee an opinion of       
counsel in the United States reasonably acceptable to the Trustee               

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confirming that the holders of the outstanding Exchange Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such        
Covenant Defeasance and will be subject to federal income tax on the same       
amounts, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred; (iv) no Default or Event of Default  
shall have occurred and be continuing on the date of such deposit (other than a 
Default or Event of Default resulting from the borrowing of funds to be applied 
to such deposit) or insofar as Events of Default from bankruptcy or insolvency  
events are concerned, at any time in the period ending on the 91st day after the
date of deposit; (v) such Legal Defeasance or Covenant Defeasance will not      
result in a breach or violation of, or constitute a default under any material  
agreement or instrument (other than the Indenture) to which the Company or any  
of its Subsidiaries is a party or by which the Company or any of its            
Subsidiaries is bound; (vi) the Company shall have delivered to the Trustee an  
opinion of counsel to the effect that after the 91st day following the deposit, 
the trust funds will not be subject to the effect of any applicable bankruptcy, 
insolvency, reorganization or similar laws affecting creditors' rights          
generally; (vii) the Company shall have delivered to the Trustee an Officers'   
Certificate stating that the deposit was not made by the Company with the intent
of preferring the holders of Exchange Notes over the other creditors of the     
Company with the intent of defeating, hindering, delaying or defrauding         
creditors of the Company or others; and (viii) the Company shall have delivered 
to the Trustee an Officers' Certificate and an opinion of counsel, each stating 
that all conditions precedent provided for relating to the Legal Defeasance or  
the Covenant Defeasance have been complied with.                                

TRANSFER AND EXCHANGE                                                           

 A holder may transfer or exchange Exchange Notes in accordance with the
Indenture. The Registrar and the Trustee may require a holder, among other      
things, to furnish appropriate endorsements and transfer documents and the      
Company may require a holder to pay any taxes and fees required by law or       
permitted by the Indenture. The Company is not required to transfer or exchange 
any Exchange Note selected for redemption. Also, the Company is not required to 
transfer or exchange any Exchange Note for a period of 15 days before a         
selection of Exchange Notes to be redeemed.                                     

   The registered holder of an Exchange Note will be treated as the owner of
it for all purposes.                                                            

AMENDMENT, SUPPLEMENT AND WAIVER                                                

  Except as provided in the next two succeeding paragraphs, the Indenture,
the Exchange Notes and the Guarantees thereof may be amended or supplemented    
with the consent of the holders of at least a majority in principal amount of   
the Exchange Notes then outstanding (including, without limitation, consents    
obtained in connection with a purchase of, or tender offer or exchange offer    
for, Exchange Notes), and any existing default or compliance with any provision 
of the Indenture, the Exchange Notes or the Guarantees thereof may be waived    
with the consent of the holders of a majority in principal amount of the then   
outstanding Exchange Notes (including consents obtained in connection with a    
tender offer or exchange offer for Exchange Notes).                             

     Without the consent of each holder affected, an amendment or waiver may not
(with respect to any Exchange Notes held by a non-consenting holder): (i) reduce
the principal amount of Exchange Notes whose holders must consent to an         
amendment, supplement or waiver, (ii) reduce the principal of or change the     
fixed maturity of any Exchange Note or alter the provisions with respect to the 
redemption of the Exchange Notes (other than provisions relating to the         
covenants described above under the caption "-- Repurchase at the Option of     
Holders"), (iii) reduce the rate of or change the time for payment of interest  
on any Exchange Note, (iv) waive a Default or Event of Default in the payment of
principal of or premium, interest or Liquidated Damages, if any, on the Exchange
Notes (except a rescission of acceleration of the Exchange Notes by the holders 
of at least a majority in aggregate principal amount of the Exchange Notes and a
waiver of the payment default that resulted from such acceleration), (v) make   
any Exchange Note payable in money other than that stated in the Exchange Notes,
(vi) make any change in the provisions of the Indenture relating to waivers of  
past Defaults or the rights of holders of Exchange Notes to receive payments of 
principal of or premium, interest or Liquidated Damages, if any, on the Exchange
Notes, (vii) waive a redemption payment with respect to any Exchange Note (other
than a payment required by one of the covenants described above under the       
caption "-- Repurchase at the Option of Holders"), (ix) release any Restricted  
Subsidiary from its                                                             

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Guarantee of the Exchange Notes or (ix) make any change in the foregoing        
amendment and waiver provisions. In addition, any amendment to the provisions of
Article 10 of the Indenture (which relates to subordination) will require the   
consent of the holders of at least 75% in aggregate principal amount of the     
Exchange Notes then outstanding if such amendment would adversely affect the    
rights of holders of Exchange Notes.                                            

Notwithstanding the foregoing, without the consent of any holder of   
Exchange Notes, the Company and the Trustee may amend or supplement the         
Indenture, the Exchange Notes or any Guarantee thereof to cure any ambiguity,   
defect or inconsistency, to provide for uncertificated Exchange Notes in        
addition to or in place of certificated Exchange Notes, to provide for the      
assumption of the Company's or any Restricted Subsidiary's obligations to       
Holders of Exchange Notes in the case of a merger or consolidation, to make any 
change that would provide any additional rights or benefits to the holders of   
Exchange Notes or that does not adversely affect the legal rights under the     
Indenture of any such holder, or to comply with requirements of the Commission  
in order to effect or maintain the qualification of the Indenture under the     
Trust Indenture Act.                                                            

CONCERNING THE TRUSTEE                                                          

  The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in      
certain cases, or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee will be permitted to engage in other
transactions; however, if it acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the Commission for permission to continue
or resign.                                                                      

The holders of a majority in principal amount of the then outstanding 
Exchange Notes will have the right to direct the time, method and place of      
conducting any proceeding for exercising any remedy available to the Trustee,   
subject to certain exceptions. The Indenture provides that in case an Event of  
Default shall occur (which shall not be cured), the Trustee will be required, in
the exercise of its power, to use the degree of care of a prudent man in the    
conduct of his own affairs. Subject to such provisions, the Trustee will be     
under no obligation to exercise any of its rights or powers under the Indenture 
at the request of any holder of Exchange Notes, unless such holder shall have   
offered to the Trustee security and indemnity satisfactory to it against any    
loss, liability or expense.                                                     

ADDITIONAL INFORMATION                                                          

    Anyone who receives this Prospectus may obtain a copy of the Indenture and
Registration Rights Agreement without charge by writing to Dyersburg            
Corporation, 1315 Phillips Street, Dyersburg, Tennessee 38025, Attention:       
Treasurer.                                                                      

BOOK-ENTRY, DELIVERY AND FORM                                                   

  The certificates representing the Exchange Notes will be issued in fully
registered form. Except as described in the next paragraph, the Exchange Notes  
initially will be represented by a single, permanent global Exchange Note, in   
definitive, fully registered form without interest coupons (the "Global Exchange
Note") and will be deposited with the Trustee as custodian for DTC and          
registered in the name of Cede & Co. or such other nominee as DTC may designate.
The Global Exchange Note (and any Exchange Notes issued in exchange therefor)   
will be subject to certain restrictions on transfer set forth therein and in the
Indenture and will bear the respective legends regarding such restrictions.     

Holders of Exchange Notes who elect to take physical delivery of their
certificates instead of holding their interest through the Global Exchange Note 
(collectively referred to herein as the "Non-Global Holders") will be issued in 
registered form a certificated Exchange Note ("Certificated Exchange Note").    
Upon the transfer of any Certificated Exchange Note initially issued to a       
Non-Global Holder, such Certificated Exchange Note will, unless the transferee  
requests otherwise or the Global Exchange Note has previously been exchanged in 
whole for Certificated Exchange Notes, be exchanged for an interest in the      
Global Exchange Note.                                                           

The Depositary has advised the Company as follows: The Depositary is a
limited-purpose trust company that was created to hold securities for its       
participating organizations (collectively, the "Participants" or the            
"Depositary's Participants") and to facilitate the clearance and settlement of  
transactions in such securities                                                 

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between Participants through electronic book-entry changes in accounts of its   
Participants. The Depositary's Participants include securities brokers and      
dealers (including the Initial Purchasers), banks and trust companies, clearing 
corporations and certain other organizations. Access to the Depositary's system 
is also available to other entities such as banks, brokers, dealers and trust   
companies (collectively, the "Indirect Participants" or the "Depositary's       
Indirect Participants") that clear through or maintain a custodial relationship 
with a Participant, either directly or indirectly. Persons who are not          
Participants may beneficially own securities held by or on behalf of the        
Depositary only through the Depositary's Participants or the Depositary's       
Indirect Participants.                                                          

The Company expects that, pursuant to procedures established by the   
Depositary, (i) upon deposit of the Global Exchange Note, the Depositary will   
credit the accounts of Participants with portions of the principal amount of the
Global Exchange Note and (ii) ownership of the Exchange Notes evidenced by the  
Global Exchange Note will be shown on, and the transfer of ownership thereof    
will be effected only through, records maintained by the Depositary (with       
respect to the interests of the Depositary's Participants), the Depositary's    
Participants and the Depositary's Indirect Participants. Prospective purchasers 
are advised that the laws of some states require that certain persons take      
physical delivery in definitive form of securities that they own. Consequently, 
the ability to transfer Exchange Notes evidenced by the Global Exchange Note    
will be limited to such extent.                                                 

   So long as the Global Exchange Note Holder is the registered owner of any
Exchange Notes, the Global Exchange Note Holder will be considered the sole     
holder under the Indenture of any Exchange Notes evidenced by the Global        
Exchange Note. Beneficial owners of Exchange Notes evidenced by the Global      
Exchange Note will not be considered the owners or holders thereof under the    
Indenture for any purpose, including with respect to the giving of any          
directions, instructions or approvals to the Trustee thereunder. Neither the    
Company nor the Trustee will have any responsibility or liability for any aspect
of the records of the Depositary or for maintaining, supervising or reviewing   
any records of the Depositary relating to the Exchange Notes.                   

Payments in respect of the principal of and premium, interest and     
Liquidated Damages, if any, on any Exchange Notes registered in the name of the 
Global Exchange Note Holder on the applicable record date will be payable by the
Trustee to or at the direction of the Global Exchange Note Holder in its        
capacity as the registered holder under the Indenture. Under the terms of the   
Indenture, the Company and the Trustee may treat the persons in whose names     
Exchange Notes, including the Global Exchange Note, are registered as the owners
thereof for the purpose of receiving such payments. Consequently, neither the   
Company nor the Trustee has or will have any responsibility or liability for the
payment of such amounts to beneficial owners of Exchange Notes. The Company     
believes, however, that it is currently the policy of the Depositary to         
immediately credit the accounts of the relevant Participants with such payments,
in amounts proportionate to their respective holdings of beneficial interests in
the relevant security as shown on the records of the Depositary. Payments by the
Depositary's Participants and the Depositary's Indirect Participants to the     
beneficial owners of Exchange Notes will be governed by standing instructions   
and customary practice and will be the responsibility of the Depositary's       
Participants or the Depositary's Indirect Participants.                         

Certificated Securities                                                     

     Subject to certain conditions, any person having a beneficial interest in a
Global Exchange Note may, upon request to the Trustee, exchange such beneficial 
interest for Exchange Notes in the form of Certificated Securities. Upon any    
such issuance, the Trustee is required to register such Certificated Securities 
in the name of, and cause the same to be delivered to, such person or persons   
(or the nominee of any thereof). In addition, if (i) the Company notifies the   
Trustee in writing that the Depositary is no longer willing or able to act as a 
depositary and the Company is unable to locate a qualified successor within 90  
days or (ii) the Company, at its option, notifies the Trustee in writing that it
elects to cause the issuance of Exchange Notes in the form of Certificated      
Securities under the Indenture, then, upon surrender by the Global Exchange Note
Holder of the Global Exchange Note, Exchange Notes in such form will be issued  
to each person that the Global Exchange Note Holder and the Depositary identify 
as being the beneficial owner of the related Exchange Notes.                    

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 Neither the Company nor the Trustee will be liable for any delay by the
Global Exchange Note Holder or the Depositary in identifying the beneficial     
owners of Exchange Notes, and the Company and the Trustee may conclusively rely 
on, and will be protected in relying on, instructions from the Global Exchange  
Note Holder or the Depositary for all purposes.                                 

Same-Day Settlement and Payment                                             

The Indenture requires that payments in respect of the Exchange Notes 
represented by the Global Exchange Note (including principal, premium, interest 
and Liquidated Damages, if any) be made by wire transfer of immediately         
available funds to the accounts specified by the Global Exchange Note Holder.   
With respect to Certificated Securities, the Company will make all payments of  
principal, premium, interest and Liquidated Damages, if any, by wire transfer of
immediately available funds to the accounts specified by the holders thereof or,
if no such account is specified, by mailing a check to each such holder's       
registered address.                                                             

     Any permitted secondary market trading activity in such Exchange Notes will
be required by the Depositary to be settled in immediately available funds. The 
Company expects that secondary trading in the Certificated Securities will also 
be settled in immediately available funds.                                      

REGISTRATION RIGHTS; LIQUIDATED DAMAGES                                         

     The Company and the Initial Purchasers entered into the Registration Rights
Agreement on the Closing Date. Pursuant to the Registration Rights Agreement,   
the Company agreed to file with the Commission the Exchange Offer Registration  
Statement on the appropriate form under the Securities Act with respect to the  
Exchange Notes. Upon the effectiveness of the Exchange Offer Registration       
Statement, the Company will offer to the holders of Transfer Restricted         
Securities pursuant to the Exchange Offer who are able to make certain          
representations the opportunity to exchange their Transfer Restricted Securities
for Exchange Notes. If (i) the Company is not required to file the Exchange     
Offer Registration Statement or permitted to consummate the Exchange Offer      
because the Exchange Offer is not permitted by applicable law or Commission     
policy or (ii) any holder of Transfer Restricted Securities notifies the Company
prior to the 20th day following consummation of the Exchange Offer that (a) it  
is prohibited by law or Commission policy from participating in the Exchange    
Offer or (b) that it may not resell the Exchange Notes acquired by it in the    
Exchange Offer to the public without delivering a prospectus and the prospectus 
contained in the Exchange Offer Registration Statement is not appropriate or    
available for such resales or (c) that it is a broker-dealer and owns Series A  
Notes acquired directly from the Company or an affiliate of the Company, the    
Company will file with the Commission a Shelf Registration Statement to cover   
resales of the Series A Notes by the holders thereof who satisfy certain        
conditions relating to the provision of information in connection with the Shelf
Registration Statement. The Company will use its best efforts to cause the      
applicable registration statement to be declared effective as promptly as       
possible by the Commission. For purposes of the foregoing, "Transfer Restricted 
Securities" means each Series A Note until (i) the date on which such Series A  
Note has been exchanged by a person other than a broker-dealer for an Exchange  
Note in the Exchange Offer, (ii) following the exchange by a broker-dealer in   
the Exchange Offer of a Series A Note for an Exchange Note, the date on which   
such Exchange Note is sold to a purchaser who receives from such broker-dealer  
on or prior to the date of such sale a copy of the prospectus contained in the  
Exchange Offer Registration Statement, (iii) the date on which such Series A    
Note has been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement or (iv) the date on which such 
Series A Note is distributed to the public pursuant to Rule 144 under the Act.  

   The Registration Rights Agreement provides that (i) the Company will file
an Exchange Offer Registration Statement with the Commission on or prior to 30  
days after the Closing Date, (ii) the Company will use its best efforts to have 
the Exchange Offer Registration Statement declared effective by the Commission  
on or prior to 90 days after the Closing Date, (iii) unless the Exchange Offer  
would not be permitted by applicable law or Commission policy, the Company will 
commence the Exchange Offer and use its best efforts to issue, on or prior to 30
business days after the date on which the Exchange Offer Registration           

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Statement was declared effective by the Commission, Exchange Notes in exchange  
for all Series A Notes tendered prior thereto in the Exchange Offer and (iv) if 
obligated to file the Shelf Registration Statement, the Company will use its    
best efforts to file the Shelf Registration Statement with the Commission on or 
prior to 30 days after such filing obligation arises and to cause the Shelf     
Registration to be declared effective by the Commission on or prior to 90 days  
after such obligation arises. If (a) the Company fails to file any of the       
Registration Statements required by the Registration Rights Agreement on or     
before the date specified for such filing, (b) any of such Registration         
Statements is not declared effective by the Commission on or prior to the date  
specified for such effectiveness (the "Effectiveness Target Date"), (c) the     
Company fails to consummate the Exchange Offer within 30 business days of the   
Effectiveness Target Date with respect to the Exchange Offer Registration       
Statement or (d) the Shelf Registration Statement or the Exchange Offer         
Registration Statement is declared effective but thereafter ceases to be        
effective or usable in connection with resales of Transfer Restricted Securities
during the periods specified in the Registration Rights Agreement (each such    
event referred to in clauses (a) through (d) above a "Registration Default"),   
then the Company will pay Liquidated Damages to each Holder of Series A Notes,  
with respect to the first 90-day period immediately following the occurrence of 
the first Registration Default, in an amount equal to one-half of one percentage
point (0.5%) per annum of the principal amount of Series A Notes held by such   
Holder. The amount of the Liquidated Damages will increase by an additional     
one-half of one percent (0.5%) per annum for each subsequent 90-day period until
all Registration Defaults have been cured, up to a maximum amount of two percent
(2.0%) per annum. All accrued Liquidated Damages will be paid by the Company on 
each Damages Payment Date to the Global Exchange Note Holder by wire transfer of
immediately available funds or by federal funds check and to Holders of         
Certificated Securities by wire transfer to the accounts specified by them or by
mailing checks to their registered addresses if no such accounts have been      
specified. Following the cure of all Registration Defaults, the accrual of      
Liquidated Damages will cease.                                                  

    Holders of Series A Notes will be required to make certain representations
to the Company (as described in the Registration Rights Agreement) in order to  
participate in the Exchange Offer and will be required to deliver information to
be used in connection with the Shelf Registration Statement and to provide      
comments on the Shelf Registration Statement within the time periods set forth  
in the Registration Rights Agreement in order to have their Series A Notes      
included in the Shelf Registration Statement and benefit from the provisions    
regarding Liquidated Damages set forth above.                                   

CERTAIN DEFINITIONS                                                             

    Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.        

"Acquired Debt" means, with respect to any specified Person, (i)      
Indebtedness of any other Person existing at the time such other Person is      
merged with or into or became a Subsidiary of such specified Person, including, 
without limitation, Indebtedness incurred in connection with, or in             
contemplation of, such other Person merging with or into or becoming a          
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien    
encumbering any asset acquired by such specified Person.                        

"Acquisition" means the acquisition by the Company of all of the      
outstanding Capital Stock of AIH Inc. pursuant to the Stock Purchase Agreement  
by and among the Company, Alamac Sub Holdings Inc., AIH Inc. and WestPoint      
Stevens Inc.                                                                    

"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common      
control with such specified Person. For purposes of this definition, "control"  
(including, with correlative meanings, the terms "controlling," "controlled by" 
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the     
direction of the management or policies of such Person, whether through the     
ownership of voting securities, by agreement or otherwise; provided that        
beneficial ownership of 10% or more of the voting securities of a Person shall  
be deemed to be control.                                                        

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    "Asset Sale" means (i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and       
leaseback), excluding sales of services and ancillary products in the ordinary  
course of business consistent with past practices (provided that the sale,      
lease, conveyance or other disposition of all or substantially all of the assets
of the Company and its Restricted Subsidiaries taken as a whole will be governed
by the provisions of the Indenture described above under the caption "-- Change 
of Control" and/or the provisions described above under the caption "-- Merger, 
Consolidation or Sale of Assets" and not by the provisions of the Asset Sale    
covenant), and (ii) the issue or sale by the Company or any of its Subsidiaries 
of Equity Interests of any of the Company's Subsidiaries, in the case of either 
clause (i) or (ii), whether in a single transaction or a series of related      
transactions (a) that have a fair market value in excess of $1.0 million or (b) 
for net proceeds in excess of $1.0 million. Notwithstanding the foregoing, the  
following will be deemed not to be Asset Sales: (i) a transfer of assets by the 
Company to a Wholly Owned Restricted Subsidiary or by a Wholly Owned Restricted 
Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary; (ii)
an issuance of Equity Interests by a Wholly Owned Restricted Subsidiary to the  
Company or to another Wholly Owned Restricted Subsidiary; (iii) the transfer of 
obsolete equipment in the ordinary course of business; (iv) a sale and leaseback
transaction in which the lease is a Capital Lease Obligation that is permitted  
by the covenant described under the caption "-- Incurrence of Indebtedness and  
Issuance of Preferred Stock;" and (v) a Restricted Payment that is permitted by 
the covenant described above under the caption "-- Restricted Payments."        

    "Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.                                                                           

  "Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,      
interests, participations, rights or other equivalents (however designated) of  
corporate stock, (iii) in the case of a partnership or limited liability        
company, partnership or membership interests (whether general or limited) and   
(iv) any other interest or participation that confers on a Person the right to  
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.                                                                 

  "Cash Equivalents" means (i) United States dollars, (ii) any evidence of
Indebtedness issued or directly and fully guaranteed or insured by the United   
States government or any agency or instrumentality thereof (provided the full   
faith and credit of the United States government is behind such obligation)     
having maturities of not more than six months from the date of acquisition,     
(iii) certificates of deposit and eurodollar time deposits with maturities of   
six months or less from the date of acquisition, bankers' acceptances with      
maturities not exceeding six months and overnight bank deposits, in each case   
with any domestic commercial bank that is a member of the Federal Reserve System
and having capital and surplus in excess of $500.0 million and a Keefe Bank     
Watch Rating of "B" or better, or whose short-term debt has the highest rating  
obtainable from Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's
Corporation ("S&P"), (iv) any money market deposit account issued or offered by 
a domestic commercial bank that is a member of the Federal Reserve System and   
having capital and surplus in excess of $500.0 million and a Keefe Bank Watch   
Rating of "B" or better, or whose short-term debt has the highest rating        
obtainable from Moody's or S&P, (v) repurchase obligations with a term of not   
more than seven days for underlying securities of the types described in clauses
(ii) and (iii) above entered into with any financial institution meeting the    
qualifications specified in clause (iii) above and (vi) commercial paper having 
the highest rating obtainable from Moody's or S&P, and in each case maturing    
within six months after the date of acquisition.                                

   "Change of Control" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of    
merger or consolidation), in one or a series of related transactions, of all or 
substantially all of the assets of the Company and its Restricted Subsidiaries  
taken as a whole to any "person" (as such term is used in Section 13(d)(3) of   
the Exchange Act) other than Texmaco or its Affiliates; (ii) the adoption of a  
plan relating to the liquidation or dissolution of the Company; (iii) the       
consummation of any transaction (including, without limitation, any merger or   
consolidation) the result of which is that any "person" (as defined above),     
other than Texmaco or its Affiliates, becomes the "beneficial owner" (as such   
term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that
a person shall be deemed to have "beneficial ownership" of all securities that  
such person has the right to acquire,                                           

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whether such right is currently exercisable or is exercisable only upon the     
occurrence of a subsequent condition), directly or indirectly, of more than 25% 
of the Voting Stock of the Company (measured by voting power rather than number 
of shares); or (iv) the first day on which two-thirds or less of the members of 
the Board of Directors of the Company are Continuing Directors.                 

  "Closing Date" means the date of the closing of the sale of the Series A
Notes.                                                                          

    "Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus, to the extent  
deducted in computing such Consolidated Net Income, (i) an amount equal to any  
extraordinary loss plus any net loss realized in connection with an Asset Sale, 
(ii) provision for taxes based on income or profits, (iii) consolidated interest
expense whether paid or accrued and whether or not capitalized (including,      
without limitation, amortization of debt issuance costs and original issue      
discount, non-cash interest payments, the interest component of any deferred    
payment obligations, the interest component of all payments associated with     
Capital Lease Obligations, commissions, discounts and other fees and charges    
incurred in respect of letter of credit or bankers' acceptance financings, and  
net payments (if any) pursuant to Hedging Obligations) and (iv) depreciation and
amortization (including amortization of goodwill and other intangibles but      
excluding amortization of prepaid cash expenses that were paid in a prior       
period) in each case, on a consolidated basis and determined in accordance with 
GAAP. Notwithstanding the foregoing, the provision for taxes based on the income
or profits of, and the depreciation and amortization of, a Restricted Subsidiary
of a Person shall be added to Consolidated Net Income to compute Consolidated   
Cash Flow only to the extent (and in the same proportion) that the Net Income of
such Restricted Subsidiary was included in calculating the Consolidated Net     
Income of such Person and only if a corresponding amount would be permitted at  
the date of determination to be dividended to the Company by such Restricted    
Subsidiary without prior approval (that has not been obtained) pursuant to the  
terms of its charter and all agreements, instruments, judgments, decrees,       
orders, statutes, rules and governmental regulations applicable to such         
Restricted Subsidiary or its stockholders.                                      

     "Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries  
for such period, on a consolidated basis, determined in accordance with GAAP;   
provided that (i) the Net Income (but not loss) of any Person that is not a     
Restricted Subsidiary or that is accounted for by the equity method of          
accounting shall be included only to the extent of the amount of dividends or   
distributions paid in cash to the referent Person or a Wholly Owned Restricted  
Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary shall be   
excluded to the extent that the declaration or payment of dividends or similar  
distributions by that Restricted Subsidiary of that Net Income is not at the    
date of determination permitted without any prior governmental approval (that   
has not been obtained) or, directly or indirectly, by operation of the terms of 
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary or its      
stockholders, (iii) the Net Income of any Person acquired in a pooling of       
interests transaction for any period prior to the date of such acquisition shall
be excluded, (iv) the cumulative effect of a change in accounting principles    
shall be excluded, (v) the Net Income (but not loss) of any Unrestricted        
Subsidiary shall be excluded, whether or not distributed to the Company or one  
of its Restricted Subsidiaries and (vi) any non-cash compensation expense in    
connection with the issuance of employee stock options shall be excluded.       

    "Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (a) the consolidated equity of the common stockholders of such Person
and its consolidated Restricted Subsidiaries as of such date, plus (b) the      
respective amounts reported on such Person's balance sheet as of such date with 
respect to any series of preferred stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may 
be declared and paid only out of net earnings in respect of the year of such    
declaration and payment, but only to the extent of any cash received by such    
Person upon issuance of such preferred stock, less (i) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition  
of such business) subsequent to the Closing Date in the book value of any asset 
owned by such Person or a consolidated Restricted Subsidiary of such Person,    
(ii) all investments as of such date in unconsolidated Subsidiaries and in      
Persons that are not Restricted Subsidiaries and (iii) all unamortized debt     

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discount and expense and unamortized deferred charges as of such date, in each  
case determined in accordance with GAAP.                                        

   "Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of  
Directors on the Closing Date or (ii) was nominated for election or elected to  
such Board of Directors with the approval of more than two-thirds of the        
Continuing Directors who were members of such Board at the time of such         
nomination or election.                                                         

     "Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.                                 

"Designated Senior Debt" means (i) any Indebtedness now or hereafter  
outstanding under the New Credit Facility and (ii) any other Senior Debt        
permitted under the Indenture the principal amount of which is $15.0 million or 
more and that has been designated by the Company as "Designated Senior Debt."   

    "Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is           
exchangeable), or upon the happening of any event, matures or is mandatorily    
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date  
that is 91 days after the date on which the Series A Notes mature.              

    "Domestic Restricted Subsidiary" means a Restricted Subsidiary that is not
incorporated in any jurisdiction outside of the United States.                  

   "Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is        
convertible into, or exchangeable for, Capital Stock).                          

"Existing Indebtedness" means Indebtedness in existence on the Closing
Date, until such Indebtedness is repaid.                                        

    "Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of (i) the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued (including,
without limitation, amortization of debt issuance costs and original issue      
discount, non-cash interest payments, the interest component of any deferred    
payment obligations, the interest component of all payments associated with     
Capital Lease Obligations, commissions, discounts and other fees and charges    
incurred in respect of letter of credit or bankers' acceptance financings, and  
net payments (if any) pursuant to Hedging Obligations), (ii) the consolidated   
interest expense of such Person and its Restricted Subsidiaries that was        
capitalized during such period, (iii) any interest expense on Indebtedness of   
another Person that is Guaranteed by such Person or one of its Restricted       
Subsidiaries or secured by a Lien on assets of such Person or one of its        
Restricted Subsidiaries (whether or not such Guarantee or Lien is called upon)  
and (iv) the product of (a) all dividend payments, whether or not in cash, on   
any series of preferred stock of such Person or any of its Restricted           
Subsidiaries, other than dividend payments on Equity Interests payable solely in
Equity Interests of the Company, times (b) a fraction, the numerator of which is
one and the denominator of which is one minus the then current combined federal,
state and local statutory tax rate of such Person, expressed as a decimal, in   
each case, on a consolidated basis and in accordance with GAAP.                 

"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period  
to the Fixed Charges of such Person and its Restricted Subsidiaries for such    
period. In the event that the Company or any of its Restricted Subsidiaries     
incurs, assumes, Guarantees or redeems any Indebtedness (other than revolving   
credit borrowings) or issues preferred stock subsequent to the commencement of  
the period for which the Fixed Charge Coverage Ratio is being calculated but    
prior to the date on which the event for which the calculation of the Fixed     
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge   
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,  
assumption, Guarantee or redemption of Indebtedness, or such issuance or        
redemption of preferred stock, as if the same had occurred at the beginning of  
the applicable four-quarter reference period. In addition, for purposes of      
making the computation referred to above, (i) acquisitions that have been made  
by the Company or any of its Restricted Subsidiaries, including through         

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mergers or consolidations and including any related financing transactions,     
during the four-quarter reference period or subsequent to such reference period 
and on or prior to the Calculation Date shall be deemed to have occurred on the 
first day of the four-quarter reference period and Consolidated Cash Flow for   
such reference period shall be calculated without giving effect to clause (iii) 
of the proviso set forth in the definition of Consolidated Net Income, (ii) the 
Consolidated Cash Flow attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the     
Calculation Date, shall be excluded and (iii) the Fixed Charges attributable to 
discontinued operations, as determined in accordance with GAAP, and operations  
or businesses disposed of prior to the Calculation Date, shall be excluded, but 
only to the extent that the obligations giving rise to such Fixed Charges will  
not be obligations of the referent Person or any of its Restricted Subsidiaries 
following the Calculation Date.                                                 

"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American  
Institute of Certified Public Accountants and statements and pronouncements of  
the Financial Accounting Standards Board or in such other statements by such    
other entity as have been approved by a significant segment of the accounting   
profession, which are in effect from time to time.                              

"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or       
indirect, in any manner (including, without limitation, letters of credit and   
reimbursement agreements in respect thereof), of all or any part of any         
Indebtedness.                                                                   

     "Guarantor" means each of the Company's Restricted Subsidiaries existing on
the Closing Date, and each other Restricted Subsidiary that executes a Guarantee
of the Exchange Notes pursuant to the terms of the Indenture.                   

     "Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (i) interest rate swap agreements, interest rate cap          
agreements and interest rate collar agreements and (ii) other agreements or     
arrangements designed to protect such Person against fluctuations in interest   
rates, currency exchange rates or commodity prices.                             

   "Indebtedness" means, with respect to any Person, (i) any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or         
evidenced by bonds, notes, debentures or similar instruments or letters of      
credit (or reimbursement agreements in respect thereof) or banker's acceptances 
or representing Capital Lease Obligations or the balance deferred and unpaid of 
the purchase price of any property or representing any Hedging Obligations,     
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of      
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, (ii) all indebtedness of others
secured by a Lien on any asset of such Person (whether or not such indebtedness 
is assumed by such Person) and (iii) to the extent not otherwise included, the  
Guarantee by such Person of any indebtedness of any other Person.               

  "Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or        
indirect loans (including guarantees of Indebtedness or other obligations),     
advances or capital contributions (excluding commission, travel and similar     
advances to officers and employees made in the ordinary course of business),    
purchases or other acquisitions for consideration of Indebtedness, Equity       
Interests or other securities, together with all items that are or would be     
classified as investments on a balance sheet prepared in accordance with GAAP.  
If the Company or any Subsidiary of the Company sells or otherwise disposes of  
any Equity Interests of any direct or indirect Subsidiary of the Company such   
that, after giving effect to any such sale or disposition, such Person is no    
longer a Subsidiary of the Company, the Company shall be deemed to have made an 
Investment on the date of any such sale or disposition equal to the fair market 
value of the Equity Interests of such Subsidiary not sold or disposed of in an  
amount determined as provided in the final paragraph of the covenant described  
above under the caption "-- Restricted Payments."                               

"Lien" means, with respect to any asset, any mortgage, lien, pledge,  
charge, security interest or encumbrance of any kind in respect of such asset,  
whether or not filed, recorded or otherwise perfected under applicable law      
(including any conditional sale or other title retention agreement, any lease in
the nature                                                                      

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thereof, any option or other agreement to sell or give a security interest in   
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction).                  

  "Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in     
respect of preferred stock dividends, excluding, however, (i) any gain (but not 
loss), together with any related provision for taxes on such gain (but not      
loss), realized in connection with (a) any Asset Sale or (b) the disposition of 
any securities by such Person or any of its Restricted Subsidiaries or the      
extinguishment of any Indebtedness of such Person or any of its Restricted      
Subsidiaries and (ii) any extraordinary or nonrecurring gain (but not loss),    
together with any related provision for taxes on such extraordinary or          
nonrecurring gain (but not loss).                                               

     "Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,     
without limitation, any cash received upon the sale or other disposition of any 
non-cash consideration received in any Asset Sale), net of the direct costs     
relating to such Asset Sale (including, without limitation, legal, accounting   
and investment banking fees, and sales commissions) and any relocation expenses 
incurred as a result thereof, taxes paid or payable as a result thereof (after  
taking into account any available tax credits or deductions and any tax sharing 
arrangements), amounts required to be applied to the repayment of Indebtedness  
secured by a Lien on the asset or assets that were the subject of such Asset    
Sale and any reserve for adjustment in respect of the sale price of such asset  
or assets established in accordance with GAAP.                                  

"New Credit Facility" means, collectively, (i) that certain credit    
agreement, dated as of August 27, 1997, by and among the Company, the           
Subsidiaries of the Company named therein, the lenders party thereto and        
SunTrust Bank, Atlanta, as Agent and Collateral Agent, and (ii) that certain    
Second Amended and Restated Letter of Credit Agreement, dated as of July 1,     
1996, by and among the Company, the Subsidiary of the Company named therein and 
SunTrust Bank, Atlanta, in each case as such agreements may be amended,         
restated, extended, modified, renewed, refunded, replaced, substituted,         
restructured or refinanced in whole or in part from time to time (including,    
without limitation, any successive renewals, extensions, substitutions,         
refinancings, restructurings, replacements, supplements or modifications of the 
foregoing), whether with the Company or with one or more of its Subsidiaries,   
and whether with the present lenders or any other lenders.                      

     "Non-Recourse Debt" means Indebtedness: (i) as to which neither the Company
nor any of its Restricted Subsidiaries (a) provides credit support of any kind  
(including any undertaking, agreement or instrument that would constitute       
Indebtedness), (b) is directly or indirectly liable (as a guarantor or          
otherwise) or (c) constitutes the lender; (ii) no default with respect to which 
(including any rights that the holders thereof may have to take enforcement     
action against an Unrestricted Subsidiary) would permit (upon notice, lapse of  
time or both) any holder of any other Indebtedness (other than the Exchange     
Notes being offered hereby) of the Company or any of its Restricted Subsidiaries
to declare a default on such other Indebtedness or cause the payment thereof to 
be accelerated or payable prior to its stated maturity; and (iii) as to which   
the lenders have been notified in writing that they will not have any recourse  
to the stock or assets of the Company or any of its Restricted Subsidiaries.    

"Obligations" means all principal of and premium, interest (including 
interest accruing after the filing of a petition initiating any proceeding under
any state, federal or foreign bankruptcy or insolvency laws, whether or not     
allowable as a claim in such proceedings), penalties, fees, indemnifications,   
reimbursements, gross-ups, damages and other liabilities payable under the      
documentation governing any Indebtedness, actually or contingently.             

 "Permitted Investments" means (i) any Investment in the Company or in a
Wholly Owned Restricted Subsidiary of the Company; (ii) any Investment in Cash  
Equivalents; (iii) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment (a) such Person      
becomes a Wholly Owned Restricted Subsidiary of the Company and a Guarantor or  
(b) such Person is merged, consolidated or amalgamated with or into, or         
transfers or conveys substantially all of its assets to, or is liquidated into, 
the Company or a Wholly Owned Restricted Subsidiary of the Company; (iv) any    
Restricted Investment made as a result of the receipt of non-cash consideration 
from an Asset Sale that was made pursuant to and in compliance with the covenant
described above under the caption "-- Repurchase at the                         

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Option of Holders -- Asset Sales;" (v) any Investment acquired solely in        
exchange for the issuance of Equity Interests (other than Disqualified Stock) of
the Company; (vi) Investments existing on the Closing Date; (vii) loans to      
employees and vendors in the ordinary course of business in an amount not to    
exceed $3.0 million; and (viii) other Investments in any Person (measured on the
date each such Investment was made and without giving effect to subsequent      
changes in value), when taken together with all other Investments made pursuant 
to this clause (viii) that are at the time outstanding, not to exceed $10.0     
million.                                                                        

     "Permitted Junior Securities" means Equity Interests in the Company or debt
securities that are subordinated to all Senior Debt (including Designated Senior
Debt) and any debt securities issued in exchange for Senior Debt (including     
Designated Senior Debt) to substantially the same extent (including with respect
to the giving of Payment Blockage Notices) as, or to a greater extent than, the 
Exchange Notes are subordinated to Senior Debt (including Designated Senior     
Debt) pursuant to Article 10 of the Indenture.                                  

   "Permitted Liens" means (i) Liens securing Senior Debt of the Company and
its Restricted Subsidiaries that was permitted by the terms of the Indenture to 
be incurred; (ii) Liens in favor of the Company or any of its Restricted        
Subsidiaries; (iii) Liens on property of a Person existing at the time such     
Person is merged into or consolidated with the Company or any Restricted        
Subsidiary of the Company; provided that such Liens were in existence prior to  
the contemplation of such merger or consolidation and do not extend to any      
assets other than those of the Person merged into or consolidated with the      
Company; (iv) Liens on property existing at the time of acquisition thereof by  
the Company or any Restricted Subsidiary of the Company, provided that such     
Liens were in existence prior to the contemplation of such acquisition; (v)     
Liens to secure the performance of statutory obligations, surety or appeal      
bonds, performance bonds or other obligations of a like nature incurred in the  
ordinary course of business; (vi) Liens to secure Indebtedness (including       
Capital Lease Obligations) permitted by clause (iv) of the second paragraph of  
the covenant described above under the caption entitled "Incurrence of          
Indebtedness and Issuance of Preferred Stock" covering only the assets acquired 
with such Indebtedness; (vii) Liens existing, or created pursuant to obligations
existing, on the Closing Date; (viii) Liens for taxes, assessments or           
governmental charges or claims that are not yet delinquent or that are being    
contested in good faith by appropriate proceedings promptly instituted and      
diligently concluded, provided that any reserve or other appropriate provision  
as shall be required in conformity with GAAP shall have been made therefore;    
(ix) statutory or common law Liens of landlords, and Liens of carriers,         
warehousemen, mechanics and materialmen, and other Liens imposed by law created 
in the ordinary course of business for amounts not yet due or which are being   
contested in good faith by appropriate proceedings and with respect to which    
adequate reserves are being maintained, (x) Liens incurred or deposits made in  
the ordinary course of business in connection with workers' compensation,       
unemployment insurance and other types of social security, or to secure the     
performance of tenders, statutory obligations, surety and appeal bonds, bids,   
leases, government contracts, performance and return-of-money bonds and other   
similar obligations (other than the payment for the payment of borrowed money); 
(xi) easements, rights-of-way, restrictions and other similar Liens not         
materially interfering with the ordinary conduct of the business of the Company 
or its Restricted Subsidiaries or any of their respective properties; (xii)     
Liens for judgments which are being actively appealed in good faith by          
appropriate proceedings in an aggregate amount not to exceed $2.0 million;      
(xiii) Liens incurred in the ordinary course of business of the Company or any  
Restricted Subsidiary of the Company with respect to obligations that do not    
exceed $2.0 million at any one time outstanding and that (a) are not incurred in
connection with the borrowing of money or the obtaining of advances or credit   
(other than trade credit in the ordinary course of business) and (b) do not in  
the aggregate materially detract from the value of the property or materially   
impair the use thereof in the operation of business by the Company or such      
Restricted Subsidiary; and (xiv) extensions, renewals or replacements of any    
Lien referred to in clauses (i) through (xiii) of this paragraph, provided that 
the principal amount of the Indebtedness or Obligation secured thereby is not   
increased and that any such extension, renewal or replacement is limited to the 
property originally encumbered by the Lien.                                     

    "Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net        
proceeds of which are used to extend, refinance, renew, replace, defease or     
refund other Indebtedness of the Company or any of its Restricted Subsidiaries; 
provided that: (i) the principal amount (or accredit value, if applicable) of   
such Permitted Refinancing Indebtedness does                                    

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not exceed the principal amount of (or accredit value, if applicable), plus     
accrued interest on, the Indebtedness so extended, refinanced, renewed,         
replaced, defeased or refunded (plus the amount of reasonable expenses incurred 
in connection therewith); (ii) such Permitted Refinancing Indebtedness has a    
final maturity date later than the final maturity date of, and has a Weighted   
Average Life to Maturity at least equal to the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or 
refunded; (iii) if the Indebtedness being extended, refinanced, renewed,        
replaced, defeased or refunded is subordinated in right of payment to the       
Exchange Notes, such Permitted Refinancing Indebtedness is subordinated in right
of payment to the Exchange Notes on terms at least as favorable to the Holders  
of Exchange Notes as those contained in the documentation governing the         
Indebtedness being extended, refinanced, renewed, replaced, defeased or         
refunded; and (iv) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary that is the obligor on the Indebtedness being extended,   
refinanced, renewed, replaced, defeased or refunded.                            

"Restricted Investment" means an Investment other than a Permitted    
Investment.                                                                     

  "Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.                                  

"Senior Debt" of a Person means (i) all Indebtedness of such Person   
outstanding under the New Credit Facility and all Hedging Obligations with      
respect thereto, (ii) any other Indebtedness of such Person permitted to be     
incurred under the terms of the Indenture, unless the instrument under which    
such Indebtedness is incurred expressly provides that it is subordinated in     
right of payment to any Senior Debt of such Person and (iii) all Obligations of 
such Person with respect to the foregoing. Notwithstanding anything to the      
contrary in the foregoing, Senior Debt of a Person will not include (a) any     
liability for federal, state, local or other taxes owed or owing by such Person,
(b) any Indebtedness of such Person to any of its Subsidiaries or other         
Affiliates, (c) any trade payables or (d) any Indebtedness that is incurred in  
violation of the Indenture.                                                     

  "Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,  
promulgated pursuant to the Act, as such Regulation is in effect on the date    
hereof.                                                                         

 "Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of      
interest or principal was scheduled to be paid in the original documentation    
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date    
originally scheduled for the payment thereof.                                   

"Subsidiary" means, with respect to any Person, (i) any corporation,  
association or other business entity of which more than 50% of the total voting 
power of shares of Capital Stock entitled (without regard to the occurrence of  
any contingency) to vote in the election of directors, managers or trustees     
thereof is at the time owned or controlled, directly or indirectly, by such     
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing  
general partner of which is such Person or a Subsidiary of such Person or (b)   
the only general partners of which are such Person or of one or more            
Subsidiaries of such Person (or any combination thereof).                       

  "Unrestricted Subsidiary" means (i) any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board        
resolution, but only to the extent that such Subsidiary: (a) has no Indebtedness
other than Non-Recourse Debt; (b) is not party to any agreement, contract,      
arrangement or understanding with the Company or any Restricted Subsidiary of   
the Company unless the terms of any such agreement, contract, arrangement or    
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from Persons who are not          
Affiliates of the Company; (c) is a Person with respect to which neither the    
Company nor any of its Restricted Subsidiaries has any direct or indirect       
obligation (1) to subscribe for additional Equity Interests or (2) to maintain  
or preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results; (d) has                              

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not guaranteed or otherwise directly or indirectly provided credit support for  
any Indebtedness of the Company or any of its Restricted Subsidiaries; and (e)  
has at least one director on its board of directors that is not a director or   
executive officer of the Company or any of its Restricted Subsidiaries and has  
at least one executive officer that is not a director or executive officer of   
the Company or any of its Restricted Subsidiaries.                              

     "Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of     
Directors of such Person.                                                       

     "Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the        
products obtained by multiplying (a) the amount of each then remaining          
installment, sinking fund, serial maturity or other required payments of        
principal, including payment at final maturity, in respect thereof, by (b) the  
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.                                                    

"Wholly Owned Restricted Subsidiary" of any Person means a Restricted 
Subsidiary of such Person all of the outstanding Capital Stock or other         
ownership interests of which (other than directors' qualifying shares) shall at 
the time be owned by such Person or by one or more Wholly Owned Restricted      
Subsidiaries of such Person and one or more Wholly Owned Restricted Subsidiaries
of such Person.                                                                 

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DESCRIPTION OF CERTAIN FEDERAL INCOME TAX 
CONSEQUENCES OF AN INVESTMENT IN THE EXCHANGE NOTES 

     The following is a summary of the material United States federal income tax
consequences of the acquisition, ownership and disposition of the Series A Notes
or the Exchange Notes by a United States Holder (as defined below). This summary
deals only with United States Holders that will hold the Series A Notes or the  
Exchange Notes as capital assets. The discussion does not cover all aspects of  
federal taxation that may be relevant to, or the actual tax effect that any of  
the matters described herein will have on, the acquisition, ownership or        
disposition of the Series A Notes or the Exchange Notes by particular investors,
and does not address state, local, foreign or other tax laws. In particular,    
this summary does not discuss all of the tax considerations that may be relevant
to certain types of investors subject to special treatment under the federal    
income tax laws (such as banks, insurance companies, investors liable for the   
alternative minimum tax, individual retirement accounts and other tax-deferred  
accounts, tax-exempt organizations, dealers in securities or currencies,        
investors that will hold the Series A Notes or the Exchange Notes as part of    
straddles, hedging transactions or conversion transactions for federal tax      
purposes or investors whose functional currency is not United States dollars).  
Furthermore, the discussion below is based on provisions of the Code, and       
regulations, rulings and judicial decisions thereunder as of the date hereof,   
and such authorities may be repealed, revoked or modified so as to result in    
U.S. federal income tax consequences different from those discussed below.      
PERSONS CONSIDERING THE PURCHASE, OWNERSHIP OR DISPOSITION OF EXCHANGE NOTES    
SHOULD CONSULT HIS, HER OR ITS OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL     
INCOME TAX CONSEQUENCES IN LIGHT OF THEIR PARTICULAR SITUATIONS AS WELL AS ANY  
CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR INTERNATIONAL TAXING 
JURISDICTION.                                                                   

     As used herein, the term "United States Holder" means a beneficial owner of
the Series A Notes or the Exchange Notes that is (i) a citizen or resident of   
the United States for United States federal income tax purposes, (ii) a         
corporation created or organized under the laws of the United States or any     
State thereof, (iii) a person or entity that is otherwise subject to United     
States federal income tax on a net income basis in respect of income derived    
from the Series A Notes or the Exchange Notes, or (iv) a partnership to the     
extent the interest therein is owned by a person who is described in clause (i),
(ii) or (iii) of this paragraph.                                                

INTEREST                                                                        

Interest (including any additional interest paid because of failure to
satisfy the requirements of the Registration Rights Agreement ("Additional      
Interest")) paid on a Series A Note or an Exchange Note will be taxable to a    
United States Holder as ordinary income at the time it is received or accrued,  
depending on the holder's method of accounting for tax purposes.                

PURCHASE, SALE, EXCHANGE, RETIREMENT AND REDEMPTION OF THE EXCHANGE NOTES       

In general (with certain exceptions described below), a United States 
Holder's tax basis in an Exchange Note will equal the price paid for the Series 
A Notes for which such Exchange Note was exchanged pursuant to the Exchange     
Offer. A United States Holder generally will recognize gain or loss on the sale,
exchange, retirement, redemption or other disposition of a Series A Note or an  
Exchange Note (or portion thereof) equal to the difference between the amount   
realized on such disposition and the United States Holder's tax basis in the    
Series A Note or the Exchange Note (or portion thereof). Except to the extent   
attributable to accrued but unpaid interest, gain or loss recognized on such    
disposition of a Series A Note or an Exchange Note will be capital gain or loss 
and will be mid-term capital gain or loss if such Series A Note or Exchange Note
was held for more than one year but not more than 18 months and will be         
long-term capital gain or loss if such Series A Note or Exchange Note was held  
for more than 18 months. Any such gain will generally be United States source   
gain.                                                                           

BOND PREMIUM                                                                    

If a United States Holder acquires an Exchange Note or has acquired a 
Series A Note, in each case, for an amount more than its redemption price, the  
Holder may elect to amortize such bond premium on a yield to maturity basis.    
Once made, such an election applies to all bonds (other than bonds the interest 
on which is                                                                     

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excludable from gross income) held by the United States Holder at the beginning 
of the first taxable year to which the election applies or thereafter acquired  
by the United States Holder, unless the IRS consents to a revocation of the     
election. The basis of an Exchange Note will be reduced by any amortizable bond 
premium taken as a deduction.                                                   

MARKET DISCOUNT                                                                 

   The purchase of an Exchange Note or the purchase of a Series A Note other
than at original issue may be affected by the market discount provisions of the 
Code. These rules generally provide that, subject to a statutorily defined de   
minimis exception, if a United States Holder purchases an Exchange Note (or     
purchased a Series A Note) at a "market discount," as defined below, and        
thereafter recognizes gain upon a disposition of the Exchange Note (including   
dispositions by gift or redemption), the lesser of such gain (or appreciation,  
in the case of a gift) or the portion of the market discount that has accrued   
("accrued market discount") while the Exchange Note (and its predecessor Series 
A Note, if any) was held by such United States Holder will be treated as        
ordinary interest income at the time of disposition rather than as capital gain.
For an Exchange Note or a Series A Note, "market discount" is the excess of the 
stated redemption price at maturity over the tax basis immediately after its    
acquisition by a United States Holder. Market discount generally will accrue    
ratably during the period from the date of acquisition to the maturity date of  
the Exchange Note, unless the United States Holder elects to accrue such        
discount on the basis of the constant yield method. Such an election applies    
only to the Exchange Note with respect to which it is made and is irrevocable.  

   In lieu of including the accrued market discount in income at the time of
disposition, a United States Holder of an Exchange Note acquired at a market    
discount (or acquired in exchange for a Series A Note acquired at a market      
discount) may elect to include the accrued market discount in income currently  
either ratably or using the constant yield method. Once made, such an election  
applies to all other obligations that the United States Holder purchases at a   
market discount during the taxable year for which the election is made and in   
all subsequent taxable years of the United States Holder, unless the IRS        
consents to a revocation of the election. If an election is made to include     
accrued market discount in income currently, the basis of an Exchange Note (or, 
where applicable, a predecessor Series A Note) in the hands of the United States
Holder will be increased by the accrued market discount thereon as it is        
includible in income. A United States Holder of a market discount Exchange Note 
who does not elect to include market discount in income currently generally will
be required to defer deductions for interest on borrowings allocable to such    
Exchange Note, if any, in an amount not exceeding the accrued market discount on
such Exchange Note until the maturity or disposition of such Exchange Note.     

BACKUP WITHHOLDING AND INFORMATION REPORTING                                    

    Payments of interest (including any Additional Interest) and principal on,
and the proceeds of sale or other disposition of the Series A Notes or the      
Exchange Notes payable to a United States Holder may be subject to information  
reporting requirements, and backup withholding at a rate of 31.0% will apply to 
such payments if the United States Holder fails to provide an accurate taxpayer 
identification number or to report all interest and dividends required to be    
shown on its federal income tax returns. Certain United States Holders          
(including, among others, corporations) are not subject to backup withholding.  
United States Holders should consult their tax advisors as to their             
qualification for exemption from backup withholding and the procedure for       
obtaining such an exemption.                                                    

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PLAN OF DISTRIBUTION

   Each Participating Broker-Dealer that receives Exchange Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a  
Prospectus in connection with any resale of such Exchange Notes. This           
Prospectus, as it may be amended or supplemented from time to time, may be used 
by a Participating Broker-Dealer in connection with resales of Exchange Notes   
received in exchange for Series A Notes where such Series A Notes were acquired 
as a result of market-making activities or other trading activities. The Company
has agreed that it will make this Prospectus, as amended or supplemented,       
available to any Participating Broker-Dealer for use in connection with any such
resale, and Participating Broker-Dealers shall be authorized to deliver this    
Prospectus in connection with the sale or transfer of the Exchange Notes. In    
addition, until January 22, 1998 (90 days after the date of this Prospectus),   
all dealers effecting transactions in the Exchange Notes may be required to     
deliver a prospectus.                                                           

  The Company will not receive any proceeds from any sales of the Exchange
Notes by Participating Broker-Dealers. Exchange Notes received by Participating 
Broker-Dealers for their own account pursuant to the Exchange Offer may be sold 
from time to time, in one or more transactions in the over-the-counter market,  
in negotiated transactions, through the writing of options on the Exchange Notes
or a combination of such methods of resale, at market prices prevailing at the  
time of resale, at prices related to such prevailing market prices or at        
negotiated prices. Any such resale may be made directly to purchasers or to or  
through brokers or dealers who may receive compensation in the form of          
commissions or concessions from any such Participating Broker-Dealer that       
resells the Exchange Notes that were received by it for its own account pursuant
to the Exchange Offer. Any broker or dealer that participates in a distribution 
of such Exchange Notes may be deemed to be an "underwriter" within the meaning  
of the Securities Act and any profit on any such resale of Exchange Notes and   
any commissions or concessions received by any such persons may be deemed to be 
underwriting compensation under the Securities Act. The Letter of Transmittal   
states that, by acknowledging that it will deliver and by delivering a          
prospectus, a Participating Broker-Dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.                      

     The Company will promptly send additional copies of this Prospectus and any
amendment or supplement of this Prospectus to any Participating Broker-Dealer   
that requests such documents in the Letter of Transmittal. See "The Exchange    
Offer."                                                                         

LEGAL MATTERS 

    Certain legal matters will be passed upon for the Company by Bass, Berry &
Sims PLC, 2700 First American Center, Nashville, Tennessee 37238.               

EXPERTS 

     The consolidated financial statements and schedule of Dyersburg Corporation
at September 30, 1995 and September 28, 1996 and for each of the three years in 
the period ended September 28, 1996 included and/or incorporated by reference in
this Prospectus and Registration Statement have been audited by Ernst & Young   
LLP, independent auditors, as set forth in their report thereon appearing       
elsewhere herein and are included in reliance upon such report given on their   
authority as experts in accounting and auditing.                                

    The consolidated financial statements of AIH Inc. at December 31, 1995 and
December 31, 1996 and for each of the three years in the period ended December  
31, 1996 included in this Prospectus and Registration Statement have been       
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon appearing elsewhere herein and are included in reliance upon such report
given on their authority as experts in accounting and auditing.                 

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                [Download Table]

                                                              PAGE
                                                              ----
                                                                  
DYERSBURG CORPORATION                                             
Report of Independent Auditors..............................   F-2
Consolidated Financial Statements:                                
  Consolidated Balance Sheets as of September 30, 1995,           
     September 28, 1996, and July 5, 1997 (Unaudited).......   F-3
  Consolidated Statements of Income for the years ended           
     October 1, 1994, September 30, 1995, September 28,           
     1996, and the nine months ended June 29, 1996 and July       
     5, 1997 (Unaudited)....................................   F-4
  Consolidated Statements of Shareholders' Equity for the         
     years ended October 1, 1994, September 30, 1995, and         
     September 28, 1996.....................................   F-5
  Consolidated Statements of Cash Flows for the years ended       
     October 1, 1994, September 30, 1995, September 28,           
     1996, and the nine months ended June 29, 1996 and July       
     5, 1997 (Unaudited)....................................   F-6
  Notes to Consolidated Financial Statements................   F-7
AIH INC.                                                          
Report of Independent Auditors..............................  F-14
Consolidated Financial Statements:                                
  Consolidated Balance Sheets as of December 31, 1995 and         
     December 31, 1996......................................  F-15
  Consolidated Statements of Operations for the years ended       
     December 31, 1994, December 31, 1995 and December 31,        
     1996...................................................  F-16
  Consolidated Statements of Cash Flows for the years ended       
     December 31, 1994, December 31, 1995 and December 31,        
     1996...................................................  F-17
  Notes to Consolidated Financial Statements................  F-18
Interim Condensed Consolidated Financial Statements               
  (Unaudited):                                                    
  Condensed Consolidated Balance Sheets as of December 31,        
     1996 and June 30, 1997.................................  F-30
  Condensed Consolidated Statements of Operations for the         
     six months ended June 30, 1996 and June 30, 1997.......  F-31
  Condensed Consolidated Statements of Cash Flows for the         
     six months ended June 30, 1996 and June 30, 1997.......  F-32
  Notes to Condensed Consolidated Financial Statements......  F-33

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REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders                                         
Dyersburg Corporation                                                           

   We have audited the accompanying consolidated balance sheets of Dyersburg
Corporation as of September 30, 1995 and September 28, 1996, and the related    
consolidated statements of income, shareholders' equity, and cash flows for each
of the three years in the period ended September 28, 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
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes 
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.          

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Dyersburg      
Corporation at September 30, 1995 and September 28, 1996, and the consolidated  
results of its operations and its cash flows for each of the three years in the 
period ended September 28, 1996, in conformity with generally accepted          
accounting principles.                                                          

                                                               Ernst & Young LLP

Memphis, Tennessee                                                              
October 22, 1996, except for                                                    
Note 11, as to which the                                                    
date is July 15, 1997                                                       

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DYERSBURG CORPORATION 

CONSOLIDATED BALANCE SHEETS 
(IN THOUSANDS, EXCEPT SHARE DATA) 

                                                        [Enlarge/Download Table]

                                                         SEPTEMBER 30,  SEPTEMBER 28,    JULY 5,   
                                                             1995           1996           1997    
                                                         -------------  -------------  ------------
                                                                                       (UNAUDITED) 
                                                                                                   
                                        ASSETS                                                     
Current assets:                                                                                    
  Cash.................................................    $    974       $    983       $  1,677  
  Accounts receivable, net of allowance for doubtful                                               
     accounts of $1,170 in 1995 and $1,500 in 1996.....      36,920         42,427         48,522  
  Inventories..........................................      22,238         23,248         30,456  
  Prepaid expenses and other...........................       1,286            858            846  
                                                           --------       --------       --------  
          Total current assets.........................      61,418         67,516         81,501  
Property, plant and equipment, net.....................      65,834         67,758         65,685  
Goodwill, net..........................................      60,954         59,097         57,697  
Deferred debt costs and other, net.....................         666            636            484  
                                                           --------       --------       --------  
                                                           $188,872       $195,007       $205,367  
                                                           ========       ========       ========  
                         LIABILITIES AND SHAREHOLDERS' EQUITY                                      
Current liabilities:                                                                               
  Trade accounts payable...............................    $ 10,515       $  8,296       $ 12,173  
  Accrued expenses.....................................       5,676          6,700          8,935  
  Income taxes payable.................................          --            437          3,047  
                                                           --------       --------       --------  
          Total current liabilities....................      16,191         15,433         24,155  
Long-term obligations..................................      76,800         80,950         75,837  
Deferred income taxes..................................       8,305          8,765          9,186  
Other liabilities......................................       1,318          1,117             --  
Commitments and contingencies                                                                      
Shareholders' equity:                                                                              
  Common stock, $0.01 par value, authorized 40,000,000                                             
     shares; issued and outstanding                                                                
     shares -- 14,196,228 in 1995 and 13,154,508 in                                                
     1996..............................................         142            132            131  
  Additional paid-in capital...........................      46,821         41,460         41,355  
  Retained earnings....................................      39,295         47,150         54,703  
                                                           --------       --------       --------  
          Total shareholders' equity...................      86,258         88,742         96,189  
                                                           --------       --------       --------  
                                                           $188,872       $195,007       $205,367  
                                                           ========       ========       ========  

See accompanying notes. 

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DYERSBURG CORPORATION 

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

                                                        [Enlarge/Download Table]

                                                              YEAR ENDED                       NINE MONTHS ENDED     
                                             --------------------------------------------  --------------------------
                                             OCTOBER 1,    SEPTEMBER 30,    SEPTEMBER 28,   JUNE 29,        JULY 5,  
                                                1994           1995             1996          1996           1997    
                                             ----------    -------------    -------------  -----------    -----------
                                                                                           (UNAUDITED)    (UNAUDITED)
                                                                                                                     
Net sales...................................  $180,520       $199,413         $195,866       $136,574       $158,214 
Cost of sales...............................   139,754        159,245          152,884        108,290        120,677 
Selling, general and administrative                                                                                  
  expenses..................................    16,223         17,447           20,707         14,418         18,538 
Goodwill amortization.......................     1,721          1,857            1,857          1,393          1,400 
Interest and amortization of debt costs.....     4,978          6,169            6,164          4,590          4,465 
Write-down of fixed assets..................        --          2,153               --             --             -- 
                                              --------       --------         --------       --------       -------- 
                                               162,676        186,871          181,612        128,691        145,080 
                                              --------       --------         --------       --------       -------- 
Income before income taxes..................    17,844         12,542           14,254          7,883         13,134 
Federal and state income taxes..............     7,496          5,982            5,854          3,278          5,188 
                                              --------       --------         --------       --------       -------- 
Net income..................................  $ 10,348       $  6,560         $  8,400       $  4,605       $  7,946 
                                              ========       ========         ========       ========       ======== 
Weighted average common and common                                                                                   
  equivalent shares outstanding.............    14,010         14,196           13,643         13,905         13,135 
                                              ========       ========         ========       ========       ======== 
Net income per share........................  $   0.74       $   0.46         $   0.62       $   0.33       $   0.60 
                                              ========       ========         ========       ========       ======== 

See accompanying notes. 

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DYERSBURG CORPORATION 

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY 

                                                        [Enlarge/Download Table]

                                                         ADDITIONAL              SUBSCRIPTION          
                                                 COMMON   PAID-IN     RETAINED      NOTES              
                                                 STOCK    CAPITAL     EARNINGS   RECEIVABLES    TOTAL  
                                                 ------  ----------   --------   ------------  ------- 
                                                           (IN THOUSANDS, EXCEPT SHARE DATA)           
                                                                                                       
Balance at October 3, 1993.....................   $136    $41,839     $23,516       $(330)     $65,161 
  Net income...................................     --         --      10,348          --       10,348 
  Cash dividends paid ($0.04 per share)........     --         --        (561)         --         (561)
  Principal collections on subscription notes                                                          
     receivable................................     --         --          --         330          330 
  Issuance of 623,536 shares of common stock in                                                        
     purchase of United Knitting, Inc..........      6      4,982          --          --        4,988 
                                                  ----    -------     -------       -----      ------- 
Balance at October 1, 1994.....................    142     46,821      33,303          --       80,266 
  Net income...................................     --         --       6,560          --        6,560 
  Cash dividends paid ($0.04 per share)........     --         --        (568)         --         (568)
                                                  ----    -------     -------       -----      ------- 
Balance at September 30, 1995..................    142     46,821      39,295          --       86,258 
  Net income...................................     --         --       8,400          --        8,400 
  Cash dividends paid ($0.04 per share)........     --         --        (545)         --         (545)
  Acquisition and retirement of 1,051,275                                                              
     shares of common stock....................    (10)    (5,404)         --          --       (5,414)
  Exercise of stock options....................     --         43          --          --           43 
                                                  ----    -------     -------       -----      ------- 
Balance at September 28, 1996..................   $132    $41,460     $47,150       $  --      $88,742 
                                                  ====    =======     =======       =====      ======= 

See accompanying notes. 

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DYERSBURG CORPORATION 

CONSOLIDATED STATEMENTS OF CASH FLOWS 
(IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                    YEAR ENDED                       NINE MONTHS ENDED     
                                                    ------------------------------------------  ---------------------------
                                                    OCTOBER 1,   SEPTEMBER 30,   SEPTEMBER 28,    JUNE 29,       JULY 5,   
                                                       1994          1995            1996           1996           1997    
                                                    ----------   -------------   -------------  ------------   ------------
                                                                                                (UNAUDITED)    (UNAUDITED) 
                                                                                                ------------   ------------
                                                                                                                           
OPERATING ACTIVITIES                                                                                                       
Net income.........................................  $ 10,348      $  6,560        $  8,400       $  4,605       $  7,946  
Adjustments:                                                                                                               
  Depreciation.....................................     8,630        10,001           9,573          7,251          7,718  
  Amortization.....................................     1,903         2,029           2,029          1,522          1,510  
  Write-down of fixed assets.......................        --         2,153              --             --             --  
  Deferred income taxes and other..................       787           (98)            554             47            (54) 
  Changes in operating assets and liabilities:                                                                             
    Accounts receivable............................    (5,321)        6,087          (5,507)       (10,857)        (6,096) 
    Inventories....................................    (1,481)       (1,601)         (1,010)        (8,102)        (7,208) 
    Trade accounts payable and other current                                                                               
      liabilities..................................       270        (1,604)           (758)         2,937          8,722  
    Other..........................................        98          (207)            288            248             12  
                                                     --------      --------        --------       --------       --------  
Net cash provided by operating activities..........    15,234        23,320          13,569         (2,349)        12,550  
INVESTING ACTIVITIES                                                                                                       
Purchases of property, plant and equipment.........   (14,278)      (12,816)        (11,778)       (10,777)        (5,685) 
Purchase of United Knitting, Inc...................    (5,426)           --              --             --             --  
Other..............................................       101           108             187            225             84  
                                                     --------      --------        --------       --------       --------  
Net cash used in investing activities..............   (19,603)      (12,708)        (11,591)       (10,552)        (5,601) 
FINANCING ACTIVITIES                                                                                                       
Net borrowings (payments) on long-term                                                                                     
  obligations......................................     2,853        (9,400)          4,150         15,843         (5,600) 
Dividends paid.....................................      (561)         (568)           (545)          (413)          (393) 
Exercise of stock options..........................        --            --              43             43             55  
Acquisition of common stock........................        --            --          (5,414)        (2,590)          (160) 
Other..............................................     1,368          (230)           (203)          (151)          (157) 
                                                     --------      --------        --------       --------       --------  
Net cash provided by (used in) financing                                                                                   
  activities.......................................     3,660       (10,198)         (1,969)        12,732         (6,255) 
                                                     --------      --------        --------       --------       --------  
Net increase (decrease) in cash....................      (709)          414               9           (169)           694  
Cash at beginning of year..........................     1,269           560             974            974            983  
                                                     --------      --------        --------       --------       --------  
Cash at end of year................................  $    560      $    974        $    983       $    805       $  1,677  
                                                     ========      ========        ========       ========       ========  

See accompanying notes. 

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DYERSBURG CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 28, 1996

1.  ACCOUNTING POLICIES                                                         

PRINCIPLES OF CONSOLIDATION                                                     

    The accompanying consolidated financial statements include the accounts of
Dyersburg Corporation and its wholly-owned subsidiaries (the "Company"). All    
significant intercompany balances and transactions have been eliminated.        

OPERATIONS                                                                      

The Company is a textile manufacturer of knit fabrics with customers  
concentrated in the domestic apparel industry. The Company does not require     
collateral for accounts receivable and is partially insured on certain customer 
balances. The level of insurance varies by customer based upon third party      
credit ratings.                                                                 

USE OF ESTIMATES                                                                

     The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates  
and assumptions that affect amounts reported in the consolidated financial      
statements and accompanying notes. Actual results could differ from those       
estimates and assumptions used.                                                 

INTANGIBLE ASSETS                                                               

Goodwill, which consists of costs in excess of net assets acquired, is
amortized by the straight-line method over forty years. Deferred debt costs are 
amortized by the interest method over the life of the related debt. Goodwill is 
net of accumulated amortization of $13,336,000 and $15,193,000 and deferred debt
costs and other is net of accumulated amortization of $500,000 and $672,000, at 
September 30, 1995 and September 28, 1996, respectively. The carrying value of  
goodwill is reviewed if the facts and circumstances suggest that it may be      
impaired. If this review indicated that goodwill was not recoverable, as        
determined based on the estimated undiscounted cash flows of the entity acquired
over the remaining amortization period, the Company's carrying value of the     
goodwill would be reduced by the estimated shortfall of cash flows.             

INVENTORIES                                                                     

   Cotton raw material inventory and the cotton component of work in process
and finished goods inventory are valued at the lower of average cost or market. 
Other inventories are valued at the lower of cost (first-in, first-out method)  
or market.                                                                      

PROPERTY, PLANT AND EQUIPMENT                                                   

   Property, plant and equipment is stated at cost. Depreciation is computed
on the straight-line basis over the estimated useful lives of the assets:       
buildings -- 25 years; machinery and equipment -- 5 to 15 years.                

INCOME TAXES                                                                    

The Company has provided for income taxes under the liability method. 
Accordingly, deferred income taxes reflect the net tax effects of temporary     
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.                

STOCK BASED COMPENSATION                                                        

    The Company grants stock options for a fixed number of shares to employees
with an exercise price equal to the fair value of the shares at the date of     
grant. The Company accounts for stock option grants in                          

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DYERSBURG CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

accordance with APB Opinion No. 25, Accounting for Stock Issued to Employees,   
and accordingly, recognizes no compensation expense for the stock option grants.

EARNINGS PER COMMON SHARE                                                       

    Earnings per common share is computed using the weighted average number of
common shares outstanding during each period, including common stock            
equivalents, consisting of stock options calculated using the treasury stock    
method, when dilutive.                                                          

ACCOUNTING PRONOUNCEMENTS                                                       

  In March 1995, the Financial Accounting Standards Board issued Statement
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. Statement 121 also addresses the         
accounting for long-lived assets that are expected to be disposed of. The       
Company will adopt Statement 121 in the first quarter of 1997 and, based on     
current circumstances, does not believe the effect of adoption will be material.
The write-down of fixed assets in 1995 would not have been materially different 
had the Company adopted Statement 121.                                          

RECLASSIFICATIONS                                                               

Certain amounts in the 1994 and 1995 financial statements have been   
reclassified to conform with the 1996 financial statement presentation. Such    
reclassifications had no effect on net income as previously reported.           

INTERIM FINANCIAL DATA (UNAUDITED)                                              

 The accompanying consolidated balance sheet as of July 5, 1997, and the
related consolidated statements of income and cash flows for the nine months    
ended July 5, 1997 and the nine months ended June 29, 1996, have been prepared  
by the Company without audit. In the opinion of management, all adjustments,    
consisting only of normal recurring adjustments, considered necessary for a fair
presentation for such periods have been made. Due to seasonal patterns, the     
results for interim periods are not necessarily indicative of results to be     
expected for a full year.                                                       

 Footnote disclosures normally included in annual consolidated financial
statements prepared in accordance with generally accepted accounting principles 
have been omitted herein with respect to the interim consolidated financial     
data. The interim information herein should be read in conjunction with the     
annual consolidated financial statements and notes presented herein.            

Accounting Pronouncements.  In February 1997, the Financial Accounting
Standards Board issued Statement No. 128, Earnings Per Share, which is required 
to be adopted in the quarter ending January 3, 1998. At that time, the Company  
will be required to change the method currently used to compute earnings per    
share and to restate all prior periods. The impact of Statement 128 on the      
calculation of earnings per share for the years ended October 1, 1994, September
30, 1995, September 28, 1996 and the nine months ended June 29, 1996 and July 5,
1997 is immaterial.                                                             

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DYERSBURG CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

2.  INVENTORIES                                                                 

Inventories consist of the following:                                 

                                                        [Enlarge/Download Table]

                                                  SEPTEMBER 30,   SEPTEMBER 28,    JULY 5,   
                                                      1995            1996           1997    
                                                  -------------   -------------  ------------
                                                         (IN THOUSANDS)          (UNAUDITED) 
                                                                                             
Raw materials....................................    $ 4,947         $ 4,649       $ 6,563   
Work in process..................................      7,621           8,530         9,470   
Finished goods...................................      8,937           9,145        13,550   
Supplies and other...............................        733             924           873   
                                                     -------         -------       -------   
                                                     $22,238         $23,248       $30,456   
                                                     =======         =======       =======   

3.  PROPERTY, PLANT AND EQUIPMENT                                               

Property, plant and equipment consists of the following:              

                                                        [Enlarge/Download Table]

                                                           SEPTEMBER 30,    SEPTEMBER 28,
                                                               1995             1996     
                                                           -------------    -------------
                                                                   (IN THOUSANDS)        
                                                                                         
Land......................................................   $    673         $    673   
Buildings.................................................     24,198           32,612   
Machinery and equipment...................................     85,701           88,370   
                                                             --------         --------   
                                                              110,572          121,655   
Less allowance for depreciation...........................     44,738           53,897   
                                                             --------         --------   
                                                             $ 65,834         $ 67,758   
                                                             ========         ========   

In 1995, the Company committed to replace certain spinning and drawing
machinery with leased equipment. Concurrently, the Company wrote down machinery 
and equipment with original cost of $11,760,000 and accumulated depreciation of 
$9,468,000. The write-down, less the proceeds from the sale of the assets,      
resulted in a loss of $2,153,000.                                               

4.  LONG-TERM OBLIGATIONS                                                       

Long-term obligations consist of the following:                       

                                                        [Enlarge/Download Table]

                                                           SEPTEMBER 30,    SEPTEMBER 28,
                                                               1995             1996     
                                                           -------------    -------------
                                                                   (IN THOUSANDS)        
                                                                                         
Revolving credit..........................................    $43,900          $48,050   
Industrial revenue bonds..................................      7,900            7,900   
Senior notes..............................................     25,000           25,000   
                                                              -------          -------   
                                                              $76,800          $80,950   
                                                              =======          =======   

  The Company has a revolving line of credit (the "Revolver") with current
availability of $80,000,000, declining to $70,000,000 on April 1, 1997, and     
maturing on July 16, 1998. Amounts outstanding under the Revolver bear interest 
at variable rates (approximately 6.9% at September 30, 1995 and 6.5% at         
September 28, 1996). In addition, the Company is required to pay a commitment   
fee of  1/4% on the average unused portion of the Revolver and a letter of      
credit fee of approximately 1% on average outstanding letters of credit. Letters
of credit outstanding under the Revolver are $8,122,000 at September 30, 1995   
and September 28, 1996. The unused portion of the Revolver is $23,828,000 at    
September 28, 1996. All amounts outstanding under the Revolver are unsecured,   
except for the letters of credit which are secured by real property and         

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DYERSBURG CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

equipment with a carrying value of approximately $3,704,000 at September 28,    
1996. Pursuant to the terms of the Revolver, the Company is required to maintain
certain financial ratios, minimum shareholders' equity and working capital      
levels.                                                                         

 The Industrial Revenue Bonds bear interest at adjustable rates (3.9% at
September 30, 1995 and 4.0% at September 28, 1996) and mature November 1, 2002. 
The bonds are secured by a letter of credit of $8,057,000 issued under the      
Revolver.                                                                       

The Senior Notes bear interest at 6.78% and require annual principal  
payments of $3,125,000 from 1998 to 2005. The Senior Note agreement requires the
Company to maintain certain financial ratios and limits the payment of          
dividends. At September 28, 1996, the amount of retained earnings available for 
the payment of dividends was approximately $12,306,000.                         

  The schedule of debt maturities presented below assumes borrowings under
the Revolver are outstanding until maturity:                                    

                                                                [Download Table]

YEAR                                                          AMOUNT 
----                                                          -------
                                                                     
1997........................................................  $    --
1998........................................................   51,175
1999........................................................    3,125
2000........................................................    3,125
2001........................................................    3,125
Thereafter..................................................   20,400
                                                              -------
          Total.............................................  $80,950
                                                              =======

Total interest paid was $4,431,000 in 1994, $5,777,000 in 1995 and    
$5,930,000 in 1996.                                                             

    The Company has additional letters of credit outstanding of $2,066,000 for
workers' compensation insurance.                                                

In 1995, the Company entered into two interest rate swap agreements to
reduce the impact of changes in interest rates on the Revolver. The two interest
rate swap agreements have a total notional principal amount of $20,000,000. The 
differential paid or received is recognized as an adjustment to interest        
expense. The Company agreed to make interest payments based on a fixed rate of  
7.06% and 6.17% on $10,000,000 and $10,000,000 notional principal, respectively,
in exchange for payments based on a floating rate of three-month LIBOR. The     
agreements terminate April 26, 2002 and June 9, 2002, respectively. The fair    
values of the swap agreements are not recognized in the financial statements.   

    The fair value of long-term obligations is estimated using discounted cash
flow analyses based on the Company's current incremental borrowing rate. The    
carrying value and fair value of long-term obligations at September 30, 1995, is
$76,800,000 and $75,343,000, respectively, and at September 28, 1996 was        
$80,950,000 and $79,438,000, respectively. The fair value of the Company's      
interest rate swaps was based on pricing models and formulas using current      
assumptions. The fair value of the Company's interest rate swaps was $(312,000) 
and $24,000 at September 30, 1995 and September 28, 1996, respectively. For all 
other financial instruments, the carrying amounts approximate fair value due to 
their short maturities.                                                         

5.  SHAREHOLDERS' EQUITY                                                        

The Company has 5,000,000 authorized shares of no par value preferred 
stock. The preferences and rights of the Preferred Stock will be fixed at the   
discretion of the Board of Directors upon issuance.                             

On October 4, 1995, the Company approved a plan to repurchase up to   
2,000,000 shares of Dyersburg Corporation common stock. Purchases are made at   
the discretion of the Company as warranted based on                             

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DYERSBURG CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

market pricing. As of September 28, 1996, a total of 1,051,275 shares had been  
purchased under the repurchase plan at an aggregate cost of approximately       
$5,414,000.                                                                     

The Company's Stock Option Plans (the "Option Plans") provide for the 
granting of stock options to management, key employees and outside directors.   
Options are subject to terms and conditions determined by the Compensation      
Committee of the Board of Directors, and generally are exercisable in increments
of 20% per year beginning one year from date of grant and expire 10 years from  
date of grant. Shares reserved for future grants under the Option Plans were    
approximately 143,000 and 277,000 at September 30, 1995 and September 28, 1996, 
respectively.                                                                   

In 1996, the Company repriced certain stock options through the       
cancellation of approximately 737,000 outstanding options and the simultaneous  
granting of 367,000 options at a reduced exercise price equal to market at the  
date of repricing. Except for the repricing, no other terms of the stock options
were changed.                                                                   

     Information pertaining to the Option Plans summarized in the table below is
in thousands except per share amounts:                                          

                                                        [Enlarge/Download Table]

                                                  NUMBER OF                                  
                                                SHARES UNDER                        AGGREGATE
                                                   OPTION        PRICE PER SHARE      PRICE  
                                                -------------  -------------------  ---------
                                                                                             
Balance at October 3, 1993.....................      273        $6.75  --   $9.00    $ 2,376 
  Options granted..............................      528       $6.625  --   $8.125     4,164 
  Options canceled.............................      (42)       $8.25  --   $9.00       (351)
                                                    ----       -------------------  ---------
Balance at October 1, 1994.....................      759       $6.625  --   $9.00      6,189 
  Options granted..............................        2             $5.625               11 
  Options canceled.............................       (4)             $6.00              (24)
                                                    ----       -------------------  ---------
Balance at September 30, 1995..................      757       $5.625  --   $9.00      6,176 
  Options granted..............................      369        $4.50  --   4.625      1,663 
  Options exercised............................      (10)             $4.50              (43)
  Options canceled.............................     (740)       $4.50  --   $9.00     (6,038)
                                                    ----       -------------------  ---------
Balance at September 28, 1996..................      376        $4.50  --   $9.00    $ 1,758 
                                                    ====       ===================  =========

At September 28, 1996, 250,829 of these options were exercisable.     

6.  PROFIT SHARING PLANS                                                        

     The Company has two separate defined contribution plans that, collectively,
cover substantially all of its employees. Contributions to one plan equal 7.5%  
of adjusted income, as defined, plus additional amounts which the Board of      
Directors may authorize. Contributions to the other plan are at the discretion  
of the Board of Directors. The contribution for either plan shall not exceed the
maximum amount deductible for federal income tax purposes. Profit-sharing       
expense was $2,171,000, $1,902,000 and $1,875,000 for fiscal years 1994, 1995   
and 1996, respectively.                                                         

7.  INCOME TAXES                                                                

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

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DYERSBURG CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

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

                                                        [Enlarge/Download Table]

                                                           SEPTEMBER 30,    SEPTEMBER 28,
                                                               1995             1996     
                                                           -------------    -------------
                                                                   (IN THOUSANDS)        
                                                                                         
Deferred tax liabilities:                                                                
  Depreciation............................................    $8,105           $ 7,944   
  Other...................................................     1,684             2,167   
                                                              ------           -------   
          Total deferred tax liabilities..................     9,789            10,111   
Deferred tax assets.......................................     1,866             1,728   
                                                              ------           -------   
Net deferred tax liabilities..............................    $7,923           $ 8,383   
                                                              ======           =======   

  Significant components of the provision for income taxes are as follows:

                                                        [Enlarge/Download Table]

                                                                    YEAR ENDED                
                                                    ------------------------------------------
                                                    OCTOBER 1,   SEPTEMBER 30,   SEPTEMBER 28,
                                                       1994          1995            1996     
                                                    ----------   -------------   -------------
                                                                  (IN THOUSANDS)              
                                                                                              
Current:                                                                                      
  Federal..........................................   $5,646        $5,570          $5,240    
  State............................................    1,038           590             154    
Deferred, primarily federal........................      812          (178)            460    
                                                      ------        ------          ------    
                                                      $7,496        $5,982          $5,854    
                                                      ======        ======          ======    

The provision for income taxes differed from the amount computed by   
applying the statutory federal income tax rate of 35% to income before income   
taxes due to the following:                                                     

                                                        [Enlarge/Download Table]

                                                                    YEAR ENDED                
                                                    ------------------------------------------
                                                    OCTOBER 1,   SEPTEMBER 30,   SEPTEMBER 28,
                                                       1994          1995            1996     
                                                    ----------   -------------   -------------
                                                                  (IN THOUSANDS)              
                                                                                              
Computed federal tax expense at statutory rate.....   $6,245        $4,390          $4,989    
State taxes, net of federal income tax benefit.....      702           383             100    
Effect of nondeductibility of amortization of                                                 
  goodwill.........................................      602           650             650    
Other..............................................      (53)          559             115    
                                                      ------        ------          ------    
                                                      $7,496        $5,982          $5,854    
                                                      ======        ======          ======    

   Income tax payments were $7,853,000, $5,996,000 and $4,885,000 for fiscal
years 1994, 1995, and 1996 respectively.                                        

8.  ACCRUED EXPENSES                                                            

Accrued expenses consist of the following:                            

                                                        [Enlarge/Download Table]

                                                             SEPTEMBER 30,   SEPTEMBER 28,
                                                                 1995            1996     
                                                             -------------   -------------
                                                                    (IN THOUSANDS)        
                                                                                          
Accrued bonuses and commissions.............................    $  838          $1,473    
Workers' compensation.......................................     2,288           2,485    
Other.......................................................     2,550           2,742    
                                                                ------          ------    
                                                                $5,676          $6,700    
                                                                ======          ======    

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DYERSBURG CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

9.  LEASES                                                                      

   The Company leases certain equipment and office space under noncancelable
operating leases. Most of these leases include renewal options and some include 
purchase options. Rent expense was $1,930,000 in 1994, $2,089,000 in 1995 and   
$3,050,000 in 1996.                                                             

    Future minimum payments under these leases are as follows at September 28,
1996: $3,212,000 in 1997, $2,978,000 in 1998, $3,004,000 in 1999, $2,398,000 in 
2000, $1,906,000 in 2001 and $5,080,000 thereafter. Total aggregate future      
minimum lease payments are $18,578,000.                                         

10.  PURCHASE OF UNITED KNITTING, INC.                                          

  On January 19, 1994, the Company acquired all of the outstanding capital
stock of United Knitting, Inc. for $5,426,000 in cash and approximately         
$5,000,000 of common stock (623,536 shares) in a transaction accounted for under
the purchase method. Goodwill resulting from the transaction was approximately  
$16,800,000. United Knitting, Inc. is a textile manufacturer which produces     
stretch fabrics.                                                                

    On a pro forma basis, net sales, net income and net income per share would
have been $192,691,000, $10,437,000, and $0.74, respectively, for the year ended
October 1,1994, assuming the acquisition occurred at the beginning of such      
fiscal year.                                                                    

11.  SUBSEQUENT EVENTS                                                          

  On July 15, 1997, the Company entered into a stock purchase agreement to
acquire the stock of AIH Inc., a wholly-owned subsidiary of WestPoint Stevens   
Inc., for a purchase price of $126,000,000. Management financed the purchase    
through a combination of the Series A Notes and a new extended Credit Facility. 
The acquisition is expected to be consummated before the end of the fiscal year 
ending October 4, 1997.                                                         

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REPORT OF INDEPENDENT AUDITORS

The Board of Directors                                                          
WestPoint Stevens Inc.                                                          

     We have audited the accompanying consolidated balance sheets of AIH Inc., a
subsidiary of WestPoint Stevens Inc. (see Note 1) as of December 31, 1995 and   
1996 and the related consolidated statements of operations and cash flows for   
each of the three years in the period ended December 31, 1996. These financial  
statements are the responsibility of the management of WestPoint Stevens Inc.   
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
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes 
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.          

 In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
AIH Inc., a subsidiary of WestPoint Stevens Inc. at December 31, 1995 and 1996  
and the results of its operations and its cash flows for each of the three years
in the period ended December 31, 1996 in conformity with generally accepted     
accounting principles.                                                          

                                                               Ernst & Young LLP

Columbus, Georgia                                                               
May 19, 1997, except for                                                        
Note 12, as to which                                                        
the date is July 15, 1997                                                   

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AIH INC.
A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

CONSOLIDATED BALANCE SHEETS 
(IN THOUSANDS OF DOLLARS) 

                                                                [Download Table]

                                                                DECEMBER 31,    
                                                             -------------------
                                                               1995       1996  
                                                             --------   --------
                                                                                
                                     ASSETS                                     
Current assets:                                                                 
  Cash and cash equivalents................................. $  5,886   $  9,554
  Inventories (Note 4)......................................   29,267     30,123
  Other current assets......................................    2,649      2,876
                                                             --------   --------
          Total current assets..............................   37,802     42,553
Property, plant and equipment, net (Notes 2 and 4)..........  107,269    104,194
                                                             --------   --------
          Total assets...................................... $145,071   $146,747
                                                             ========   ========
                    LIABILITIES AND OWNER'S EQUITY                              
Current liabilities:                                                            
  Accounts payable.......................................... $  6,508   $  5,673
  Accrued employee related liabilities......................    3,913      4,362
  Deferred income taxes (Note 6)............................    2,674      2,192
  Intercompany, net (Notes 4, 7 and 8)......................    1,583        626
  Accrued interest (Note 4).................................    1,609         --
  Other accrued liabilities (Note 3)........................    3,527      3,228
                                                             --------   --------
          Total current liabilities.........................   19,814     16,081
Long-term related party debt (Note 4).......................   71,000     76,603
Deferred income taxes (Note 6)..............................   19,296     19,393
Commitment and contingencies (Notes 4, 9 and 10)                                
Owner's equity (Notes 7 and 8)..............................   34,961     34,670
                                                             --------   --------
          Total liabilities and owner's equity.............. $145,071   $146,747
                                                             ========   ========

See accompanying notes. 

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AIH INC.
A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS 
(IN THOUSANDS OF DOLLARS) 

                                                        [Enlarge/Download Table]

                                                                YEAR ENDED DECEMBER 31,     
                                                             ------------------------------ 
                                                               1994       1995       1996   
                                                             --------   --------   -------- 
                                                                                            
Net sales................................................... $249,935   $231,721   $222,019 
Cost of goods sold..........................................  213,831    206,842    196,518 
                                                             --------   --------   -------- 
          Gross earnings....................................   36,104     24,879     25,501 
                                                             --------   --------   -------- 
Selling, general and administrative expenses................   20,678     19,733     17,495 
Amortization of excess reorganization value.................   33,624     25,229         -- 
                                                             --------   --------   -------- 
          Operating earnings (loss).........................  (18,198)   (20,083)     8,006 
                                                             --------   --------   -------- 
Securitization expense on sale of accounts receivable (Note                                 
  4)........................................................    1,057      1,184        955 
Interest expense (Note 4)...................................       --      5,514      7,942 
Royalty expense.............................................    7,120      5,275         -- 
Other (income) expense, net.................................       --        (18)      (219)
                                                             --------   --------   -------- 
Net loss before income tax expense (benefit)................  (26,375)   (32,038)      (672)
Income tax expense (benefit) (Note 6).......................    2,835     (2,683)      (385)
                                                             --------   --------   -------- 
          Net loss.......................................... $(29,210)  $(29,355)  $   (287)
                                                             ========   ========   ======== 

See accompanying notes. 

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AIH INC.
A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS 
(IN THOUSANDS OF DOLLARS) 

                                                        [Enlarge/Download Table]

                                                                YEAR ENDED DECEMBER 31,    
                                                             ----------------------------- 
                                                               1994       1995      1996   
                                                             --------   --------   ------- 
                                                                                           
OPERATING ACTIVITIES:                                                                      
  Net loss.................................................. $(29,210)  $(29,355)  $  (287)
  Adjustments to reconcile net loss to net cash provided by                                
     operating activities:                                                                 
     Amortization of excess reorganization value............   33,624     25,229        -- 
     Depreciation and other amortization....................   11,976     11,117     8,059 
     Deferred income taxes..................................    2,835     (2,683)     (385)
     Changes in operating assets and liabilities:                                          
       Accounts receivable..................................     (233)       424        -- 
       Inventories..........................................   (1,692)      (352)     (856)
       Other current assets.................................   (2,004)      (373)     (227)
       Accounts payable and other liabilities...............   (1,277)     3,215    (1,134)
       Employee related liabilities.........................      (99)       552       449 
                                                             --------   --------   ------- 
Net cash provided by operating activities...................   13,920      7,774     5,619 
                                                             --------   --------   ------- 
INVESTING ACTIVITIES:                                                                      
  Capital expenditures......................................  (24,475)    (9,757)   (4,998)
  Net proceeds from sale of assets..........................    3,285        261        -- 
                                                             --------   --------   ------- 
Net cash used in investment activities......................  (21,190)    (9,496)   (4,998)
                                                             --------   --------   ------- 
FINANCING ACTIVITIES:                                                                      
  Intercompany, net.........................................    7,270      5,999      (943)
  Indebtedness                                                                             
     Related party borrowings...............................       --     72,609     3,994 
     Credit Facility                                                                       
       Borrowings...........................................       --         --     2,000 
       Repayments...........................................       --         --    (2,000)
  Dividends.................................................       --    (71,000)       (4)
                                                             --------   --------   ------- 
Net cash provided by financing activities...................    7,270      7,608     3,047 
                                                             --------   --------   ------- 
Increase in cash and cash equivalents.......................       --      5,886     3,668 
Cash and cash equivalents at beginning of year..............       --         --     5,886 
                                                             --------   --------   ------- 
Cash and cash equivalents at end of year.................... $     --   $  5,886   $ 9,554 
                                                             ========   ========   ======= 

See accompanying notes. 

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AIH INC.
A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996 

1.  ACCOUNTING POLICIES                                                         

BASIS OF PRESENTATION                                                           

     The accompanying consolidated financial statements include the accounts and
operations of AIH Inc. ("AIH") and its wholly owned subsidiaries, Alamac Knit   
Fabrics, Inc. and Alamac Enterprises Inc. (collectively "Alamac"). AIH is a     
wholly owned indirect subsidiary of Alamac Holdings Inc. ("Holdings"), which is 
an indirect subsidiary of WestPoint Stevens Inc. ("WestPoint"). All material    
intercompany accounts and transactions have been eliminated. AIH was            
incorporated in September 1995 and its primary asset is its investment in its   
wholly owned subsidiaries. Prior to becoming an AIH subsidiary in September     
1995, Alamac Knit Fabrics, Inc. ("Knit Fabrics") was a wholly owned subsidiary  
of Alamac Holdings Inc., another WestPoint subsidiary company. Alamac           
Enterprises Inc. ("AE"), was incorporated in September 1995 and its primary     
assets are trademarks and patents used by Knit Fabrics. Prior to September 1995 
such trademarks and patents were owned by another WestPoint subsidiary.         
Operating results in the accompanying consolidated financial statements for     
periods prior to September 1995 are based on the operating results of Knit      
Fabrics.                                                                        

BUSINESS                                                                        

     Alamac manufactures and sells knitted fabrics primarily to manufacturers of
men's, women's and children's apparel. Alamac also supports a close working     
relationship with major retailers to provide fabric, fashion and color          
direction, quality standards specifications and customer service programs where 
required.                                                                       

USE OF ESTIMATES                                                                

  The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and        
assumptions that affect the amount reported in the financial statements and     
accompanying notes. Actual results could differ from those estimates.           

REVENUE RECOGNITION                                                             

     Alamac records revenues principally when products are shipped to customers.
Consistent with recognized practice in the textile industry, Alamac also records
revenues to a lesser extent (approximately 7%, 5% and 3% of total revenues for  
the years ended December 31, 1994, 1995 and 1996, respectively) on a bill and   
hold basis under which the goods are complete, packaged and ready for shipment. 
These goods are effectively segregated from inventory which is available for    
sale, the risks of ownership of the goods have passed to the customer, and the  
underlying customer orders are supported by contracts or written confirmations. 
The credit status of each customer is approved and monitored. Also see Note 4   
"Indebtedness -- Accounts Receivable Securitization". Sales to one customer     
represented approximately 13%, 16% and 15% of net sales for the years ended     
December 31, 1994, 1995 and 1996, respectively.                                 

CONCENTRATIONS OF CREDIT RISK                                                   

Financial instruments that potentially subject Alamac to significant  
concentrations of credit risk consist principally of cash investments and trade 
accounts receivable.                                                            

Alamac maintains cash and cash equivalents and certain other financial
instruments with various financial institutions. Alamac performs periodic       
evaluations of the relative credit standing of those financial institutions that
are considered in Alamac's investment strategy.                                 

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AIH INC.
A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

     Concentrations of credit risk with respect to trade accounts receivable are
limited due to the large number of entities comprising Alamac's customer base.  
However, as of December 31, 1996, substantially all of Alamac's sales were to   
companies in the apparel industry.                                              

CASH AND CASH EQUIVALENTS                                                       

     Cash and cash equivalents include cash on deposit with banks. Deposits with
banks are generally insured in limited amounts. All liquid investments with an  
original maturity of three months or less when purchased are considered to be   
cash equivalents. Short-term investments totaling approximately $5.9 million and
$9.6 million are included in cash and cash equivalents at December 31, 1995 and 
1996, respectively. These investments are carried at cost, which approximates   
market value.                                                                   

INVENTORIES                                                                     

   Inventory costs include material, labor and factory overhead. Inventories
are stated at the lower of cost or market (net realizable value). At December   
31, 1995 and 1996, approximately 85% of the Company's inventories are valued at 
the lower of cost or market using the "dollar value" last-in, first-out ("LIFO")
method. The remainder of the inventories (approximately $4.5 million and $4.7   
million at December 31, 1995 and 1996, respectively) are valued at the lower of 
cost (substantially first-in, first-out method) or market.                      

Inventories consist of the following (in thousands of dollars):       

                                                                [Download Table]

                                                                DECEMBER 31     
                                                             ------------------ 
                                                              1995       1996   
                                                             -------    ------- 
                                                                                
Finished goods.............................................. $ 9,451    $ 7,967 
Work in progress............................................   5,595      7,532 
Raw materials and supplies..................................  17,262     16,901 
                                                             -------    ------- 
                                                              32,308     32,400 
LIFO reserve................................................  (3,041)    (2,277)
                                                             -------    ------- 
                                                             $29,267    $30,123 
                                                             =======    ======= 

PROPERTY, PLANT AND EQUIPMENT                                                   

As a result of WestPoint's adoption of Fresh Start reporting as of    
September 30, 1992, property, plant and equipment balances were adjusted to     
their estimated fair values and historical accumulated depreciation was         
eliminated. Additions since September 30, 1992 are stated at cost.              

Depreciation is computed over estimated useful lives using the        
straight-line method for financial reporting purposes and accelerated methods   
for income tax reporting. Depreciation expense was approximately $12.0 million, 
$11.1 million, and $8.1 million in the years ended December 31, 1994, 1995 and  
1996, respectively. (See Note 2 "Change in Accounting Estimate".)               

REORGANIZATION VALUE IN EXCESS OF AMOUNTS ALLOCATED TO IDENTIFIABLE ASSETS      
("EXCESS REORGANIZATION VALUE")                                                 

In September 1992, WestPoint completed a "prepackaged" plan of        
reorganization and, in accordance with SOP 90-7, WestPoint established a new    
basis of accounting ("Fresh Start"). In Fresh Start reporting, WestPoint's      
assets and liabilities were adjusted to their fair values as of September 30,   
1992. The excess of the reorganization value over the value of identifiable     
assets was reported as Excess Reorganization Value at                           

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AIH INC.
A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

September 30, 1992. Excess Reorganization Value of approximately $95 million was
allocated to Alamac and has been amortized on a straight-line basis over three  
years and was fully amortized by September 1995.                                

HEDGING TRANSACTIONS                                                            

  All of Alamac's cotton purchases are handled by WestPoint and charged to
Alamac at actual cost. WestPoint engages in hedging activities within the normal
course of its business. Management has been authorized to manage exposure to    
price fluctuations relevant to the purchase of cotton through the use of a      
variety of derivative nonfinancial instruments. Derivative nonfinancial         
instruments require or permit settlement by the delivery of commodities and     
include exchange traded commodity futures contracts and options. Gains and      
losses on these hedges, which were not material at December 31, 1995 and 1996,  
are deferred and subsequently recognized in operations as cost of goods sold in 
the same period as the hedged item. WestPoint does not hold or issue derivative 
instruments for trading purposes.                                               

PENSION PLANS                                                                   

WestPoint has a number of defined benefit pension plans covering      
essentially all employees. The benefits are based on years of service and       
compensation. WestPoint's practice is to fund amounts which are required by the 
Employee Retirement Income Security Act of 1974.                                

WestPoint also sponsors an employee savings plan covering certain     
employees. Participants in this plan elect to make contributions as either a    
percent of earnings or a basic contribution. For the periods prior to December  
31, 1994, there were no contributions by WestPoint for this plan. WestPoint     
amended the plan to provide for WestPoint contributions beginning in 1995 (see  
Note 5 "Employee Benefit Plans -- Retirement Savings Plan").                    

OTHER EMPLOYEE BENEFITS                                                         

WestPoint accounts for post-retirement and post-employment benefits in
accordance with FAS 106, "Employer's Accounting for Post Retirement Benefits    
Other Than Pensions" and FAS 112, "Employer's Accounting for Post Employment    
Benefits."                                                                      

STOCK BASED COMPENSATION                                                        

   WestPoint grants stock options for a fixed number of shares of its common
stock in accordance with certain of its benefit plans. WestPoint accounts for   
stock option grants in accordance with APB Opinion No. 25, "Accounting for Stock
Issued to Employees", and, accordingly, recognizes no compensation expense for  
the stock option grants if the exercise price is equal to or more than the fair 
value of the shares at the date of grant.                                       

INCOME TAXES                                                                    

   WestPoint accounts for income taxes under FAS 109, "Accounting for Income
Taxes". Under the provisions of FAS 109, deferred income taxes are provided at  
the enacted marginal rates on the differences between the financial statement   
and income tax bases of assets and liabilities. WestPoint and its subsidiaries  
file a consolidated federal income tax return and separate, combined or unitary 
state and local income tax returns in accordance with the filing requirements   
and options applicable in the jurisdiction in which income tax returns are      
required. Income tax expense for AIH is presented in the accompanying financial 
statements on a separate return basis consistent with the terms of a tax sharing
agreement between AIH and WestPoint.                                            

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A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

FAIR VALUES OF FINANCIAL INSTRUMENTS                                            

    WestPoint has adopted FASB Statement No. 107, "Disclosure about Fair Value
of Financial Instruments", which requires disclosure of fair value, to the      
extent practical, of certain of Alamac's financial instruments. The fair value  
amounts do not necessarily represent the amount that could be realized in a sale
or settlement. Alamac's financial instruments are comprised principally of      
long-term subordinated debt. (See Note 4 "Credit Arrangements".)                

 The estimated fair value of long-term subordinated debt at December 31,
1996 approximates book value since, in management's opinion, such obligations   
are at market rates of interest for unsecured debt. Alamac does not anticipate  
settlement of long-term subordinated debt at other than book value and currently
intends to hold this financial instrument through maturity.                     

    The fair value of other financial instruments classified as current assets
or liabilities approximate their carrying values due to the short-term          
maturities of these instruments.                                                

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS                                  

  On January 1, 1996, WestPoint adopted Statement No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
("Statement 121"), which requires impairment losses to be recorded on long-lived
assets used in operations when indicators of impairments are present and the    
undiscounted cash flows estimated to be generated by those assets are less than 
the asset's carrying amount. Statement 121 also addresses the accounting for    
long-lived assets that are expected to be disposed of. The adoption of Statement
121 had no impact on WestPoint's or AIH's financial position.                   

2.  CHANGE IN ACCOUNTING ESTIMATE                                               

  Effective January 1, 1996, Alamac extended its estimates of useful lives
for its property, plant and equipment. The effect of this change in estimate was
to reduce depreciation expense by approximately $3.9 million for the year ended 
December 31, 1996. A summary of average economic lives assigned to property and 
equipment is as follows:                                                        

                                                        [Enlarge/Download Table]

                                                           YEAR ENDED DECEMBER 31,     
                                                       --------------------------------
                                                       1994 AND 1995          1996     
                                                       --------------    --------------
                                                                                       
Buildings and buildings improvements.................. 10 to 40 years    10 to 40 years
Furniture and fixtures................................  5 to 10 years     6 to 12 years
Machinery and equipment -- used.......................        8 years          13 years
Machinery and equipment -- new........................  8 to 15 years    10 to 18 years

3.  SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION                                

     The composition of other accrued liabilities is as follows (in thousands of
dollars):                                                                       

                                                                [Download Table]

                                                                DECEMBER 31,  
                                                              ----------------
                                                               1995      1996 
                                                              ------    ------
                                                                              
Reserve for customer returns................................  $2,500    $2,500
Property taxes payable......................................     788       479
Other.......................................................     239       249
                                                              ------    ------
                                                              $3,527    $3,228
                                                              ======    ======

     Components of "Other (income) expense, net" are principally interest income
from cash equivalents.                                                          

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A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

     Alamac made state income tax payments of $600,000, $100,000 and $-0- in the
years ended December 31, 1994, 1995 and 1996, respectively. Alamac made interest
payments of approximately $-0-, $3.9 million and $3.9 million in the years ended
December 31, 1994, 1995, and 1996.                                              

4.  CREDIT ARRANGEMENTS                                                         

BANK CREDIT AGREEMENT                                                           

Alamac has a Credit Facility with certain lenders (collectively, the  
"Banks"), which consists of a $25.0 million revolving credit facility due May   
23, 2001. At Alamac's option, interest under the Credit Facility will be payable
either at the prime rate plus .25% or at LIBOR plus 1.5%. The loans under the   
Credit Facility are secured by the pledge of the inventories and certain other  
assets. Availability under the Credit Facility is determined by a borrowing     
calculation of 60% of FIFO inventory values, as defined. No amounts were        
outstanding under this facility at December 31, 1995 and 1996.                  

All amounts outstanding under the Credit Facility reduce WestPoint's  
availability under its Senior Credit Facility. Additionally, the amounts        
outstanding under the WestPoint Senior Credit Facility are secured by the pledge
of the stock of WestPoint's subsidiaries, including AIH.                        

Alamac's credit agreement contains a number of customary covenants    
including, among others, restrictions on the incurrence of indebtedness,        
transactions with affiliates, and certain asset dispositions. Certain provisions
require Alamac to maintain certain financial ratios, such as a minimum cash flow
coverage ratio and minimum tangible net worth, as defined. Additionally,        
intercompany payables and receivables balances occurring subsequent to November 
1995 between Alamac and its WestPoint affiliates must be settled within 30 days 
of each month-end.                                                              

ACCOUNTS RECEIVABLE SECURITIZATION                                              

WestPoint, through a "bankruptcy remote" receivables subsidiary       
("Receivables Subsidiary") has a trade receivables program ("Trade Receivables  
Program") which provides for the sale of accounts receivable, on a revolving    
basis. Alamac's trade receivables are sold to an affiliate in connection with   
this program. Alamac recognizes in its operating results, the anticipated       
periodic costs for bad debts, returns and allowances and other customer         
accommodations impacting the collection of trade receivables. At December 31,   
1995 and 1996, all of Alamac trade receivables outstanding, totaling            
approximately $37.4 million and $37.0 million, respectively, had been sold to   
WestPoint and were outstanding. The sale is reflected as a reduction of accounts
receivable in the accompanying Consolidated Balance Sheets. The Trade           
Receivables Program was financed through the issuance of (a) $115 million of    
Floating Rate Class A Trade Receivables Participation Certificates ("Class A    
Certificates"); (b) $18 million of Floating Rate Class B Trade Receivables      
Participation Certificates ("Class B Certificates"), and (c) $27 million of     
Investor Revolving Certificates. The Class A Certificates and Class B           
Certificates bear interest at LIBOR plus .27% and LIBOR plus .57%, respectively,
and the Investor Revolving Certificates bear interest at LIBOR plus .375%. The  
expected final payment date of amounts outstanding under the Trade Receivables  
Program is May 18, 1999, but earlier termination could occur upon the occurrence
of certain defined events. The cost of the Trade Receivables Program allocated  
to Alamac, $1.1 million, $1.2 million and $1.0 million for the years ended      
December 31, 1994, 1995 and 1996, respectively, is charged to securitization    
expense in the accompanying Consolidated Statements of Operations.              

     The Trade Receivables Program requires WestPoint and Receivables Subsidiary
to perform certain servicing obligations with respect to the existing and future
trade receivables sold by WestPoint. WestPoint is not subject to any financial  
covenants under the Trade Receivables Program, but the documentation for the    

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AIH INC.
A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

Trade Receivables Program provides for early termination of the Trade           
Receivables Program and early payment of the securities issued thereunder upon  
certain events, which include the incurrence of losses or delinquencies on the  
receivables in excess of certain levels or the bankruptcy or insolvency of      
WestPoint.                                                                      

RELATED PARTY INDEBTEDNESS                                                      

In April 1995, Knit Fabrics, as payment of a $71.0 million dividend   
distribution, entered into an unsecured subordinated debt agreement with its    
parent company at that time, Holdings (the "Subordinated Agreement"). The       
Subordinated Agreement, with an original principal amount of $71 million at     
April 1995, bears interest at 11% payable semi-annually or, at the option of    
Knit Fabrics, can be converted to additional subordinated debt. Principal       
amounts outstanding under the Subordinated Agreement mature in April 1999.      
Accrued interest outstanding on the Subordinated Agreement at December 31, 1996 
of approximately $1.7 million was converted to additional subordinated debt in  
April 1997 under the same terms as the Subordinated Agreement. Such interest has
been classified as long-term related party debt in the accompanying Consolidated
Balance Sheets. Additionally, during 1996 approximately $3.9 million of interest
expense also was converted to additional related party debt.                    

5.  EMPLOYEE BENEFIT PLANS                                                      

DEFINED BENEFIT PENSION PLAN                                                    

    WestPoint has a defined benefit pension plan that covers substantially all
its full-time employees including substantially all Alamac employees. Benefits  
are based on years of service and compensation. Benefits become vested upon     
completion of five years of service. No vesting occurs until the employee has   
completed five years of service. WestPoint's practice is to fund amounts which  
are required by the Employee Retirement Income Security Act of 1974.            

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AIH INC.
A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

    The following summarizes information including the plan's funded status as
of the plan's December 31 year end and assumptions used to develop the net      
periodic pension expense for all WestPoint operations (in thousands of dollars):

                                                        [Enlarge/Download Table]

                                                                 DECEMBER 31,              
                                                    ---------------------------------------
                                                       1995                 1996           
                                                    -----------   -------------------------
                                                    ACCUMULATED     ASSETS      ACCUMULATED
                                                     BENEFITS       EXCEED       BENEFITS  
                                                      EXCEED      ACCUMULATED     EXCEED   
                                                      ASSETS       BENEFITS       ASSETS   
                                                    -----------   -----------   -----------
                                                                                           
Actuarial present value of accumulated benefit                                             
  obligations:                                                                             
  Vested...........................................  $ 312,899     $ 85,620      $200,902  
  Nonvested........................................      3,696        3,835         5,706  
                                                     ---------     --------      --------  
Accumulated benefit obligations....................    316,595       89,455       206,608  
Effect of future salary increases..................     23,633           --        16,918  
                                                     ---------     --------      --------  
Projected benefit obligation.......................    340,228       89,455       223,526  
Plan assets at fair value..........................    281,443      102,718       197,174  
                                                     ---------     --------      --------  
Projected benefit obligation less than (in excess                                          
  of) plan assets..................................    (58,785)      13,263       (26,352) 
Unrecognized net actuarial losses..................     75,670       15,458        27,089  
Minimum pension liability adjustment...............    (52,037)          --       (10,171) 
                                                     ---------     --------      --------  
Pension related asset (liability)..................  $ (35,152)    $ 28,721      $ (9,434) 
                                                     =========     ========      ========  
Actuarial assumptions for funded status                                                    
  information:                                                                             
  Discount rate....................................       7.25%        8.25%         8.25% 
  Average rate of increase in compensation                                                 
     levels........................................        4.0%          --           3.5% 

 At December 31, 1995, WestPoint changed the discount rate to 7.25% from
8.5% which increased the projected benefit obligation by approximately $43.5    
million. At December 31, 1996, WestPoint changed the discount rate to 8.25% from
7.25% which decreased the projected benefit obligation by approximately $38.5   
million.                                                                        

 The provisions of Financial Accounting Standards Board Statement No. 87
Employee Accounting for Pensions (SFAS No. 87) require recognition in the       
balance sheet of an additional minimum liability for pension plans with         
accumulated benefits in excess of plan assets. At December 31, 1995 and 1996,   
minimum pension liability adjustments of $52.0 million ($32.0 million after     
related income taxes) and $10.2 million ($6.4 million after related income      
taxes), respectively, were included in WestPoint's Consolidated Financial       
Statements.                                                                     

Plan assets are primarily invested in United States Government and    
corporate debt securities, equity securities and fixed income insurance         
contracts. At December 31, 1995 and 1996, WestPoint's pension plans held Notes  
and Debentures of WestPoint with a market value of $13.2 million and $17.0      
million, respectively.                                                          

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AIH INC.
A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

   Pension expense included in WestPoint's Consolidated Financial Statements
was calculated as follows (in thousands of dollars):                            

                                                        [Enlarge/Download Table]

                                                        YEAR ENDED DECEMBER 31,      
                                                    -------------------------------- 
                                                      1994        1995        1996   
                                                    --------    --------    -------- 
                                                                                     
Service costs -- benefits earned during the year... $  7,428    $  6,174    $  8,244 
Interest cost on projected benefit obligation......   22,731      23,757      24,255 
Actual loss (return) on plan assets................    5,026     (49,969)    (22,276)
Deferred actuarial gains (losses)..................  (22,285)     33,038      (1,170)
                                                    --------    --------    -------- 
Net pension expense................................ $ 12,900    $ 13,000    $  9,053 
                                                    ========    ========    ======== 

 Total pension expense allocated to AIH for benefits to Alamac employees
under this plan was approximately $2.3 million, $2.0 million and $1.3 million   
for the years ended December 31, 1994, 1995 and 1996, respectively.             

    The assumptions used to develop the plan's funded status and expenses were
as follows:                                                                     

                                                        [Enlarge/Download Table]

                                                              YEAR ENDED DECEMBER 31,  
                                                             ------------------------- 
                                                             1994      1995      1996  
                                                             ----      ----      ----- 
                                                                                       
Assumptions:                                                                           
  Discount rate.............................................  7.0%      8.5%      7.25%
  Expected long-term rate of return on plan assets..........  8.5%      8.5%      10.0%
  Average rate of increase in compensation levels...........  4.0%      4.0%       4.0%

RETIREMENT SAVINGS PLAN                                                         

WestPoint amended its Retirement Savings Value Plan (the "401K Plan") 
effective January 1, 1995, to provide that WestPoint will match 50 percent of   
each employee's before-tax contributions up to two percent of the employee's    
compensation. WestPoint's contributions may be made either in cash or in shares 
of its common stock. During both 1995 and 1996, Alamac was allocated            
approximately $.4 million, of expense in connection with the 401K Plan.         

OTHER POST-RETIREMENT BENEFIT PLANS                                             

     In addition to sponsoring defined benefit pension plans, WestPoint sponsors
various defined benefit post-retirement plans that provide health care and life 
insurance benefits to certain current and future retirees. All such             
post-retirement benefit plans are unfunded. Amounts allocated to Alamac under   
these plans during the three years ended December 31, 1996 were not material.   

6.  INCOME TAXES                                                                

 Alamac accounts for income taxes under FAS 109. Under FAS 109, deferred
income taxes are provided at the enacted marginal rates on the difference       
between the financial statement and income tax bases of assets and liabilities. 
Deferred income tax provisions or benefits are based on the change in the       
deferred tax assets and liabilities from period to period.                      

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AIH INC.
A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

   The total provision (benefit) for income taxes consisted of the following
(in thousands of dollars):                                                      

                                                        [Enlarge/Download Table]

                                                           YEAR ENDED DECEMBER 31,   
                                                          -------------------------- 
                                                           1994      1995      1996  
                                                          ------    -------    ----- 
                                                                                     
Current.................................................. $   --    $    --    $  -- 
Deferred.................................................  2,835     (2,683)    (385)
                                                          ------    -------    ----- 
                                                          $2,835    $(2,683)   $(385)
                                                          ======    =======    ===== 

 Income tax expense (benefit) from operations differs from the statutory
federal income tax rate of 35% for the following reasons (in thousands of       
dollars):                                                                       

                                                        [Enlarge/Download Table]

                                                             YEAR ENDED DECEMBER 31,   
                                                            -------------------------- 
                                                             1994       1995     1996  
                                                            -------   --------   ----- 
                                                                                       
Income tax expense (benefit) at federal statutory income                               
  tax rate................................................. $(9,231)  $(11,213)  $(235)
State income taxes (net of effect of federal income tax)...     311       (374)   (150)
Amortization of Excess Reorganization Value................  11,768      8,830      -- 
Other -- net...............................................     (13)        74      -- 
                                                            -------   --------   ----- 
Income tax expense (benefit)............................... $ 2,835   $ (2,683)  $(385)
                                                            =======   ========   ===== 

Components of the net deferred income tax liability are as follows (in
thousands of dollars):                                                          

                                                                [Download Table]

                                                                DECEMBER 31,     
                                                             ------------------- 
                                                               1995       1996   
                                                             --------   -------- 
                                                                                 
Deferred tax liabilities:                                                        
  Property, plant and equipment............................. $(21,978)  $(21,866)
  Inventories...............................................   (2,711)    (2,277)
  Other.....................................................       --       (427)
Deferred tax assets:                                                             
  Reserves for intercompany items, employee benefits and                         
     other..................................................    2,683      2,901 
  Other.....................................................       36         84 
                                                             --------   -------- 
                                                             $(21,970)  $(21,585)
                                                             ========   ======== 

7.  WESTPOINT CORPORATE ALLOCATIONS                                             

     Corporate expenses of WestPoint, including corporate officers' salaries and
related employee benefits, travel costs, and related support staff and          
operations (including cash management, accounting, tax and other corporate      
services) are allocated to the operating units of WestPoint. In addition,       
certain direct operating costs including pensions, property taxes, group health 
insurance, fire and other insurance, and workers compensation are recorded on a 
consolidated basis by WestPoint and allocated to the operating divisions. In the
opinion of WestPoint's management, these charges have been made on a basis which
is reasonable, however, they are not necessarily indicative of the level of     
expenses which might have been incurred by Alamac on a stand-alone basis.       

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AIH INC.
A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

  Alamac was charged approximately $22.9 million, $22.9 million, and $19.4
million for these services and operating costs during the years ended December  
31, 1994, 1995 and 1996, respectively, which was allocated between cost of goods
sold and selling, general and administrative expenses as follows (in thousands  
of dollars):                                                                    

                                                        [Enlarge/Download Table]

                                                             YEAR ENDED DECEMBER 31,  
                                                           ---------------------------
                                                            1994      1995      1996  
                                                           -------   -------   -------
                                                                                      
Cost of goods sold........................................ $11,153   $11,646   $10,397
Selling, general and administrative expenses..............  11,715    11,283     9,015
                                                           -------   -------   -------
                                                           $22,868   $22,929   $19,412
                                                           =======   =======   =======

8.  SUMMARY ACTIVITY WITH WESTPOINT AND AFFILIATES                              

   Upon incorporation, AIH authorized 1,000 shares of $1.00 par value common
stock. At December 31, 1995 and 1996, 100 shares of AIH common stock were issued
and outstanding. The cumulative net earnings of, and net intercompany advances  
between, Knit Fabrics, AIH, and WestPoint affiliates as of the date of AIH's    
incorporation were deemed by management to be additional paid-in capital of AIH 
and are included in owners' equity.                                             

  WestPoint provides centralized cash management for Alamac. Substantially
all cash receipts are remitted to WestPoint and substantially all disbursements 
are made by WestPoint. There are no terms of settlement for interest charges on 
these intercompany accounts. However, intercompany payables and receivables     
balances occurring subsequent to November 1995 between Alamac and its WestPoint 
affiliates must be settled within 30 days of each month-end. Components of the  
activity with WestPoint and affiliates as reflected in the accompanying         
Consolidated Balance Sheets are as follows (in thousands of dollars):           

                                                                [Download Table]

                                                                 DECEMBER 31,    
                                                             --------------------
                                                               1995        1996  
                                                             --------    --------
                                                                                 
Intercompany, net........................................... $  1,583    $    626
Accrued interest............................................    1,609          --
Long-term related party debt................................   71,000      76,603
Owner's equity..............................................   34,961      34,670
                                                             --------    --------
                                                             $109,153    $111,899
                                                             ========    ========

  An analysis of the net transactions with WestPoint and affiliates are as
follows (in thousands of dollars):                                              

                                                        [Enlarge/Download Table]

                                                          YEAR ENDED DECEMBER 31,      
                                                     --------------------------------- 
                                                       1994        1995        1996    
                                                     ---------   ---------   --------- 
                                                                                       
Net balances at the beginning of year............... $ 152,880   $ 131,096   $ 109,153 
  Gross sales.......................................  (254,726)   (235,452)   (225,874)
  Payments of direct operating costs and purchases                                     
     of raw materials...............................   233,356     215,723     211,551 
  WestPoint allocations.............................    22,868      22,929      19,412 
  Intercompany borrowings...........................        --      72,609       3,994 
  Other.............................................     5,928       2,603      (6,046)
  Net loss..........................................   (29,210)    (29,355)       (287)
  Dividends.........................................        --     (71,000)         (4)
                                                     ---------   ---------   --------- 
Net balances at the end of year..................... $ 131,096   $ 109,153   $ 111,899 
                                                     =========   =========   ========= 

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AIH INC.
A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

9.  LITIGATION AND CONTINGENT LIABILITIES                                       

  Alamac is subject to various federal, state and local environmental laws
and regulations governing, among other things, the discharge, storage, handling 
and disposal of a variety of hazardous and non-hazardous substances and wastes  
used in or resulting from its operations and potential remediation obligations  
thereunder. Certain of Alamac's facilities may occasionally experience permit   
violation under such laws and regulations. Alamac believes that it has          
adequately provided in its financial statements for any expenses and liabilities
that may result from such matters. Alamac's operations are governed by laws and 
regulations relating to employee safety and health which, among other things,   
establish exposure limitations for cotton dust, formaldehyde, asbestos and      
noise, and regulate chemical and ergonomic hazards in the workplace. Although   
Alamac does not expect that compliance with any such laws and regulations will  
adversely affect its operations, there can be no assurance such regulatory      
requirements will not become more stringent in the future or that Alamac will   
not incur significant costs in the future to comply with such requirements.     

  Alamac is involved in various legal proceedings, as plaintiff, which are
normal to its business. It is the opinion of management that the aforementioned 
actions and claims, if determined adversely to Alamac, will not have a material 
adverse effect on the financial condition or operations of Alamac taken as a    
whole.                                                                          

10.  COMMITMENTS AND CONTINGENCIES                                              

Alamac has contracts to purchase steam, at a fixed price per thousand 
pounds through December 31, 2001, from electric power cogeneration plants       
located at two manufacturing facilities. The term of the steam purchase         
contracts are concurrent with ground leases between Alamac and the power        
supplier for the lease of land adjacent to its facilities on which the          
cogeneration plants are located. The steam purchase contracts and the ground    
leases have 15 year extension options subject to price renegotiation.           

    In November 1992, WestPoint entered into an agreement with a textile waste
purchaser. Under the terms of the agreement, WestPoint agreed to sell certain   
textile by-products generated by WestPoint's facilities, including the Alamac   
facilities, through November 1997. The pricing, delivery and scheduling of      
shipments are determined pursuant to negotiations. In April 1997, WestPoint     
extended the agreement through November 2002 under substantially the same terms.

  Alamac has an agreement to provide engineering and technology consulting
and knowledge transfer to Arvind Mills ("Arvind"), an Indian company entering   
the knit fabric industry. During the year ended December 31, 1995, Alamac has   
received approximately $1.7 million for services to Arvind in establishing a    
manufacturing facility with additional fees of approximately $900,000 due upon  
satisfactory commencement of commercial production at the facility. The facility
is scheduled to begin production in early 1998. Also, Alamac has an agreement   
with Arvind to receive royalties based on Arvind's domestic and export sales for
a period of six years from the start of commercial production.                  

Certain office space in New York and certain machinery are subleased, 
through verbal arrangements with WestPoint, at terms which mirror the original  
lease terms. Certain of these leases have payment terms which result in payment 
amounts exceeding the amount of lease expense recognized during the period. The 
difference is reflected as a prepaid lease asset in the accompanying            
Consolidated Balance Sheets. Alamac also leases from third parties certain sales
office space. The operating leases have various renewal options. Rental         

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AIH INC.
A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 

expense for operating leases, either directly charged or included in corporate  
allocations, was as follows (in thousands of dollars):                          

                                                                [Download Table]

YEAR ENDED DECEMBER 31,                                  WESTPOINT  OTHER   TOTAL 
-----------------------                                  ---------  -----  -------
                                                                                  
1994....................................................  $ 4,191   $ 81   $ 4,272
1995....................................................    7,134     80     7,214
1996....................................................    7,056     80     7,136

 The minimum aggregate rentals under operating leases are payable to the
lessors as follows (in thousands of dollars):                                   

                                                                [Download Table]

YEAR ENDED DECEMBER 31,                                  WESTPOINT  OTHER   TOTAL 
-----------------------                                  ---------  -----  -------
                                                                                  
1997....................................................  $ 2,974   $ 80   $ 3,054
1998....................................................    3,086     18     3,104
1999....................................................    2,284      6     2,290
2000....................................................    2,043     --     2,043
2001 and thereafter.....................................    1,464     --     1,464
                                                          -------   ----   -------
                                                          $11,851   $104   $11,955
                                                          =======   ====   =======

11.  SUBSEQUENT EVENT -- SALE OF YARN MILL (UNAUDITED)                          

In May 1997, WestPoint's Board of Directors approved the purchase of  
Alamac's Whitmire yarn mill and related assets for a cash payment of            
approximately $25.0 million. Whitmire had a net book value of assets to be sold 
of approximately $21.7 million at December 31, 1996. WestPoint's Board of       
Directors has obtained a fairness opinion relative to this proposed transaction.
The excess of cash proceeds over the net book value of assets to be sold will be
treated as a capital transaction by AIH. The sale is expected to close in June  
1997.                                                                           

    The Whitmire yarn mill produced approximately 26.2 million pounds of yarn,
of which, approximately 2.3 million pounds were sold to an affiliate for        
approximately $3.1 million during the year ended December 31, 1996. In the      
opinion of WestPoint's management, these related party sales are priced at the  
fair market value at the date of sale.                                          

12.  SUBSEQUENT EVENT                                                           

     On July 15, 1997, WestPoint entered into a definitive agreement pursuant to
which WestPoint sold its subsidiaries AIH Inc., Alamac Knit Fabrics, Inc. and   
Alamac Enterprises Inc., other than cash, accounts receivable and a yarn mill   
located in Whitmire, S.C., to Dyersburg Corporation ("Dyersburg") for           
approximately $126 million. Certain current liabilities and long-term debt on   
the accompanying balance sheets were not assumed by Dyersburg. Such liabilities 
were retained by WestPoint or retired at the closing date of the acquisition by 
Dyersburg. Dyersburg entered into contractual commitments, subject to normal    
closing conditions, for the necessary financing to conclude this transaction.   
The transaction was consummated in August 1997.                                 

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AIH INC.
A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS 
(IN THOUSANDS OF DOLLARS) 

                                                        [Enlarge/Download Table]

                                                             DECEMBER 31,   JUNE 30,  
                                                                 1996         1997    
                                                             ------------  -----------
                                                                           (UNAUDITED)
                                                                                      
                                         ASSETS                                       
Current assets:                                                                       
  Cash and cash equivalents.................................   $  9,554     $  2,135  
  Inventories...............................................     30,123       32,785  
  Other current assets......................................      2,876        3,317  
                                                               --------     --------  
          Total current assets..............................     42,553       38,237  
Property, plant and equipment, net..........................    104,194      102,233  
                                                               --------     --------  
          Total Assets......................................   $146,747     $140,470  
                                                               ========     ========  

                             LIABILITIES AND OWNER'S EQUITY                           
Current liabilities:                                                                  
  Accounts payable..........................................   $  5,673     $  6,853  
  Accrued employee related liabilities......................      4,362        3,200  
  Deferred income taxes.....................................      2,192        2,456  
  Intercompany, net.........................................        626       (1,529) 
  Other accrued liabilities.................................      3,228        2,898  
                                                               --------     --------  
          Total current liabilities.........................     16,081       13,878  
Long-term related party debt................................     76,603       80,735  
Deferred income taxes.......................................     19,393       20,551  
Owner's equity..............................................     34,670       25,306  
                                                               --------     --------  
          Total liabilities and owner's equity..............   $146,747     $140,470  
                                                               ========     ========  

See accompanying notes to condensed consolidated financial statements.

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AIH INC.
A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(IN THOUSANDS OF DOLLARS) 

                                                        [Enlarge/Download Table]

                                                             SIX MONTHS ENDED JUNE 30 
                                                             ------------------------ 
                                                               1996           1997    
                                                             ---------      --------- 
                                                                                      
Net sales...................................................  $114,004       $127,793 
Cost of goods sold..........................................   101,439        111,321 
                                                              --------       -------- 
          Gross earnings....................................    12,565         16,472 
Selling, general and administrative expenses................     9,473          8,012 
                                                              --------       -------- 
          Operating earnings................................     3,092          8,460 
Securitization expense on sale of accounts receivable.......       492            520 
Interest expense............................................     3,861          4,132 
Other (income) expense, net.................................      (101)          (257)
                                                              --------       -------- 
Net income (loss) before income tax expense (benefit).......    (1,161)         4,065 
Income tax expense (benefit)................................      (495)         1,427 
                                                              --------       -------- 
          Net income (loss).................................  $   (666)      $  2,638 
                                                              ========       ======== 

See accompanying notes to condensed consolidated financial statements.

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AIH INC.
A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS OF DOLLARS) 

                                                                [Download Table]

                                                                 SIX MONTHS     
                                                                ENDED JUNE 30   
                                                              ----------------- 
                                                               1996      1997   
                                                              ------    ------- 
                                                                                
OPERATING ACTIVITIES:                                                           
  Net income (loss).........................................  $ (666)   $ 2,638 
  Adjustments to reconcile net income (loss) to net cash                        
     provided by operating activities:                                          
     Depreciation and other amortization....................   4,100      4,268 
     Deferred income taxes..................................    (495)     1,422 
     Changes in operating assets and liabilities:                               
       Inventories..........................................     325     (2,662)
       Other current assets.................................    (455)      (441)
       Accounts payable and other liabilities...............    (436)       850 
       Employee related liabilities.........................  (1,389)    (1,162)
       Other................................................       7         (7)
                                                              ------    ------- 
Net cash provided by operating activities...................     991      4,906 
INVESTING ACTIVITIES:                                                           
  Capital expenditures......................................  (2,665)    (2,300)
                                                              ------    ------- 
Net cash used for investing activities......................  (2,665)    (2,300)
FINANCING ACTIVITIES:                                                           
  Intercompany, net.........................................  (1,397)    (2,155)
  Indebtedness:                                                                 
     Related party borrowings (repayments)..................     (51)     4,132 
     Credit facility borrowings.............................   1,000         -- 
  Dividends.................................................      --    (12,002)
                                                              ------    ------- 
Net cash used for financing activities......................    (448)   (10,025)
                                                              ------    ------- 
Decrease in cash and cash equivalents.......................  (2,122)    (7,419)
Cash and cash equivalents at beginning of period............   5,886      9,554 
                                                              ------    ------- 
Cash and cash equivalents at end of period..................  $3,764    $ 2,135 
                                                              ======    ======= 

See accompanying notes to condensed consolidated financial statements.

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AIH INC.
A SUBSIDIARY OF 
WESTPOINT STEVENS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1997 

1. BASIS OF PRESENTATION                                                        

   The accompanying unaudited condensed consolidated financial statements of
AIH Inc. have been prepared in accordance with generally accepted accounting    
principles for interim financial information and with the instructions to Form  
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of  
the information and footnotes required by generally accepted accounting         
principles for complete financial statements. In the opinion of management, all 
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the six month period
ending June 30, 1997, are not necessarily indicative of the results that may be 
expected for the year ending December 31, 1997. For further information, refer  
to the annual financial statements and footnotes thereto of AIH Inc. included   
herein.                                                                         

2. SUBSEQUENT EVENT-SALE OF AIH INC.                                            

     On July 15, 1997, WestPoint entered into a definitive agreement pursuant to
which WestPoint sold its subsidiaries AIH Inc., Alamac Knit Fabrics, Inc. and   
Alamac Enterprises Inc., other than cash, accounts receivable and a yarn mill   
located in Whitmire, S.C., to Dyersburg Corporation ("Dyersburg") for           
approximately $126 million. Certain current liabilities and long-term debt on   
the accompanying balance sheets were not assumed by Dyersburg. Such liabilities 
were retained by WestPoint or retired at the closing date of the acquisition by 
Dyersburg. Also, see Note 11. "Subsequent Event-Sale of Yarn Mill" in the annual
financial statements and footnotes thereto of AIH Inc. included herein.         
Dyersburg entered into contractual commitments, subject to normal closing       
conditions, for the necessary financing to conclude this transaction. The       
transaction was consummated in August 1997.                                     

  The accompanying condensed consolidated financial statements are derived
from the historical books and records of AIH Inc. and do not give effect to any 
purchase accounting adjustments which Dyersburg may record as a result of its   
acquisition.                                                                    

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

  NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN  
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH 
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE INITIAL PURCHASERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITY OTHER THAN THE
SECURITIES TO WHICH IT RELATES, OR ANY OFFER TO SELL OR A SOLICITATION OF AN    
OFFER TO BUY THE EXCHANGE NOTES 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 NOT BEEN ANY CHANGE IN THE FACTS SET FORTH
IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.      

--------------------- 
TABLE OF CONTENTS 

                                                                [Download Table]

                                       PAGE
                                       ----
                                           
Prospectus Summary...................    1 
Risk Factors.........................   10 
The Acquisition......................   17 
The Exchange Offer...................   18 
Certain Federal Income Tax                 
  Consequences of the Exchange             
  Offer..............................   26 
Use of Proceeds......................   27 
Capitalization.......................   28 
Selected Financial Data..............   29 
Unaudited Pro Forma Condensed              
  Consolidated Financial                   
  Statements.........................   30 
Management's Discussion and Analysis       
  of Financial Condition and Results       
  of Operations......................   38 
Business.............................   43 
Management...........................   53 
Principal Shareholders...............   57 
Description of New Credit Facility...   58 
Description of the Exchange Notes....   60 
Description of Certain Federal Income      
  Tax Consequences of an Investment        
  in the Exchange Notes..............   86 
Plan of Distribution.................   88 
Legal Matters........................   88 
Experts..............................   88 
Index to Consolidated Financial            
  Statements.........................  F-1 

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

[DYERSBURG CORPORATION LOGO]

OFFER TO EXCHANGE 
$125,000,000

9 3/4% SENIOR SUBORDINATED
NOTES DUE 2007, SERIES B

FOR 

9 3/4% SENIOR SUBORDINATED
NOTES DUE 2007

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

PROSPECTUS

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

OCTOBER 24, 1997

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

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PART II 

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.                            

    Chapter 58 of the Tennessee Business Corporation Act (the "TBCA") provides
that a corporation may indemnify any of its directors and officers against      
liability incurred in connection with a proceeding if (i) such person acted in  
good faith; (ii) in the case of conduct in such person's official capacity with 
the corporation, he reasonably believed such conduct was in the corporation's   
best interests; (iii) in all other cases, he reasonably believed that his       
conduct was at least not opposed to the best interests of the corporation; and  
(iv) in connection with any criminal proceeding, such person had no reasonable  
cause to believe his conduct was unlawful.                                      

Article 10 of the Company's Certificate of Incorporation provides for 
indemnification of officers, directors and employees of the Company against     
liabilities, including liabilities under the Act, in connection with the defense
of any action, suit or proceeding to which such persons are made a party by     
reason of being an officer, director or employee of the Company, except in      
relation to matters as to which such persons are adjudged liable for negligence 
or misconduct in the performance of their duties.                               

  The Company maintains directors' and officers' liability insurance which
may cover liabilities under the Act.                                            

ITEM 21.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.                           

(a) Exhibits.                                                         

                                                                [Download Table]

EXHIBIT                                                                     
NUMBER                                  DESCRIPTION                         
-------                                 -----------                         
                                                                            
   3.1      --  Amended and Restated Charter as of May 11,                  
                1992 -- Incorporated by reference to Registration Statement 
                on Form S-1 (Registration No. 33-46331).                    
   3.2      --  Amended and Restated By-Laws of the Company -- Incorporated 
                by reference to Form 8-K dated April 17, 1997.              
   4.1      --  Indenture dated August 27, 1997 among the Company, the      
                Guarantors and State Street Bank & Trust                    
                Company -- Incorporated by reference to Form 8-K dated      
                September 2, 1997.                                          
   4.2      --  Form of Notes -- (Included in Exhibit 4.1).                 
   4.3      --  Form of Guaranty -- (Included in Exhibit 4.1).              
   4.4      --  Registration Rights Agreement dated August 27, 1997 among   
                the Company, the Guarantors, Bear, Stearns & Co. Inc. and   
                Prudential Securities Incorporated -- Incorporated by       
                reference to Form 8-K dated September 2, 1997.              
     5      --  Opinion of Bass, Berry & Sims PLC.*                         
  10.1      --  Stock Purchase Agreement, dated as of January 19, 1994,     
                including certain exhibits, relating to the acquisition of  
                the outstanding capital stock of United Knitting Acquisition
                Corp. -- Incorporated by reference to Form 8-K dated        
                February 2, 1994.                                           
  10.2      --  Agreement, dated as of April 8, 1997, among Polysindo Hong  
                Kong Limited, PT. Texmaco Jaya and the                      
                Company -- Incorporated by reference to Form 8-K dated April
                17, 1997.                                                   
  10.3      --  Stock Purchase Agreement, dated as of July 15, 1997, among  
                the Company, Alamac Sub Holdings Inc., AIH Inc. and         
                WestPoint Stevens Inc. -- Incorporated by reference to Form 
                8-K dated July 18, 1997.                                    
  10.4      --  Loan Agreement between The Industrial Revenue Board of the  
                City of Trenton, Tennessee and Dyersburg Fabrics Inc. dated 
                as of July 1, 1990 -- Incorporated by reference to Form 10-K
                for the fiscal year ended September 29, 1990.               

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                                                                [Download Table]

EXHIBIT                                                                     
NUMBER                                  DESCRIPTION                         
-------                                 -----------                         
                                                                            
  10.5      --  Tax Sharing Agreement dated July 24, 1990 between Dyersburg 
                Fabrics Inc. and the Company -- Incorporated by reference to
                Form 10-K for the fiscal year ended September 29, 1990.     
  10.6      --  First Amendment to Amended and Restated Letter of Credit    
                Agreement dated November 30, 1992 by and among Dyersburg    
                Fabrics Inc., the Company and Trust Company Bank --         
                Incorporated by reference to Form 10-K for the fiscal year  
                ended October 3, 1992.                                      
  10.7      --  Second amendment to Amended and Restated Letter of Credit   
                Agreement dated October 29, 1993 by and among Dyersburg     
                Fabrics Inc., the Company and Trust Company Bank --         
                Incorporated by reference to Form 10-K for the fiscal year  
                ended October 2, 1993.                                      
  10.8      --  Dyersburg Corporation 1992 Stock Incentive Plan, as         
                amended -- Incorporated by reference to Proxy Statement     
                dated December 14, 1995.                                    
  10.9      --  Dyersburg Fabrics Inc. Deferred Compensation Plan, as       
                amended -- Incorporated by reference to Proxy Statement     
                dated December 14, 1995.                                    
 10.10      --  Form of Purchase Agreement dated March 4, 1992 between the  
                Company and each of the holders of the Junior Term          
                Notes -- Incorporated by reference to the Registration      
                Statement on Form S-1 (Registration No. 33-46331).          
 10.11      --  Form of Registration Rights Agreement dated as of April 30, 
                1992 between the Company and each shareholder of the        
                Company -- Incorporated by reference to the Registration    
                Statement on Form S-1 (Registration No. 33-46331).          
 10.12      --  Dyersburg Corporation Non-qualified Stock Option Plan for   
                Employees of Acquired Companies, as amended, -- Incorporated
                by reference to Proxy Statement dated December 14, 1995.    
 10.13      --  Second Amended and Restated Letter of Credit Agreement dated
                as of July 1, 1990, among Dyersburg Fabrics Limited         
                Partnership, I, Dyersburg Fabrics Inc., the Company, DFIC,  
                Inc., and SunTrust Bank, Atlanta, relating to $7,900,000 The
                Industrial Development Board of the City of Trenton,        
                Tennessee Industrial Development Revenue Bonds (Dyersburg   
                Fabrics Inc. Project) Series 1990 -- Incorporated by        
                reference to Form 10-Q for the quarter ended March 30, 1996.
 10.14      --  Purchase Agreement dated August 20, 1997 among the Company, 
                Dyersburg Fabrics Inc., Dyersburg Fabrics Limited           
                Partnership, I, DFIC, Inc., IQUE, Inc., IQUEIC, Inc., IQUE  
                Limited Partnership, I, United Knitting Inc., UKIC, Inc.,   
                United Knitting Limited Partnership, I, Bear, Stearns & Co. 
                Inc. and Prudential Securities Incorporated -- Incorporated 
                by reference to Form 8-K dated September 2, 1997.           
 10.15      --  Credit Agreement dated as of August 27, 1997 among the      
                Company, Dyersburg Fabrics Limited Partnership, I, United   
                Knitting Limited Partnership, I, IQUE Limited Partnership,  
                I, Alamac Knit Fabrics, Inc., the Lenders listed therein,   
                SunTrust Bank Atlanta, as Agent, and SunTrust Bank Altanta, 
                as Collateral Agent -- Incorporated by reference to Form 8-K
                dated September 2, 1997.                                    
    11      --  Statement regarding Computation of Earnings Per Share.*     
    12      --  Statement regarding Computation of Ratios.*                 
    21      --  Subsidiaries of the Registrant.*                            
  23.1      --  Consent of Independent Auditors -- Dyersburg Corporation.   
  23.2      --  Consent of Independent Auditors -- AIH Inc.                 
  23.3      --  Consent of Bass, Berry & Sims PLC (contained in their       
                opinion filed as Exhibit 5).*                               
    24      --  Powers of Attorney (included on signature pages).*          

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                                                                [Download Table]

EXHIBIT                                                                    
NUMBER                                  DESCRIPTION                        
-------                                 -----------                        
                                                                           
    25      --  Form T-1 Statement of Eligibility under the Trust Indenture
                Act of 1939 of State Street Bank and Trust Company.*       
  99.1      --  Form of Letter of Transmittal.*                            
  99.2      --  Form of Notice of Guaranteed Delivery.*                    
  99.3      --  Guidelines for Certification of Taxpayer Identification    
                Number on Substitute Form W-9.*                            

(b) Financial Statement Schedules                                     

       II -- Valuation and Qualifying Accounts -- Incorporated by reference to
Form 10-K for year ended September 28, 1996.        
---------------                                                                 

* Previously Filed                                                              

ITEM 22.  UNDERTAKINGS.                                                         

The undersigned Registrant hereby undertakes:                         

        (a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;      

           (i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;                                         

             (ii) To reflect in the prospectus any facts or events arising after
    the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the 
      aggregate, represent a fundamental change in the information set forth
 in the Registration Statement. Notwithstanding the foregoing, any
  increase or decrease in volume of securities offered (if the total
  dollar value of securities offered would not exceed that which was
       registered) and any deviation from the low or high and of the estimated
       maximum offering range may be reflected in the form of prospectus filed
     with the Commission pursuant to Rule 424(b) if, in the aggregate, the
       changes in volume and price represent no more than 20 percent change in
     the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.

            (iii) To include any material information with respect to the plan
      of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration  
Statement.                                                      

    (2) That, for the purpose of determining any liability under the
    Securities Act of 1933, each such post-effective amendment 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.                         

          (3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the     
termination of the offering.                                          

 (b) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report 
   pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
  (and, where applicable, each filing of an employee benefit plan's annual
  report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
  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.                  

          (c) That, insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and    
     controlling persons of the registrant pursuant to the foregoing provisions,
  or otherwise, the registrant has been advised that in the opinion of the
   Securities and Exchange Commission such indemnification is against public
 policy as expressed in the 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                                      

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     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 Act and will be governed by the final adjudication of such issue. 

      (d) To respond to requests for information that is incorporated by
    reference into the Prospectus pursuant to Items 4, 10(b), 11 or 13 of this
   Form, within one business day of receipt of such request, and to send the
   incorporated documents by first class mail or other equally prompt means.
  This includes information contained in documents filed subsequent to the
     effective date of the Registration Statement through the date of responding
to the request.                                                       

        (e) To supply by means of a post-effective amendment all information
    concerning a transaction, and the company being acquired involved therein,
     that was not the subject of and included in the Registration Statement when
it became effective.                                                  

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SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, as amended, the
undersigned registrants have duly caused this Amendment Number 1 to the         
Registration Statement to be signed on their behalf by the undersigned,         
thereunto duly authorized, in the City of Dyersburg, State of Tennessee, on     
October 24, 1997.                                                               

                         DYERSBURG CORPORATION

                                     By:/s/ WILLIAM S. SHROPSHIRE, JR.
                                            ------------------------------------
                                            William S. Shropshire, Jr.
                                           Executive Vice President, Chief
                                          Financial Officer,
                                           Secretary and Treasurer

                          DYERSBURG FABRICS INC.

                                     By:/s/ WILLIAM S. SHROPSHIRE, JR.
                                            ------------------------------------
                                            William S. Shropshire, Jr.
                                           Executive Vice President, Chief
                                            Financial Officer,
                                           Secretary and Treasurer

                             DYERSBURG FABRICS LIMITED
                      PARTNERSHIP, I
                                   By: Dyersburg Fabrics Inc., its
                   General Partner

                                     By:/s/ WILLIAM S. SHROPSHIRE, JR.
                                            ------------------------------------
                                            William S. Shropshire, Jr.
                                           Executive Vice President, Chief
                                         Financial Officer
                                         Secretary and Treasurer

    Pursuant to the requirements of the Securities Act of 1933, this Amendment
Number 1 to the Registration Statement has been signed by the following persons 
in the capacities and on the dates indicated.                                   

                                                        [Enlarge/Download Table]

                         SIGNATURE                                    TITLE                 DATE      
                         ---------                                    -----                 ----      
                                                                                                      

                             *                               Chairman and Chief       October 24, 1997
-----------------------------------------------------------  Executive Officer                        
                     T. Eugene McBride                                                                

                             *                               President and Chief      October 24, 1997
-----------------------------------------------------------  Operating Officer and                    
                     Jerome M. Wiggins                       Director                                 

              /s/ WILLIAM S. SHROPSHIRE, JR.                 Executive Vice           October 24, 1997
-----------------------------------------------------------  President, Chief                         
                William S. Shropshire, Jr.                   Financial Officer,                       
                                                             Secretary and Treasurer                  

                             *                               Director                 October 24, 1997
-----------------------------------------------------------                                           
                      Julius Lasnick                                                                  

                             *                               Director                 October 24, 1997
-----------------------------------------------------------                                           
                     L.R. Jalenak, Jr.                                                                

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                         SIGNATURE                                    TITLE        DATE      
                         ---------                                    -----        ----      
                                                                                             
                                                             Director        October 24, 1997
                             *                                                               
-----------------------------------------------------------                                  
                     Patricia Hilsberg                                                       

                             *                               Director        October 24, 1997
-----------------------------------------------------------                                  
                        Marvin Crow                                                          

                                                             Director        , 1997          
-----------------------------------------------------------                                  
                        P. Manohar                                                           

                                                             Director        , 1997          
-----------------------------------------------------------                                  
                       Ravi Shankar                                                          

                                                             Director        , 1997          
-----------------------------------------------------------                                  
                       Mickey Ganot                                                          

            *By: /s/ WILLIAM S. SHROPSHIRE, JR.                                              
-----------------------------------------------------------                                  
                William S. Shropshire, Jr.                                                   
                     Attorney-in-Fact                                                        

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SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, as amended, the
undersigned registrants have duly caused this Amendment Number 1 to the         
Registration Statement to be signed on their behalf by the undersigned,         
thereunto duly authorized, in the City of Dyersburg, State of Tennessee, on     
October 24, 1997.                                                               

              DFIC, INC.

                                By:      /s/ PAUL L. HALLOCK
                                            ------------------------------------
                                           Paul L. Hallock
                                           Vice President, Treasurer and
                                             Assistant
                                           Secretary

              UKIC, INC.

                                By:      /s/ PAUL L. HALLOCK
                                            ------------------------------------
                                           Paul L. Hallock
                                           Vice President, Treasurer and
                                           Assistant Secretary

                IQUEIC, INC.

                                By:      /s/ PAUL L. HALLOCK
                                            ------------------------------------
                                           Paul L. Hallock
                                           Vice President, Treasurer and
                                           Assistant Secretary

    Pursuant to the requirements of the Securities Act of 1933, this Amendment
Number 1 to the Registration Statement has been signed by the following persons 
in the capacities and on the dates indicated.                                   

                                                        [Enlarge/Download Table]

                         SIGNATURE                                    TITLE                 DATE      
                         ---------                                    -----                 ----      
                                                                                                      

                             *                               President and Director   October 24, 1997
-----------------------------------------------------------                                           
                      Jerry W. Patton                                                                 

                             *                               Vice President,          October 24, 1997
-----------------------------------------------------------  Treasurer and Assistant                  
                      Paul L. Hallock                        Secretary and Director                   

                             *                               Secretary, Assistant     October 24, 1997
-----------------------------------------------------------  Treasurer and Director                   
                     Barbara A. Steen                                                                 

            *By: /s/ WILLIAM S. SHROPSHIRE, JR.                                                       
-----------------------------------------------------------                                           
                William S. Shropshire, Jr.                                                            
                     Attorney-in-Fact                                                                 

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SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, as amended, the
undersigned registrants have duly caused this Amendment Number 1 to the         
Registration Statement to be signed on their behalf by the undersigned,         
thereunto duly authorized, in the City of Dyersburg, State of Tennessee, on     
October 24, 1997.                                                               

                        UNITED KNITTING INC.

                                     By:/s/ WILLIAM S. SHROPSHIRE, JR.
                                            ------------------------------------
                                            William S. Shropshire, Jr.
                                           Vice President, Secretary and
                                           Treasurer

                           UNITED KNITTING LIMITED
                      PARTNERSHIP, I
                                         By: United Knitting Inc., its General
           Partner

                                     By:/s/ WILLIAM S. SHROPSHIRE, JR.
                                            ------------------------------------
                                            William S. Shropshire, Jr.
                                           Vice President, Secretary and
                                           Treasurer

    Pursuant to the requirements of the Securities Act of 1933, this Amendment
Number 1 to the Registration Statement has been signed by the following persons 
in the capacities and on the dates indicated.                                   

                                                        [Enlarge/Download Table]

                         SIGNATURE                                    TITLE                 DATE      
                         ---------                                    -----                 ----      
                                                                                                      

                             *                               President                October 24, 1997
-----------------------------------------------------------                                           
                      Jerry W. Miller                                                                 

              /s/ WILLIAM S. SHROPSHIRE, JR.                 Vice President,          October 24, 1997
-----------------------------------------------------------  Secretary and Treasurer                  
                William S. Shropshire, Jr.                                                            

                             *                               Vice President and       October 24, 1997
-----------------------------------------------------------  Director                                 
                     T. Eugene McBride                                                                

                             *                               Director                 October 24, 1997
-----------------------------------------------------------                                           
                      Julius Lasnick                                                                  

                             *                               Director                 October 24, 1997
-----------------------------------------------------------                                           
                     Jerome M. Wiggins                                                                

                             *                               Director                 October 24, 1997
-----------------------------------------------------------                                           
                    L. R. Jalenak, Jr.                                                                

                             *                               Director                 October 24, 1997
-----------------------------------------------------------                                           
                     Patricia Hilsberg                                                                

                             *                               Director                 October 24, 1997
-----------------------------------------------------------                                           
                        Marvin Crow                                                                   

                                                             Director                 , 1997          
-----------------------------------------------------------                                           
                        P. Manohar                                                                    

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                         SIGNATURE                                    TITLE        DATE
                         ---------                                    -----        ----
                                                                                       
                                                             Director        , 1997    
-----------------------------------------------------------                            
                       Ravi Shankar                                                    

                                                             Director        , 1997    
-----------------------------------------------------------                            
                       Mickey Ganot                                                    

            *By: /s/ WILLIAM S. SHROPSHIRE, JR.                                        
-----------------------------------------------------------                            
                William S. Shropshire, Jr.                                             
                     Attorney-in-Fact                                                  

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SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, as amended, the
undersigned registrants have duly caused this Amendment Number 1 to the         
Registration Statement to be signed on their behalf by the undersigned,         
thereunto duly authorized, in the City of Dyersburg, State of Tennessee, on     
October 24, 1997.                                                               

              IQUE, INC.

                                     By:/s/ WILLIAM S. SHROPSHIRE, JR.
                                            ------------------------------------
                                            William S. Shropshire, Jr.
                                           Executive Vice President, Chief
                                             Financial
                                            Officer, Secretary and Treasurer

                               IQUE LIMITED PARTNERSHIP, I
                                       By: IQUE, Inc., its General Partner

                                     By:/s/ WILLIAM S. SHROPSHIRE, JR.
                                            ------------------------------------
                                            William S. Shropshire, Jr.
                                           Executive Vice President, Chief
                                             Financial
                                            Officer, Secretary and Treasurer

    Pursuant to the requirements of the Securities Act of 1933, this Amendment
Number 1 to the Registration Statement has been signed by the following persons 
in the capacities and on the dates indicated.                                   

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                         SIGNATURE                                   TITLE                 DATE     
                         ---------                                   -----                 ----     
                                                                                                    

                             *                               Vice President         October 24, 1997
-----------------------------------------------------------  (Principal Executive                   
                     T. Eugene McBride                       Officer) and Director                  

              /s/ WILLIAM S. SHROPSHIRE, JR.                 Executive Vice         October 24, 1997
-----------------------------------------------------------  President, Chief                       
                William S. Shropshire, Jr.                   Financial Officer,                     
                                                             Secretary and                          
                                                             Treasurer                              

                             *                               Director               October 24, 1997
-----------------------------------------------------------                                         
                      Julius Lasnick                                                                

                             *                               Director               October 24, 1997
-----------------------------------------------------------                                         
                     Jerome M. Wiggins                                                              

                             *                               Director               October 24, 1997
-----------------------------------------------------------                                         
                    L. R. Jalenak, Jr.                                                              

                             *                               Director               October 24, 1997
-----------------------------------------------------------                                         
                     Patricia Hilsberg                                                              

                             *                               Director               October 24, 1997
-----------------------------------------------------------                                         
                        Marvin Crow                                                                 

                                                             Director               , 1997          
-----------------------------------------------------------                                         
                        P. Manohar                                                                  

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                         SIGNATURE                                   TITLE         DATE
                         ---------                                   -----         ----
                                                                                       
                                                             Director       , 1997     
-----------------------------------------------------------                            
                       Ravi Shankar                                                    

                                                             Director       , 1997     
-----------------------------------------------------------                            
                       Mickey Ganot                                                    

            *By: /s/ WILLIAM S. SHROPSHIRE, JR.                                        
-----------------------------------------------------------                            
                William S. Shropshire, Jr.                                             
                     Attorney-in-Fact                                                  

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SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, as amended, the
undersigned registrants have duly caused this Amendment Number 1 to the         
Registration Statement to be signed on their behalf by the undersigned,         
thereunto duly authorized, in the City of Dyersburg, State of Tennessee, on     
October 24, 1997.                                                               

            AIH INC.

                                     By:/s/ WILLIAM S. SHROPSHIRE, JR.
                                            ------------------------------------
                                            William S. Shropshire, Jr.
                                            Vice President and Secretary

                            ALAMAC KNIT FABRICS INC.

                                     By:/s/ WILLIAM S. SHROPSHIRE, JR.
                                            ------------------------------------
                                            William S. Shropshire, Jr.
                                            Vice President and Secretary

                           ALAMAC ENTERPRISES INC.

                                     By:/s/ WILLIAM S. SHROPSHIRE, JR.
                                            ------------------------------------
                                            William S. Shropshire, Jr.
                                            Vice President and Secretary

    Pursuant to the requirements of the Securities Act of 1933, this Amendment
Number 1 to the Registration Statement has been signed by the following persons 
in the capacities and on the dates indicated.                                   

                                                        [Enlarge/Download Table]

                         SIGNATURE                                   TITLE                  DATE     
                         ---------                                   -----                  ----     
                                                                                                     

                             *                               President               October 24, 1997
-----------------------------------------------------------                                          
                     T. Eugene McBride                                                               

              /s/ WILLIAM S. SHROPSHIRE, JR.                 Vice President,         October 24, 1997
-----------------------------------------------------------  Secretary (Principal                    
                William S. Shropshire, Jr.                   Financial Officer) and                  
                                                             Director                                

            *By: /s/ WILLIAM S. SHROPSHIRE, JR.                                                      
-----------------------------------------------------------                                          
                William S. Shropshire, Jr.                                                           
                     Attorney-in-Fact                                                                

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EXHIBIT INDEX 

                                                        [Enlarge/Download Table]

                                                                           SEQUENTIALLY
EXHIBIT                                                                      NUMBERED  
NUMBER                               DESCRIPTION                               PAGE    
-------                              -----------                           ------------
                                                                                       
3.1      --  Amended and Restated Charter as of May 11,                                
             1992 -- Incorporated by reference to Registration Statement               
             on Form S-1 (Registration No. 33-46331).                                  
3.2      --  Amended and Restated By-Laws of the Company -- Incorporated               
             by reference to Form 8-K dated April 17, 1997.                            
4.1      --  Indenture dated August 27, 1997 among the Company, the                    
             Guarantors and State Street Bank & Trust                                  
             Company -- Incorporated by reference to Form 8-K dated                    
             September 2, 1997.                                                        
4.2      --  Form of Notes -- (Included in Exhibit 4.1).                               
4.3      --  Form of Guaranty -- (Included in Exhibit 4.1).                            
4.4      --  Registration Rights Agreement dated August 27, 1997 among                 
             the Company, the Guarantors, Bear, Stearns & Co. Inc. and                 
             Prudential Securities Incorporated -- Incorporated by                     
             reference to Form 8-K dated September 2, 1997.                            
5        --  Opinion of Bass, Berry & Sims PLC.*                                       
10.1     --  Stock Purchase Agreement, dated as of January 19, 1994,                   
             including certain exhibits, relating to the acquisition of                
             the outstanding capital stock of United Knitting Acquisition              
             Corp. -- Incorporated by reference to Form 8-K dated                      
             February 2, 1994.                                                         
10.2     --  Agreement, dated as of April 8, 1997, among Polysindo Hong                
             Kong Limited, PT. Texmaco Jaya and the                                    
             Company -- Incorporated by reference to Form 8-K dated April              
             17, 1997.                                                                 
10.3     --  Stock Purchase Agreement, dated as of July 15, 1997, among                
             the Company, Alamac Sub Holdings Inc., AIH Inc. and                       
             WestPoint Stevens Inc. -- Incorporated by reference to Form               
             8-K dated July 18, 1997.                                                  
10.4     --  Loan Agreement between The Industrial Revenue Board of the                
             City of Trenton, Tennessee and Dyersburg Fabrics Inc. dated               
             as of July 1, 1990 -- Incorporated by reference to Form 10-K              
             for the fiscal year ended September 29, 1990.                             
10.5     --  Tax Sharing Agreement dated July 24, 1990 between Dyersburg               
             Fabrics Inc. and the Company -- Incorporated by reference to              
             Form 10-K for the fiscal year ended September 29, 1990.                   
10.6     --  First Amendment to Amended and Restated Letter of Credit                  
             Agreement dated November 30, 1992 by and among Dyersburg                  
             Fabrics Inc., the Company and Trust Company                               
             Bank -- Incorporated by reference to Form 10-K for the                    
             fiscal year ended October 3, 1992.                                        
10.7     --  Second amendment to Amended and Restated Letter of Credit                 
             Agreement dated October 29, 1993 by and among Dyersburg                   
             Fabrics Inc., the Company and Trust Company                               
             Bank -- Incorporated by reference to Form 10-K for the                    
             fiscal year ended October 2, 1993.                                        
10.8     --  Dyersburg Corporation 1992 Stock Incentive Plan, as                       
             amended -- Incorporated by reference to Proxy Statement                   
             dated December 14, 1995.                                                  
10.9     --  Dyersburg Fabrics Inc. Deferred Compensation Plan, as                     
             amended -- Incorporated by reference to Proxy Statement                   
             dated December 14, 1995.                                                  
10.10    --  Form of Purchase Agreement dated March 4, 1992 between the                
             Company and each of the holders of the Junior Term                        
             Notes -- Incorporated by reference to the Registration                    
             Statement on Form S-1 (Registration No. 33-46331).                        

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                                                                           SEQUENTIALLY
EXHIBIT                                                                      NUMBERED  
NUMBER                               DESCRIPTION                               PAGE    
-------                              -----------                           ------------
                                                                                       
10.11    --  Form of Registration Rights Agreement dated as of April 30,               
             1992 between the Company and each shareholder of the                      
             Company -- Incorporated by reference to the Registration                  
             Statement on Form S-1 (Registration No. 33-46331).                        
10.12    --  Dyersburg Corporation Non-qualified Stock Option Plan for                 
             Employees of Acquired Companies, as amended, -- Incorporated              
             by reference to Proxy Statement dated December 14, 1995.                  
10.13    --  Second Amended and Restated Letter of Credit Agreement dated              
             as of July 1, 1990, among Dyersburg Fabrics Limited                       
             Partnership, I, Dyersburg Fabrics Inc., the Company, DFIC,                
             Inc., and SunTrust Bank, Atlanta, relating to $7,900,000 The              
             Industrial Development Board of the City of Trenton,                      
             Tennessee Industrial Development Revenue Bonds (Dyersburg                 
             Fabrics Inc. Project) Series 1990 -- Incorporated by                      
             reference to Form 10-Q for the quarter ended March 30, 1996.              
10.14    --  Purchase Agreement dated August 20, 1997 among the Company,               
             Dyersburg Fabrics Inc., Dyersburg Fabrics Limited                         
             Partnership, I, DFIC, Inc., IQUE, Inc., IQUEIC, Inc., IQUE                
             Limited Partnership, I, United Knitting Inc., UKIC, Inc.,                 
             United Knitting Limited Partnership, I, Bear, Stearns & Co.               
             Inc. and Prudential Securities Incorporated -- Incorporated               
             by reference to Form 8-K dated September 2, 1997.                         
10.15    --  Credit Agreement dated as of August 27, 1997 among the                    
             Company, Dyersburg Fabrics Limited Partnership, I, United                 
             Knitting Limited Partnership, I, IQUE Limited Partnership,                
             I, Alamac Knit Fabrics, Inc., the Lenders listed therein,                 
             SunTrust Bank Atlanta, as Agent, and SunTrust Bank Altanta,               
             as Collateral Agent -- Incorporated by reference to Form 8-K              
             dated September 2, 1997.                                                  
11       --  Statement regarding Computation of Earnings Per Share.*                   
12       --  Statement regarding Computation of Ratios.*                               
21       --  Subsidiaries of the Registrant.*                                          
23.1     --  Consent of Independent Auditors -- Dyersburg Corporation.                 
23.2     --  Consent of Independent Auditors -- AIH Inc.                               
23.3     --  Consent of Bass, Berry & Sims PLC (contained in their                     
             opinion filed as Exhibit 5).*                                             
24       --  Powers of Attorney (included on signature pages).*                        
25       --  Form T-1 Statement of Eligibility under the Trust Indenture               
             Act of 1939 of State Street Bank and Trust Company.*                      
99.1     --  Form of Letter of Transmittal.*                                           
99.2     --  Form of Notice of Guaranteed Delivery.*                                   
99.3     --  Guidelines for Certification of Taxpayer Identification                   
             Number on Substitute Form W-9.*                                           

(b) Financial Statement Schedules                                     

       II -- Valuation and Qualifying Accounts -- Incorporated by reference to
Form 10-K for year ended September 28, 1996.        
---------------                                                                 

* Previously Filed                                                              

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘S-4/A’ Filing		Date		First		Last			Other Filings
		9/1/07		3		65
		11/1/02		103
		9/1/02		3		76
		6/9/02		103
		4/26/02		103
		12/31/01		121
		5/23/01		115
		9/1/00		12		68
		5/18/99		115					10-Q
		11/5/98		18
		7/16/98		32		102
		3/1/98		3		65
		1/22/98		3		93
		1/3/98		101					10-Q
		12/31/97		126
		11/26/97		3		24
		11/19/97		5
Filed on:		10/24/97		1		139
		10/4/97		106					10-K
		9/23/97		5					10-Q/A
		9/2/97		5		141			8-K
		8/27/97		4		141
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		7/30/97		5					8-K
		7/18/97		5		140			8-K
		7/15/97		7		140			8-K
		7/5/97		3		101			10-Q,  10-Q/A
		6/30/97		35		126
		5/19/97		107
		5/5/97		8		18
		4/17/97		5		140			8-K
		4/8/97		18		140
		4/5/97		5					10-Q
		4/1/97		102
		1/4/97		5					10-Q
		12/31/96		7		122
		10/22/96		95
		9/30/96		39
		9/28/96		5		141			10-K405
		7/1/96		87
		6/30/96		94
		6/29/96		14		101			10-Q
		3/30/96		129		141
		1/1/96		114
		12/31/95		93		121
		12/14/95		129		141
		10/4/95		103
		10/1/95		14		35
		9/30/95		34		104
		1/1/95		118
		12/31/94		94		120
		10/1/94		94		104
		2/2/94		128		140
		1/19/94		34		140
		1/1/94		19		55
		10/29/93		129		140
		10/3/93		98		104
		10/2/93		129		140
		11/30/92		129		140
		10/3/92		129		140
		9/30/92		112		113
		7/5/92		34
		5/11/92		128		140
		4/30/92		129		141
		3/4/92		129		140
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