Form 10-Q Quarterly Report

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    Form 10-Q

|X|      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended       February 26, 2000
                              -------------------------------

                                       OR

|_|      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

For the transition period from______________________      to___________________


Commission file number 1-5901
                      ---------------------------------------------------------

                              Fab Industries, Inc.
                              --------------------
             (Exact name of registrant as specified in its charter)

           Delaware                                             13-2581181
(State or other jurisdiction of                              (I.R.S. Employer)
  incorporation or organization)                            Identification No.)

  200 Madison Avenue, New York, N.Y.                               10016
--------------------------------------------------------------------------------
(Address of principal executive office)                          (Zip Code)

                                                                (212) 592-2700
              (Registrant's telephone number, including area code)
 -------------------------------------------------------------------------------

                                      N/A
-------------------------------------------------------------------------------
        (Former name, former address and former fiscal year; if changed
                               since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X   No__

                 CLASS                      Shares Outstanding at April 10, 2000
-----------------------------------         ------------------------------------
     Common stock, $.20 par value                       5,353,516

<PAGE>


                      FAB INDUSTRIES INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS


PART 1 - FINANCIAL INFORMATION                                             PAGE

          Table of Contents                                                  1

          Condensed Consolidated Statements of Operations
          13 Weeks ended February 26, 2000 and February 27, 1999             2

          Condensed Consolidated Balance Sheets (Asset Section)
          February 26, 2000 and November 27, 1999                            3

          Condensed Consolidated Balance Sheets (Liabilities and
          Stockholders' Equity Section) February 26, 2000
          and November 27, 1999                                              4

          Condensed Consolidated Statements of Stockholders'
          Equity 13 Weeks ended February 26, 2000                            5

          Condensed Consolidated Statements of Cash Flows
          13 Weeks ended February 26, 2000 and February 27, 1999             6


          Notes to Condensed Consolidated Financial Statements               7

PART II - OTHER INFORMATION
         Item 6. Exhibits and Reports on Form 8-K                           13


Management's Discussion and Analysis of Financial Condition
and Results of Operations                                                   14


SIGNATURES                                                                  17

                                       1

<PAGE>

                      FAB INDUSTRIES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                  FOR THE 13 WKS ENDED
                                     ------------------------------------------
                                          February 26, 2000   February 27, 1999
                                     ------------------------------------------

Net sales                                       $28,339,000        $29,007,000
Cost of goods sold                               25,888,000         28,761,000
                                               ------------       ------------
Gross profit                                      2,451,000            246,000

Selling, general and administrative
  expenses                                        3,338,000          3,875,000
                                               --------------     ------------
Operating (loss)                                   (887,000)        (3,629,000)
                                               --------------     ------------
 Other income (expense):
  Interest and dividend income                      862,000            837,000
  Interest expense                                  (11,000)           (13,000)
  Net gain on investment securities                 422,000            319,000
                                               ------------       ------------
Total other income                                1,273,000          1,143,000
                                               --------------     ------------
Income (loss) before taxes                          386,000         (2,486,000)

Income tax expense (benefit)                         82,000           (671,000)
                                               ------------       ------------
Net income (loss)                                $  304,000       $ (1,815,000)

Earnings (loss) per share: (Note 5)

      Basic                                           $0.06             $(0.33)

      Diluted                                         $0.06             $(0.33)

Cash dividends declared per share                    $0.175             $0.175


See notes to condensed consolidated financial statements.


                                       2
<PAGE>

FAB INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

              A S S E T S
              -----------

                                                              AS OF
                                             -----------------------------------
                                                    February 26,    November 27,
                                                       2000            1999
                                             -----------------------------------
Current Assets:

 Cash and cash equivalents (Note 2)                $   7,622,000  $   6,078,000
 Investment securities available-for-sale
   (Note 3)                                           58,505,000     57,752,000
 Accounts receivable-net of allowance of
   $1,600,000 and $1,500,000 for doubtful
   accounts                                           19,287,000     21,417,000
 Inventories (Note 4)                                 23,054,000     24,002,000
 Other current assets                                  1,937,000      2,215,000
                                                  --------------  -------------
   Total current assets                              110,405,000    111,464,000
                                                  --------------  -------------

Property, plant and equipment - at cost              131,479,000    131,021,000
Less: Accumulated depreciation                        96,137,000     94,612,000
                                                  --------------  -------------
                                                      35,342,000     36,409,000

Other assets                                           4,266,000      4,305,000
                                                  --------------  -------------
                                                    $150,013,000   $152,178,000
                                                  ==============   ============

See notes to condensed consolidated financial statements.


                                       3

<PAGE>


                      FAB INDUSTRIES, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                            L I A B I L I T I E S and
                           ---------------------------
                      S T O C K H O L D E R S' E Q U I T Y
                     ---------------------------------------

                                                              AS OF
                                             -----------------------------------
                                                    February 26,    November 27,
                                                       2000            1999
                                             -----------------------------------
Current liabilities:

 Accounts payable                                 $  7,446,000     $  7,191,000
 Corporate income and other taxes                    1,186,000        1,553,000
 Accrued payroll and related expenses                1,189,000        1,829,000
 Dividends payable                                     937,000          946,000
 Other current liabilities                             630,000          562,000
 Deferred income taxes                                 287,000          517,000
                                                  ------------     ------------
   Total current liabilities                        11,675,000       12,598,000
                                                  ------------     ------------
Obligations under capital leases - net of
   current maturities                                  397,000          409,000

Other noncurrent liabilities                         3,313,000        3,313,000

Deferred income taxes                                5,260,000        5,070,000
                                                  ------------     ------------
    Total liabilities                               20,645,000       21,390,000
                                                  ------------     ------------

Stockholders' equity                               129,368,000      130,788,000
                                                  ------------     ------------
                                                  $150,013,000     $152,178,000
                                                  ============     ============

See notes to condensed consolidated financial statements.


                                       4

<PAGE>


FAB INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE 13 WEEKS ENDED FEBRUARY 26, 2000
<TABLE>
<CAPTION>

                                                                                Loan to
                                                                                Employee     Accumulated    Treasury
                                Common Stock *            Additional             Stock         Other          Stock
                                 Number of                Paid-in    Retained   Ownership    Comprehensive   Number of
                       Total      Shares       Amount     Capital    Earnings     Plan       Income (Loss)    Shares       Cost
------------------------------------------------------------------------------------------------------------------------------------
Balance at
<S>                 <C>           <C>        <C>        <C>        <C>          <C>          <C>            <C>         <C>
November 27, 1999   $130,788,000  6,591,944 $1,319,000 $6,967,000 $161,445,000 ($5,537,000) ($411,000)     (1,188,389) ($32,995,000)

Net Income               304,000                                       304,000

Change in net
unrealized holding
loss on  investment
securities available-for-
sale, net of taxes      (239,000)                                                            (239,000)
                        --------
Total comprehensive
  income                  65,000

Cash dividends          (937,000)                                     (937,000)

Purchase of
  treasury stock        (548,000)                                                                             (50,039)     (548,000)
                    ----------------------------------------------------------------------------------------------------------------
Balance at
February 26, 2000   $129,368,000  6,591,944 $1,319,000 $6,967,000 $160,812,000 ($5,537,000) ($650,000)     (1,238,428) ($33,543,000)
(Unaudited)         ================================================================================================================
</TABLE>

* Common stock $0.20 par value - 15,000,000 shares authorized.
Preferred stock $1.00 par value - 2,000,000 shares authorized,  none issued. See
notes to condensed consolidated financial statements.


                                       5

<PAGE>

FAB INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                       FOR THE 13 WKS ENDED
                                             -----------------------------------
                                                     February 26,   November 27,
                                                        2000           1999
                                             -----------------------------------
OPERATING ACTIVITIES:
Net Income (Loss)                                        $304,000   ($1,815,000)
 Adjustments to reconcile net income
 to  net cash provided by operating
 activities:
   Provision for doubtful accounts                        175,000       100,000
     Depreciation and amortization                      1,525,000     1,617,000
     Deferred income taxes                                119,000        (6,000)
     Net gain on investment securities                   (422,000)     (319,000)
     Compensation under restricted stock plan              -             12,000
     Decrease (increase) in:
     Accounts receivable                                1,955,000     5,993,000
      Inventories                                         948,000     2,240,000
     Other current assets                                 278,000      (745,000)
     Other assets                                          39,000        80,000
    (Decrease) increase in:
     Accounts payable                                     255,000    (2,244,000)
     Accruals and other liabilities                      (960,000)   (1,356,000)
                                                    -------------  ------------
     Net cash provided by
     operating activities                               4,216,000     3,557,000
                                                    -------------  ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property, plant and equipment            (458,000)   (1,530,000)

   Proceeds from sales of investment securities                 -     1,208,000

   Acquisition of investment securities                  (729,000)     (709,000)
                                                    -------------  ------------
   Net cash used in
   investing activities                                (1,187,000)   (1,031,000)
                                                    -------------  ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Purchase of treasury stock                            (548,000)   (3,196,000)
   Dividends                                             (937,000)     (948,000)
   Exercise of stock options                              -              54,000
                                                    -------------  ------------
   Net cash used in financing activities               (1,485,000)   (4,090,000)
                                                    -------------  ------------
   Increase (decrease) in cash and cash equivalents     1,544,000    (1,564,000)

   Cash and cash equivalents, beginning of period       6,078,000     6,078,000
                                                    -------------  ------------
   Cash and cash equivalents, end of period            $7,622,000    $4,514,000
                                                    =============  ============

See notes to condensed consolidated financial statements.


                                       6

<PAGE>


              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.  Basis of presentation:

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally  accepted  accounting  principles for
interim  financial  information and the instructions to Form 10-Q and Rule 10-01
of Regulation S-X of the Securities and Exchange Commission.  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 13 weeks ended February 26, 2000 are not necessarily  indicative
of the results that may be expected for the entire  fiscal year ending  December
2, 2000.  The balance  sheet at  November  27,  1999 has been  derived  from the
audited  balance  sheet at that  date.  For  further  information,  refer to the
consolidated   financial  statements  and  footnotes  thereto  included  in  the
Company's  Annual  Report on Form 10-K for the fiscal  year ended  November  27,
1999.


2.  Cash and cash equivalents consist of the following (in thousands):


                                         February 26, 2000     November 26, 1999
                                         -----------------     -----------------

Cash                                          $1,416                $2,078

Tax-free short-term debt instruments           6,206                 4,000
                                              ------                ------
                                              $7,622                $6,078
                                              ======                ======


                                       7

<PAGE>


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3.  Investment Securities:

     At February 26, 2000 and November 27, 1999 investment securities
available-for-sale consist of the following (in thousands):
<TABLE>
<CAPTION>

                                                        Gross                Gross
                                                      Unrealized           Unrealized
                                                       Holding               Holding            Fair
February 26, 2000 (Unaudited)           Cost            Gain                  Loss              Value
-----------------------------           ----            ----                  ----              -----
<S>                                    <C>             <C>                   <C>               <C>
Equities                               $ 1,225         $       -             ($     38)        $  1,187

U.S. Treasury obligations
and cash equivalents                    15,937                 -                                 15,937

Tax-exempt obligations                  21,959                17             (     583)          21,393

Corporate bonds                         20,466                15             (     493)          19,988
                                      --------         ---------             ---------         --------
                                      $ 59,587         $      32             (  $1,114)         $58,505
                                      ========         =========             =========          =======
</TABLE>
<TABLE>
<CAPTION>

                                                        Gross                Gross
                                                      Unrealized           Unrealized
                                                       Holding               Holding            Fair
November 27, 1999                       Cost            Gain                  Loss              Value
-----------------                       ----            ----                  ----              -----
<S>                                       <C>           <C>                    <C>              <C>
Equities                               $ 1,224         $       -               ($   25)        $  1,199

U.S. Treasury obligations               12,587                 1                     -           12,588

Tax-exempt obligations                  24,168                55               (   380)          23,843

Corporate bonds                         20,457                19               (   354)          20,122
                                      --------         ---------               -------          -------
                                      $ 58,436         $      75               ($  759)         $57,752
                                      ========         =========               =======          =======
</TABLE>


                                       8

<PAGE>


 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4.  Inventories:

    The Company's inventories are valued at the lower of cost or market. Cost is
determined  principally  by  the  last-in,  first-out  (LIFO)  method  with  the
remainder being determined by the first-in, first-out (FIFO) method. Because the
inventory valuation under the LIFO method is based upon an annual  determination
of  inventory  levels  and costs as of the fiscal  year-end,  the  interim  LIFO
calculations are based on management's  estimates of expected year-end inventory
levels and costs.

                                          February 26, 2000    November 27, 1999
                                          -----------------    -----------------

Raw materials                                 $  6,522,000         $ 7,337,000
Work in process                                  7,963,000           7,871,000
Finished goods                                   8,569,000           8,794,000
                                              ------------         -----------
         Total                                $ 23,054,000         $24,002,000
                                              ============         ===========
Approximate percentage of
   inventories valued
   under LIFO valuation                            55%                  53%

Excess of FIFO valuation
   over LIFO valuation                        $  3,000,000         $ 3,000,000
                                              ============         ===========

5.       Earnings Per Share:

         Basic and  diluted  earnings  (loss)  per share for the 13 weeks  ended
     February 26, 2000 and February 27, 1999 are calculated as follows:

                                                     Net
                                                    Income             Per-share
                                                    (loss)     Shares    Amount
                                                    ------     ------    ------
     For the 13 weeks ended February 26, 2000:

     Basic and diluted earnings per share           $304,000  5,373,856  $0. 06
                                                    --------  ---------  ------


     For the 13 weeks ended February 27, 1999:

     Basic and diluted loss per share            ($1,815,000) 5,435,028 ($0.33)
                                                 ------------ --------- -------


                                       9

<PAGE>


CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6.  Segment Information:

         The Company's  chief operating  decision-maker  is considered to be the
Chief Executive Officer (CEO). The Company's CEO evaluates both consolidated and
disaggregated  financial  information in deciding how to allocate  resources and
assess  performance.  The Company has identified three reportable segments based
upon  the  primary  markets  it  serves:  Apparel  Fabrics,  Home  Fashions  and
Accessories and Other.

Apparel Fabrics:  The Company is a major  manufacturer of warp and circular knit
fabrics and raschel  laces.  The  Company's  textile  fabrics are sold to a wide
variety of manufacturers  of ready-to-wear  and intimate apparel for men, women,
and  children,   including   dresses  and  sportswear,   children's   sleepwear,
activewear, swimwear, and recreational apparel.

Home  Fashions  and  Accessories:  The  Company  uses  its own  textile  fabrics
internally to produce 100% cotton jersey  sheets,  flannel and satin sheets,  as
well as blankets,  comforters and other bedding products which the Company sells
to department and specialty stores,  catalogues and mail order companies as well
as airlines and healthcare institutions.  The Company's textile fabrics are also
sold to manufacturers of home furnishings.

Other: The Company produces a line of ultrasonically,  hot melt adhesive,  flame
and adhesive bonded products for apparel, environmental, health care, industrial
and consumer markets. The Company's textile fabrics are sold to manufacturers of
industrial  fabrics and upholstery  fabrics for residential and contact markets.
The Company also sells retail over-the-counter fabrics.

         The  Company  neither  allocates  to the  segments  nor  bases  segment
decisions on the following:

                  - Interest and dividend  income
                  - Interest  expense
                  - Net gain on investment securities
                  - Income tax expense or benefit

        Many of the  Company's  assets  are  used by  multiple  segments.  While
certain  assets  such  as  Inventory  and  Property,  Plant  and  Equipment  are
identifiable by segment,  an allocation of the substantial  remaining  assets is
not meaningful.

                                 (in thousands)

<TABLE>
<CAPTION>
                                                        Home Fashions
First Quarter Ended 02/26/00       Apparel            and Accessories      Other            Total
----------------------------       -------            ---------------      -----            -----
<S>                                 <C>                    <C>             <C>              <C>
External sales                      $22,937                $2,958          $2,444           $28,339
Intersegment sales                    2,706                    25              71             2,802
Operating income/(loss)              (1,561)                  681              (7)             (887)
Depreciation expense                  1,361                    14             119             1,494
Segment assets                       51,002                 2,505           4,576            58,083
Capital expenditures                    257                     -             195               452
</TABLE>


                                       10

<PAGE>


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                                                       Home
                                                      Fashions
                                                        and
First Quarter Ended 02/27/99           Apparel        Accessories         Other            Total
----------------------------           -------        -----------         -----            -----
<S>                                     <C>             <C>              <C>              <C>
External sales                          $23,342         $3,583           $2,082           $29,007
Intersegment sales                        3,407             22              187             3,616
Operating income/(loss)                  (3,224)            88             (493)           (3,629)
Depreciation expense                      1,465             14              101             1,580
Segment assets                           56,367          5,068            4,562            65,997
Capital expenditures                      1,040             19              469             1,528
</TABLE>

Revenues                                               2000            1999
--------                                               ----            ----

Total external sales for segments                    $28,339          $29,007
Intersegment sales for segments                        2,802            3,616
Elimination of intersegment sales                     (2,802)          (3,616)
                                                     -------          -------
Total consolidated sales                             $28,339          $28,339
                                                     =======          =======

Profit or Loss                                        2000             1999
--------------                                        ----             ----

Total operating income (loss) for segments           $  (887)         $(3,629)
Total other income                                     1,273            1,143
                                                     -------          -------
Income (loss) before taxes on income                 $   386          $(2,486)
                                                     =======          =======

Assets                                                2000              1999
------                                                ----              ----

Total segments assets                                $58,083           65,997
Assets not allocated to segments                      91,930            6,181
                                                    --------         --------
Total consolidated assets                           $150,013         $152,178
                                                   =========         ========

Other Significant Items                               2000              1999
-----------------------                               ----              ----

Depreciation expense                                $  1,494          $ 1,580
Not allocated to segments                                 31                7
                                                    --------          -------
Consolidated total                                  $ 1 ,525          $ 1,617
                                                    ========          =======
Capital expenditures                                $    452          $ 1,528
Not allocated to segments                                  6                2
                                                    --------          -------
Consolidated total                                  $    458          $ 1,530
                                                    ========          =======


                                       11

<PAGE>


CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


7.  Comprehensive Income (Loss):

         Accumulated   other   comprehensive   income  (loss)  is  comprised  of
unrealized  holding  gain  (loss)  related  to  available-for-sale   securities.
Comprehensive  income (loss) was $65,000 and  ($1,927,000) for the quarter ended
February 26, 2000 and February 27, 1999, respectively.


8.  Contingencies:

         A number of claims and lawsuits seeking  unspecified  damages and other
relief are pending  against the Company.  It is  impossible at this time for the
Company to predict with any certainty the outcome of such  litigation.  However,
management is of the opinion based upon information presently available, that it
is unlikely that any liability, to the extent not provided for through insurance
or  otherwise,  would be  material in  relation  to the  Company's  consolidated
financial position.


                                       12

<PAGE>


                           PART II. OTHER INFORMATION
                        --------------------------------


        Item 6. Exhibits and Reports on Form 8-K
        ----------------------------------------

        a)  Exhibits: No exhibits are filed herewith except for Exhibit 27 which
            is filed with EDGAR filing only.


        b)  Reports on Form 8-K: The Registrant did not file any Current Reports
            on Form 8-K during the quarter ending February 26, 2000.


                                       13

<PAGE>

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


Results of Operations
First Quarter
Fiscal 2000 Compared to Fiscal 1999
-----------------------------------

         Net sales for the first  quarter  of fiscal  2000 were  $28,339,000  as
compared to  $29,007,000  in the similar 1999 period,  a decrease of $668,000 or
2.3%.   Business  conditions  within  the  domestic  textile  industry  remained
depressed,   and  the  Company  continued  to  experience   competitive   market
conditions,  both domestic and foreign. U.S. firms are forced to compete against
a flood of cheap  imports  and falling  demand for U.S.  goods  overseas.  These
factors have continued to exert downward pressure on the Company's sales levels.
Certain of the Company's products enjoyed stronger customer demand.

         Overall  Company  gross  margins for the quarter  improved to 8.6% from
0.8% last  year.  Margins  were  aided by  improved  product  mix and lower cost
structures.  The Company has intensified its cost control programs.  In the 1999
quarter,  a reduction  in LIFO  reserves  arising  from lower  average FIFO cost
levels benefited margins in the amount of $1,095,000. In the current quarter, no
adjustments to LIFO inventory reserves were required.

         Selling,  general and  administrative  expenses in the current  quarter
decreased  by  $537,000,   or  13.9%.  Reduced  expenses  related  primarily  to
incentive-based  compensation,  lower related salaries and salesmen commissions.
As a percentage of sales, such costs decreased to 11.8% from 13.4%.


                                       14

<PAGE>


         The  effective  income tax rate for the  current  quarter  was 21.2% as
against a tax benefit in the comparative 1999 period.

         As a result  of these  factors,  quarterly  net  income  was  $304,000,
compared to net loss of $(1,815,000) in last year's first quarter.

         For the  current  quarter,  basic and diluted  earnings  per share were
$0.06  compared to basic and diluted  losses of $(0.33) per share in last years'
first quarter.

Liquidity and Capital Resources
-------------------------------

         Operating  activities  provided cash of $4,216,000 and $3,557,000,  for
the 13 weeks ended February 26, 2000 and February 27, 1999 respectively. Of this
increase, $2,119,000 relates to comparative changes in net income, $1,023,000 in
other  current  assets and  $2,895,000 to accounts  payable,  accruals and other
liabilities. These increases were offset by reductions of $4,038,000 in accounts
receivable and $1,292,000 in inventories.

         Capital  expenditures  for  the  quarter  were  approximately  $450,000
compared to approximately $1.5 million in the comparative 1999 first quarter.

         During the quarter, the Company repurchased 50,039 shares of its common
stock at an average price of $11.05. The Company intends to continue to purchase
its shares of common stock from  time-to-time,  as market conditions warrant and
price criteria are met.

         The Company declared a quarterly dividend of $0.175 per share,  payable
April 21, 2000, to stockholders of record as of March 15, 2000.

         Stockholders'  equity was $129,368,000 ($24.16 book value per share) at
February 26, 2000, as compared to $130,788,000,


                                       15

<PAGE>


($24.20 book value per share) at the previous fiscal year-end November 27, 1999,
and  $131,522,000  ($24.29  book value per share) at the end of the  comparative
1999 first quarter.

         Management  believes that the current financial position of the company
is more than adequate to internally  fund any future  expenditures  to maintain,
modernize and expand its manufacturing facilities, and pay dividends.

Pending Accounting Pronouncements
---------------------------------

         In June 1998,  the FASB  issued  FAS 133,  "Accounting  for  Derivative
Instruments  and Hedging  Activities",  effective for years beginning after June
15, 1999.  The effective  date has been delayed to June 15, 2000,  the Company's
fiscal year 2001, as a result of the FASB's  issuance in August 1999 of FAS 137,
"Accounting for Derivative  Instruments and Hedging Activities - Deferral of the
Effective date of FASB Statement No. 133". FAS 133 requires that all derivatives
be recorded on the balance sheet at fair value.  Derivatives that are not hedges
must be adjusted to fair value  through  income.  If the  derivative is a hedge,
depending on the nature of the hedge,  changes in the fair value of  derivatives
are either offset  against the change in the fair value of assets,  liabilities,
or firm commitments through earnings or recognized in other comprehensive income
until the hedged item is recognized in earnings.  The  ineffective  portion of a
derivative's  change in fair value will be  immediately  recognized in earnings.
The  Company  has not yet  determined  what the effect of FAS 133 will be on the
earnings and financial position of the Company.

FORWARD LOOKING INFORMATION
---------------------------

        Certain  statements  in this  report are  "forward  looking  statements"
within the meaning of the Private Securities  Litigation Reform Act of 1995. All
forward looking statements involve risks and uncertainties.  In particular,  any
statement  contained  herein,  in press  releases,  written  statements or other
documents filed with the Securities and Exchange Commission, or in the Company's
communications  and discussions with investors and analysts in the normal course
of business through meetings,  phone calls and conference  calls,  regarding the
consummation and benefits of future  acquisitions,  as well as expectations with
respect to future  sales,  operating  efficiencies  and product  expansion,  are
subject to known and unknown risks,  uncertainties  and  contingencies,  many of
which are beyond the control of the  Company,  which may cause  actual  results,
performance or  achievements  to differ  materially  from  anticipated  results,
performances  or  achievements.  Factors that might affect such forward  looking
statements   include,   among  other  things,   overall  economic  and  business
conditions; the demand for the Company's goods and services; competitive factors
in  the  industries  in  which  the  Company  competes;  changes  in  government
regulation;  changes in tax  requirements  (including tax rate changes,  new tax
laws and revised tax law interpretations);  interest rate fluctuations and other
capital  market  conditions,   including  foreign  currency  rate  fluctuations:
economic  and  political   conditions  in   international   markets,   including
governmental  changes and restrictions on the ability to transfer capital across
borders; the ability to achieve anticipated  synergies and other cost savings in
connection with  acquisitions;  the timing,  impact and other  uncertainties  of
future acquisitions.

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<PAGE>

                                   SIGNATURES
--------------------------------------------------------------------------------

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



Dated: April 10, 2000                         FAB INDUSTRIES, INC.



                                              By: /s/ David A. Miller
                                                 ------------------------------
                                                      David A. Miller
                                              Vice President-Finance, Treasurer
                                              and Chief Financial Officer
                                              (Principal Financial and
                                              Accounting Officer)


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