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         May 31, 2003
                              --------------------------------------------------

                                       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
                                       ---       ---

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes       No   X
                                                ---       ---

As of July 15, 2003, 5,238,015 shares of the registrant's common stock, $0.20
par value, were outstanding.


<PAGE>

                      FAB INDUSTRIES INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS


PART 1 - FINANCIAL INFORMATION                                              PAGE

         Item 1.  Financial Statements

         Condensed Consolidated Statements of Operations
         13 Weeks ended May 31, 2003 and June 1, 2002 (unaudited)              2

         Condensed Consolidated Statements of Operations
         26 Weeks ended May 31, 2003 and June 1, 2002 (unaudited)              3

         Condensed Consolidated Balance Sheets
          May 31, 2003 (unaudited) and November 30, 2002                       4

         Condensed Consolidated Statements of Stockholders' Equity
         26 Weeks ended May 31, 2003 (unaudited)                               6

         Condensed Consolidated Statements of Cash Flows
         26 Weeks ended May 31, 2003 and June 1, 2002 (unaudited)              7

         Notes to Condensed Consolidated Financial Statements (unaudited)      8

         Item 2. Management's Discussion and Analysis of Financial
                        Condition and Results of Operations                   18

         Item 3. Quantitative and Qualitative Disclosures about Market Risk   20

         Item 4. Controls and Procedures                                      21


PART II - OTHER INFORMATION
         Item 5. Submission of matters to a vote of stockholders              21

         Item 6. Exhibits and Reports on Form 8-K                             21


SIGNATURES                                                                    22

CERTIFICATIONS                                                                23


                                       (1)

<PAGE>

                      FAB INDUSTRIES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                  FOR THE 13 WEEKS ENDED
                                               ----------------------------
                                                MAY 31, 2003   JUNE 1, 2002
                                               ----------------------------
                                                (unaudited)    (unaudited)

Net sales                                      $ 13,646,000    $ 17,362,000
Cost of goods sold                               12,151,000      14,765,000
                                               ------------    ------------
Gross profit                                      1,495,000       2,597,000

Selling, general and administrative expenses      1,579,000       2,146,000
                                               ------------    ------------
Operating income (loss)                             (84,000)        451,000
                                               ------------    ------------
Other income:
  Interest and dividend income                      347,000         931,000
  Net gain on investment securities                 232,000       1,021,000
                                               ------------    ------------
Total other income                                  579,000       1,952,000
                                               ------------    ------------
Income before taxes                                 495,000       2,403,000

Income tax expense                                  175,000         777,000
                                               ------------    ------------
Net income                                     $    320,000    $  1,626,000
                                               ============    ============


Earnings per share: (Note 5)

      Basic                                    $       0.06    $       0.31

      Diluted                                  $       0.06    $       0.31

Cash dividends declared per share              $         --    $      10.00

See notes to condensed consolidated financial statements.


                                       (2)

<PAGE>

                      FAB INDUSTRIES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                 FOR THE 26 WEEKS ENDED
                                               ----------------------------
                                               MAY 31, 2003    JUNE 1, 2002
                                               ----------------------------
                                                 (unaudited)    (unaudited)

Net sales                                      $ 25,233,000    $ 31,612,000
Cost of goods sold                               22,823,000      27,829,000
                                               ------------    ------------
Gross profit                                      2,410,000       3,783,000

Operating expenses:
Selling, general and administrative expenses      3,207,000       4,518,000
Other expense (Note 11)                                  --         750,000
                                               ------------    ------------
Total operating expenses                          3,207,000       5,268,000
                                               ------------    ------------
Operating loss                                     (797,000)     (1,485,000)
                                               ------------    ------------
Other income:
  Interest and dividend income                      694,000       1,828,000
  Net gain on investment securities                 203,000       1,116,000
  Interest expense                                       --         (10,000)
                                               ------------    ------------
Total other income                                  897,000       2,934,000
                                               ------------    ------------
Income before taxes                                 100,000       1,449,000

Income tax expense                                   50,000         500,000
                                               ------------    ------------
Net income                                     $     50,000    $    949,000
                                               ============    ============

Earnings per share: (Note 5)

      Basic                                    $       0.01    $       0.18

      Diluted                                  $       0.01    $       0.18

Cash dividends declared per share              $         --    $      10.00

See notes to condensed consolidated financial statements.


                                       (3)

<PAGE>

FAB INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

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

<TABLE>
<CAPTION>
                                                                 AS OF
                                                     ---------------------------------
                                                     MAY 31, 2003    NOVEMBER 30, 2002
                                                     ---------------------------------
                                                     (unaudited)
<S>                                                  <C>             <C>
Current Assets:

 Cash and cash equivalents (Note 2)                  $ 2,514,000     $ 3,146,000
 Investment securities available-for-sale (Note 3)    46,969,000      45,551,000
 Accounts receivable-net of allowance of
   $1,200,000 and $1,000,000 for doubtful accounts     8,140,000       7,548,000
 Inventories (Note 4)                                  7,919,000       8,386,000
 Other current assets                                    519,000         867,000
                                                     -----------     -----------
   Total current assets                               66,061,000      65,498,000
                                                     -----------     -----------

Property, plant and equipment - at cost               83,794,000      85,628,000
Less: Accumulated depreciation                        72,670,000      73,621,000
                                                     -----------     -----------
                                                      11,124,000      12,007,000

Other assets                                           3,790,000       3,724,000
                                                     -----------     -----------
                                                     $80,975,000     $81,229,000
                                                     ===========     ===========
</TABLE>


See notes to condensed consolidated financial statements.


                                       (4)

<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
                      ------------------------------------

<TABLE>
<CAPTION>
                                                                 AS OF
                                                     ---------------------------------
                                                     MAY 31, 2003    NOVEMBER 30, 2002
                                                     ---------------------------------
                                                     (unaudited)
<S>                                                  <C>             <C>
Current liabilities:

 Accounts payable                                    $ 2,480,000     $ 2,858,000
 Corporate income and other taxes                      1,510,000       1,980,000
 Accrued payroll and related expenses                    561,000         903,000
 Other current liabilities                             1,148,000         940,000
 Deferred income taxes                                   260,000           9,000
                                                     -----------     -----------
   Total current liabilities                           5,959,000       6,690,000
                                                     -----------     -----------

Other noncurrent liabilities                           3,039,000       2,968,000

                                                     -----------     -----------
    Total liabilities                                  8,998,000       9,658,000
                                                     -----------     -----------

Redeemable common stock (Note 12)                      7,000,000       7,000,000

Stockholders' equity                                  64,977,000      64,571,000
                                                     -----------     -----------
                                                     $80,975,000     $81,229,000
                                                     ===========     ===========
</TABLE>

See notes to condensed consolidated financial statements.


                                       (5)

<PAGE>

FAB INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE 26 WEEKS ENDED May 31, 2003 (unaudited)

<TABLE>
<CAPTION>
                                            COMMON STOCK *                      ACCUMULATED       TREASURY STOCK     NOTES
                                            ============                           OTHER          ===============   RECEIVABLE
                                              NUMBER OF             RETAINED   COMPREHENSIVE  NUMBER OF              FROM
                                 TOTAL         SHARES     AMOUNT    EARNINGS       INCOME       SHARES      COST   SHAREHOLDERS
-------------------------------------------------------------------------------------------------------------------------------
<S>                           <C>           <C>        <C>          <C>           <C>       <C>         <C>           <C>
Balance at
November 30, 2002             $64,571,000   6,724,944  $1,345,000   $100,455,000  $229,000  (1,486,929) ($37,237,000) ($221,000)

Net income                         50,000                                 50,000

Change in net
unrealized holding
gain on investment
securities available-for-
sale, net of taxes                349,000                                          349,000
                              -----------
Total comprehensive
Income                            399,000                                                      399,000

Repayment of notes
receivable from stockholders        7,000                                                                                 7,000

                              --------------------------------------------------------------------------------------------------
Balance at
May 31, 2003                  $64,977,000   6,724,944  $1,345,000   $100,505,000  $578,000  (1,486,929) ($37,237,000) ($214,000)
(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.


                                       (6)

<PAGE>


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

<TABLE>
<CAPTION>
                                                            FOR THE 26 WEEKS ENDED
                                                         ---------------------------
                                                          MAY 31,2003   JUNE 1, 2002
                                                         ---------------------------
                                                          (unaudited)    (unaudited)
<S>                                                      <C>            <C>
OPERATING ACTIVITIES:
Net income                                               $    50,000    $   949,000
 Adjustments to reconcile net income
 to net cash provided by (used in) operating
 activities:
   Provision for doubtful accounts                           200,000        200,000
     Depreciation and amortization                           960,000      1,027,000
     Deferred income taxes                                  (121,000)       (62,000)
     Net gain on investment securities                      (203,000)    (1,116,000)
     Gain on disposition of fixed assets                    (316,000)      (216,000)
     Compensation relating to
         acceleration of stock options                            --        418,000
      Decrease (increase) in:
      Accounts receivable                                   (792,000)      (792,000)
      Inventories                                            467,000      2,235,000
      Other current assets                                   348,000        377,000
      Other assets                                            74,000        153,000
     (Decrease) increase in:
      Accounts payable                                      (378,000)       481,000
      Accruals and other liabilities                        (533,000)      (412,000)
                                                         -----------    -----------
     Net cash provided by (used in)
     operating activities                                   (244,000)     3,242,000
                                                         -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property, plant and equipment               (108,000)      (193,000)
   Proceeds from dispositions of property                    347,000        320,000
   Acquisition of investment securities                     (634,000)    (1,644,000)
                                                         -----------    -----------
   Net cash used in
   investing activities                                     (395,000)    (1,517,000)
                                                         -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Purchase of treasury stock                                     --       (280,000)
   Dividends                                                      --       (521,000)
   Exercise of stock options                                      --        172,000
   Repayment of loan from stockholders                         7,000             --
                                                         -----------    -----------
   Net cash provided by (used in) financing activities         7,000       (629,000)
                                                         -----------    -----------
   Increase (decrease) in cash and cash equivalents         (632,000)     1,096,000

   Cash and cash equivalents, beginning of period          3,146,000      6,742,000
                                                         -----------    -----------
   Cash and cash equivalents, end of period              $ 2,514,000    $ 7,838,000
                                                         ===========    ===========
</TABLE>

   See notes to condensed consolidated financial statements.


                                       (7)

<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
26 weeks ended May 31, 2003 are not necessarily indicative of the results that
may be expected for the entire fiscal year ending November 29, 2003. The balance
sheet at November 30, 2002 has been derived from the audited balance sheet at
that date. The financial information included in the quarterly report should be
read in conjunction with the consolidated financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the fiscal year
ended November 30, 2002.

The Company's Board of Directors has determined that it is in the best interests
of its stockholders to sell the Company's textile business as a going concern.
In order to maximize stockholder value, the Board of Directors adopted
resolutions dated March 1, 2002 which authorized, subject to stockholder
approval, the sale of the Company's business pursuant to a Plan of Liquidation
and Dissolution (the "Plan"). The Company's stockholders approved the Plan at
the annual meeting on May 30, 2002. The Plan provides the Company's officers and
directors will continue to operate the Company's textile business in its current
fashion and pursue a sale of the business as a going concern. The Company's
Board of Directors has approved the engagement of McFarland Dewey & Co., LLC
financial advisors in November 2002 to assist with the sale of the business. The
accompanying financial statements have been prepared on a going concern basis.
There can be no assurance, however, that the Company will be successful in
selling it's business or if it does sell the business, that it will be able to
recover full value of it's assets, particularly it's property, plant and
equipment. On May 30, 2002, the Company's Board of Directors declared an initial
liquidating distribution of $10.00 per share, which resulted in a payment to
stockholders of $52,380,000 in June 2002.

Pursuant to resolutions adopted by the Company's Board of Directors, upon
approval of the Plan by stockholders on May 30, 2002 the Employees Stock
Ownership Plan (the ESOP) was terminated and all shares of common stock of the
Company then held in the ESOP suspense account (86,456 shares) were transferred
to the Company, and held as treasury stock, in exchange for the cancellation of
the outstanding loan in the amount of $3,957,000 from the Company to the ESOP.
The Company recorded the related treasury stock at the fair market value on the
date of the termination, which resulted in a $2.4 million charge to additional
paid-in-capital.

Pursuant to resolutions adopted by the Company's Board of Directors and
documentation sent to and returned to the Company by option holders, effective
immediately following stockholder approval of the Plan, on May 30, 2002, all
outstanding options under the Company's 1997 Stock Incentive Plan became vested,
and all options as to which optionees (including employees and directors) had
returned to the Company the appropriate forms (representing options held by all
but one optionee, who exercised via payment to the Company) were exercised
through the issuance of loans from the Company to the optionees, with stock of
the optionees held as collateral by the Company until the loans have been
satisfied. These loans receivable have been recorded as a reduction of
stockholders' equity as of May 31, 2003. The amount loaned to employees and
directors to exercise their options was approximately $1,495,000, of which
approximately $1,281,000 was repaid prior to May 31, 2003. These options were
subject to variable accounting at each reporting period, until the related loans
were repaid. As of May 31, 2003 the balance of the loans outstanding was
$214,000. The loans were due as of May 31, 2003, but the borrowers had a month
grace period to repay these loans. In June 2003, the Company repurchased 22,984
shares of its common stock at an average fair market value of $9.48 per share,
and offset the related payment against loans due from employees and directors,
which were due as of May 31,2003. The Company purchased enough shares in
sufficient quantity to pay all outstanding loans, including interest.


                                       (8)

<PAGE>

         During the last quarter, the Company inadvertently exceeded the 40%
limitation on holding investment securities set forth in the Investment Company
Act of 1940 (the "Act"). Under the Act, a company 40% or more of whose assets
are investment securities would be an investment company and would be required
to register as such, absent an available exemption or exclusion. No other
exemption is available to the Company. The failure to remain below the 40%
threshold was discussed with the Company's Audit Committee, which adopted
remedial procedures that required the Company to sell investment securities to
fall below the threshold forthwith and instructed Company management to
vigilantly maintain compliance on an ongoing basis. The Company has taken steps
to comply with the 40% limitation mentioned above and intends promptly to come
into and remain in compliance with such requirement in the future. Were the
Securities and Exchange Commission to pursue an enforcement action against the
Company it could have adverse consequences for the Company.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities", the Company's
policy is to recognize all derivatives instruments as either assets or
liabilities on its consolidated balance sheet and to measure those instruments
at market value. SFAS No. 133 also requires the disclosure of certain other
information including a description of the instruments, objectives, strategies
and risk management policies for holding all derivatives (See Notes 3 and 9).

ACCOUNTING FOR STOCK-BASED COMPENSATION

The Company applies Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" and related interpretations in accounting for its
various stock option plans. The Company has adopted the disclosure - only
provisions of SFAS No. 123, "Accounting for Stock- Based Compensation" and SFAS
No. 148, "Accounting for Stock Based Compensation-Transition and Disclosure",
which was released in December 2002 as an amendment to SFAS No. 123. In
accordance with SFAS No. 148, the following table illustrates the effect on net
income and earnings per share as if the company has applied the fair value
recognition provisions of SFAS No. 123.

<TABLE>
<CAPTION>
                                             (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                          THREE MONTHS ENDED                   SIX MONTHS ENDED
                                    ------------------------------    ------------------------------
PROFIT OR LOSS (UNAUDITED)          MAY 31, 2003     JUNE 1, 2002     MAY 31, 2003     JUNE 1, 2002
---------------------------         ------------     ------------     ------------     ------------
<S>                                         <C>            <C>                 <C>             <C>
Net income, as reported                     $320           $1,626              $50             $949
Less: Total stock-based
  employee compensation
  expense determined under
  fair value based method for
  all awards, net of tax.                      0              (33)               0              (65)
                                            ----           ------              ---             ----

Proforma net income                         $320           $1,593              $50             $884
                                            ----           ------              ---             ----
Basic and diluted net income per
  share: as reported                       $0.06            $0.31            $0.01            $0.18

Pro Forma                                  $0.06            $0.31            $0.01            $0.17
</TABLE>


                                       (9)

<PAGE>

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

RECLASSIFICATIONS

Certain accounts in the 2002 financial statements have been reclassified with
the 2003 presentations for comparatives purposes.

2.       Cash and Cash Equivalents:

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

                                         MAY 31, 2003         NOVEMBER 30, 2002
                                         ------------         -----------------
                                         (unaudited)

Cash                                          $   477                 $   526
Taxable and tax-free
Short-term debt instruments                     2,037                   2,620
                                         ------------         -----------------
                                              $ 2,514                 $ 3,146
3.       Investment Securities:

         At May 31, 2003 and November 30, 2002, investment securities
available-for-sale consisted of the following (in thousands):

                                          GROSS           GROSS
                                          UNREALIZED      UNREALIZED
MAY 31, 2003                              HOLDING         HOLDING         FAIR
(UNAUDITED)                     COST      GAIN            LOSS            VALUE
--------------------------   --------     ----------      ----------    --------
Equities                     $ 11,008     $      223      $        0    $ 11,231

U.S. Treasury obligations      22,191            899              (2)     23,088

Tax-Exempt Obligations          1,055              7               0       1,062

Corporate bonds                 7,978            264            (253)      7,989

Money market                    3,599              0               0       3,599
                             --------     ----------      ----------    --------
                             $ 45,831     $    1,393     ($      255)   $ 46,969
                             ========     ==========      ==========    ========


                                      (10)

<PAGE>

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3.       Investment Securities (continued):

                                          GROSS           GROSS
                                          UNREALIZED      UNREALIZED
                                          HOLDING         HOLDING         FAIR
NOVEMBER 30, 2002               COST      GAIN            LOSS            VALUE
--------------------------   --------     ----------      ----------    --------
Equities                     $    750     $        0      $        0    $    750

U.S. Treasury obligations      32,411            617               0      33,028

Corporate bonds                 7,748            194            (254)      7,688

Money Market                    4,085              0               0       4,085
                             --------     ----------      ----------    --------
                             $ 44,994     $      811      ($     254)   $ 45,551
                             ========     ==========      ==========    ========


During the six months ended May 31, 2003, the Company invested a portion of its
investment securities in equity securities consisting of a portfolio of Standard
and Poor's 100 ("S&P 100") common stocks, the fair value of which varies
consistently with changes in the S&P 100 index. To hedge against fluctuations in
the market value of the portfolio, the Company has purchased short-term S&P 100
index put options with a fair value of $115,440 and short-term S&P 100 index
call options sold, not yet purchased with a fair value of $179,820, which were
outstanding at May 31, 2003. At November 30, 2002, the Company had no such
investments.

The Company has agreements with various brokerage firms to carry its account as
a customer. The brokers have custody of the Company's securities and, from time
to time, cash balances which may be due from these brokers. These securities
and/or cash positions serve as collateral for any amounts due to brokers or as
collateral for securities sold short or securities purchased on margin. The
securities and/or cash positions also serve as collateral for potential defaults
of the Company.

The Company is subject to credit risk if the brokers are unable to repay
balances due or deliver securities in their custody. It is the policy of the
Company to limit the amount of credit exposure to any one financial institution.
The Company has received confirmation indicating that, with respect to
investment securities, each custodian with the exception of one custodian
maintains appropriate insurance coverage. During fiscal 2002 and the six months
ended May 31, 2003, that custodian had approximately $10 million and $10.5
million, respectively, of the Company's cash under investment which from time to
time during such periods was invested entirely in equity securities. At May 31,
2003, that custodian had approximately $10.5 million of the Company's cash under
investments, which a majority were invested in equity securities. The Company's
investment policy currently permits up to 25% of the Company's portfolio to
include equity securities.


                                      (11)

<PAGE>

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4.       Inventories:

The Company's inventories are valued at the lower of cost or market value. 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.

                                      MAY 31, 2003    NOVEMBER 30, 2002
                                     --------------   -----------------
                                       (unaudited)

Raw materials                        $    1,902,000        $ 2,131,000
Work in process                           2,774,000          2,717,000
Finished goods                            3,243,000          3,538,000
                                     --------------        -----------
         Total                       $    7,919,000        $ 8,386,000
                                     ==============        ===========
Approximate percentage of
   inventories valued
   under LIFO valuation                         60%                62%
                                     ==============        ===========

Excess of FIFO valuation
   over LIFO valuation               $    1,914,000       $  1,614,000
                                     ==============        ===========


5.       Earnings Per Share:

         Basic and diluted earnings per share for the 13 weeks ended May 31,
         2003 and June 1, 2002 were calculated as follows:


                                                          WEIGHTED      BASIC
                                                          AVERAGE        AND
                                                           COMMON      DILUTED
                                                NET        SHARES      EARNINGS
                                              INCOME     OUTSTANDING   PER-SHARE
                                            -----------  -----------   ---------
For the 13 weeks ended May 31, 2003         $   320,000    5,238,015   $    0.06
                                            ===========  ===========   =========

For the 13 weeks ended June 1, 2002         $ 1,626,000    5,205,854   $    0.31
                                            ===========  ===========   =========


                                      (12)

<PAGE>

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Basic and diluted earnings per share for the 26 weeks ended May 31, 2003 and
June 1, 2002 are calculated as follows:

                                                          WEIGHTED      BASIC
                                                          AVERAGE        AND
                                                           COMMON      DILUTED
                                                NET        SHARES      EARNINGS
                                              INCOME     OUTSTANDING   PER-SHARE
                                            -----------  -----------   ---------
For the 26 weeks ended May 31, 2003         $    50,000    5,238,015   $    0.01
                                            ===========  ===========   =========

For the 26 weeks ended June 1, 2002         $   949,000    5,207,605   $    0.18
                                            ===========  ===========   =========

There were no options outstanding during the 13 weeks and 26 weeks ended May 31,
2003. All options outstanding during the 13 weeks and 26 weeks ended June 1,
2002 were not included in the computation of diluted earnings per share as their
effect would be anti-dilutive.

6.       Comprehensive Income:

Accumulated other comprehensive income is comprised of unrealized holding gain
related to available-for-sale securities. Comprehensive income was $399,000 and
$782,000 for the 26 weeks ended May 31, 2003 and June 1, 2002, respectively, and
$427,000 and $1,493,000 for the 13 weeks ended May 31, 2003 and June 1, 2002,
respectively.

7.       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 and results of operations.

8.       New Accounting Standards

In July 2002, the FASB issued SFAS 146 "Accounting for Restructuring Costs."
SFAS 146 applies to costs associated with an exit activity (including
restructuring) or with a disposal of long-lived assets. Those activities can
include eliminating or reducing product lines, terminating employees and
contracts, or relocating plant facilities or personnel. Under SFAS 146, a
company will record a liability for a cost associated with an exit or disposal
activity when that liability is incurred and can be measured at fair value. SFAS
146 requires a company to disclose information about its exit and disposal
activities, the related costs and changes in those costs in the notes to the
interim and annual financial statements that include the period in which an exit
activity is initiated and in any subsequent period until the activity is
completed. SFAS 146 is effective prospectively for exit or disposal activities
initiated after December 31, 2002, with an earlier adoption encouraged. Under
SFAS 146, a company may not restate its previously issued financial statements
and the new statement grandfathers the accounting for liabilities that a company
had previously recorded under Emerging Issues Task Force Issue 94-3. The
adoption of this statement did not have a material impact on the Company's
financial position or results of operations.


                                      (13)

<PAGE>

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In December 2002, the FASB issued SFAS No. 148 "Accounting for Stock Based
Compensation - Transition and Disclosure." This Statement amends SFAS No. 123,
"Accounting for Stock-Based Compensation" to provide alternative methods of
transition for a voluntary change to the fair market value based method of
accounting for stock-based employee compensation. In addition, this Statement
amends the disclosure requirements of Statement 123 to require prominent
disclosures in both annual and interim financial statements about the method
used on reported results. The Statement has varying effective dates commencing
with interim periods beginning after December 15, 2002 (See Note 1).

In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Guarantees of
the Indebtedness of Others," which addresses accounting for and disclosure of
guarantees. Interpretation No. 45 requires a guarantor to recognize a liability
for the fair value of a guarantee at inception. The recognition of the liability
is required even if it is not probable that payments will be required under the
guarantee. The disclosure requirements are effective for interim and annual
financial statements ending after December 15, 2002. The initial recognition and
measurement provisions are effective on a prospective basis for guarantees
issued or modified after December 31, 2002. The Company's adoption of
Interpretation No. 45 did not have a material effect on the Company's
consolidated financial statements.

In January 2003, the FASB issued FASB Interpretation No. 46. "Consolidation of
Variable Interest Entities." The objective of this interpretation is to provide
guidance on how to identify a variable interest entity ("VIE") and determine
when the assets, liabilities, noncontrolling interests, and results of
operations of a VIE need to be included in a company's consolidated financial
statements. A company that holds variable interests in an entity will need to
consolidate the entity if the company's interest in the VIE is such that the
company will absorb a majority of the VIE's expected losses and/or receive a
majority of the entity's expected residual returns, if they occur.
Interpretation No. 46 also requires additional disclosures by primary
beneficiaries and other significant variable interest holders. The
interpretation became effective upon issuance. The Company's adoption of this
interpretation did not have a material effect on its consolidated financial
statements.


In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." This statement
affects the classification, measurement and disclosure requirements of the
following three types of freestanding financial instruments: 1) mandatorily
redeemable shares, which the issuing company is obligated to buy back with cash
or other assets; 2) instruments that do or may require the issuer to buy back
some of its shares in exchange for cash or other assets, which includes put
options and forward purchase contracts; and 3) obligations that can be settled
with shares, the monetary value of which is fixed, tied solely or predominantly
to a variable such as a market index, or varies inversely with the value of the
issuers' shares. In general, SFAS No. 150 is effective for all financial
instruments entered into or modified after May 31, 2003, and otherwise is
effective at the beginning of the first interim period beginning after June 15,
2003. The adoption of SFAS No. 150 is expected to result in the Company
reclassifying the $7 million in redeemable common stock to a liability in the
fourth quarter 2003 (See Note 12).


                                      (14)

<PAGE>

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

9.       Derivative Financial Instruments Held or Issued

The Company is party to equity option contracts as part of its investing
activities. Option contracts are contractual agreements that give the purchaser
the right, but not the obligation, to purchase or sell a financial instrument at
a predetermined exercise price. In return for this right, the purchaser pays a
premium to the seller of the option. By selling or writing options, the Company
receives a premium and becomes obligated during the term of the option to
purchase or sell a financial instrument at a predetermined exercise price if the
option is exercised, and assumes the risk of not being able to enter into a
closing transaction if a liquid secondary market does not exist. At May 31,
2003, the Company purchased short-term S&P 100 index put options with a fair
value of $115,440 and short-term S & P 100 index call options sold, not yet
purchased with a fair value of $179,820.

10.      Segment Information:

The Company adopted SFAS No. 131 "Disclosure About Segments of an Enterprise and
Related Information" in fiscal 1999. SFAS No. 131 requires companies to report
information on segments based upon the methodology management utilizes to
organize segments within the company for making operating decisions and
assessing financial performance.

The Company's chief operating decision-maker is considered to be the Chief
Executive Officer (CEO). The 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, Industrial Fabrics
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: With sales primarily to manufacturers of home
furnishings, the Company uses its own textile fabrics internally to produce
flannel and satin sheets, blanket products, comforters, and other bedding
products which it sells to specialty stores, catalogue and mail order companies,
airlines and cruise lines and health care institutions.

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
servicing the residential and contract markets.
The Company also sells fabrics to vendors in the over the counter markets.


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

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


                                      (15)

<PAGE>

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Many of the Company's assets are used in 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.

The 26 weeks ended June 1, 2002 include a litigation settlement in the amount of
$750,000 which is included in the Home Fashions and Accessory Segment. (See Note
11).

                                 (in thousands)

<TABLE>
<CAPTION>
                                                       HOME FASHIONS
26 WEEKS ENDED 05/31/03             APPAREL            AND ACCESSORIES      OTHER             TOTAL
-----------------------            --------            ---------------      ------           -------
(UNAUDITED)
-----------
<S>                                <C>                   <C>                <C>              <C>
External sales                     $19,708               $1,774             $3,751           $25,233
Intersegment sales                   1,752                   21                168             1,941
Operating income (loss)             (1,056)                 (92)               351              (797)
Segment assets                      15,462                  920              2,615            18,997


                                                       HOME FASHIONS
26 WEEKS ENDED 06/01/02             APPAREL            AND ACCESSORIES       OTHER            TOTAL
-----------------------             -------            ---------------       -----            -----
(UNAUDITED)
-----------
External sales                      $25,889              $2,373             $3,350           $31,612
Intersegment sales                    1,918                  23                204             2,145
Operating income (loss)                (418)             (1,120)                53            (1,485)
Segment assets                       19,194               1,062              3,282            23,538

                                                                                 26 WEEKS ENDED
                                                                           -------------------------
PROFIT OR LOSS (UNAUDITED)                                                  MAY 31           JUNE 01
--------------------------                                                 -------        ----------
                                                                              2003              2002
                                                                              ----              ----

Total operating loss for segments                                          $  (797)       $   (1,485)
Total other income                                                             897             2,934
                                                                           -------        ----------
Income before taxes on income                                              $   100        $    1,449
                                                                           =======        ==========


                                                       HOME FASHIONS
13 WEEKS ENDED 05/31/03            APPAREL             AND ACCESSORIES      OTHER              TOTAL
-----------------------            --------            ---------------      ------            ------
(UNAUDITED)
-----------
External sales                     $ 10,586                $969             $2,091           $13,646
Intersegment sales                      906                   2                 96             1,004
Operating income (loss)                (292)                (54)               262               (84)


                                                       HOME FASHIONS
13 WEEKS ENDED 05/31/02            APPAREL             AND ACCESSORIES      OTHER              TOTAL
-----------------------            --------            ---------------      ------           -------
(UNAUDITED)
-----------
External sales                      $14,355              $1,154             $1,853           $17,362
Intersegment sales                    1,289                  11                163             1,463
Operating income (loss)                 581               (150)                 20               451
</TABLE>


                                      (16)

<PAGE>

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                                                               13 WEEKS ENDED
                                                           ---------------------
PROFIT OR LOSS  (UNAUDITED)                                MAY 31        JUNE 01
---------------------------                                ------       --------
                                                             2003           2002
                                                           ------       --------
Total operating income (loss) for segments                 $  (84)      $    451

Total other income                                            579          1,952
                                                           ------       --------
Income before taxes on income                              $  495       $  2,403
                                                           ======       ========

11.      Other:

During the fall of 1999, San Francisco Network ("SFN") commenced an action in
the Superior Court of California, Marin County, against the Company and the
Company's Salisbury Manufacturing Corporation ("Salisbury") subsidiary. The
action related to an agreement between SFN and Salisbury (whose performance the
Company guaranteed), pursuant to which Salisbury was licensed to use the Karen
Neuburger trademark for branded bedding products. The case was removed to the
United States District Court of California. Salisbury and the Company denied any
wrongdoing and asserted affirmative claims against SFN and certain of its
principals. On March 14, 2002, at a court -ordered conference, the Company
settled this issue without admitting liability. On April 12, 2002, the Company
paid SFN $750,000 in exchange for a complete release of all claims.

12.      Commitments

The Company has an agreement with the Chairman of the Board of Directors and
Chief Executive Officer which extends automatically from year to year unless
either party gives notice of cancellation at least six months prior to the then
current expiration date. The current expiration date is March 2004. The
agreement provides that, in the event of the Chairman's death, his estate has
the option to sell, and the Company has the obligation to purchase, certain
stock owned by the chairman. The amount of stock subject to purchase is equal to
the lesser of $7 million or 10% of the book value of the Company at the end of
the Company's fiscal year immediately prior to his death, plus the $3 million
proceeds from insurance on his life for which the Company is the beneficiary. As
a result of this feature, shares of common stock equal in value to $7 million
has been classified as redeemable common stock, for all periods presented (See
Note 8).


                                      (17)

<PAGE>

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF

                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations
Second Quarter and Six Months of
FISCAL 2003 COMPARED TO FISCAL 2002

Net sales for the second quarter of fiscal 2003 were $13,646,000 as compared to
$17,362,000 in the similar 2002 period, a decrease of $3,716,000 or 21.4%. For
the six months ended May 31, 2003, net sales were $25,233,000, a decline of
$6,379,000, or 20.2% from 2002. The decrease was caused substantially by lower
volume as business conditions within the domestic textile industry remained
depressed, and low-cost foreign imports continued to take a toll on the U.S.
textile manufacturing sector. These factors have negatively impacted sales and
production. These conditions have to date continued into the third quarter.

Gross margins as a percentage of sales for the second quarter of fiscal 2003
decreased to 11.0% from 15.0% as compared to the similar 2002 period. For the
six months ended May 31, 2003 gross margins decreased to 9.6% compared to 12.0%
in the similar 2002 period. Lower sales volume reduced operating schedules at
production facilities. For the six months and three months ended May 31, 2003
and for the six months and three months ended June 1, 2002, an increase in LIFO
reserves of $300,000 and $490,000 respectively, was recorded. This was due to
the liquidation of certain LIFO layers and higher average FIFO prices.

Selling, general and administration expenses in the current quarter decreased by
$567,000, or 26.4% from that in the three months ended June 1, 2003. For the six
months ended May 31, 2003, selling, general and administration expenses
decreased by $1,311,000 or 29.0% from that in the six months ended June 1, 2002.
The decrease in expenses resulted primarily from the reduction in the number of
employees and related expenses, moving executive offices and showroom facilities
to smaller premises and the continued effectiveness of the cost containment
programs.

In March 2002, the Company settled a dispute without admitting liability for
$750,000. See Note 11 to the Condensed Consolidated Financial Statements.

Interest and dividend income for the current quarter decreased by $584,000 or
62.7% from that in the second quarter 2002. For the six months ended May 31,
2003, interest and dividend income decreased by $1,134,000 or 62.0%, from that
in the similar six months ended June 1, 2002. On June 24, 2002, the Company
distributed an initial liquidating distribution of $10.00 per share, or
$52,380,000. Accordingly, the Company had lower average invested balances for
the three and six months ended May 31, 2003. In the current quarter, the Company
realized gains from the sale of investment securities of $232,000 compared to
$1,021,000 in last year's second quarter. For the six months ended May 31, 2003,
we realized gains from the sale of investment securities of $203,000 compared to
$1,116,000 in last year's six months.

The effective income tax rate for the current quarter was 35.4% as compared to
32.3% last year's second quarter. The effective income tax rate for the 26 weeks
ended May 31,2003 was 50% as compared to 34.5% for the 26 weeks ended June
1,2002. The increase in the current year is due to a minimum State and Franchise
Tax.


                                      (18)

<PAGE>

As a result of these factors, the Company has net income of $320,000 or $0.06
basic and diluted earnings per share and $50,000 or $0.01 basic and diluted
earnings per share for the 13 and 26 weeks ended May 31, 2003, respectively. For
the 13 and 26 weeks ended June 1, 2002, the Company has net income of $1,626,000
or $0.31 basic and diluted earnings per share and $949,000 or $0.18 basic and
diluted earnings per share.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities was $244,000 for the 26 weeks ended May
31, 2003, compared to $3,242,000 provided by operations for the comparative 2002
period. The decrease was primarily caused by a $899,000 decrease in net income,
$1,768,000 increase of inventories, a decrease of $980,000 in accounts payable
and other currant liabilities, offset by $913,000 in net gain on investment
securities.

In the six months ended May 31, 2003, net acquisition of investment securities
were $634,000 as compared to net acquisitions of $1,644,000 in the comparative
2002 period.

Stockholder's equity was $64,977,000 ($12.40 book value per share) at May 31,
2003 as compared to $64,571,000 ($12.33 book value per share) at the previous
fiscal year end November 30, 2002 and $69,215,000 ($13.21 book value per share)
at the end of the comparative 2002 second quarter.

In June 2003, the Company repurchased 22,984 shares of its common stock at an
average fair market value of $9.48 per share, and offset the related payment
against loans due from employees and directors, which were due as of May 31,
2003. The Company purchased enough shares in sufficient quantity to pay off the
entire loan, including interest.

Management believes that the Company's current financial position is adequate to
satisfy working capital requirements and to internally fund any future
expenditures to maintain its manufacturing facilities for the next twelve
months.

Commitments

The Company has an agreement with the Chairman of the Board of Directors and
Chief Executive Officer which extends automatically from year to year unless
either party gives notice of cancellation at least six months prior to the then
current expiration date. The current expiration date is March 2004. The
agreement provides that, in the event of the Chairman's death, his estate has
the option to sell, and the Company has the obligation to purchase, certain
stock owned by the chairman. The amount of stock subject to purchase is equal to
the lesser of $7 million or 10% of the book value of the Company at the end of
the Company's fiscal year immediately prior to his death, plus the $3 million
proceeds from insurance on his life for which the Company is the beneficiary. As
a result of this feature, shares of common stock equal in value to $7 million
has been classified as redeemable common stock, for all periods presented. See
Note 8 to the Condensed Consolidated Financial Statements.


                                      (19)

<PAGE>

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. The
critical accounting policies that affect the Company's more complex judgments
and estimates are described in the Company's Annual Report on Form 10-K for the
fiscal year ended November 30, 2002.

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 our
communications and discussions with investors and analysts in the normal course
of business including, but not limited to, meetings, phone calls and conference
calls, regarding the sale of our assets pursuant to a plan of liquidation and
dissolution, as well as expectations with respect to future sales and operating
efficiencies prior to a sale of the company, are subject to known and unknown
risks, uncertainties and contingencies, many of which are beyond our control and
which may cause actual results, performance or achievements to differ materially
from anticipated results, performances or achievements. Forward-looking
statements, which are based on certain assumptions and describe our future
plans, strategies, and expectations, are generally identifiable by the use of
words "may", "will", "should", "expect", "anticipate", "estimate" "believe"
"intend" or "project" or the negative of them or other variations of them or
comparable terminology.

         Factors that could have a material adverse effect on our operations and
future prospects include, but are not limited to: our ability to find qualified
buyers for our assets; overall economic and business conditions; our continuing
ability to support the demand for our goods and services; competitive factors in
the industries in which we compete; 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; material contingencies
provided for in a sale of our assets; de-listing of our common stock from the
American Stock Exchange; our ability to retain key employees through any wind
down period; and any litigation arising as a result of our plan to wind down our
operations. These risks and uncertainties should be considered in evaluating any
forward-looking statements contained in this Quarterly Report on Form 10-Q.

         We undertake no obligation to update or revise a forward-looking
statement, whether as a result of new information, future events, or otherwise,
other than required by law.



ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See "Derivative Instruments and Hedging Activities" in Note 1 and Note 3 of the
Notes to the Condensed Consolidated Financial Statements. See also "Derivative
Financial Instruments Held or Issued" in Note 9 of the Notes to the Condensed
Consolidated Financial Statements.


                                      (20)

<PAGE>

ITEM 4.  CONTROLS AND PROCEDURES

         (a)      EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES: The
                  Company's Chief Executive Officer and it's Chief Financial
                  Officer, after evaluating the effectiveness of the Company's
                  disclosure controls and procedures (as defined in the
                  Securities and Exchange Act of 1934 Rules 13a-14(c) and
                  15d-14(c) as of a date within 90 days of the filing date of
                  this quarterly report on form 10-Q (the "Evaluation Date"),
                  have concluded that as of the Evaluation Date, the Company's
                  disclosure controls and procedures were adequate and effective
                  to ensure that material information relating to the Company
                  and it's consolidated subsidiaries would be made known to them
                  by others within those entities, particularly during the
                  period in which this quarterly report on Form 10-Q was being
                  prepared.

         (b)      CHANGE IN INTERNAL CONTROL: There were no significant changes
                  in the Company's internal controls or in other factors that
                  could significantly affect the Company's internal controls and
                  procedures subsequent to the evaluation, nor any significant
                  deficiencies or material weaknesses in such internal controls
                  and procedures requiring corrective actions. As a result, no
                  corrective actions were taken.

PART II. OTHER INFORMATION

         ITEM 5. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The Company held it's Annual Meeting of Stockholders on May 13, 2003.
         The matter submitted to a vote of the Company's stockholders were the
         election of two directors to Class III of the Company's Board of
         Directors.

         The Company's stockholders elected Messrs. Samson Bitensky and Frank
         Greenberg to Class III of the Company's Board of Directors, to hold
         office until the 2006 Annual Meeting of the Stockholders and until
         their respective successors are duly elected and qualified. The results
         of the voting were as follows:

                                           Votes For        Votes Withheld

         Samson Bitensky                   3,482,102            83,038

         Frank Greenberg                   3,527,674            37,466

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         a)        Exhibits:

         99.1     Certification by Samson Bitensky pursuant to 18 U.S.C. Section
         1350, as adopted
         Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

         99.2     Certification by David A. Miller pursuant to 18 U.S.C. Section
         1350, as adopted
         Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

         b)       Reports on Form 8-K:

         The Company furnished on April 15, 2003 a report on Form 8-K
         announcing, under Item 9 of such form, its earnings for the first
         quarter ended March 1, 2003.


                                      (21)

<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: July 15, 2003                       FAB INDUSTRIES, INC.



                                           By: /s/ Samson Bitensky
                                               ---------------------------------
                                               Samson Bitensky
                                               Chairman of the Board
                                               and Chief Executive Officer


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



                                      (22)

<PAGE>

CERTIFICATION

I, Samson Bitensky, certify that:

         1.       I have reviewed this quarterly report on Form 10-Q of Fab
                  Industries, Inc. (the Company);

         2.       Based on my knowledge, this quarterly report does not contain
                  any untrue statement of a material fact or omit to state a
                  material fact necessary to make the statements made, in light
                  of the circumstances under which such statements were made,
                  not misleading with respect to the period covered by the
                  quarterly report; 3. Based on my knowledge, the financial
                  statements, and other financial information included in this
                  quarterly report, fairly present in all material respects the
                  financial condition, results of operations and cash flows of
                  the registrant as of, and for, the periods presented in this
                  quarterly report; 4. The Company's other certifying officers
                  and I are responsible for establishing and maintaining
                  disclosure controls and procedures (as defined in Exchange Act
                  Rules 13A-14 and 15d-14) for the Company and have;

         a)       Designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including it's consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which quarterly report is being prepared;

         b)       Evaluated the effectiveness of the Company's disclosure
                  controls and procedures as of a date 90 days prior to the
                  filing date of this quarterly report (the Evaluation Date):
                  and

         c)       Presented in this quarterly report our conclusions
                  about the effectiveness of the disclosure controls and
                  procedures based on our evaluation as of the Evaluation Date;

         5.       The Company's other certifying officers and I have
                  disclosed, based on our most recent evaluation, to the
                  Company's auditors and the audit committee of the Company's
                  board of directors (or persons performing the equivalent
                  functions);

         a.)      all significant deficiencies in the design or
                  operation of internal controls which could adversely affect
                  the Company's ability to record, process, summarize and report
                  financial data and have identified for the Company's auditors
                  any material weaknesses in internal controls and

         b.)      any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  Company's internal controls; and

         6.       The Company's other certifying officers and I have indicated
                  in this quarterly report whether there were significant
                  changes in internal controls or in other factors that could
                  significantly affect internal controls subsequent to the date
                  of our most recent evaluation including any corrective actions
                  with regard to significant deficiencies and material
                  weaknesses.


Date: July 15, 2003                        /s/ Samson Bitensky
                                           -----------------------------
                                           Samson Bitensky
                                           Chief Executive Officer


                                      (23)

<PAGE>

CERTIFICATION

I, David A. Miller, certify that:

         1.       I have reviewed this quarterly report on Form 10-Q of Fab
                  Industries, Inc. (the Company); 2. Based on my knowledge, this
                  quarterly report does not contain any untrue statement of a
                  material fact or omit to state a material fact necessary to
                  make the statements made, in light of the circumstances under
                  which such statements were made, not misleading with respect
                  to the period covered by the quarterly report; 3. Based on my
                  knowledge, the financial statements, and other financial
                  information included in this quarterly report, fairly present
                  in all material respects the financial condition, results of
                  operations and cash flows of the registrant as of, and for,
                  the periods presented in this quarterly report; 4. The
                  Company's other certifying officers and I are responsible for
                  establishing and maintaining disclosure controls and
                  procedures (as defined in Exchange Act Rules 13A-14 and
                  15d-14) for the Company and have;

         a)       Designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including it's consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which quarterly report is being prepared;

         b)       Evaluated the effectiveness of the Company's disclosure
                  controls and procedures as f a date 90 days prior to the
                  filing date of this quarterly report (the Evaluation Date):
                  and

         c)       Presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

         5.       The Company's other certifying officers and I have disclosed,
                  based on our most recent evaluation, to the Company's auditors
                  and the audit committee of the Company's board of directors
                  (or persons performing the equivalent functions);

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the Company's
                  ability to record, process, summarize and report financial
                  data and have identified for the Company's auditors any
                  material weaknesses in internal controls and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  Company's internal controls; and

         6.       The Company's other certifying officers and I have indicated
                  in this quarterly report whether there were significant
                  changes in internal controls or in other factors that could
                  significantly affect internal controls subsequent to the date
                  of our most recent evaluation including any corrective actions
                  with regard to significant deficiencies and material
                  weaknesses.


Date: July 15, 2003                        /s/ David A. Miller
                                           -----------------------------
                                           David A. Miller
                                           Chief Financial Officer


                                      (24)