================================================================================
                                                                   Page 1 of 42
                                              Index to Exhibits - Pages 27 - 42
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                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 June 29, 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 1-3634

                             CONE MILLS CORPORATION
             (Exact name of registrant as specified in its charter)

North Carolina                                        56-0367025
--------------                                        ----------
(State or other jurisdiction)               (I.R.S. Employer Identification No.)

804 Green Valley Road, Suite 300, Greensboro, N.C.      27408
--------------------------------------------------      -----
(Address of principal executive offices)             (Zip Code)

        Registrant's telephone number, including area code: 336-379-6220

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 Act). Yes __ No X

Number of shares of common stock outstanding as of July 23, 2003:  25,941,475.


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


<PAGE>


                             CONE MILLS CORPORATION

                                      INDEX



PART I. FINANCIAL INFORMATION
                                                                       Page
                                                                      Number

Item 1.    Financial Statements

           Consolidated Condensed Statements of Operations
           Thirteen and Twenty-Six weeks ended June 29, 2003 and
           June 30, 2002 (Unaudited)                                       3

           Consolidated Condensed Balance Sheets
           June 29, 2003 and June 30, 2002 (Unaudited)
           and December 29, 2002                                           4

           Consolidated Condensed Statements of Cash Flows
           Twenty-Six weeks ended June 29, 2003 and
           June 30, 2002 (Unaudited)                                       5

           Notes to Consolidated Condensed Financial Statements
           (Unaudited)                                                     6

Item 2.    Management's Discussion and Analysis of
           Financial Condition and Results of Operations                  16

Item 3.    Quantitative and Qualitative Disclosures about Market
           Risk                                                           25

Item 4.    Controls and Procedures                                        25


PART II.   OTHER INFORMATION

Item 1.    Legal Proceedings                                              26
Item 6.    Exhibits and Reports on Form 8-K                               26



<PAGE>


                                                PART I
Item 1.

                                   CONE MILLS CORPORATION AND SUBSIDIARIES
                               CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                        Thirteen          Thirteen          Twenty-Six       Twenty-Six
                                                       Weeks Ended       Weeks Ended        Weeks Ended      Weeks Ended
(in thousands, except per share data)                 June 29, 2003     June 30, 2002      June 29, 2003    June 30, 2002
---------------------------------------------------------------------------------------------------------------------------
                                                       (Unaudited)       (Unaudited)        (Unaudited)       (Unaudited)
<S>                                                    <C>              <C>                <C>              <C>
Net Sales                                              $    96,336      $    125,837       $    198,600     $    231,657
Cost of Goods Sold                                          85,966           108,570            174,431          200,085
                                                      ---------------------------------------------------------------------
Gross Profit                                                10,370            17,267             24,169           31,572
Selling and Administrative                                   7,768             9,466             16,451           17,095
Impairment of Assets                                           766                 -                766                -
                                                      ---------------------------------------------------------------------
Income from Operations                                       1,836             7,801              6,952           14,477
                                                      ---------------------------------------------------------------------
Other Income (Expense)
  Interest income                                               51               111                130              129
  Interest expense                                         ( 3,828 )         ( 3,994 )          ( 7,477 )        ( 8,302 )
  Other                                                      ( 367 )           ( 541 )            ( 685 )        ( 1,006 )
  Equity appreciation rights                               ( 4,117 )               -            ( 4,117 )              -
                                                      ---------------------------------------------------------------------
                                                           ( 8,261 )         ( 4,424 )         ( 12,149 )        ( 9,179 )
                                                      ---------------------------------------------------------------------

Income (Loss) from Operations before
  Income Tax Expense (Benefit) and Equity in
  Earnings of Unconsolidated Affiliates                    ( 6,425 )           3,377            ( 5,197 )          5,298
Income Tax Expense (Benefit)                               ( 2,348 )           1,013            ( 1,940 )          1,447
                                                      ---------------------------------------------------------------------

Income (Loss) from Operations before
  Equity in Earnings of Unconsolidated Affiliates          ( 4,077 )           2,364            ( 3,257 )          3,851
Equity in Earnings of Unconsolidated Affiliates                506               729              1,487              682
                                                      ---------------------------------------------------------------------
Net Income (Loss)                                      $   ( 3,571 )    $      3,093       $    ( 1,770 )   $      4,533
                                                      ---------------------------------------------------------------------

Income (Loss) Available to Common Stockholders         $   ( 4,593 )    $      2,015       $    ( 3,768 )   $      2,423
                                                      ---------------------------------------------------------------------

Earnings (Loss) per Share - Basic and Diluted          $    ( 0.18 )    $       0.08       $     ( 0.15 )   $       0.09
                                                      ---------------------------------------------------------------------

Weighted-Average Common Shares Outstanding
  Basic                                                     25,832            25,692             25,795           25,679
                                                      ---------------------------------------------------------------------
  Diluted                                                   25,832            26,109             25,795           26,065
                                                      ---------------------------------------------------------------------
</TABLE>

See Notes to Consolidated Condensed Financial Statements.



<PAGE>



                                     CONE MILLS CORPORATION AND SUBSIDIARIES
                                      CONSOLIDATED CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                          June 29,          June 30,       December 29,
(in thousands, except share and par value data)             2003              2002            2002
----------------------------------------------------------------------------------------------------------
                                                       (Unaudited)       (Unaudited)         (Note)
<S>                                                    <C>               <C>                <C>
ASSETS
  Current Assets
    Cash                                               $     4,308       $       408        $     1,654
    Accounts receivable, less allowances:
     2003, $3,400; 2002, $5,700 and $3,400                  33,602            40,028             33,017
    Inventories                                             60,747            49,518             48,848
    Other current assets                                     2,855             5,330              1,630
                                                      ----------------------------------------------------
       Total Current Assets                                101,512            95,284             85,149

  Investments in and Advances to Unconsolidated
    Affiliates                                              55,100            52,087             53,613
  Other Assets                                              29,569            27,176             30,423
  Property, Plant and Equipment                            141,161           155,640            149,077
                                                      ----------------------------------------------------
                                                       $   327,342       $   330,187        $   318,262
                                                      ----------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
  Current Liabilities
    Current maturities of long-term debt               $    58,655       $    62,160        $    46,170
    Accounts payable                                        33,518            31,053             25,589
    Sundry accounts payable and accrued liabilities         19,737            22,409             25,448
                                                      ----------------------------------------------------
       Total Current Liabilities                           111,910           115,622             97,207

  Long-Term Debt                                            99,241            98,797             99,019
  Deferred Income Taxes                                     12,988            12,278             14,884
  Other Liabilities                                         13,871            14,043             13,699

  Stockholders' Equity
    Class A preferred stock - $100 par value;
     authorized 1,500,000 shares; issued and outstanding:
       2003, 348,812 shares; 2002, 349,913 shares and
       327,283 shares                                       34,881            34,991             32,728
    Class B preferred stock - no par value; authorized
       5,000,000 shares                                          -                 -                  -
    Common stock - $0.10 par value; authorized
       42,700,000 shares; issued and outstanding:
       2003, 25,941,475 shares; 2002, 25,706,193
       shares and 25,757,344 shares                          2,594             2,571              2,576
    Capital in excess of par                                58,366            57,950             58,098
    Retained earnings                                        3,581             2,550              9,279
    Deferred compensation - restricted stock                     -               ( 5 )                -
    Accumulated other comprehensive loss                  ( 10,090 )         ( 8,610 )          ( 9,228 )
                                                      ----------------------------------------------------
       Total Stockholders' Equity                           89,332            89,447             93,453
                                                      ----------------------------------------------------
                                                       $   327,342       $   330,187        $   318,262
                                                      ----------------------------------------------------
</TABLE>

Note:  The balance sheet at December 29, 2002, has been derived from
       the audited financial statements at that date.

See Notes to Consolidated Condensed Financial Statements.



<PAGE>



                                     CONE MILLS CORPORATION AND SUBSIDIARIES
                                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                         Twenty-Six         Twenty-Six
                                                                         Weeks Ended        Weeks Ended
(in thousands)                                                          June 29, 2003      June 30, 2002
----------------------------------------------------------------------------------------------------------
                                                                         (Unaudited)        (Unaudited)
<S>                                                                      <C>                <C>
CASH PROVIDED BY (USED IN) OPERATIONS                                    $    (3,748 )      $    19,668
                                                                        ----------------------------------

INVESTING
  Proceeds from sale of property, plant and equipment                          1,076                997
  Capital expenditures                                                       ( 2,464 )          ( 1,906 )
                                                                        ----------------------------------
   Cash used in investing                                                    ( 1,388 )            ( 909 )
                                                                        ----------------------------------

FINANCING
  Decrease in checks issued in excess of deposits                            ( 1,148 )          ( 3,515 )
  Principal borrowings (payments) on long-term debt                           10,697            (12,996 )
  Proceeds from issuance of common stock                                          16                 83
  Dividends paid - Class A Preferred                                            ( 68 )             ( 92 )
  Redemption of Class A Preferred stock                                      ( 1,707 )          ( 2,360 )
                                                                        ----------------------------------
   Cash provided by (used in) financing                                        7,790            (18,880 )
                                                                        ----------------------------------

   Net change in cash                                                          2,654               (121 )

Cash at Beginning of Period                                                    1,654                529
                                                                        ----------------------------------

Cash at End of Period                                                    $     4,308        $       408
                                                                        ----------------------------------

Supplemental Disclosures of Additional Cash Flow Information:
Cash payments (receipts) for:
  Interest                                                               $     7,199        $     8,411
                                                                        ----------------------------------
  Income tax refunds                                                     $      (406 )      $         -
                                                                        ----------------------------------

Supplemental Schedule of Noncash Financing Activities:
  Stock dividend - Class A Preferred Stock                               $     3,860        $     3,920
                                                                        ----------------------------------
</TABLE>

See Notes to Consolidated Condensed Financial Statements.


<PAGE>


                     CONE MILLS CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS



Note 1.  Basis of Financial Statement Preparation

Financial   Statement   Preparation.   The  Cone  Mills   Corporation   ("Cone")
consolidated  condensed financial statements for June 29, 2003 and June 30, 2002
are  unaudited,  but  in the  opinion  of  management  reflect  all  adjustments
necessary to present fairly the  consolidated  condensed  balance sheets of Cone
Mills  Corporation and Subsidiaries at June 29, 2003, June 30, 2002 and December
29, 2002, and the related  consolidated  condensed  statements of operations for
the respective  thirteen and  twenty-six  weeks ended June 29, 2003 and June 30,
2002 and cash flows for the twenty-six  weeks then ended. All adjustments are of
a normal recurring nature with the exception of the Equity  Appreciation  Rights
("EARS")  payment  and  the  asset  impairment   charge.  The  results  are  not
necessarily indicative of the results to be expected for the full year.

These  statements  should  be read in  conjunction  with the  audited  financial
statements  and related notes  included in Cone's annual report on Form 10-K for
fiscal year 2002.

Inventories. Inventories are stated at the lower of cost or market. The last-in,
first-out  ("LIFO")  method  is used  to  determine  cost  of most  domestically
produced  goods.  The first-in,  first-out  ("FIFO") or average cost methods are
used to determine cost of all other inventories. Because amounts for inventories
under the LIFO method are based on an annual  determination  of quantities as of
year-end,  the  inventories  at June 29,  2003 and  June  30,  2002 and  related
consolidated  condensed statements of operations for the thirteen and twenty-six
weeks then ended are based on certain estimates  relating to quantities and cost
as of the end of the fiscal year.

Stock-Based Employee  Compensation.  Cone has stock-based employee  compensation
plans.  Cone  accounts  for those plans under the  recognition  and  measurement
principles of Accounting  Principles  Board ("APB") Opinion No. 25,  "Accounting
for Stock Issued to  Employees,"  and related  Interpretations.  No  stock-based
employee  compensation  cost is reflected in net income,  as all options granted
under  those  plans  had an  exercise  price  equal to the  market  value of the
underlying  common stock on the date of grant.  The following table  illustrates
the  effect on net  income  (loss)  and  earnings  (loss)  per share if Cone had
applied  the  fair  value  recognition  provisions  of  Statement  of  Financial
Accounting   Standards   ("SFAS")   No.   123,   "Accounting   for   Stock-Based
Compensation," to stock-based employee  compensation.  SFAS No. 123 requires pro
forma  disclosures only for options granted after December 31, 1994;  therefore,
the pro forma amounts for compensation  expense may not be representative of the
pro forma earnings impact upon future years.


<PAGE>


<TABLE>
<CAPTION>

                                              Thirteen          Thirteen         Twenty-Six         Twenty-Six
                                             Weeks Ended       Weeks Ended       Weeks Ended        Weeks Ended
(in thousands, except per share data)          6/29/03           6/30/02           6/29/03            6/30/02
                                            ----------------------------------------------------------------------
<S>                                          <C>               <C>               <C>                <C>
Net income (loss), as reported               $   ( 3,571 )     $     3,093       $   ( 1,770 )      $     4,533
Deduct: Total stock-based employee
  compensation expense determined
  under fair value based method for
  all awards, net of related tax effects           ( 126 )           ( 155 )           ( 251 )            ( 311 )
                                            ----------------------------------------------------------------------
Pro forma net income (loss)                  $   ( 3,697 )     $     2,938       $   ( 2,021 )      $     4,222
                                            ----------------------------------------------------------------------

Earnings (loss) per share - basic and diluted:
  Basic and diluted - as reported            $    ( 0.18 )     $      0.08       $    ( 0.15 )      $      0.09
  Basic and diluted - pro forma              $    ( 0.18 )     $      0.07       $    ( 0.16 )      $      0.08

</TABLE>

Recent Accounting Pronouncements.  Effective third quarter 2003, Cone will adopt
SFAS No. 149, "Amendment of Statement 133 on Derivative  Instruments and Hedging
Activities",   if  required.  This  statement  amends  and  clarifies  financial
accounting and reporting for derivatives and for hedging  activities  under SFAS
No. 133,  "Accounting for Derivative  Instruments and Hedging  Activities." This
standard is not expected to have an impact on Cone's financial statements.

In May 2003, the Financial  Accounting  Standards Board ("FASB") issued SFAS No.
150,   "Accounting  for  Certain   Instruments  with   Characteristics  of  Both
Liabilities  and  Equity."  This  standard   requires  that  certain   financial
instruments  embodying  an  obligation  to  transfer  assets or to issue  equity
securities  be  classified  as  liabilities.   It  is  effective  for  financial
instruments  entered  into or modified  after May 31,  2003,  and  otherwise  is
effective  July 1,  2003.  This  standard  has no  impact  on  Cone's  financial
statements.


Note 2.  Securitization of Accounts Receivable

As of June 29, 2003 and June 30, 2002,  the total amount of advances of proceeds
from  the sale of  receivables  under  the  Accounts  Receivable  Securitization
Facility  ("A/R  Securitization  Facility") was $30.3 million and $37.7 million,
respectively.  As of June  29,  2003 and June 30,  2002,  included  in  accounts
receivable were deferred purchase price receivables under the A/R Securitization
Facility of $27.8 million and $29.4 million, respectively.  Expenses incurred in
connection  with the sale of  accounts  receivable  were $0.4  million  and $0.5
million  for the  thirteen  weeks  ended  June  29,  2003  and  June  30,  2002,
respectively,  and $0.7 million and $1.0 million for the twenty-six  weeks ended
June 29, 2003 and June 30, 2002,  respectively,  and were included in "Other" in
the  Consolidated  Condensed  Statements of Income.  The table below  summarizes
certain cash flows under the  securitization  for the fiscal quarters ended June
29, 2003 and June 30, 2002:



<PAGE>



<TABLE>
<CAPTION>
                                 Thirteen            Thirteen          Twenty-Six         Twenty-Six
                                Weeks Ended         Weeks Ended        Weeks Ended        Weeks Ended
(in thousands)                    6/29/03             6/30/02            6/29/03            6/30/02
                               -------------------------------------------------------------------------
<S>                             <C>                 <C>                <C>                <C>
Proceeds from securitizations   $    24,806         $    36,536        $    48,472        $    67,447
Reductions due to change
  in level of receivables sold     ( 21,147 )          ( 30,562 )         ( 46,042 )         ( 66,702 )
Daily yield paid                      ( 366 )             ( 539 )            ( 685 )            ( 990 )
Servicing fees paid                   ( 139 )             ( 170 )            ( 265 )            ( 311 )
Servicing fees received                 139                 170                265                311

</TABLE>


Note 3.  Inventories

(in thousands)                          6/29/03        6/30/02       12/29/02
                                     -----------------------------------------

Greige and finished goods              $ 36,061       $ 27,220       $ 24,401
Work in process                           4,447          4,326          6,237
Raw materials                            11,589          8,442          9,188
Supplies and other                        8,650          9,530          9,022
                                     -----------------------------------------
                                       $ 60,747       $ 49,518       $ 48,848
                                     -----------------------------------------


Note 4.  Long-Term Debt

(in thousands)                          6/29/03        6/30/02       12/29/02
                                     -----------------------------------------

14.2% Senior Notes                     $ 22,484       $ 25,160       $ 22,170
12.0% Senior Notes                       26,171              -              -
Revolving Credit Facility                10,000         37,000         24,000
8-1/8% Debentures                        99,241         98,797         99,019
                                     -----------------------------------------
                                        157,896        160,957        145,189
Less current maturities                  58,655         62,160         46,170
                                     -----------------------------------------
                                       $ 99,241       $ 98,797       $ 99,019
                                     -----------------------------------------


On May 27, 2003, Cone amended agreements with its lenders extending the maturity
date of its existing  Revolving  Credit  Facility and its Senior Note obligation
through  March 15, 2004.  With the  amendments,  the interest rate on the senior
note  remained  14.2%.  The  revolving  credit  agreement  was  split  into  two
components. The first component is a $25 million, 12% senior note and the second
component is a $31 million  revolving  credit facility bearing interest at LIBOR
plus 6.75%.



<PAGE>


The Revolving Credit Facility and Senior Notes call for monthly amortizations of
$0.8 million, beginning in July 2003. As part of the extension, Cone settled the
EARS,  which  were  contingent  rights  granted as a part of the  November  2001
agreements,  for $4.1 million.  The rights entitled the lenders,  upon giving of
notice within two years following  January 15, 2003, to receive a payment of the
greater of $1 million or 10% of the market  value of Cone's  outstanding  common
stock if Cone did not refinance the Revolving Credit Facility and Senior Note by
January 15, 2003,  which did not occur. The rights were settled for $2.1 million
in cash, $1.8 million in senior notes bearing interest at 12% and 14.2% maturing
on March 15, 2004 and approximately 169,000 shares of Cone common stock.

Given the  current  business  environment,  it is likely  that Cone will need to
amend its Revolving Credit Facility and Senior Notes during the third quarter of
2003.  There can be no  assurance  that an  amendment  to the  Revolving  Credit
Facility and Senior Notes will be obtained. Absent an amendment, Cone may be out
of compliance  with one or more  covenants  some time during or after  September
2003.

The failure to comply with the provisions of the Revolving  Credit  Facility and
Senior Notes would result in events of default  thereunder,  and, depending upon
the actions of the lenders  thereunder,  all  amounts  owed under the  Revolving
Credit  Facility and Senior Notes could be declared due and payable.  If Cone is
not able to repay all  amounts  owed under the  Revolving  Credit  Facility  and
Senior Notes, the lenders thereunder would have the right to proceed against the
collateral granted to the lenders to secure such  indebtedness.  An acceleration
of  indebtedness  under the  Revolving  Credit  Facility  and Senior Notes would
result in a cross-default under Cone's indebtedness under its 8-1/8% debentures.
If the indebtedness  outstanding  under the Revolving Credit Facility and Senior
Notes  were to be  accelerated,  there  can be no  assurance  that the funds and
assets of the company would be  sufficient  to repay in full such  indebtedness,
and there can be no assurance  that there would be sufficient  assets  remaining
after  such  repayments  to  pay  amounts  due in  respect  of any or all of the
company's other  indebtedness or to fund  continuing  operations.  The financial
statements do not include any adjustments  that might result from the outcome of
these matters.

By March 2004,  or earlier if events of default  occur,  Cone must either amend,
refinance or replace the Revolving  Credit  Facility and Senior Notes.  Based on
Cone's operating results,  its business  environment and the negative perception
by lenders regarding the U.S. textile industry,  there is no assurance that Cone
will be able to amend as needed,  refinance  or  replace  its  Revolving  Credit
Facility  and its  Senior  Notes or  otherwise  obtain  financing  on terms  and
conditions  acceptable  to  Cone.  Cone  has not yet been  able to  finance  its
proposed  denim  expansion  strategy,  and its current debt  structure  will not
permit that financing.

On January 16, 2003 Cone entered into a letter of intent with WLR Recovery  Fund
II, L.P.  ("WLR"),  a fund managed by W.L. Ross and Company,  in which WLR would
support a  recapitalization  of Cone's balance sheet that would provide funds to
allow  Cone to execute  its  Mexican  expansion  strategy.  Based  upon  present
economic conditions and Cone's near-term operating outlook the  recapitalization
plan as  described  in Cone's Form 10-K for the year ended  December 29, 2002 is
not  expected to be  consummated.  Cone is  continuing  to explore  alternatives
related to  financing  its  business  and the  expansion  of denim  capacity  in
low-cost countries.


<PAGE>


Note 5.  Class A Preferred Stock

On February 12,  2003,  Cone  declared a 12.0% stock  dividend on Cone's Class A
Preferred  Stock,  which was paid on March 31, 2003. The dividend was charged to
retained  earnings in the amount of approximately  $3.9 million in Cone's fiscal
quarter ended June 29, 2003. The 2004 dividend rate for Class A Preferred  Stock
is 11.5%, payable March 31, 2004.


Note 6.  Depreciation and Amortization

The  following  table  presents   depreciation  and  amortization   included  in
operations in the consolidated condensed statements of operations.

<TABLE>
<CAPTION>
                              Thirteen             Thirteen           Twenty-Six          Twenty-Six
                             Weeks Ended          Weeks Ended         Weeks Ended         Weeks Ended
(in thousands)                 6/29/03              6/30/02             6/29/03             6/30/02
                            --------------------------------------------------------------------------
<S>                          <C>                  <C>                 <C>                 <C>
Depreciation                 $     4,833          $     5,048         $     9,623         $    10,098
Amortization                          23                   23                  46                  46
                            ---------------------------------------------------------------------------
                             $     4,856          $     5,071         $     9,669         $    10,144
                            ---------------------------------------------------------------------------
</TABLE>


Note 7.  Earnings (Loss) Per Share

The following  table sets forth the  computation  of basic and diluted  earnings
(loss) per common share ("EPS").

<TABLE>
<CAPTION>
                                                               Thirteen           Thirteen
                                                              Weeks Ended        Weeks Ended
(in thousands, except per share data)                           6/29/03            6/30/02
                                                             ----------------------------------
<S>                                                           <C>                <C>
Net income (loss)                                             $    (3,571 )      $     3,093
Preferred dividends                                               ( 1,022 )          ( 1,078 )
                                                             ----------------------------------
Basic EPS - income (loss) available to common
  stockholders                                                    ( 4,593 )            2,015
Effect of dilutive securities                                           -                  -
                                                             ----------------------------------
Diluted EPS - income (loss) available to common
  stockholders after assumed conversions                      $   ( 4,593 )      $     2,015
                                                             ----------------------------------

Determination of shares:
Weighted-average shares                                            25,832             25,700
Contingently issuable (unvested restricted shares)                      -                ( 8 )
                                                             ----------------------------------
Basic EPS - weighted-average shares                                25,832             25,692
Effect of dilutive securities                                           -                417
                                                             ----------------------------------
Diluted EPS - adjusted weighted-average shares after
  assumed conversions                                              25,832             26,109
                                                             ----------------------------------

  Earnings (loss) per share - basic and diluted               $     (0.18 )      $      0.08
                                                             ----------------------------------
</TABLE>

The number of potentially  dilutive common stock options  outstanding  using the
treasury  stock  method  for the  thirteen  weeks  ended  June  29,  2003,  were
approximately  220,000 but were not included in the  computation of diluted loss
per share because to do so would have been antidilutive.


<PAGE>


Note 7.  Earnings (Loss) Per Share (continued)

The  following  table sets forth the  computation  of basic and  diluted  income
(loss) per common share ("EPS").

<TABLE>
<CAPTION>
                                                              Twenty-Six         Twenty-Six
                                                              Weeks Ended        Weeks Ended
(in thousands, except per share data)                           6/29/03            6/30/02
                                                             ----------------------------------
<S>                                                           <C>                <C>
Net income (loss)                                             $   ( 1,770 )      $     4,533
Preferred dividends                                               ( 1,998 )          ( 2,110 )
                                                             ----------------------------------
Basic EPS - income (loss) available to common
  stockholders                                                    ( 3,768 )            2,423
Effect of dilutive securities                                           -                  -
                                                             ----------------------------------
Diluted EPS - income (loss) available to common
  stockholders after assumed conversions                      $   ( 3,768 )      $     2,423
                                                             ----------------------------------

Determination of shares:
Weighted-average shares                                            25,795             25,687
Contingently issuable (unvested restricted shares)                      -                ( 8 )
                                                             ----------------------------------
Basic EPS - weighted-average shares                                25,795             25,679
Effect of dilutive securities                                           -                386
                                                             ----------------------------------
Diluted EPS - adjusted weighted-average shares after
  assumed conversions                                              25,795             26,065
                                                             ----------------------------------

  Earnings (loss) per share - basic and diluted               $    ( 0.15 )      $      0.09
                                                             ----------------------------------
</TABLE>

The number of potentially  dilutive common stock options  outstanding  using the
treasury  stock  method  for the  twenty-six  weeks  ended June 29,  2003,  were
approximately  230,000 but were not included in the  computation of diluted loss
per share because to do so would have been antidilutive.


Note 8.  Segment Information

Cone has three principal business segments based upon organizational  structure:
1) Denim; 2) Commission Finishing; and 3) Decorative Fabrics.

Operating  income  (loss)  for each  segment  is total  revenue  less  operating
expenses  applicable to the segment.  Intersegment  revenue relates to the denim
and  commission  finishing  segments.   Equity  in  earnings  of  unconsolidated
affiliates is included in the denim segment.  Impairment of asset charges,  EARS
expenses,  unallocated  expenses,  interest and income tax expense (benefit) are
not included in segment  operating income (loss).  Unallocated  expenses include
certain legal expenses, bank fees and fees and discounts on the sale of accounts
receivable.


<PAGE>


Note 8.  Segment Information (continued)

Net sales and income (loss) from operations for Cone's operating segments are as
follows:

<TABLE>
<CAPTION>
                                                                        Thirteen            Thirteen
                                                                       Weeks Ended         Weeks Ended
(in thousands)                                                           6/29/03             6/30/02
                                                                      -----------------------------------
<S>                                                                    <C>                 <C>
Net Sales
  Denim                                                                $    78,930         $   101,725
  Commission Finishing                                                      11,348              15,365
  Decorative Fabrics                                                         6,243               9,491
  Other                                                                        114                  81
                                                                      -----------------------------------
                                                                            96,635             126,662
Less Intersegment Sales                                                        299                 825
                                                                      -----------------------------------
                                                                       $    96,336         $   125,837
                                                                      -----------------------------------
Income (Loss) from Operations
  Denim                                                                $     5,496         $     8,692
  Commission Finishing                                                        (205 )             1,073
  Decorative Fabrics                                                       ( 1,122 )             ( 145 )
  Other                                                                      ( 411 )             ( 626 )
  Unallocated Expenses                                                       ( 650 )             ( 464 )
                                                                      -----------------------------------
                                                                             3,108               8,530
  Impairment of Assets                                                       ( 766 )                 -
                                                                      -----------------------------------
                                                                             2,342               8,530
  Less Equity in Earnings of Unconsolidated Affiliates                         506                 729
                                                                      -----------------------------------
                                                                             1,836               7,801
Other Expense, Net                                                         ( 4,144 )           ( 4,424 )
Equity Appreciation Rights                                                 ( 4,117 )                 -
                                                                      -----------------------------------
Income (Loss) from Operations before Income Tax Expense
  (Benefit) and Equity in Earnings of Unconsolidated Affiliates        $   ( 6,425 )       $     3,377
                                                                      -----------------------------------
</TABLE>


<PAGE>


Note 8.  Segment Information (continued)

<TABLE>
<CAPTION>
                                                                    Twenty-Six          Twenty-Six
                                                                    Weeks Ended         Weeks Ended
(in thousands)                                                        6/29/03             6/30/02
                                                                   -----------------------------------
<S>                                                                 <C>                 <C>
Net Sales
  Denim                                                             $   163,425         $   183,840
  Commission Finishing                                                   22,968              30,524
  Decorative Fabrics                                                     13,618              19,810
  Other                                                                     188                 143
                                                                   -----------------------------------
                                                                        200,199             234,317
Less Intersegment Sales                                                   1,599               2,660
                                                                   -----------------------------------
                                                                    $   198,600         $   231,657
                                                                   -----------------------------------
Income (Loss) from Operations
  Denim                                                             $    13,183         $    14,473
  Commission Finishing                                                    ( 193 )             2,129
  Decorative Fabrics                                                    ( 2,024 )               371
  Other                                                                   ( 807 )             ( 994 )
  Unallocated Expenses                                                    ( 954 )             ( 820 )
                                                                   -----------------------------------
                                                                          9,205              15,159
  Impairment of Assets                                                    ( 766 )                 -
                                                                   -----------------------------------
                                                                          8,439              15,159
  Less Equity in Earnings of Unconsolidated Affiliates                    1,487                 682
                                                                   -----------------------------------
                                                                          6,952              14,477
Other Expense, Net                                                      ( 8,032 )           ( 9,179 )
Equity Appreciation Rights                                              ( 4,117 )                 -
                                                                   -----------------------------------
Income (Loss) from Operations before Income Tax Expense
  (Benefit) and Equity in Earnings of Unconsolidated Affiliates     $   ( 5,197 )       $     5,298
                                                                   -----------------------------------
</TABLE>


Note 9.  Comprehensive Income (Loss)

Comprehensive  income (loss) is the total of net income (loss) and other changes
in equity,  except those resulting from investments by owners and  distributions
to owners not reflected in net income (loss).  Total comprehensive income (loss)
for the periods was as follows:

<TABLE>
<CAPTION>
                                            Thirteen            Thirteen          Twenty-Six          Twenty-Six
                                           Weeks Ended         Weeks Ended        Weeks Ended         Weeks Ended
(in thousands)                               6/29/03             6/30/02            6/29/03             6/30/02
                                        -------------------------------------------------------------------------------
<S>                                        <C>                 <C>                <C>                 <C>
Net income (loss)                          $  ( 3,571 )        $   3,093          $  ( 1,770 )        $   4,533
Other comprehensive income (loss),
  cotton derivatives gains (losses)             ( 579 )              843               ( 862 )              666
                                        -------------------------------------------------------------------------------
                                           $  ( 4,150 )        $   3,936          $  ( 2,632 )        $   5,199
                                        -------------------------------------------------------------------------------
</TABLE>

Cotton  derivatives  losses  as of June  29,  2003,  reflected  above  in  other
comprehensive  income  (loss) will be  recognized in cost of goods sold over the
next twelve months.



<PAGE>



Note 10.  Financial Instruments

Cone utilizes derivative  financial  instruments to manage risks associated with
changes in cotton prices.

Cotton is the primary raw material for Cone's fabric  manufacturing  operations.
Cone has an established cotton purchasing  program,  administered in conformance
with  policies  approved by the Board of Directors,  to ensure an  uninterrupted
supply of appropriate  quality and quantities of cotton,  to cover committed and
anticipated  fabric  sales and to manage  margin  risks  associated  with  price
fluctuations  on  anticipated  cotton  purchases.  Cone  primarily  uses forward
purchase contracts and, to a lesser extent,  futures and option contracts.  Cone
considers its cotton derivatives to be primarily cash flow hedges of anticipated
future  transactions  under SFAS No. 133. The  effective  portion of  derivative
gains and losses for these hedges is initially  reported as a component of other
comprehensive  income (loss) outside  results of operations and is  subsequently
reclassified into results of operations when the forecasted  transactions  being
hedged  affect  results  of  operations.  At June 29,  2003,  Cone  recorded  in
accumulated other  comprehensive  income (loss) cotton derivative losses, net of
deferred tax  benefit,  of $0.5  million.  At June 30,  2002,  Cone  recorded in
accumulated  other  comprehensive  income (loss) cotton derivative gains, net of
deferred  taxes,  of $1.0 million.  Gains of less than $0.1 million and gains of
$0.7  million  were  credited  to cost of goods  sold  during the  thirteen  and
twenty-six  weeks ended June 29, 2003,  respectively.  Gains of $0.2 million and
$0.6  million  were  credited  to cost of goods  sold  during the  thirteen  and
twenty-six weeks ended June 30, 2002,  respectively.  The ineffective portion of
derivative  gains and losses is reported in results of  operations  immediately.
Hedge  ineffectiveness for the thirteen and twenty-six weeks ended June 29, 2003
and June 30, 2002, was immaterial.


Note 11.  Restructuring and Impairment of Assets

A roll-forward of the activity related to Cone's  restructuring  charges for the
twenty-six weeks ended June 29, 2003 and June 30, 2002 follows:

                                                           Corporate &
                                                         Textile Products
          (in thousands)                                      Group
                                                      ----------------------

          Balance, December 29, 2002                  $               58
          Deductions:
          Terminal leave and related benefits                       ( 15  )
                                                      ----------------------
          Balance, June 29, 2003                      $               43
                                                      ----------------------

          Balance, December 30, 2001                  $              639
          Deductions:
          Terminal leave and related benefits                      ( 639  )
                                                      ----------------------
          Balance, June, 30, 2002                     $                -
                                                      ----------------------

In the second  quarter of 2003,  Cone made an adjustment  to certain  impairment
charges  recognized in 2000. Cone recorded a $0.8 million  impairment  charge on
the Consolidated  Condensed Statement of Operations,  as a further write down to
certain  assets  available  for sale that it had reached an agreement to sell in
the third quarter of 2003.  The fair value that is ultimately  realized upon the
sale may differ from the currently estimated fair value.


<PAGE>


Note 12.  Income Taxes

Excluding equity in earnings of  unconsolidated  affiliates,  upon which no U.S.
tax was  provided,  the  effective  tax benefit for the thirteen and  twenty-six
weeks  ended  June  29,  2003,  was  37%.   Excluding   equity  in  earnings  of
unconsolidated  affiliates,  upon which no U.S. tax was provided,  the effective
tax rate for the thirteen and twenty-six  weeks ended June 30, 2002, was 30% and
27%,  respectively.  Tax  benefits  of export  sales  significantly  reduced the
effective tax rate for the thirteen and twenty-six weeks ended June 30, 2002.


<PAGE>


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

OVERVIEW

The U.S. economy continued its tepid recovery in the second quarter of 2003. The
U.S.  Commerce  Department  reported  that the economy grew at an annual rate of
2.4% in the second  quarter of 2003,  compared  to the 1.4%  growth rate for the
first quarter of 2003 and fourth quarter of 2002. However, U.S. defense spending
accounted for 1.0% of the growth in the second quarter 2003 GDP. Economic growth
continues  to be  negatively  impacted  by several  factors,  including  lack of
business  spending,  war worries and bad weather in the Eastern U.S. In response
to the weakness in the economic  recovery  since the mild recession of 2001, the
U.S.  government  has attempted to accelerate  the rate of growth in the economy
with massive monetary and fiscal stimulus efforts. While some economists believe
that the anticipated consumer spending effect of the tax package will enable the
U.S.  economy  to finally  turn the corner  over the next six months to a higher
rate of growth, Cone has yet to see an improvement in our business outlook.

In the face of the difficult  retail  environment  and  generally  poor domestic
textile market  conditions,  Cone experienced a 14.3% sales decline in the first
half of 2003, as compared with the prior year period, and reported a net loss of
$1.8 million or $0.15 per share after preferred  dividends for the first half of
2003.  For  comparison,  Cone  reported  net income of $4.5 million or $0.09 per
share after preferred dividends for the first half of 2002.

As a result of sluggish  retail sales in the first half of 2003,  retailers have
been  extremely  conservative  in the level of orders for the critical  fall and
holiday 2003 selling  seasons.  As retailers have  aggressively  acted to reduce
their inventories this has increased  inventories  throughout the balance of the
softgoods pipeline.  Many of our customers have indicated that they will seek to
reduce their inventories in the second half of 2003, which is expected to impact
negatively Cone's profitability as a result of lower sales volume, sales revenue
and  curtailed  operating  schedules.  The  continued  pressure on denim  prices
coupled  with  rising raw  material  costs is  expected  to reduce  margins  and
operating  earnings  in the second  half of 2003,  as  compared  with the second
quarter of 2003.

The textile  business is an extremely  competitive  business on a global  basis.
Overall  apparel  and  textile  imports  into  the  U.S.  continued  to  grow at
double-digit  rates with the bulk of the growth  coming from the Far East.  Many
Asian countries,  including China, have artificially  pegged their currencies to
the U.S.  dollar,  which has helped to keep their goods cheaper thereby boosting
their exports.  This currency effect,  the general global  oversupply of apparel
and textiles,  U.S. retail  consolidation  and the slowing in consumer  spending
have  resulted  in volume and  deflationary  pricing  pressures  throughout  the
apparel and home furnishings  markets.  On an aggregate basis the North American
Free Trade  Agreement  ("NAFTA")  and the  Caribbean  Basin  Initiative  ("CBI")
countries  currently  provide  approximately  60% of the denim  jeans and fabric
imports  into the U.S. In the near term,  imports of denim  apparel  continue to
accelerate as U.S. garment producers  continue to shutter U.S.  operations.  For
the twelve-month period ended May 2003, imports of denim apparel from Mexico and
CBI grew at an annual rate of 10.8%, as compared with a 47.6% rate of growth for
imports from the Far East.  Denim  apparel  produced in CBI is made  principally
from U.S.  fabrics while denim apparel produced in Mexico is made typically from
U.S. or Mexican produced fabrics.


<PAGE>


Cone's business  strategy is to invest and grow in its core franchises  where it
is  recognized  as a  market  leader.  As a  result  of  economic  and  industry
conditions,  Cone is focused on four  initiatives:  (1) engage in  businesses in
which Cone believes it is an industry leader; (2) retain, attract,  motivate and
focus  a  talented  and  capable   management  team;  (3)  migrate  to  low-cost
manufacturing  platforms for commodity products; and (4) attract and efficiently
invest  capital.  Our  long-term  migration  strategy is focused on the Americas
where free trade  agreements,  such as NAFTA,  CAFTA (Central America Free Trade
Act) and FTAA (Free Trade of the  Americas),  are in place or are expected to be
enacted in the future.  We believe  that denim jeans  produced in these  regions
will maintain a significant  market share of the U.S.  retail market  because of
certain  unique  product  characteristics.  Among the  characteristics  of denim
fabric  and jeans that make them more  likely to be sourced  closer to or in the
U.S. are the  significant  fashion  element,  especially in women's  jeans,  the
overall  low labor  content as  compared  to other  textiles  and  apparel,  the
availability of U.S. cotton and certain other supply chain factors.

Cone's  strategy  is to grow its denim  business  by  expanding  its  production
capacity in Mexico or other low-cost  countries in this hemisphere.  The options
to expand Cone's denim capacity in low cost countries include acquiring existing
operations, acquiring existing buildings and retrofitting into a denim operation
or building a greenfield  facility.  We believe that the capital  investment for
such a denim expansion is approximately $60 - $90 million.  The capital cost for
such a facility will be dependent  upon its size, age and  flexibility.  Funding
the  denim  facility  will  require  debt  and  equity   financing  and  certain
modifications to Cone's current debt structure and lending agreements.  Cone has
not arranged  financing or modified its debt structure or lending  agreements to
date,  and there can be no assurance  that such  financing  will be available on
acceptable  terms and  conditions or that its present  lenders will agree to the
required modifications.

Regarding the  near-term  operating  outlook,  we expect  continued  pressure on
margins and volumes as a result of weak U.S. economic conditions,  higher cotton
costs, higher than desired customer and competitor inventory levels,  retailers'
cautiousness  and imports.  Longer term the monetary  and fiscal  stimuli  being
applied  to the  U.S.  economy  along  with  the  inevitable  end  to  inventory
liquidations should result in some recovery in our markets.


RESULTS OF OPERATIONS

Second  Quarter Ended June 29, 2003 Compared with Second  Quarter Ended June 30,
2002.

For the second  quarter of 2003,  Cone had sales of $96.3  million,  as compared
with sales of $125.8 million for the second quarter of 2002 or a 23.4% decrease.
The decrease in sales was attributable to lower unit volume in all segments,  as
domestic retail sales of apparel continued to reflect weak consumer demand.

Gross profit margin  decreased to 10.8% of sales for the second quarter of 2003,
as compared with 13.7% for the second  quarter of 2002. In the second quarter of
2003,  the  decline  in  gross  profit  margin  was  primarily  attributable  to
unfavorable   manufacturing   variances   associated  with  curtailed  operating
schedules resulting from lower sales.


<PAGE>


Cone operates in three  principal  business  segments:  1) Denim;  2) Commission
Finishing;  and 3) Decorative Fabrics.  (See Note 8 of the Notes to Consolidated
Condensed Financial Statements included in Part I, Item 1.)

     Denim.  Outside sales (total segment sales less intercompany  sales) of the
     denim  segment  for the  second  quarter  of 2003 were  $78.8  million,  as
     compared with sales of $101.7  million for the second quarter of 2002, or a
     decrease of 22.6%.  Sales yards decreased 23.5%, as compared with the prior
     year's second  quarter  results,  as a result of market  weaknesses and the
     comparison against a strong prior year period. Denim sales prices continued
     to decline slightly, as compared with the second quarter of 2002. Operating
     income  for the denim  segment  was $5.5  million  or 7.0% of sales for the
     second quarter of 2003, as compared with $8.7 million, or 8.5% of sales for
     the  second  quarter  of  2002.   The  decline  in  operating   income  was
     attributable to lower sales volume and unfavorable  manufacturing variances
     associated with curtailed  operating  schedules.  Operating  income for the
     segment  includes the equity in earnings  (losses) of the Parras Cone joint
     venture and the Altamira industrial park joint venture.  Equity in earnings
     of Parras Cone was $0.6 million for the second quarter of 2003, as compared
     with $0.8 million for the second quarter of 2002.

     Commission Finishing.  Outside sales (total segment sales less intercompany
     sales) of the commission  finishing  segment for the second quarter of 2003
     were $11.2  million,  down 22.8%,  as compared  with  second  quarter  2002
     results.  Sales volume declined  significantly  as a result of overall weak
     market  conditions in all of  Carlisle's  market  segments.  For the second
     quarter of 2003, the segment  reported a loss of $0.2 million,  as compared
     with a profit of $1.1  million  for the second  quarter of 2002.  Operating
     results were negatively  impacted by lower sales volume,  which resulted in
     curtailed  operating  schedules,  and higher energy costs.  Plant operating
     efficiencies  continued  to  improve  in the  second  quarter  of 2003,  as
     compared  with the  second  quarter  of 2002.  The home  fashions  industry
     continues to experience extremely difficult market conditions.

     Decorative  Fabrics.  Sales revenue in the second  quarter of 2003 was $6.2
     million,  as compared  with $9.5 million for second  quarter  2002.  Market
     conditions in the bedding and furniture  segments  continued to be weak and
     were exacerbated by increased import  penetration of furniture products and
     the low level of new product  introductions  achieved by Cone  Jacquards in
     2001 and 2002.  Decorative fabrics operating loss for the second quarter of
     2003 was $1.1  million,  as compared  with $0.1 million for second  quarter
     2002.  Operating  results were  affected  negatively by lower sales volume,
     resulting in poor plant  utilization  levels and  unsatisfactory  operating
     efficiencies.   In   addition,   in  order  to  improve   its  new  product
     introductions  in 2003 the business unit increased  expenditures  on design
     and sampling.

Selling and administrative  expenses for the second quarter of 2003 were 8.1% of
sales,  as  compared  to 7.5%  for the  second  quarter  of  2002.  Selling  and
administrative  expenses were a higher percentage of sales in the second quarter
of 2003 primarily as a result of significantly  lower sales,  increased  pension
costs related to a negative  return on plan assets in 2002  partially  offset by
lower accruals for performance-based compensation.


<PAGE>


Interest  expense for the second  quarter of 2003 was $3.8 million,  as compared
with $4.0  million for the second  quarter of 2002.  Benefits  from lower market
interest  rates and lower  borrowings  outstanding  were  partially  reduced  by
increased rates under the lending agreements.  Other expenses of $0.4 million in
the second  quarter of 2003  consist of the  ongoing  expenses  of the  accounts
receivable  securitization program, as compared to other expense of $0.5 million
in the second quarter of 2002.

On May 27, 2003, Cone amended agreements with its lenders extending the maturity
date of its existing  Revolving  Credit  Facility and its Senior Note obligation
through  March 15, 2004.  With the  amendments,  the interest rate on the senior
note  remained  14.2%.  The  revolving  credit  agreement  was  split  into  two
components. The first component is a $25 million, 12% senior note and the second
component is a $31 million  revolving  credit facility bearing interest at LIBOR
plus 6.75%.

The Revolving Credit Facility and Senior Notes call for monthly amortizations of
$0.8 million, beginning in July 2003. As part of the extension, Cone settled the
Equity Appreciation  Rights ("EARS"),  which were contingent rights granted as a
part of the November 2001 agreements,  for $4.1 million. The rights entitled the
lenders,  upon giving of notice within two years following  January 15, 2003, to
receive a payment of the  greater  of $1  million or 10% of the market  value of
Cone's  outstanding  common stock if Cone did not refinance the Revolving Credit
Facility  and Senior Note by January 15, 2003,  which did not occur.  The rights
were  settled for $2.1 million in cash,  $1.8  million in senior  notes  bearing
interest at 12% and 14.2% maturing on March 15, 2004 and  approximately  169,000
shares of Cone common stock.

Excluding equity in earnings of  unconsolidated  affiliates,  upon which no U.S.
tax was provided,  the  effective tax benefit for the thirteen  weeks ended June
29, 2003, was 37%.  Excluding equity in earnings of  unconsolidated  affiliates,
upon which no U.S. tax was  provided,  the  effective  tax rate for the thirteen
weeks ended June 30, 2002,  was 30%. Tax benefits of export sales  significantly
reduced the effective tax rate for the thirteen weeks ended June 30, 2002.

For the second  quarter of 2003,  Cone had a net loss $3.6  million or $0.18 per
share  after  preferred  dividends.  Included  in the net loss  were  before-tax
charges  of $4.1  million  for the  EARS  payment  and  $0.8  million  of  asset
impairment  charges.  For the second  quarter of 2002,  Cone had a net profit of
$3.1 million or $0.08 per share after preferred dividends.


Six Months Ended June 29, 2003 Compared with Six Months Ended June 30, 2002.

For the first six months of 2003, Cone had sales of $198.6  million,  a decrease
of 14.3%,  as compared with sales of $231.7  million for the first six months of
2002. The decrease in sales was across all business segments.

Gross profit  margin  decreased to 12.2% of sales for the first half of 2003, as
compared  with 13.6% for the first  half of 2002.  The  decline in gross  profit
margin  was  primarily  attributable  to  unfavorable   manufacturing  variances
associated with curtailed  operating  schedules partially offset by lower cotton
costs and the benefits of cost reduction programs.

Cone operates in three  principal  business  segments:  1) Denim;  2) Commission
Finishing;  and 3) Decorative Fabrics.  (See Note 8 of the Notes to Consolidated
Condensed Financial Statements included in Part I, Item 1.)


<PAGE>


     Denim.  Outside sales (total segment sales less intercompany  sales) of the
     denim  segment were $163.1  million for the first half of 2003, as compared
     with sales of $183.8  million for the first half of 2002,  or a decrease of
     11.3%.  Sales yards were down in the first half of 2003,  as compared  with
     the first half of 2002 as a result of market weaknesses that became evident
     in the second quarter of 2003.  Denim sales prices  declined  slightly,  as
     compared  with the  first  half of 2002.  Operating  income  for the  denim
     segment was $13.2  million or 8.1% of sales for the first half of 2003,  as
     compared  with  $14.5  million or 7.9% of sales for the first half of 2002.
     The decline in operating  income was primarily  attributable to lower sales
     volume  partially  offset by lower cotton costs.  Operating  income for the
     segment  includes the equity in earnings  (losses) of the Parras Cone joint
     venture and the Altamira industrial park joint venture.  Equity in earnings
     of Parras  Cone was $1.6  million  for the first half of 2003,  as compared
     with $0.9  million  for the first half of 2002.  Parras Cone  results  were
     favorably impacted by lower raw material costs and the decline in the value
     of the Mexican peso versus the U.S. dollar.

     Commission Finishing.  Outside sales (total segment sales less intercompany
     sales) of the commission  finishing segment decreased by 22.1%, as compared
     with first half 2002.  Sales volume declined  significantly  as a result of
     overall weak market  conditions in all of Carlisle's  market segments.  For
     the first half of 2003,  the segment  reported a loss of $0.2  million,  as
     compared with operating  income of $2.1 million for the first half of 2002.
     Operating  results were  negatively  impacted by lower sales volume,  which
     resulted in curtailed operating  schedules,  and higher energy costs. Plant
     operating efficiencies continued to improve in 2003, as compared with 2002.

     Decorative  Fabrics.  Sales  revenue  in the  first  half of 2003 was $13.6
     million,  as  compared  with $19.8  million  for first half of 2002.  Sales
     volume decreased by 30.8% as market conditions in the bedding and furniture
     segments  continued to be weak and were  exacerbated  by  increased  import
     penetration  of  furniture  products  and  the  low  level  of new  product
     introductions  achieved  by  Cone  Jacquards  in  2001  and  2002.  Segment
     operating  loss was $2.0  million  for the first half of 2003,  as compared
     with segment operating income of $0.4 million for the comparable prior year
     period.  Operating results were affected  negatively by lower sales volume,
     resulting in poor plant  utilization  levels and  unsatisfactory  operating
     efficiencies.   In   addition,   in  order  to  improve   its  new  product
     introductions  in 2003 the business unit increased  expenditures  on design
     and sampling.

Selling  and  administrative  expenses  for the first  half of 2003  were  $16.5
million or 8.3% of sales,  as compared to $17.1 million or 7.4% of sales for the
first half of 2002. While selling and  administrative  expenses were lower on an
aggregate basis they were a higher percentage of sales in the first half of 2003
primarily as a result of lower sales and  increased  pension  costs related to a
negative return on plan assets in 2002.

Interest  expense for the first half of 2003 was $7.5 million,  as compared with
$8.3 million for the first half of 2002.  Benefits from lower  borrowing  levels
and lower  market  interest  rate levels were  partially  offset by increases in
rates under Cone's financing  agreements.  Other expenses of $0.7 million in the
first half of 2003  include the  ongoing  expenses  of the  accounts  receivable
securitization  program,  as  compared to other  expense of $1.0  million in the
first half of 2002.



<PAGE>


Excluding equity in earnings of  unconsolidated  affiliates,  upon which no U.S.
tax was provided,  the effective tax benefit for the twenty-six weeks ended June
29, 2003 was 37%.  Excluding  equity in earnings of  unconsolidated  affiliates,
upon which no U.S. tax was provided,  the effective tax rate for the  twenty-six
weeks ended June 30, 2002 was 27%. Tax  benefits of export  sales  significantly
reduced the effective tax rate for the twenty-six weeks ended June 30, 2002.

For the first  half of 2003,  Cone had a net loss of $1.8  million  or $0.15 per
share  after  preferred  dividends.  Included  in the net loss  were  before-tax
charges  of $4.1  million  for the  EARS  payment  and  $0.8  million  of  asset
impairment  charges.  For the first six months of 2002, Cone had a net profit of
$4.5 million or $0.09 per share after preferred dividends.


LIQUIDITY AND CAPITAL RESOURCES

Cone's  principal  capital  components  consists of debt  outstanding  under its
Revolving  Credit  Facility,   its  Senior  Notes,  its  8-1/8%  Debentures  and
stockholders'  equity.  Primary  sources of liquidity are  internally  generated
funds,  availability  under the  Revolving  Credit  Facility  and a $60  million
Receivables   Purchase  and  Servicing   Agreement   (the  "A/R   Securitization
Facility").

The following is a summary of primary financing agreements as of June 29, 2003.

<TABLE>
<CAPTION>
                                                                   Interest/
  ($ Amounts in Millions)       Facility            Amount         Discount
    Financing Agreement        Commitment        Outstanding         Rate       Maturity Date
---------------------------------------------------------------------------------------------
<C>                           <C>                <C>                <C>         <C>
                                                                      %
8-1/8% Debentures              $   100.0          $   100.0          8.125      Mar 15, 2005
14.2% Senior Notes                  22.5               22.5         14.200      Mar 15, 2004
12.0% Senior Notes                  26.2               26.2         12.000      Mar 15, 2004
Revolving Credit Facility           31.3               10.0          8.328      Mar 15, 2004
A/R Securitization Facility         60.0               30.3          4.710      Sept 1, 2004

</TABLE>

On May 27, 2003, Cone amended agreements with its lenders extending the maturity
date of its existing  Revolving  Credit  Facility and its Senior Note obligation
through  March 15, 2004.  With the  amendments,  the interest rate on the senior
note  remained  14.2%.  The  revolving  credit  agreement  was  split  into  two
components. The first component is a $25 million, 12% senior note and the second
component is a $31 million  revolving  credit facility bearing interest at LIBOR
plus 6.75%.

The Revolving Credit Facility and Senior Notes call for monthly amortizations of
$0.8 million, beginning in July 2003. As part of the extension, Cone settled the
EARS,  which  were  contingent  rights  granted as a part of the  November  2001
agreements,  for $4.1 million.  The rights entitled the lenders,  upon giving of
notice within two years following  January 15, 2003, to receive a payment of the
greater of $1 million or 10% of the market  value of Cone's  outstanding  common
stock if Cone did not refinance the Revolving Credit Facility and Senior Note by
January 15, 2003,  which did not occur. The rights were settled for $2.1 million
in cash, $1.8 million in senior notes bearing interest at 12% and 14.2% maturing
on March 15, 2004 and approximately 169,000 shares of Cone common stock.



<PAGE>


At June 29, 2003, Cone had availability under its financing  agreements of $18.3
million.   Availability   under  the  Revolving  Credit  Facility  and  the  A/R
Securitization  Facility is determined by overall facility commitment levels and
borrowing base calculations, as defined in the respective agreements. During the
first six  months of 2003,  cash used in  operations  was $3.7  million  as cash
generated was offset by an increase of $11.9 million in inventories.  During the
first six months of 2003, Cone invested in capital  expenditures of $2.5 million
and received proceeds of $1.1 million from the sale of non-essential  equipment.
Subsequent   to  June  29,  2003,   we  funded  $4.5  million  in  pension  plan
contributions and amortized $1.7 million of long-term debt reducing availability
under our  financing  agreements  to $8.7 million as of August 12, 2003.  Cone's
domestic capital budget was $10.0 million for 2003 but is expected to be reduced
to $5.0 - $6.0  million to reflect  poor  market  conditions  in the textile and
apparel  sectors.  Cone's  capital  budget is based  upon  project  requests  to
maintain  its  manufacturing  facilities  in good  condition  and to provide the
flexibility  and capability  necessary to meet market  demands.  Cone expects to
finance capital  expenditures  with internally  generated funds and availability
under its Revolving Credit Facility.

Given the current business environment,  it is likely that we will need to amend
our Revolving Credit Facility and Senior Notes during the third quarter of 2003.
There can be no assurance that an amendment to the Revolving Credit Facility and
Senior Notes will be obtained.  Absent an amendment, we may be out of compliance
with one or more covenants some time during or after September 2003.

The failure to comply with the provisions of the Revolving  Credit  Facility and
Senior Notes would result in events of default  thereunder,  and, depending upon
the actions of the lenders  thereunder,  all  amounts  owed under the  Revolving
Credit  Facility and Senior Notes could be declared due and payable.  If we were
not able to repay all  amounts  owed under the  Revolving  Credit  Facility  and
Senior Notes, the lenders thereunder would have the right to proceed against the
collateral  granted  to  the  lenders  to  secure  such  indebtedness.   If  the
indebtedness  outstanding  under the Revolving  Credit Facility and Senior Notes
were to be  accelerated,  there can be no assurance that the funds and assets of
the company would be sufficient  to repay in full such  indebtedness,  and there
can be no assurance that there would be sufficient  assets  remaining after such
repayments  to pay amounts due in respect of any or all of the  company's  other
indebtedness.  An  acceleration  of  indebtedness  under  the  Revolving  Credit
Facility  and  Senior  Notes  would  result  in  a  cross-default  under  Cone's
indebtedness under its 8-1/8% debentures.

By March 2004,  or earlier if events of default  occur,  Cone must either amend,
refinance or replace the Revolving  Credit  Facility and Senior Notes.  Based on
Cone's operating results,  its business  environment and the negative perception
by lenders regarding the U.S. textile industry,  there is no assurance that Cone
will be able to amend as needed,  refinance  or  replace  its  Revolving  Credit
Facility  and its  Senior  Notes or  otherwise  obtain  financing  on terms  and
conditions  acceptable  to  Cone.  Cone  has not yet been  able to  finance  its
proposed  denim  expansion  strategy,  and its current debt  structure  will not
permit that financing.

On January 16, 2003, Cone entered into a letter of intent with WLR Recovery Fund
II, L.P.  ("WLR"),  a fund managed by W.L. Ross and Company,  in which WLR would
support a  recapitalization  of Cone's balance sheet that would provide funds to
allow  Cone to execute  its  Mexican  expansion  strategy.  Based  upon  present
economic conditions and Cone's near-term operating outlook, the recapitalization
plan as  described  in Cone's Form 10-K for the year ended  December 29, 2002 is
not  expected to be  consummated.  Cone is  continuing  to explore  alternatives
related to  financing  its  business  and the  expansion  of denim  capacity  in
low-cost countries.



<PAGE>


On June 29, 2003, Cone's capital  structure  consisted of $157.9 million of debt
(including  current  maturities) and $89.3 million of stockholders'  equity. For
comparison,  Cone had $161.0 million of debt (including current  maturities) and
$89.4 million of stockholders' equity at June 30, 2002.

Accounts  receivable on June 29, 2003 were $33.6 million, as compared with $40.0
million at June 30, 2002. Receivables,  including those sold pursuant to the A/R
Securitization  Facility,  represented 63 days of sales  outstanding at June 29,
2003  and 57  days  at  June  30,  2002.  Advances  outstanding  under  the  A/R
Securitization Facility were $30.3 million at June 29, 2003 and $37.7 million at
June 30, 2002.

Inventories on June 29, 2003 were $60.7 million,  as compared with $48.8 million
at December 29, 2002 reflecting an increase in denim finished goods  inventories
and raw materials,  partially offset by a decrease in work in process inventory.
For comparison  purposes,  inventories at June 30, 2002 were $49.5 million.  The
year-over-year  increase in  inventories  is  primarily  the result of increased
denim finished goods inventory levels and higher cotton prices.

Financing  agreements  of Cone  prohibit it from paying  dividends on its Common
Stock.


FORWARD-LOOKING STATEMENTS AND RISK FACTORS

Except for the historical  information  presented,  the matters disclosed in the
discussion  and  analysis  and  other  parts  of  this  report,  as well as oral
statements  made  from  time  to  time  by   representatives  of  Cone,  include
forward-looking  statements  within the meaning of the Federal  Securities laws.
These statements represent Cone's current judgment on the future and are subject
to risks and uncertainties that could cause actual results to differ materially.
These forward-looking  statements include statements relating to our anticipated
financial  performance and business prospects.  Statements preceded by, followed
by or that include words such as "believe," "anticipate,"  "estimate," "expect,"
"could," and other similar expressions are to be considered such forward-looking
statements.  These  forward-looking  statements speak only as of the date stated
and we do not  undertake  any  obligation  to  update  or  revise  publicly  any
forward-looking  statements,  whether  as a result  of new  information,  future
events or otherwise,  even if experience or future events make it clear that any
expected results expressed or implied by these  forward-looking  statements will
not be realized.  Although we believe that the  expectations  reflected in these
forward-looking  statements are reasonable,  these expectations may not prove to
be  correct  or we may not  achieve  the  financial  results,  savings  or other
benefits anticipated in the forward-looking  statements.  These  forward-looking
statements are necessarily  estimates reflecting the best judgment of our senior
management and involve a number of risks and uncertainties, some of which may be
beyond our control,  that could cause actual results to differ  materially  from
those suggested by the forward-looking statements. Such factors include, without
limitation:

o    the demand for textile products,  including Cone's products, will vary with
     the U.S. and world business cycles,  imbalances between consumer demand and
     inventories of retailers and manufacturers and changes in fashion trends,

o    the highly  competitive  nature of the textile  industry  and the  possible
     effects  of  reduced  import   protection,   free-trade   initiatives   and
     retaliatory measures in trade disputes,

o    the  unpredictability  of the  cost  and  availability  of  cotton,  Cone's
     principal raw material, and other manufacturing costs,

o    Cone's  relationships with Levi Strauss as its major customer including its
     sourcing practices,


<PAGE>


o    Cone's  ability to attract and maintain  adequate  capital to meet its debt
     maturities and to fund operations and strategic initiatives,

o    Cone's  ability to amend or modify its lending  agreements as may be needed
     from time to time.

o    increases in prevailing interest rates,

o    Cone's ability to complete an acceptable recapitalization  transaction that
     will  enable it to  refinance  its  existing  debt and to expand  its denim
     manufacturing in low-cost countries, and

o    the  effect on Cone's  sales and  markets  of events  such as the events of
     September 11, 2001.

For a further  description  of these risks see "Item 1.  Business  -Competition,
-Raw Materials and -Customers" and "Item 7. Management's Discussion and Analysis
of Results of  Operations  and  Financial  Condition --  Overview"  contained in
Cone's 2002 Form 10-K. Other risks and  uncertainties may be described from time
to time in Cone's  other  reports and filings with the  Securities  and Exchange
Commission.


OTHER MATTERS

Federal, state and local regulations relating to the workplace and the discharge
of materials into the environment  continue to change and,  consequently,  it is
difficult to gauge the total future impact of such regulations on Cone. Existing
government  regulations  are not  expected to cause a material  change in Cone's
competitive position,  operating results or planned capital  expenditures.  Cone
has an environmental committee,  which fosters protection of the environment and
compliance with laws.

Cone and its subsidiaries  are involved in legal  proceedings and claims arising
in the ordinary course of business. Although there can be no assurance as to the
ultimate  disposition  of these matters,  management  believes that the probable
resolution of such  contingencies will not have a material adverse effect on the
results of operations, financial condition and liquidity of Cone. As of June 29,
2003, no significant litigation existed.


NON-GAAP FINANCIAL MEASURES

From  time  to  time  management   discloses   Operating  Income  (Loss)  before
Depreciation and Amortization as well as Earnings Per Share,  excluding selected
items.  These non-GAAP  (general  accepted  accounting  principles in the United
States) financial measure  calculations may be presented in earnings releases of
Cone,  furnished in Form 8-K to the  Securities and Exchange  Commission,  along
with  reconciliations  to the most  comparable  GAAP  financial  measure for the
period.   Operating  Income  (Loss)  before  Depreciation  and  Amortization  is
presented based on management's  belief that this non-GAAP measure is considered
an important  indicator of the operational  strength of the business and is used
in Cone's current  financing  agreements for covenant  compliance as well as its
incentive  compensation  plans.  Operating Income (Loss) before Depreciation and
Amortization is not a measure of financial performance under GAAP and should not
be considered as an  alternative  to cash flows from  operating  activities,  as
defined by GAAP, or as a measure of liquidity,  or an  alternative to Net Income
(Loss).


<PAGE>


Net  Income  (Loss)  excluding  selected  items and  Earnings  (Loss)  Per Share
excluding  selected items is presented based on  management's  belief that these
non-GAAP  measures enable a user of the financial  information to understand the
impact of these  items on  reported  results.  Additionally,  this  presentation
provides a beneficial  comparison to similarly  adjusted  measurements  of prior
periods.  Net Income  (Loss) and Earnings  (Loss) Per Share  excluding  selected
items is not a measure  of  financial  performance  under GAAP and should not be
considered as an alternative to Net Income (Loss) and Earnings (Loss) Per Share,
as defined by GAAP.

<TABLE>
<CAPTION>
                                                       Thirteen Weeks Ended                Twenty-Six Weeks Ended
                                                 ----------------------------------------------------------------------
 (in thousands)                                      6/29/03          6/30/02             6/29/03           6/30/02
                                                 ----------------------------------------------------------------------
 <S>                                                 <C>              <C>                 <C>              <C>
Income from operations                              $   1,836        $   7,801           $   6,952        $   14,477
Depreciation and amortization                           4,856            5,071               9,669            10,144
Impairment of Assets                                      766                -                 766                 -
                                                 ----------------------------------------------------------------------
 Operating Income before Depreciation,
  Amortization and Impairment of Assets             $   7,458        $  12,872           $  17,387        $   24,621
                                                 ----------------------------------------------------------------------
</TABLE>


Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Cone is exposed to market risks relating to  fluctuations  in interest rates and
commodity prices.  There has been no material change in Cone's market risks that
would  significantly  affect the disclosures  made in the Form 10-K for the year
ended December 29, 2002.


Item 4.  Controls and Procedures

Based on their evaluation of Cone's  disclosure  controls and procedures,  which
was completed as of the end of the period  covered by the report,  the Chairman,
President and Chief Executive  Officer  ("CEO") and the Chief Financial  Officer
("CFO")  have  concluded  that Cone's  disclosure  controls and  procedures  are
effective  to ensure that  information  required to be  disclosed by Cone in the
reports that it files or submits under the  Securities  Exchange Act of 1934, as
amended, is recorded, processed, summarized and reported within the time periods
specified  in the  Securities  and  Exchange  Commission's  rules and forms.  In
reaching this  conclusion,  the CEO and CFO  determined  that Cone's  disclosure
controls and  procedures  are  effective in ensuring  that such  information  is
accumulated  and  communicated  to Cone's  management to allow timely  decisions
regarding required disclosure.

There  were no  significant  changes  in Cone's  internal  controls  or in other
factors that could significantly affect these controls subsequent to the date of
their evaluations.



<PAGE>



                                     PART II

Item 1.  Legal Proceedings

Cone and its subsidiaries  are involved in legal  proceedings and claims arising
in the ordinary course of business. Although there can be no assurance as to the
ultimate  disposition  of these matters,  management  believes that the probable
resolution of such  contingencies will not have a material adverse effect on the
results of operations, financial condition and liquidity of Cone. As of June 29,
2003, no significant litigation existed.


Item 6.  Exhibits and Reports on Form 8-K

(a)  The  exhibits  to this Form 10-Q are  listed in the  accompanying  Index to
     Exhibits.
(b)  Reports on Form 8-K.

     Cone  filed the  following  current  reports  on form 8-K during the period
     December 30, 2002, to the date of the filing of this report:

     o    Current  report on Form 8-K,  filed on January  17,  2003,  disclosing
          Cone's  entering  into a letter of intent with WLR  Recovery  Fund II,
          L.P., a fund managed by W.L. Ross and Company, to purchase up to $27.0
          million of convertible notes to support a  recapitalization  of Cone's
          balance sheet.  The Form 8-K contained one exhibit,  the press release
          issued by Cone on January 17, 2003.

     o    Current report on Form 8-K, filed on April 24, 2003, disclosing Cone's
          first quarter 2003 earnings  release and conference call. The Form 8-K
          contained one exhibit,  the earnings  release  issued by Cone on April
          24, 2003.

     o    Current report on Form 8-K, filed on May 6, 2003,  disclosing  John L.
          Bakane  elected by the Board of  Directors to the position of Chairman
          of the Board.  The Form 8-K contained  one exhibit,  the press release
          issued by Cone on May 6, 2003.

     o    Current  report on Form 8-K,  filed on May 28,  2003,  disclosing  the
          amended  agreements with Cone's lenders  extending its existing credit
          facility and senior note obligations  through March 15, 2004. The Form
          8-K contained one exhibit, the press release issued by Cone on May 28,
          2003.

     o    Current  report on Form 8-K,  filed on May 29,  2003,  disclosing  the
          amended  agreements  with Cone's  lenders.  The Form 8-K contained two
          exhibits,  the  Amendment of 1992 Note  Agreement  dated as of May 27,
          2003 and  Amendment  No.  12 to Credit  Agreement  dated as of May 27,
          2003.

     o    Current report on Form 8-K, filed on July 30, 2003,  disclosing Cone's
          second quarter 2003 earnings release and conference call. The Form 8-K
          contained one exhibit, the earnings release issued by Cone on July 30,
          2003

     o    Current  report  on Form  8-K,  filed  on July  30,  2003,  disclosing
          statements  made by  officials  of Cone on July 30,  2003  during  the
          quarterly  conference  call.  The Form 8-K contained one exhibit,  the
          statements  made by the chief  executive  officer and chief  financial
          officer.

     o    Current  report on Form  8-K,  filed on August  11,  2003,  disclosing
          Cone's press  release.  The Form 8-K contained one exhibit,  the press
          release issued by Cone on August 11, 2003.


<PAGE>


Exhibit
  No.     Description

*2.1      Receivables  Purchase and Servicing Agreement dated as of September 1,
          1999,  by and  among  Cone  Receivables  II LLC,  as  Seller,  Redwood
          Receivables Corporation,  as Purchaser,  the Registrant,  as Servicer,
          and General  Electric  Capital  Corporation,  as  Operating  Agent and
          Collateral  Agent,  filed as Exhibit 2.1(h) to Registrant's  report on
          Form 10-Q for the quarter ended October 3, 1999.

*2.2      Receivables  Transfer  Agreement dated as of September 1, 1999, by and
          among the  Registrant,  any other  Originator  Party hereto,  and Cone
          Receivables II LLC, filed as Exhibit 2.1(i) to Registrant's  report on
          Form 10-Q for the quarter ended October 3, 1999.

*2.3.1    First Amendment and Waiver to  Securitization  Agreements  dated as of
          November  16,  1999,  by and  between  Cone  Receivables  II LLC,  the
          Registrant,  Redwood  Receivables  Corporation  and  General  Electric
          Capital  Corporation,  together  with all exhibits  thereto,  filed as
          Exhibit 2.1(c) to Registrant's report on Form 10-K for the fiscal year
          ending January 2, 2000.

*2.3.2    Second Amendment to Securitization  Agreements dated as of January 28,
          2000, by and between Cone Receivables II LLC, the Registrant,  Redwood
          Receivables  Corporation,  and General Electric  Capital  Corporation,
          together  with all  exhibits  thereto,  filed  as  Exhibit  2.1(d)  to
          Registrant's report on Form 10-K for the fiscal year ending January 2,
          2000.

*2.3.3    Third  Amendment to  Securitization  Agreements  dated as of March 31,
          2000, by and between Cone Receivables II LLC, the Registrant,  Redwood
          Receivables  Corporation,  and General Electric  Capital  Corporation,
          together  with all  Exhibits  thereto,  filed  as  Exhibit  2.1(e)  to
          Registrant's report on Form 10-Q for the quarter ended April 2, 2000.

*2.3.4    Fourth  Amendment to  Securitization  Agreements dated as of April 24,
          2000 by and between  Cone  Receivables  II LLC, the  Registrant,  Cone
          Foreign  Trading LLC,  Redwood  Receivables  Corporation,  and General
          Electric  Capital  Corporation,  together  with all exhibits  thereto,
          filed as Exhibit  2.1(f) to  Registrant's  report on Form 10-Q for the
          quarter ended April 2, 2000,  filed as Exhibit  2.3.4 to  Registrant's
          Registration Statement on Form S-4 (File No. 333-43014).

*2.3.5    Fifth Amendment to Securitization Agreements dated as of June 30, 2000
          by and between Cone  Receivables II LLC, the Registrant,  Cone Foreign
          Trading LLC,  Redwood  Receivables  Corporation,  and General Electric
          Capital   Corporation,   filed  as  Exhibit   2.3.5  to   Registrant's
          Registration Statement on Form S-4 (File No. 333-43014).


<PAGE>


Exhibit
  No.     Description

*2.3.6    Sixth Amendment to Securitization  Agreements dated as of December 12,
          2000 by and between  Cone  Receivables  II LLC, the  Registrant,  Cone
          Foreign  Trading  LLC,  Redwood  Receivables  Corporation  and General
          Electric Capital  Corporation,  filed as Exhibit 2.3.6 to Registrant's
          Registration Statement on Form S-4 (File No. 333-43014).

*2.3.7    Seventh  Amendment to  Securitization  Agreement dated as of April 23,
          2001 by and between  Cone  Receivables  II LLC, the  Registrant,  Cone
          Foreign Trading LLC, and General Electric Capital  Corporation,  filed
          as Exhibit 2.3.7 to  Registrant's  report on Form 10-Q for the quarter
          ended July 1, 2001.

*2.3.8    Eighth Amendment to Securitization Agreement dated as of July 20, 2001
          by and between Cone  Receivables II LLC, the Registrant,  Cone Foreign
          Trading  LLC,  and  General  Electric  Capital  Corporation,  filed as
          Exhibit  2.3.8 to  Registrant's  report on Form  10-Q for the  quarter
          ended July 1, 2001.

*2.3.9    Ninth  Amendment to  Securitization  Agreement dated as of November 9,
          2001 by and between  Cone  Receivables  II LLC, the  Registrant,  Cone
          Foreign Trading LLC, and General Electric Capital  Corporation,  filed
          as Exhibit 2.3.9 to the Registrant's  report on Form 10-K for the year
          ended December 30, 2001.

*2.4      Investment  Agreement  dated  as of  June  18,  1993,  among  Compania
          Industrial de Parras, S.A. de C.V., Sr. Rodolfo Garcia Muriel, and the
          Registrant,  filed as Exhibit  2.2(a) to  Registrant's  report on Form
          10-Q for the quarter ended July 4, 1993.

*2.5      Commercial  Agreement  dated  as  of  July  1,  1999,  among  Compania
          Industrial de Parras, S.A. de C.V., the Registrant, and Parras Cone de
          Mexico,  S.A., filed as Exhibit 2.2(b) to Registrant's  report on Form
          10-K for the fiscal year ending January 2, 2000.

*2.5.1    Amended and Restated  Commercial  Agreement,  dated as of December 12,
          2000,  among  Compania   Industrial  de  Parras,  S.A.  de  C.V.,  the
          Registrant and Parras Cone de Mexico,  S.A., filed as Exhibit 2.5.1 to
          Registrant's Registration Statement on Form S-4 (File No. 333-43014).

*2.6      Guaranty  Agreement dated as of June 25, 1993,  between the Registrant
          and  Compania  Industrial  de Parras,  S.A. de C.V.,  filed as Exhibit
          2.2(c) to Registrant's  report on Form 10-Q for the quarter ended July
          4, 1993.


<PAGE>


Exhibit
  No.     Description

*2.7      Joint Venture  Agreement dated as of June 25, 1993,  between  Compania
          Industrial de Parras,  S.A. de C.V., and Cone Mills (Mexico),  S.A. de
          C.V., filed as Exhibit 2.2(d) to Registrant's  report on Form 10-Q for
          the quarter ended July 4, 1993.

*2.7.1    First Amendment to Joint Venture  Agreement dated as of June 14, 1995,
          between  Compania  Industrial de Parras,  S.A. de C.V., and Cone Mills
          (Mexico), S.A. de C.V., filed as Exhibit 2.2(e) to Registrant's report
          on Form 10-Q for the quarter ended July 2, 1995.

*2.8      Joint Venture Registration Rights Agreement dated as of June 25, 1993,
          among Parras Cone de Mexico, S.A., Compania Industrial de Parras, S.A.
          de C.V. and Cone Mills (Mexico), S.A. de C.V., filed as Exhibit 2.2(e)
          to  Registrant's  report on Form 10-Q for the  quarter  ended  July 4,
          1993.

*2.9      Parras  Registration  Rights  Agreement  dated  as of June  25,  1993,
          between  Compania   Industrial  de  Parras,   S.A.  de  C.V.  and  the
          Registrant,  filed as Exhibit  2.2(f) to  Registrant's  report on Form
          10-Q for the quarter ended July 4, 1993.

*2.10     Support Agreement dated as of June 25, 1993, among the Registrant, Sr.
          Rodolfo L. Garcia, Sr. Rodolfo Garcia Muriel and certain other persons
          listed therein  ("private  stockholders"),  filed as Exhibit 2.2(g) to
          Registrant's report on Form 10-Q for the quarter ended July 4, 1993.

*3.1      Restated Articles of Incorporation of the Registrant  effective August
          25, 1993, filed as Exhibit 4.1 to Registrant's report on Form 10-Q for
          the quarter ended October 3, 1993.

*3.1.1    Articles  of  Amendment  of  the  Articles  of  Incorporation  of  the
          Registrant  effective  October  22,  1999,  to  fix  the  designation,
          preferences, limitations, and relative rights of a series of its Class
          B Preferred Stock,  filed as Exhibit 4.1(a) to Registrant's  report on
          Form 10-Q for the quarter ended October 3, 1999.

*3.2      Amended and Restated  Bylaws of  Registrant,  effective June 18, 1992,
          filed as Exhibit 3.5 to  Registrant's  Registration  Statement on Form
          S-1 (File No. 33-46907).

*4.1      Rights Agreement dated as of October 14, 1999,  between the Registrant
          and First Union National Bank, as Rights Agent,  with Form of Articles
          of Amendment  with respect to the Class B Preferred  Stock (Series A),
          the Form of Rights Certificate,  and Summary of Rights attached, filed
          as  Exhibit 1 to  Registrant's  report on Form 8-A dated  October  29,
          1999.


<PAGE>


Exhibit
  No.     Description

*4.2      Note Agreement dated as of August 13, 1992, between the Registrant and
          The  Prudential  Insurance  Company  of  America,   with  form  of  8%
          promissory note attached, filed as Exhibit 4.01 to Registrant's report
          on Form 8-K dated August 13, 1992.

*4.2.1    Letter Agreement dated September 11, 1992, amending the Note Agreement
          dated  August 13,  1992,  between the  Registrant  and The  Prudential
          Insurance  Company of America,  filed as Exhibit  4.2 to  Registrant's
          report on Form 8-K dated March 1, 1995.

*4.2.2    Letter  Agreement  dated July 19, 1993,  amending  the Note  Agreement
          dated  August 13,  1992,  between the  Registrant  and The  Prudential
          Insurance  Company of America,  filed as Exhibit  4.3 to  Registrant's
          report on Form 8-K dated March 1, 1995.

*4.2.3    Letter  Agreement  dated June 30, 1994,  amending  the Note  Agreement
          dated  August 13,  1992,  between the  Registrant  and The  Prudential
          Insurance  Company of America,  filed as Exhibit  4.4 to  Registrant's
          report on Form 8-K dated March 1, 1995.

*4.2.4    Letter Agreement dated November 14, 1994,  amending the Note Agreement
          dated  August 13,  1992,  between the  Registrant  and The  Prudential
          Insurance  Company of America,  filed as Exhibit  4.5 to  Registrant's
          report on Form 8-K dated March 1, 1995.

*4.2.5    Letter  Agreement  dated  as of  June  30,  1995,  amending  the  Note
          Agreement  dated  August 13,  1992,  between  the  Registrant  and The
          Prudential  Insurance  Company of America,  filed as Exhibit 4.3(e) to
          Registrant's report on Form 10-Q for the quarter ended July 2, 1995.

*4.2.6    Letter Agreement dated as of June 30, 1995, between the Registrant and
          The  Prudential   Insurance  Company  of  America  superseding  Letter
          Agreement, filed as Exhibit 4.3(e) to Registrant's report on Form 10-Q
          for the  quarter  ended  July 2,  1995,  filed as  Exhibit  4.3(f)  to
          Registrant's report on Form 10-K for year ended December 31, 1995.

*4.2.7    Letter  Agreement  dated as of March 30, 1996,  between the Registrant
          and The  Prudential  Insurance  Company of  America,  filed as Exhibit
          4.3(g) to Registrant's report on Form 10-Q for the quarter ended March
          31, 1996.


<PAGE>


Exhibit
  No.     Description

*4.2.8    Letter Agreement dated as of January 31, 1997,  between the Registrant
          and The  Prudential  Insurance  Company of  America,  filed as Exhibit
          4.3(h) to Registrant's report on Form 10-K for the year ended December
          29, 1996.

*4.2.9    Letter Agreement dated as of July 31, 1997, between the Registrant and
          The Prudential  Insurance Company of America,  filed as Exhibit 4.3(i)
          to  Registrant's  report on Form 10-Q for the quarter ended  September
          28, 1997.

*4.2.10   Modification to Note Agreement dated as of February 14, 1998,  between
          the Registrant and The Prudential Insurance Company of America,  filed
          as Exhibit 4.3(j) to Registrant's  report on Form 10-Q for the quarter
          ended March 29, 1998.

*4.2.11   Letter  Agreement  dated as of  September  1, 1999,  amending the Note
          Agreement  dated  August 13,  1992,  between  the  Registrant  and The
          Prudential  Insurance  Company of America,  filed as Exhibit 4.3(i) to
          Registrant's  report on Form 10-Q for the  quarter  ended  October  3,
          1999.

*4.2.12   Amendment of 1992 Note Agreement  dated as of January 28, 2000, by and
          among the Registrant and The Prudential  Insurance Company of America,
          together with all exhibits thereto, filed as Exhibit 9 to Registrant's
          report on Form 8-K dated February 11, 2000.

*4.2.13   Waiver under Note Agreement dated as of July 3, 2000, by and among the
          Registrant and The Prudential  Insurance Company of America,  filed as
          Exhibit  4.2.13 to  Registrant's  Registration  Statement  on Form S-4
          (File No. 333-43014).

*4.2.14   Amendment of 1992 Note  Agreement  dated as of July 14,  2000,  by and
          among the Registrant and The Prudential  Insurance Company of America,
          filed as Exhibit 4.2.14 to Registrant's Registration Statement on Form
          S-4 (File No. 333-43014).

*4.2.15   Amendment of 1992 Note Agreement dated as of December 12, 2000, by and
          among the Registrant and The Prudential  Insurance Company of America,
          filed as Exhibit 4.2.15 to the Registrant's  Registration Statement on
          Form S-4 (File No. 333-43014).

*4.2.16   Amendment  of 1992 Note  Agreement  and  Waiver  dated as of April 23,
          2001, by and among the Registrant and The Prudential Insurance Company
          of America,  filed as Exhibit  4.2.16 to  Registrant's  report on Form
          10-Q for quarter ended July 1, 2001.


<PAGE>


Exhibit
  No.     Description

*4.2.17   Amendment of 1992 Note  Agreement  dated as of June 28,  2001,  by and
          among the Registrant and The Prudential  Insurance Company of America,
          filed as Exhibit  4.2.17 to  Registrant's  report on Form 10-Q for the
          quarter ended July 1, 2001.

*4.2.18   Waiver Under 1992 Note  Agreement  dated as of August 10, 2001, by and
          among the Registrant and The Prudential  Insurance Company of America,
          filed as Exhibit  4.2.18 to  Registrant's  report on Form 10-Q for the
          quarter ended September 30, 2001.

*4.2.19   Amendment of 1992 Note  Agreement  dated as of September  25, 2001, by
          and among the  Registrant  and The  Prudential  Insurance  Company  of
          America,  filed as Exhibit 4.2.19 to Registrant's  report on Form 10-Q
          for the quarter ended September 30, 2001.

*4.2.20   Amendment of 1992 Note Agreement  dated as of October 25, 2001, by and
          among the Registrant and The Prudential  Insurance Company of America,
          filed as Exhibit  4.2.20 to  Registrant's  report on Form 10-Q for the
          quarter ended September 30, 2001.

*4.2.21   Amendment of 1992 Note Agreement  dated as of November 9, 2001, by and
          among the Registrant and The Prudential  Insurance Company of America,
          filed as Exhibit  4.2.21 to the  Registrant's  report on Form 10-K for
          the year ended December 30, 2001.

*4.2.22   Amendment of 1992 Note  Agreement  dated as of March 22, 2002,  by and
          among the Registrant and The Prudential  Insurance Company of America,
          filed as Exhibit  4.2.22 to the  Registrant's  report on Form 10-K for
          the year ended December 30, 2001.

*4.2.23   Amendment of 1992 Note Agreement  dated as of December 2, 2002, by and
          among the Registrant and The Prudential  Insurance Company of America,
          filed as Exhibit 4.2.23 to the  Registrant's  report on Form 8-K dated
          December 6, 2002.

*4.2.24   Amendment of 1992 Note  Agreement  dated as of April 30, 2003,  by and
          among the Registrant and The Prudential  Insurance Company of America,
          filed as Exhibit  4.2.24 to the  Registrant's  report on Form 10-Q for
          the quarter ended March 30, 2003.


<PAGE>


Exhibit
  No.     Description

*4.2.25   Amendment  of 1992 Note  Agreement  dated as of May 27,  2003,  by and
          among the Registrant and The Prudential  Insurance Company of America,
          filed as Exhibit 4.2.25 to the  Registrant's  report on Form 8-K dated
          May 29, 2003.

*4.3      Credit  Agreement  dated as of  January  28,  2000,  by and  among the
          Registrant, as Borrower, Bank of America, N.A., as Agent and as Lender
          and the Lenders  party  thereto from time to time,  together  with all
          exhibits  thereto,  filed as Exhibit 1 to Registrant's  report on Form
          8-K dated February 11, 2000.

*4.3.1    Amendment No. 1 to Credit  Agreement dated as of July 14, 2000, by and
          among the Registrant,  as Borrower,  Cone Global Finance Corp.,  CIPCO
          S.C.  Inc.  and Cone  Foreign  Trading  LLC,  as  Guarantors,  Bank of
          America,  N.A., as Agent and as Lender,  and the Lenders party thereto
          from time to time, filed as Exhibit 4.3.1 to Registrant's Registration
          Statement on Form S-4 (File No. 333-43014).

*4.3.2    Amendment No. 2 to Credit  Agreement dated as of December 12, 2000, by
          and among the  Registrant,  as Borrower,  Cone Global  Finance  Corp.,
          CIPCO S.C. Inc. and Cone Foreign  Trading LLC, as Guarantors,  Bank of
          America,  N.A., as Agent and as Lender,  and the Lenders party thereto
          from time to time, filed as Exhibit 4.3.2 to Registrant's Registration
          Statement on Form S-4 (File No. 333-43014).

*4.3.3    Waiver and Amendment No. 3 to Credit  Agreement  dated as of April 23,
          2001, by and among the Registrant, as Borrower, Bank of America, N.A.,
          as Agent and as Lender,  and the Lenders Signatory  Thereto,  filed as
          Exhibit  4.3.3 to  Registrant's  report on Form  10-Q for the  quarter
          ended July 1, 2001.

*4.3.4    Amendment No. 4 to Credit  Agreement dated as of June 28, 2001, by and
          among the Registrant, as Borrower, Bank of America, N.A., as Agent and
          Lender, and the Lenders Signatory  Thereto,  filed as Exhibit 4.3.4 to
          Registrant's report on Form 10-Q for the quarter ended July 1, 2001.

*4.3.5    Amendment  No. 5 to Credit  Agreement  dated as of August 10, 2001, by
          and among the Registrant, as Borrower, Bank of America, N.A., as Agent
          and Lender, and the Lenders Signatory Thereto,  filed as Exhibit 4.3.5
          to  Registrant's  report on Form 10-Q for the quarter ended  September
          30, 2001.

*4.3.6    Amendment No. 6 to Credit Agreement dated as of September 25, 2001, by
          and among the Registrant, as Borrower, Bank of America, N.A., as Agent
          and Lender, and the Lenders Signatory Thereto,  filed as Exhibit 4.3.6
          to  Registrant's  report on Form 10-Q for the quarter ended  September
          30, 2001.


<PAGE>


Exhibit
  No.     Description

*4.3.7    Amendment No. 7 to Credit  Agreement  dated as of October 25, 2001, by
          and among the Registrant, as Borrower, Bank of America, N.A., as Agent
          and Lender, and the Lenders Signatory Thereto,  filed as Exhibit 4.3.7
          to  Registrant's  report on Form 10-Q for the quarter ended  September
          30, 2001.

*4.3.8    Amendment No. 8 to Credit  Agreement  dated as of November 9, 2001, by
          and among the Registrant, as Borrower, Bank of America, N.A., as Agent
          and Lender, and the Lenders Signatory Thereto,  filed as Exhibit 4.3.8
          to the  Registrant's  report on Form 10-K for the year ended  December
          30, 2001.

*4.3.9    Amendment No. 9 to Credit  Agreement dated as of February 27, 2002, by
          and among the Registrant, as Borrower, Bank of America, N.A., as Agent
          and Lender, and the Lenders Signatory Thereto,  filed as Exhibit 4.3.9
          to the  Registrant's  report on Form 10-K for the year ended  December
          30, 2001.

*4.3.10   Amendment No. 10 to Credit  Agreement dated as of December 2, 2002, by
          and among the Registrant,  as Borrower, Bank of America, N.A., Each of
          the Lenders Signatory  Thereto,  and Bank of America,  N.A., as Agent,
          filed as Exhibit 4.3.10 to the  Registrant's  report on Form 8-K dated
          December 6, 2002.

*4.3.11   Amendment  No. 11 to Credit  Agreement  dated as of April 30, 2003, by
          and among the Registrant,  as Borrower,  Each of the Lenders Signatory
          Thereto, and Bank of America,  N.A., as Agent, filed as Exhibit 4.3.11
          to the  Registrant's  report on Form 10-Q for the quarter  ended March
          30, 2003.

*4.3.12   Amendment No. 12 to Credit  Agreement  dates as of May 27, 2003 by and
          among the  Registrant,  as  Borrower,  Each of the  Lenders  Signatory
          Hereto and Bank of America, N.A., as Agent, filed as Exhibit 4.3.12 to
          the Registrant's report on Form 8-K dated May 29, 2003.

*4.4      Guaranty  Agreement  dated as of January 28, 2000, made by Cone Global
          Finance Corporation,  CIPCO S.C., Inc. and Cone Foreign Trading LLC in
          favor of Bank of  America,  N.A.  as  Revolving  Credit  Agent for the
          Lenders, The Prudential  Insurance Company of America,  SunTrust Bank,
          Morgan Guaranty Trust Company of New York,  Wilmington  Trust Company,
          as General  Collateral  Agent,  Bank of  America,  N.A.,  as  Priority
          Collateral Agent, and Atlantic  Financial Group,  Ltd.,  together with
          all exhibits  thereto,  filed as Exhibit 2 to  Registrant's  report on
          Form 8-K dated February 11, 2000.


<PAGE>


Exhibit
  No.     Description

*4.5      Priority  Security  Agreement  dated as of January  28,  2000,  by the
          Registrant and certain of its subsidiaries,  as Grantors,  and Bank of
          America,  N.A.,  as  Priority  Collateral  Agent,  together  with  all
          exhibits  thereto,  filed as Exhibit 3 to Registrant's  report on Form
          8-K dated February 11, 2000.

*4.6      General  Security  Agreement  dated as of  January  28,  2000,  by the
          Registrant  and  certain  of  its  subsidiaries,   as  Grantors,   and
          Wilmington Trust Company,  as General Collateral Agent,  together with
          all exhibits  thereto,  filed as Exhibit 4 to  Registrant's  report on
          Form 8-K dated February 11, 2000.

*4.7      Securities  Pledge  Agreement  dated as of January  28,  2000,  by the
          Registrant in favor of Wilmington Trust Company, as General Collateral
          Agent,  together  with all  exhibits  thereto,  filed as  Exhibit 5 to
          Registrant's report on Form 8-K dated February 11, 2000.

*4.8      CMM Pledge  Agreement  dated as of January 28, 2000, by the Registrant
          in favor of Wilmington  Trust Company,  as General  Collateral  Agent,
          together with all exhibits thereto, filed as Exhibit 6 to Registrant's
          Report on Form 8-K dated February 11, 2000.

*4.9      Deed of Trust,  Security  Agreement,  Fixture  Filing,  Assignment  of
          Leases and Rents and Financing Statement dated as of January 28, 2000,
          between the Registrant, as Grantor, TIM, Inc., as Trustee,  Wilmington
          Trust Company, as General Collateral Agent, and Bank of America, N.A.,
          as Designated Collateral Subagent, together with all exhibits thereto,
          filed as Exhibit 7 to  Registrant's  report on Form 8-K dated February
          11, 2000.

*4.10     Deed of Trust,  Security  Agreement,  Fixture  Filing,  Assignment  of
          Leases and Rents and Financing Statement dated as of January 28, 2000,
          between the Registrant, as Grantor, TIM, Inc., as Trustee, and Bank of
          America,  N.A.,  as  Priority  Collateral  Agent,  together  with  all
          exhibits  thereto,  filed as Exhibit 8 to Registrant's  report on Form
          8-K dated February 11, 2000.

*4.11     Termination  Agreement  dated as of  January  28,  2000,  between  the
          Registrant and Morgan Guaranty Trust Company of New York, as Agent for
          various banks terminating the Credit Agent dated August 7, 1997, filed
          as Exhibit 4.4(h) to  Registrant's  report on Form 10-K for the fiscal
          year ending January 2, 2000.

*4.12     Specimen Class A Preferred Stock Certificate,  filed as Exhibit 4.5 to
          Registrant's Registration Statement on Form S-1 (File No. 33-46907).


<PAGE>


Exhibit
  No.     Description

*4.13     Specimen Common Stock  Certificate,  effective June 18, 1992, filed as
          Exhibit 4.7 to Registrant's  Registration  Statement on Form S-1 (File
          No. 33-46907).

*4.14     Cone Mills  Corporation  1983 ESOP as amended and  restated  effective
          December 1, 1994, filed as Exhibit 4.9 to Registrant's  report on Form
          10-K for year ended January 1, 1995.

*4.14.1   First Amendment to the Cone Mills  Corporation  1983 ESOP dated May 9,
          1995, filed as Exhibit 4.9(a) to Registrant's  report on Form 10-K for
          year ended December 31, 1995.

*4.14.2   Second  Amendment  to the  Cone  Mills  Corporation  1983  ESOP  dated
          December 5, 1995,  filed as Exhibit 4.9(b) to  Registrant's  report on
          Form 10-K for year ended December 31, 1995.

*4.14.3   Third Amendment to the Cone Mills  Corporation  1983 ESOP dated August
          7, 1997,  filed as Exhibit 4.8(c) to Registrant's  report on Form 10-Q
          for the quarter ended September 28, 1997.

*4.14.4   Fourth  Amendment  to the  Cone  Mills  Corporation  1983  ESOP  dated
          December 4, 1997,  filed as Exhibit 4.8(d) to  Registrant's  report on
          Form 10-K for the year ended December 28, 1997.

*4.15     Indenture  dated as of February 14, 1995,  between the  Registrant and
          Wachovia Bank of North Carolina, N.A. as Trustee (The Bank of New York
          is  successor   Trustee),   filed  as  Exhibit  4.1  to   Registrant's
          Registration Statement on Form S-3 (File No. 33-57713).

*10.1     Employees'  Retirement  Plan of Cone Mills  Corporation as amended and
          restated  effective  December  1,  1994,  filed  as  Exhibit  10.1  to
          Registrant's report on Form 10-K for the year ended January 1, 1995.

*10.1.1   First  Amendment  to the  Employees'  Retirement  Plan of  Cone  Mills
          Corporation   dated  May  9,  1995,   filed  as  Exhibit   10.1(a)  to
          Registrant's report on Form 10-K for the year ended December 31, 1995.

*10.1.2   Second  Amendment  to the  Employees'  Retirement  Plan of Cone  Mills
          Corporation  dated  December  5,  1995,  filed as  Exhibit  10.1(b) to
          Registrant's report on Form 10-K for the year ended December 31, 1995.

*10.1.3   Third  Amendment  to the  Employees'  Retirement  Plan of  Cone  Mills
          Corporation  dated  August  16,  1996,  filed as  Exhibit  10.1(c)  to
          Registrant's report on Form 10-K for the year ended December 29, 1996.


<PAGE>


Exhibit
  No.     Description

*10.1.4   Fourth  Amendment  to the  Employees'  Retirement  Plan of Cone  Mills
          Corporation,  filed as Exhibit 10 to Registrant's  report on Form 10-Q
          for the quarter ended September 28, 1997.

*10.1.5   Fifth   Amendment  to  Employees'   Retirement   Plan  of  Cone  Mills
          Corporation  dated  December  4,  1997,  filed as  Exhibit  10.1(e) to
          Registrant's report on Form 10-K for the year ended December 28, 1997.

*10.1.6   Employees  Retirement  Plan of Cone Mills  Corporation  as amended and
          restated as of June 30, 2001,  filed as Exhibit 10.1.6 to Registrant's
          report on Form 10-Q for the quarter ended July 1, 2001.

*10.7     Cone Mills  Corporation SERP as amended and restated as of December 5,
          1995,  filed as Exhibit 10.2 to  Registrant's  report on Form 10-K for
          the year ended December 31, 1995.

*10.7.1   Cone Mills Corporation SERP as amended and restated effective June 30,
          2001, filed as Exhibit 10.7.1 to Registrant's  report on Form 10-Q for
          the quarter ended July 1, 2001.

*10.8     Excess Benefit Plan of Cone Mills  Corporation as amended and restated
          as of December 5, 1995,  filed as Exhibit 10.3 to Registrant's  report
          on Form 10-K for the year ended December 31, 1995.

*10.8.1   Excess Benefit Plan of Cone Mills  Corporation as amended and restated
          effective  June 30,  2001,  filed as  Exhibit  10.8.1 to  Registrant's
          report on form 10-Q for the quarter ended July 1, 2001.

*10.9     1984  Stock  Option  Plan  of  Registrant  filed  as  Exhibit  10.7 to
          Registrant's Registration Statement on Form S-1 (File No. 33-28040).

*10.10    Form of  Nonqualified  Stock Option  Agreement under 1984 Stock Option
          Plan of Registrant, filed as Exhibit 10.8 to Registrant's Registration
          Statement on Form S-1 (File No. 33-28040).

*10.11    Form of Incentive Stock Option  Agreement under 1984 Stock Option Plan
          of  Registrant,  filed as Exhibit  10.9 to  Registrant's  Registration
          Statement on Form S-1 (File No. 33-28040).

*10.12    1992  Stock  Option  Plan of  Registrant,  filed  as  Exhibit  10.9 to
          Registrant's Report on Form 10-K for the year ended December 29, 1991.


<PAGE>


Exhibit
  No.     Description

*10.12.1  Amended  and  Restated  1992  Stock  Plan,  filed as  Exhibit  10.1 to
          Registrant's report on Form 10-Q for the quarter ended March 31, 1996.

*10.13    Form of Incentive Stock Option Agreement under 1992 Stock Option Plan,
          filed as  Exhibit  10.10 to  Registrant's  report on Form 10-K for the
          year ended January 3, 1993.

*10.14    Form of  Nonqualified  Stock Option  Agreement under 1992 Stock Option
          Plan, filed as Exhibit 10.8(a) to Registrant's report on Form 10-K for
          the year ended December 29, 1996.

*10.14.1  Form of  Nonqualified  Stock Option  Agreement  under 1992 Amended and
          Restated Stock Plan,  filed as Exhibit 10.8(b) to Registrant's  report
          on Form 10-K for the year ended December 29, 1996.

*10.15    Form of  Restricted  Stock  Award  Agreement  under 1992  Amended  and
          Restated Stock Plan,  filed as Exhibit 10.8(c) to Registrant's  report
          on Form 10-K for the year ended December 28, 1997.

*10.15.1  Form of  Incentive  Stock  Option  Agreement  under 1992  Amended  and
          Restated Stock Plan,  filed as Exhibit 10.8(d) to Registrant's  report
          on Form 10-K for the year ended December 28, 1997.

*10.16    1994 Stock Option Plan for Non-Employee Directors of Registrant, filed
          as Exhibit 10.9 to Registrant's report on Form 10-K for the year ended
          January 2, 1994.

*10.17    Form of  Non-Qualified  Stock Option Agreement under 1994 Stock Option
          Plan for Non-Employee Directors of Registrant,  filed as Exhibit 10.10
          to  Registrant's  report on Form 10-K for the year  ended  January  2,
          1994.

*10.18    Management Incentive Plan of the Registrant, filed as Exhibit 10.11(b)
          to  Registrant's  report on Form 10-K for the year  ended  January  3,
          1993.

*10.19    1997 Senior Management  Incentive  Compensation Plan, filed as Exhibit
          10.2 to  Registrant's  report on Form 10-Q for the quarter ended March
          31, 1996.

*10.20    1997 Senior  Management  Discretionary  Bonus  Plan,  filed as Exhibit
          10.13 to Registrant's  report on Form 10-K for the year ended December
          29, 1996.

*10.21    2000 Stock Compensation Plan for Non-Employee  Directors of Registrant
          dated as of May 9, 2000, filed as Exhibit 10.18 to Registrant's report
          on Form 10-Q for the quarter ended April 7, 2000.


<PAGE>


Exhibit
  No.     Description

*10.22    Form of Agreement  between the Registrant and Levi Strauss dated as of
          March 30, 1992,  filed as Exhibit 10.14 to  Registrant's  Registration
          Statement on Form S-1 (File No. 33-46907).

*10.23    First  Amendment  to  Supply  Agreement  dated as of April  15,  1992,
          between the  Registrant  and Levi Strauss  dated as of March 30, 1992,
          filed as Exhibit 10.15 to Registrant's  Registration Statement on Form
          S-1 (No. 33-46907).

*10.23.1  Second Amendment to Supply Agreement dated as of May 13, 2002, between
          the Registrant  and Levi Strauss dated as of March 30, 1992,  filed as
          Exhibit  10.23.1 to  Registrant's  report on Form 10-Q for the quarter
          ended March 31, 2003.

*10.24    Agreement  dated January 1, 1999,  between the Registrant and Parkdale
          Mills,  Inc.,  filed as Exhibit 10.17 to  Registrant's  report on Form
          10-K for the year ended January 2, 2000.

*10.24.1  Amendment  and  Restatement  of Yarn  Purchase  Agreement  as  amended
          December 31, 2001,  between the Registrant and Parkdale America,  LLC,
          Parkdale  Mills,  Incorporated,  and Magnolia  Manufacturing  Co. Inc.
          effective  as of  February  15,  2002,  filed as  Exhibit  10.24.1  to
          Registrant's report on Form 10-K for the year ended December 29, 2002.

*10.25    Tenth Amendment to Master Lease dated as of January 28, 2000,  between
          Atlantic  Financial Group, Ltd. and the Registrant,  together with all
          exhibits thereto,  filed as Exhibit 10 to Registrant's  report on Form
          8-K dated February 11, 2000.

*10.25.1  Eleventh  Amendment  to Master Lease dated as of July 14, 2000 between
          Atlantic  Financial Group,  Ltd. and the Registrant,  filed as Exhibit
          10.25.1 to Registrant's  Registration  Statement on Form S-4 (File No.
          333-43014).

*10.25.2  Assignment  and  Termination  Agreement  dated as of August 31,  2000,
          among  Atlantic  Financial  Group,   Ltd.,   Suntrust  Bank,  and  the
          Registrant,  filed as Exhibit 10.25.2 to  Registrant's  report on Form
          10-Q for the quarter ended October 1, 2000.

*10.26    2001 Stock  Incentive  Plan,  filed as Exhibit  10.26 to  Registrant's
          report on Form 10-Q for the quarter ended April 1, 2001.

*10.26.1  Form of Incentive  Stock Option  Agreement  under 2001 Stock Incentive
          Plan, filed as Exhibit 10.26.1 to Registrant's report on Form 10-Q for
          the quarter ended April 1, 2001.


<PAGE>


Exhibit
  No.     Description

*10.26.2  2002 Executive Incentive Compensation Plan filed as Exhibit 10.26.2 to
          Registrant's report on Form 10-K for the year ended December 30, 2001.

*10.27.1  Joint  Venture  Agreement  between Isko Dokuma  Isletmeleri  Sanayi ve
          Ticaret A.S. and Cone Mills  Corporation  and Zekeriye  Konukoglu  and
          Fatih Konukoglu and Oguzhan  Gurdogan dated as of June 17, 2002, filed
          as Exhibit 10.27.1 to Registrant's report on Form 10-Q for the quarter
          ended September 29, 2002.

*10.27.2  Commercial  Agreement among Isko Dokuma  Isletmeleri Sanayi ve Ticaret
          A.S., Cone Mills  Corporation and IsKone Denim Pazarlama A.S. dated as
          of October 3, 2002, filed as Exhibit 10.27.2 to Registrant's report on
          Form 10-Q for the quarter ended September 29, 2002.

*10.27.3  Transfer  Price  Agreement  among Isko  Dokuma  Isletmeleri  Sanayi ve
          Ticaret A.S.,  Cone Mills  Corporation and IsKone Denim Pazarlama A.S.
          dated as of October 3, 2002,  filed as Exhibit 10.27.3 to Registrant's
          report on Form 10-Q for the quarter ended September 29, 2002.

*10.27.4  License  Agreement  among Isko  Dokuma  Isletmeleri  Sanayi ve Ticaret
          A.S., Cone Mills  Corporation and IsKone Denim Pazarlama A.S. dated as
          of October 3, 2002, filed as Exhibit 10.27.4 to Registrant's report on
          Form 10-Q for the quarter ended September 29, 2002.

*10.27.5  Administrative  Services  Agreement  between  Isko Dokuma  Isletmeleri
          Sanayi ve Ticaret  A.S. and IsKone Denim  Pazarlama  A.S.  dated as of
          October 3, 2002,  filed as Exhibit 10.27.5 to  Registrant's  report on
          Form 10-Q for the quarter ended September 29, 2002.

*21       Subsidiaries of the Registrant.

*23.1     Consent of McGladrey & Pullen, LLP, independent auditor,  with respect
          to the  incorporation  by reference in the  Registrant's  Registration
          Statements on Form S-8 (Nos. 33-31977;  33-31979;  33-51951; 33-51953;
          33-53705; 33-67800;  333-37054; and 333-60954) of their reports on the
          consolidated   financial   statements   and   schedules   included  in
          Registrant's report on Form 10-K for the year ended December 29, 2002.


<PAGE>


Exhibit
  No.     Description

*23.2     Consent of  Auditors  of Parras  Cone de  Mexico,  S.A.  de C.V.  with
          respect  to  the   incorporation  by  reference  in  the  Registrant's
          Registration   Statements  on  Form  S-8  (Nos.  33-31977;   33-31979;
          33-51951;  33-51953;  333-37054;  333-60954;  and  33-67800;) of their
          reports  on  the  financial   statements  and  schedules  included  in
          Registrant's  report on Form  10-K/A for the year ended  December  29,
          2002.

 31.1     Certification  of the Chairman, President and Chief Executive Officer
          Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 31.2     Certification  of the Chief Financial Officer Pursuant  to Section 302
          of the Sarbanes-Oxley Act of 2002.


 32       Certifications of the  Chairman, President and Chief Executive Officer
          and the  Chief  Financial  Officer  Pursuant  to  Section  906 of  the
          Sarbanes-Oxley Act of 2002.

*99.1     Financial  Statements of Parras Cone de Mexico, S.A. de C.V. as of and
          for the year ended  December  29,  2002,  as filed as Exhibit  99.1 to
          Registrant's  report on Form  10-K/A for the year ended  December  29,
          2002.

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

*Incorporated by reference to the statement or report indicated.

The Registrant  will provide any Shareholder or participant in the Company Stock
Fund in the 401(k) Programs copies of any of the foregoing exhibits upon written
request  addressed to Corporate  Secretary,  Cone Mills  Corporation,  804 Green
Valley Road, Suite 300, Greensboro NC 27408.



<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.


                                            CONE MILLS CORPORATION
                                            ----------------------
                                            (Registrant)




Date:    August 13, 2003                    /s/Gary L. Smith
                                            -----------------
                                            Gary L. Smith
                                            Executive Vice President and
                                            Chief Financial Officer