<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
 [X] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 For the fiscal year ended October 28, 2000

 [ ] 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: 33-27038

                              JPS INDUSTRIES, INC.
             (Exact name of registrant as specified in its charter)

           Delaware                                            57-0868166
(STATE OF OTHER JURISDICTION OF                             (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)                             IDENTIFICATION NO.)

555 North Pleasantburg Drive, Suite 202, Greenville, SC           29607
     (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                  (ZIP CODE)

       Registrant's telephone number, including area code: (864) 239-3900

        Securities registered pursuant to Section 12(b) of the Act: None.

           Securities registered pursuant to Section 12(g) of the Act:
      Common Stock, Par Value $.01 per share, 22,000,000 shares authorized;
                10,000,000 shares issued, 9,157,333 outstanding.

         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: [X]

         Indicate by check mark if disclosure of delinquent filers, pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K: [ ]

         As of January 11, 2001, the aggregate market value of the Registrant's
Common Stock held by non-affiliates, based upon the closing price of the Common
Stock on January 11, 2001, as reported by the Nasdaq National Market, was
approximately $33,626,351.

         Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court: [X]

         As of the date hereof, 10,000,000 of the registrant's Common Stock $.01
par value per share were issued and 9,156,833 were outstanding.

         The Registrant's Definitive Proxy Statement for the Annual Meeting of
Stockholders to be held on February 27, 2001 is incorporated by reference in
Part III of this Form 10-K to the extent stated herein.


<PAGE>   2

                              JPS INDUSTRIES, INC.

                                Table of Contents

                                     PART I
<TABLE>
<S>        <C>                                                                                                   <C>
Item 1.    BUSINESS...........................................................................................    3

Item 2.    PROPERTIES.........................................................................................    9

Item 3.    LEGAL PROCEEDINGS..................................................................................   10

Item 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS.................................................   10

                                                       PART II

Item 5.    MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS..........................   10

Item 6.    SELECTED HISTORICAL FINANCIAL DATA.................................................................   11

Item 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS..............   13

Item 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK..........................................   20

Item 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA........................................................   21

Item 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE...............   43

                                                      PART III

Item 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.................................................   43

Item 11.   EXECUTIVE COMPENSATION.............................................................................   43

Item 12.   SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT........................................   43

Item 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.....................................................   43

Item 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K.....................................   43

           INDEX TO EXHIBITS..................................................................................   45

           SIGNATURES.........................................................................................   49
</TABLE>


<PAGE>   3


                                     PART I


ITEM 1.       BUSINESS

GENERAL

Unless the context otherwise requires, the terms "JPS" and the "Company" as used
in this Form 10-K mean JPS Industries, Inc. and JPS Industries, Inc. together
with its subsidiaries, respectively.

The Company is a major U.S. manufacturer of extruded urethanes, polypropylenes
and mechanically formed glass substrates for specialty industrial applications.
JPS specialty industrial products are used in a wide range of applications,
including: printed electronic circuit boards; advanced composite materials;
aerospace components; filtration and insulation products; surf boards;
tarpaulins and awnings; construction substrates; high performance glass
laminates for security and transportation applications; plasma display screens;
athletic shoes; commercial and industrial roofing; reservoir covers; and
medical, automotive and industrial components. Headquartered in Greenville,
South Carolina, the Company operates manufacturing locations in Slater, South
Carolina; Westfield, North Carolina; and Easthampton, Massachusetts.

JPS is a Delaware corporation incorporated in 1986 and has been publicly held
since the completion of its financial restructuring in October 1997. The
Company's common stock is listed in the Nasdaq National Market System under the
stock symbol "JPST."

THE 1997 RESTRUCTURING

In 1997, JPS determined that it would be unable to meet certain debt obligations
on its public bonds that would become due commencing in June 1997. Accordingly,
on May 15, 1997, JPS, JPS Capital Corp., a wholly-owned subsidiary of JPS ("JPS
Capital") and an unofficial committee (the "Unofficial Bondholder Committee")
comprised of institutions that owned, or represented owners that beneficially
owned, approximately 60% of the 10.85% Senior Subordinated Discount Notes due
June 1, 1999 (the "10.85% Notes"), the 10.25% Senior Subordinated Notes due June
1, 1999 (the "10.25% Notes"), and the 7% Subordinated Debentures due May 15,
2000 ("the 7% Notes") (together with the 10.85% Notes and the 10.25% Notes, the
"Old Debt Securities") reached an agreement in principle on the terms of a
restructuring to be accomplished under chapter 11 of the Bankruptcy Code which
culminated in a Joint Plan of Reorganization (as amended, the "Plan of
Reorganization") proposed by JPS and JPS Capital under chapter 11 of the
Bankruptcy Code. Pursuant to a disclosure statement, dated June 25, 1997 (the
"Disclosure Statement"), on June 26, 1997, JPS and JPS Capital commenced a
prepetition solicitation of votes by the holders of Old Debt Securities and
390,719 shares of Series A Senior Preferred Stock (the "Old Senior Preferred
Stock") to accept or reject the Plan of Reorganization. Under the Plan of
Reorganization, the holders of Old Debt Securities and Old Senior Preferred
Stock were the only holders of impaired claims and impaired equity interests
entitled to receive a distribution, and therefore, pursuant to section 1126 of
the Bankruptcy Code, were the only holders entitled to vote on the Plan of
Reorganization. At the conclusion of the 32-day solicitation period, the Plan of
Reorganization had been accepted by holders of more than 99% of the Old Debt
Securities that voted on the Plan of Reorganization and by holders of 100% of
the Old Senior Preferred Stock that voted on the Plan of Reorganization.

On August 1, 1997, JPS commenced its voluntary reorganization case under chapter
11 of the Bankruptcy Code in the Bankruptcy Court for the Southern District of
New York (the "Bankruptcy Court"), and filed the Plan of Reorganization and the
Disclosure Statement. None of JPS's subsidiaries, including JPS Capital which
was a co-proponent of the Plan of Reorganization, commenced a case under the
Bankruptcy Code. Pursuant to orders of the Bankruptcy Court entered on September
9, 1997, the Bankruptcy Court (i) approved the Disclosure Statement and the
solicitation of votes on the Plan of Reorganization and (ii) confirmed the Plan
of Reorganization. The


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<PAGE>   4

Plan of Reorganization became effective on October 9, 1997 (the "Effective
Date") resulting in, among other things, the cancellation of the Old Senior
Preferred Stock, 10,000 shares of Series B Junior Preferred Stock (the "Old
Junior Preferred Stock"), 490,000 shares of Class A common stock and 510,000
shares of Class B common stock (together with Class A common stock, the "Old
Common Stock"), and the issuance of 10,000,000 shares of Common Stock $.01 par
value per share (the "Common Stock").

Through the implementation of the Plan of Reorganization, as of the Effective
Date, JPS's most significant financial obligations were restructured:
$240,091,318 in face amount of outstanding Old Debt Securities were exchanged
for, among other things, $14.0 million in cash, 99.25% of the shares of Common
Stock and $34.0 million in aggregate principal amount (subject to adjustment on
the maturity date) of contingent payment notes issued by JPS Capital (the
"Contingent Notes"); the Old Senior Preferred Stock, the Old Junior Preferred
Stock and the Old Common Stock were canceled; warrants to purchase up to 5% of
the common stock of JPS (the "New Warrants") with an initial purchase price of
$98.76 per share were issued in respect of the Old Senior Preferred Stock; and
the obligations of JPS under its former working capital facility were satisfied
and the Revolving Credit Facility was obtained. JPS's senior management received
approximately 0.75% of the Common Stock in lieu of payment under their
contractual retention bonus agreements. As a result of the restructuring, JPS's
only significant debt obligation is its guaranty of the obligations of its
operating subsidiaries under the Revolving Credit Facility. The equipment loan
contracts, which are long-term obligations of the operating subsidiaries, are
not guaranteed by, or otherwise obligations of, JPS. In August 1998, the Company
reduced its long-term debt and related investments by repaying all of the
approximately $34.0 million in principal amount of JPS Capital's Contingent
Notes.

CURRENT YEAR DEVELOPMENTS

During the year ended October 28, 2000 ("Fiscal 2000"), the Company sold its
Apparel Division and completed its exit from the textile business in order to
focus on its Glass and Elastomerics industrial businesses.

With these changes, the Company's organization has been scaled down to
approximately 750 employees at fiscal year-end compared with approximately 1,900
employees at the beginning of the fiscal year. See additional discussion
regarding the disposition of these businesses in Item 7 of this Form 10-K,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

The Company has also taken action to substantially reduce costs in its remaining
businesses, including general and administrative support. JPS is now focused on
improving the performance and profitability of its remaining core
businesses--JPS Elastomerics and JPS Glass.

BUSINESS SEGMENTS

The Company currently operates in two reportable business segments (each of
which constitutes a separate and distinct division)--JPS Elastomerics and JPS
Glass. Item 7 of this Form 10-K, "Management's Discussion and Analysis of
Financial Condition and Results of Operation," discloses the sales,
profitability and net assets of each segment. Each division has independent
administrative, manufacturing and marketing capabilities for all material
aspects of their operations, including product design, technical development,
customer service, purchasing, and collections. JPS's corporate group is
responsible for finance, strategic planning, legal, tax, and regulatory affairs
for its subsidiaries. Corporate costs are allocated to the divisions for segment
reporting purposes. The following discussion provides general information as it
relates to each division:

JPS Elastomerics

Through its JPS Elastomerics division, the Company is a market leader in the
manufacturing and marketing of scrim-reinforced, heat-weldable, single-ply
roofing membrane that is sold globally through a network of roofing


                                       4
<PAGE>   5

distributors. The Company offers two roofing products: a Hypalon(R)
(chlorosulfonated polyethylene)-based material and a polypropylene-based
material. Both products, marketed under Stevens(R) Roofing Systems, are sold
primarily to roofing distributors and contractors who install new and
retrofitted roofs for commercial, industrial and institutional construction. The
Company is a major manufacturer and marketer of polyurethane film, sheet,
tubing, cord, and profile for a myriad of applications in athletic, automotive,
medical, industrial, and consumer products industries, and plasma screens.

JPS Glass

Through its JPS Glass segment, the Company manufactures and markets mechanically
formed fiberglass substrates. Fiberglass substrates exhibit dimensional
stability, moisture resistance, high strength, fire and chemical resistance, low
dielectric properties and thermal conductivity, and as a result of these many
attributes, they provide the perfect platform for the construction of printed
circuit boards, substrates for exterior insulation facing systems, filtration
products, surfboard substrates, composite materials for aircraft cabin interiors
and cargo liners, and other numerous technical, industrial applications.

The Company is a leading producer of AstroQuartz(R) substrates formed from
quartz filaments to produce sophisticated electronic circuit boards and
extremely high temperature thermal insulation for the defense and civilian
aerospace industries.

JPS's wholly-owned operating subsidiaries include JPS Elastomerics and JPS
Converter and Industrial Corp. ("C&I"). JPS's other wholly-owned subsidiaries do
not have any significant operations: JPS Capital, International Fabrics, Inc.
("Fabrics"), JPS Auto, Inc. ("Auto") and JPS Carpet Corp. ("Carpet"). JPS
business units are managed in two separate divisions: Elastomerics and Glass.

MANUFACTURING

JPS Elastomerics

The Elastomerics division operates two facilities and employs approximately 280
employees. Construction products are produced from raw materials, where they are
blended to proprietary specifications along with fire-retardant and UV
stabilizers and then calendered on state-of-the-art equipment.

Polyurethane is extruded in highly automated, computer controlled, blown film
and sheet-fed extrusion processes from raw urethane resins. Depending on end
uses, some materials are manufactured in clean zone environments.

JPS Glass

The Glass division operates one facility and employs approximately 470
employees. The Company purchases fiberglass and other specialty materials to
mechanically form substrates which have proprietary finishes applied to meet
individual customer specifications. These proprietary finishes are designed to
act as the bonding agent between the fiberglass substrate and the customer's
value-added application. In almost every case, the customer's product would have
lower or unacceptable performance without the proprietary finish. These finishes
are customer specific and developed over years of trial and development. All
products are manufactured to customer specification and require certification to
either military specification or customer specification prior to shipment.

RAW MATERIALS

The Company maintains good relationships with its suppliers and has, where
possible, diversified its supplier base so as to avoid a disruption of supply.
In most cases, the Company's raw materials are staple goods that are readily
available from domestic and international fiberglass and chemical manufacturers.
For several products, however, branded goods or other circumstances prevent such
a diversification, and an interruption of the supply


                                       5
<PAGE>   6

of these raw materials could have a significant negative impact on the Company's
ability to produce certain products. The construction products group has
negotiated comprehensive supply agreements for all its polymer, chemical and
accessory products, with multiple production sites assuring an uninterrupted
supply. The urethane products group purchases under contract from all major
thermoplastic polyurethane suppliers. The Company believes that its practice of
purchasing such items from large, stable companies minimizes the risk of
interrupting the supply of raw materials.

MARKETING AND COMPETITION

The following is a discussion of marketing and competitive factors as they
relate to each of the Company's divisions:

JPS Elastomerics

The commercial roofing industry is highly competitive with a number of major
participants in all segments of the industry. Many of the Company's competitors
are significantly larger in terms of aggregate sales. In the specialty segment
of the single-ply market where the Company competes, there are more than 10
competitors, with the Company having the largest market share in this segment.
Due to the success of the Company's EP product line and new product
introductions in Fiscal 2000, management expects continued growth in this
sector.

The Company markets it products under the Stevens(R) brand name using a
push-pull strategy: pushing products through distribution to the roofing
contractor and pulling products through the market by creating demand on the
part of building owners, architects and specifiers.

The Company has approximately 20 field sales staff as well as a network of
independent representatives, distributors and distributor-representatives as its
sales force. In addition, the Company operates a sales office in the United
Kingdom, has an extensive distribution network in Europe, and a strong licensing
program in Asia. Marketing efforts in the roofing industry include (i) new
product development to meet changing market demands, (ii) providing proprietary
accessory products, (iii) implementing several contractor-specific programs, and
(iv) a comprehensive marketing communications effort.

Geomembrane products are sold to a select group of fabricators and installers.
The Company's marketing efforts are focused exclusively on supporting those
companies in a variety of ways.

The Company's urethane products are also marketed through both direct sales
personnel and a nationwide network of independent representatives. None of the
Company's products are sold "off the shelf," as each application has specific
end-use performance requirements. As with the construction products, marketing
efforts for urethane are multifaceted with new product development and
engineering being critical factors to the success of these products.

JPS Glass

The glass substrate business is highly competitive and globally influenced
because of the significant capacity that exists in Europe, Asia and North
America. The Company believes itself to be the third largest North American
producer of glass substrates, where the majority of its products are sold.
Importantly, it is very well-positioned because of the balance between its
electrical components, fiberglass reinforced composites, construction, and
insulation product lines. Additionally, within the electrical substrate product
line (i.e., printed circuit boards) the Company's ability to commit
substantially all of its capacity to light weight substrates is a market
strength because they are used in a vast array of growing consumer product
markets, such as cell phones, computers, pagers, as well as the electronic
infrastructure for the internet.


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<PAGE>   7

The Company's glass products are marketed through a combination of direct sales
and distributors, with the central focus being development of customer specific
finishes that enhance their respective value added processes.

CUSTOMERS

No customer accounts for more than 10% of the Company's sales. However, the loss
of certain other customers could have a material adverse effect on sales.

PRODUCT DEVELOPMENT

The following is a discussion of product development as it relates to each of
the Company's divisions:

JPS Elastomerics

On-going product development and process improvement activities include a
constant evaluation of new advanced polymers and polymer compounds, as well as
the evaluation and analysis of material additives required in the manufacture of
commercial roofing products, geomembranes and thermoplastic polyurethane. As
appropriate, additives are required to ensure long-term UV stability, fire or
chemical resistance or to ensure that a specific product can be used in contact
with drinking water.

For its roofing products, the Company continues to develop advanced material
products that meet fire, wind and other building code requirements on a global
basis. Such building codes vary from country to country, and even regionally,
presenting a challenge to the manufacturer. Geomembranes must also meet
stringent code requirements of several countries, particularly when used in
potable water reservoirs.

The Company offers both aliphatic and aromatic polyurethane products. Aliphatic,
which is used in glass clad polycarbonate laminates for security-glazing
applications, is extruded in a clean zone environment to ensure maximum product
cleanliness. Aromatic materials are extruded by blown film and flat sheet fed
technologies. The Company spends a considerable amount of R&D effort to develop
material additives that enable end products to be more fire resistant, more
breathable, more permeable, etc. In addition, the Company must provide specific
surface finishes and textures that may be required for end-use applications.

JPS Glass

R&D efforts include the continued refinement of silane chemistry for high Tg
resin systems in the printed circuit board industry, development of soft
moldable finishes for the building products industry, high-flex finishes to
extend the life of filtration substrates for the power generation industry, and
new low cost materials for the mechanically needled insulation industry. The
product development effort is an ongoing customer specific process that is
enhanced by the involvement of the division's vendor partners with the
division's highly skilled research department.

BACKLOG

Unfilled open orders, which the Company believes are firm, were $24.5 million at
October 28, 2000 and $21.9 million at October 30, 1999. The Company generally
fills its open orders in the following fiscal year and the Company expects that
all of the open orders as of October 28, 2000, will be filled in the 52-week
period ending October 27, 2001 ("Fiscal 2001"). The Company believes that the
amount of backlog provides some indication of the sales volume that can be
expected in coming months, although changes in economic conditions may result in
deferral or acceleration of orders which may affect sales volume for a period.


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<PAGE>   8

No significant portion of the Company's business is subject to renegotiation of
profits, or termination of contracts or subcontracts at the election of the
government.

PATENTS, LICENSES AND TRADEMARKS

The following is a discussion of patent licenses and trademarks as they relate
to each of the Company's divisions:

JPS Elastomerics

Products, such as commercial roofing, geomembranes and polyurethane, are
marketed under the "Stevens" brand name. As such, the Company is in the process
of securing U.S. trademarks for the following names: Stevens Roofing
Systems(TM), Stevens Geomembranes(TM) and Stevens Urethane(TM). In addition, the
Company currently holds U.S. trademarks on the names Hi-Tuff(R) and Hi-Tuff
Plus(R). The Company also holds trademarks for the Hi-Tuff name in Canada,
Mexico and certain European and Asian countries.

In terms of product licensing, the Company is currently involved with two
manufacturing licensees: Tsutsunaka Plastics Industries ("TPI") of Japan and
Protan A/S of Norway. The Company has licensed roofing technology to Protan for
manufacturing and marketing TPO-based roofing products in the Scandinavian
countries. In addition, Stevens roofing and geomembrane compound and
manufacturing technologies have been licensed to TPI for the production and
marketing of membranes in Japan.

JPS Glass

A total of three patents and 30 trademarks are secured or in the process of
being secured by the Company for its Glass business. These include, but are not
limited to: alkali resistant meshes for Exterior Insulation Facing Systems
trademarked under the names of Versaflex(R), Duraflex(R), Ultraflex(R) and
Standardflex(R); filtration products trademarked under the names AcidFlex(TM)
and Ultraflex(R); and substrates meeting high temperature requirements
trademarked under the name Tempratex(R).

EMPLOYEES

As of October 28, 2000, the Company had approximately 750 employees of which
approximately 564 were hourly and approximately 186 were salaried. None of the
Company's employees are represented by unions. The Company believes its
relations with its employees to be good.

ENVIRONMENTAL AND REGULATORY MATTERS

The Company is subject to various federal, state and local government laws and
regulations concerning, among other things, the discharge, storage, handling and
disposal of a variety of hazardous and non-hazardous substances and wastes. The
Company's plants generate small quantities of hazardous waste that are either
recycled or disposed of off-site by or at licensed disposal or treatment
facilities.

The Company believes that it is in substantial compliance with all existing
environmental laws and regulations to which it is subject. In addition, the
Company is subject to liability under environmental laws relating to the past
release or disposal of hazardous materials. To date, and in management's belief
for the foreseeable future, liability under and compliance with existing
environmental laws has not had and will not have a material adverse effect on
the Company's financial or competitive positions. No representation or assurance
can be made, however, that any change in federal, state or local requirements or
the discovery of unknown problems or conditions will not require substantial
expenditures by the Company.


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<PAGE>   9

SEASONALITY

Certain portions of the business of the Company are seasonal (principally
construction products) and sales of these products tend to decline during winter
months in correlation with construction activity. These declines have
historically tended to result in lower sales and operating profits in the first
and second quarters than in the third and fourth quarters of the Company's
fiscal year.

WORKING CAPITAL

Information regarding the Company's working capital position and practices is
set forth in Item 7 of this Form 10-K under the caption "Liquidity and Capital
Resources."

Financial information for the JPS Elastomerics and JPS Glass segments is set
forth in Note 10 to the Consolidated Financial Statements included in Item 8
herein.

PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements contained in this Item 1 "Business" and Item 7 "Management's
Discussion and Analysis of Financial Condition and Results of Operations" that
are not historical facts are forward-looking statements subject to the safe
harbor created by the Private Securities Litigation Reform Act of 1995. The
Company cautions readers of this Annual Report on Form 10-K that a number of
important factors could cause the Company's actual results in Fiscal 2001 and
beyond to differ materially from those expressed in any such forward-looking
statements. These factors include, without limitation, the general economic and
business conditions affecting the Company's industries, the Company's ability to
meet its debt service obligations, the seasonality of the Company's sales, the
volatility of the Company's raw material costs, and the Company's dependence on
key personnel and certain large customers.

Shareholders, potential investors and other readers are urged to consider these
factors carefully in evaluating the forward-looking statements are cautioned not
to place undue reliance on such forward-looking statements. The forward-looking
statements made herein are only made as of the date of this report and the
Company undertakes no obligation to publicly update such forward-looking
statements to reflect subsequent events or circumstances.

ITEM 2.  PROPERTIES.

The following table sets forth certain information relating to the Company's
principal facilities (segment information relates to principal use). All of the
facilities are owned and are used for manufacturing.

<TABLE>
<CAPTION>
                                      Square                                          Square
     Location                         Footage           Location                      Footage
     --------                         -------           ---------                     -------
                JPS Elastomerics                                      JPS Glass
                ----------------                                      ---------

     <S>        <C>                   <C>               <C>           <C>             <C>
     Westfield, NC                    237,000           Slater, SC                    433,000
     Easthampton, MA                   50,000
</TABLE>

The Company also leases certain other warehouse facilities, various regional
sales offices and its corporate headquarters. The Company believes that all of
its facilities are suitable and adequate for the current and anticipated conduct
of its operations.


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<PAGE>   10

ITEM 3.       LEGAL PROCEEDINGS.

The Company is a party to lawsuits in the normal course of its business. The
Company believes that it has meritorious defenses in all lawsuits in which the
Company or its subsidiaries is a defendant. Except as discussed below,
management believes that none of this litigation, if determined unfavorable to
the Company, would have a material adverse effect on the financial condition or
results of operations of the Company.

In June 1997, Sears Roebuck and Co. ("Sears") filed a multi-count complaint, in
the Circuit Court of Cook County, Illinois (Case No. 97C8586), against
Elastomerics and two other defendants alleging an unspecified amount of damages
in connection with the alleged premature deterioration of the Company's roofing
membrane installed on approximately 140 Sears stores. The Company believes it
has meritorious defenses to the claims and intends to continue to defend the
lawsuit vigorously. Management cannot determine the outcome of the lawsuit or
estimate the range of loss, if any, that may occur and no provision for losses
has been established in the Company's financial statements. An unfavorable
resolution of the actions could have a material adverse effect on the business,
results of operations and financial condition of the Company.

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS.

No matters were submitted to a vote of securityholders during the fourth quarter
of Fiscal 2000.

                                     PART II

ITEM 5.       MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
              STOCKHOLDER MATTERS.

The common stock of the Company was approved for listing and trading on the
Nasdaq National Market System under the stock symbol "JPST," effective January
30, 1998. Prior to that time, there was only sporadic trading of the common
stock in the over-the-counter market. The following table presents the high and
low sales prices for the common stock for each full quarterly period since the
common stock became eligible for trading on Nasdaq.

<TABLE>
<CAPTION>
                           FISCAL 1999                  HIGH             LOW
                           --------------              -------         -------
                           <S>                         <C>             <C>
                           First Quarter               $ 5 1/2         $     4
                           Second Quarter                5 5/8           2 3/4
                           Third Quarter                 4 3/4           3
                           Fourth Quarter                3 1/4           2 1/4

<CAPTION>

                           FISCAL 2000                  HIGH            LOW
                           --------------              ------         -------
                           <S>                         <C>            <C>
                           First Quarter               $4             $ 2.75
                           Second Quarter               3.938           2.875
                           Third Quarter                5.688           3.125
                           Fourth Quarter               5.75            3.875
</TABLE>

As of January 16, 2001, there were approximately 14 holders of record of the
Company's common stock.

The Company has never paid a dividend on its common stock. The Company presently
intends to retain earnings to fund working capital and for general corporate
purposes and therefore, does not intend to pay cash dividends on shares of the
common stock in the foreseeable future. The payment of future cash dividends, if
any, would depend on the Company's financial condition, results of operations,
current and anticipated capital requirements, restrictions under the existing
indebtedness (including, without limitation, indebtedness evidenced by the


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<PAGE>   11

Revolving Credit Facility (as later defined) and refundings and refinancings
thereof) and other factors deemed relevant by JPS's Board of Directors. The
Company's subsidiaries that are borrowers under certain credit agreements are
restricted from paying cash dividends to JPS with respect to their capital stock
unless, among other things, JPS and its subsidiaries satisfy certain specified
financial tests.

ITEM 6.       SELECTED HISTORICAL FINANCIAL DATA.
              (Dollars in Thousands Except Per Share Data)

The following table presents selected consolidated historical financial data for
the Company as of the dates and for the fiscal years or periods indicated. The
selected historical financial data for the year ended November 2, 1996, the
period from November 3, 1996 to October 9, 1997, the period from October 10,
1997 to November 1, 1997, and the years ended October 31, 1998, October 30, 1999
and October 28, 2000 have been derived from the Consolidated Financial
Statements of the Company for such periods, which have been audited. The
presentation of certain previously reported amounts has been reclassified to
conform to the current presentation and to reflect discontinued operations of
the yarn sales business (sold on July 23, 1999), the cotton commercial products
business (sold on August 27, 1999), and the Apparel Division (sold on November
17, 2000), as discussed in Note 3 to the Consolidated Financial Statements of
the Company at Item 8 in this Form 10-K.

The financial statements for the period from October 10, 1997 to November 1,
1997 and for the years ended October 31, 1998, October 30, 1999 and October 28,
2000 reflect the Company's emergence from chapter 11 and were prepared utilizing
the principles of fresh start accounting contained in the American Institute of
Certified Public Accountants" Statement of Position 90-7, "Financial Reporting
by Entities in Reorganization Under the Bankruptcy Code." As a result of the
implementation of fresh start accounting, certain of the selected financial data
for the period from October 10, 1997 to November 1, 1997 and for the years ended
October 31, 1998, October 30, 1999 and October 28, 2000 are not comparable to
the selected financial data of prior periods. Therefore, selected financial data
for the "Reorganized Company" has been separately identified from that of the
"Predecessor Company." The following information should be read in conjunction
with the Consolidated Financial Statements of the Company and Notes thereto, and
"Management's Discussion and Analysis of Financial Conditions and Results of
Operations" presented elsewhere herein.


                                       11
<PAGE>   12

<TABLE>
<CAPTION>
                                              Predecessor Company                               Reorganized Company
                                        ----------------------------- -------------------------------------------------------------
                                         Fiscal Year      Period from   Period from      Fiscal Year     Fiscal Year    Fiscal Year
                                            Ended         November 3,   October 10,         Ended           Ended          Ended
                                         November 2,        1996 to       1997 to        October 31,     October 30,    October 28,
                                            1996           October 9,    November 1,        1998            1999           2000
INCOME STATEMENT DATA:                   (53 Weeks)           1997          1997         (52 Weeks)      (52 Weeks)     (52 Weeks)
                                        ------------    ------------- -------------    -------------   -------------   ------------
<S>                                     <C>             <C>           <C>              <C>             <C>             <C>
Net sales                               $   169,631     $   146,926   $     14,724     $    155,944    $    156,867    $   167,978
Cost of sales                               131,930         109,760         10,602          119,727         121,579        126,380
                                        -----------     -----------   ------------     ------------    ------------    -----------
Gross profit                                 37,701          37,166          4,122           36,217          35,288         41,598
Selling, general and
  administrative expenses                    26,093          23,094          1,744           25,134          26,978         27,368
Other expense (income), net                     485             302             (1)             (67)          1,663            (18)
Charges for plant closing, loss on
  sale of certain operations, write-
  down of certain long-lived assets
  and restructuring costs                     8,847              --             --               --              --             --
                                        -----------     -----------   ------------     ------------    ------------    -----------
Operating profit                              2,276          13,770          2,379           11,150           6,647         14,248
Valuation allowance on
  Gulistan securities                        (4,242)         (5,070)            --               --              --             --
Interest income                               2,856           2,744             94            1,038              --             --
Interest expense                            (37,437)        (29,425)          (507)          (4,013)         (3,511)        (3,442)
                                        -----------     -----------   ------------     ------------    ------------    -----------
Income (loss) before
  reorganization items, income
  taxes, discontinued operations
  and extraordinary items                   (36,547)        (17,981)         1,966            8,175           3,136         10,806
Reorganization items:
  Fair-value adjustments                         --          (4,651)            --               --              --             --
  Professional fees and
   expenses                                  (2,255)         (8,420)            --               --              --             --
                                        -----------     -----------   ------------     ------------    ------------    -----------
Income (loss) before income taxes,
  discontinued operations and
  extraordinary items                       (38,802)        (31,052)         1,966            8,175           3,136         10,806
Income taxes (benefit)                         (300)         (8,821)         1,177            3,462           1,997          4,517
                                        -----------     -----------   ------------     ------------    ------------    -----------
Income (loss) from continuing
  operations                                (38,502)        (22,231)           789            4,713           1,139          6,289
Discontinued operations (net of
  taxes):
  Income (loss) from
   discontinued operations                  (27,434)         (1,726)         1,928          (15,377)         (4,485)          (104)
  Loss on disposal of discontinued
   operations                                (1,500)             --             --               --         (18,096)       (47,415)
                                        -----------     -----------   ------------     ------------    ------------    -----------
Income (loss) before
  extraordinary items                       (67,436)        (23,957)         2,717          (10,664)        (21,442)       (41,230)
Extraordinary gain on early
  extinguishment of debt                         --         100,235             --               --              --             --
                                        -----------     -----------   ------------     ------------    ------------    -----------

Net income (loss)                       $   (67,436)    $    76,278   $      2,717     $    (10,664)   $    (21,442)   $   (41,230)
                                        ===========     ===========   ============     ============    ============    ===========

Income (loss) applicable to
  common stock                          $   (71,941)    $    72,451   $      2,717     $    (10,664)   $    (21,442)   $   (41,230)
                                        ===========     ===========   ============     ============    ============    ===========

Weighted average number
  of shares outstanding (1)               1,000,000       1,000,000     10,000,000       10,000,000      10,000,000      9,940,000
                                        ===========     ===========   ============     ============    ============    ===========
</TABLE>


                                       12
<PAGE>   13

<TABLE>
<CAPTION>
                                              Predecessor Company                               Reorganized Company
                                        ----------------------------- -------------------------------------------------------------
                                         Fiscal Year      Period from   Period from      Fiscal Year     Fiscal Year    Fiscal Year
                                            Ended         November 3,   October 10,         Ended           Ended          Ended
                                         November 2,        1996 to       1997 to        October 31,     October 30,    October 28,
                                            1996           October 9,    November 1,        1998            1999           2000
INCOME STATEMENT DATA:                   (53 Weeks)           1997          1997         (52 Weeks)      (52 Weeks)     (52 Weeks)
                                        ------------    ------------- -------------    -------------   -------------   ------------
<S>                                     <C>             <C>           <C>              <C>             <C>             <C>
Basic income (loss) per common share:
Income (loss) from continuing
  operations                             $(43.00)          $(26.06)       $0.08           $ 0.47           $0.11          $ 0.63
Discontinued operations (net of
  taxes):
  Income (loss) from
   discontinued operations                (27.44)            (1.73)        0.19            (1.54)          (0.44)          (0.01)
  Loss on disposal of discontinued
   operations                              (1.50)               --           --               --           (1.81)          (4.77)
Extraordinary gain                            --            100.24           --               --              --              --
                                         -------           -------        -----           ------          ------          ------
Net income (loss)                        $(71.94)          $ 72.45        $0.27           $(1.07)         $(2.14)         $(4.15)
                                         =======           =======        =====           ======          ======          ======
</TABLE>

<TABLE>
<CAPTION>
BALANCE SHEET DATA:                              November 2,       November 1,   October 31,   October 30,  October 28,
                                                    1996              1997          1998          1999          2000
                                               --------------    -------------- ------------  ------------  ------------
<S>                                            <C>               <C>            <C>           <C>           <C>
Working capital (deficiency), excluding net
  assets held for sale                           $(257,866)(1)      $ 27,281      $ 29,606      $ 29,148      $ 28,734
Total assets                                       335,927           300,051       255,284       216,316       148,242
Total long-term debt, less current portion           4,226 (1)        94,891        98,693        79,806        51,529
Senior redeemable preferred stock                   32,676                --            --            --            --
Shareholders' equity (deficit)                    (108,986)          126,047       109,528        94,653        52,408

</TABLE>

(1)  All of the Company's senior credit facility revolving line of credit and
     all of the Company's subordinated notes and debentures are classified as
     current liabilities as of November 2, 1996.

ITEM 7.       MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
              RESULTS OF OPERATIONS.

The following discussion should be read in conjunction with the Consolidated
Financial Statements of the Company and the Notes thereto included in Item 8
herein. The presentation of certain previously reported amounts has been
reclassified to conform to the current presentation and to reflect discontinued
operations of the yarn sales business (sold on July 23, 1999), the cotton
commercial products business (sold on August 27, 1999), and the Apparel Division
(sold on November 17, 2000).

<TABLE>
<CAPTION>
                                              Fiscal Year     FiscalYear      Fiscal Year
                                                 Ended          Ended            Ended
                                              October 31,     October 30,     October 28,
                                                 1998            1999            2000
                                              -----------     -----------     -----------
<S>                                           <C>             <C>             <C>
NET SALES
  Elastomerics                                 $  83,708       $  80,035       $  86,595
  Glass                                           79,323          83,453          87,319
                                               ---------       ---------       ---------
                                                 163,031         163,488         173,914
Less intersegment sales (1)                       (7,087)         (6,621)         (5,936)
                                               ---------       ---------       ---------
Net sales                                      $ 155,944       $ 156,867       $ 167,978
                                               =========       =========       =========
</TABLE>

                                                  (Table continued on next page)


                                       13
<PAGE>   14

(Table continued from previous page)

<TABLE>
<CAPTION>
                                              Fiscal Year    Fiscal Year    Fiscal Year
                                                 Ended         Ended           Ended
                                              October 31,    October 30,    October 28,
                                                 1998           1999           2000
                                              -----------    -----------    -----------
<S>                                           <C>            <C>            <C>
OPERATING PROFIT (2)
  Elastomerics                                 $  6,290       $  4,889       $  7,458

  Glass                                           4,860          1,758          6,790
                                               --------       --------       --------
Operating profit                                 11,150          6,647         14,248
Interest expense, net                            (2,975)        (3,511)        (3,442)
                                               --------       --------       --------
Income before income taxes and
  discontinued operations                      $  8,175       $  3,136       $ 10,806
                                               ========       ========       ========


OTHER DATA

EBITDA (3)
  Elastomerics                                 $  8,692       $  8,786       $ 10,369
  Glass                                           7,146          5,934         10,036
                                               --------       --------       --------
Total EBITDA                                   $ 15,838       $ 14,720       $ 20,405
                                               ========       ========       ========
</TABLE>

(1)    Intersegment sales consist primarily of the transfer of certain scrim
       products manufactured by the Glass segment to the Elastomerics segment.
       All intersegment revenues and profits are eliminated in the accompanying
       condensed consolidated financial statements.

(2)    The operating profit (loss) of each business segment includes a
       proportionate share of indirect corporate expenses. The Company's
       corporate group is responsible for finance, strategic planning, legal,
       tax and regulatory affairs for the business segments. Such expense
       consists primarily of salaries and employee benefits, professional fees
       and amortization of reorganization costs in excess of amounts allocable
       to identifiable assets.

(3)    EBITDA represents operating income plus depreciation and amortization and
       certain other charges. EBITDA as determined by the Company may not be
       comparable to the EBITDA measure as reported by other companies. This
       presentation of EBITDA is not intended to represent cash flow from
       operations as defined by GAAP and should not be considered as an
       indicator of operating performance or an alternative to cash flow or
       operating income (as measured by GAAP) or as a measure of liquidity. In
       addition, this measure does not represent funds available for
       discretionary use. It is included herein to provide additional
       information with respect to ability of the Company to meet its future
       debt service, capital expenditures and working capital requirements. The
       other charges added back to operating income represent severance and
       restructuring charges of $1.7 million in Fiscal 1999.

RESULTS OF OPERATIONS

INTRODUCTION

The Company has repositioned itself from being largely textile oriented to a
diversified manufacturing and marketing company that is focused on a broad array
of industrial applications. This has been accomplished by successfully exiting
the apparel fabric business and two other textile businesses, while intensifying
its focus on the two businesses with growth potential, JPS Glass and JPS
Elastomerics. On November 17, 2000, the Company sold its Apparel Division,
thereby exiting the apparel fabrics business. On March 2, 1999, the


                                       14
<PAGE>   15

Company sold its Boger City manufacturing plant, thereby exiting the home
fashions woven fabrics business. The Company closed its Angle manufacturing
facility in the third quarter of 1999 and sold the remaining plant on September
3, 1999, thereby streamlining the apparel business. On July 23, 1999, the
Company sold its Stanley manufacturing plant, thereby exiting its yarn sales
segment. On August 27, 1999, the Company sold its Borden manufacturing plant,
thereby exiting its cotton commercial products segment. The apparel, yarn sales
and cotton commercial products segments are reported in the accompanying
condensed consolidated financial statements as discontinued operations.
Additionally, Company-wide cost reduction measures were implemented at the
beginning of Fiscal 1999, which included the elimination of certain jobs at
estimated annualized savings of approximately $1.3 million. The Company is now
focusing solely on improving the performance and profitability of its remaining
core businesses: JPS Elastomerics and JPS Glass.

FISCAL 2000 COMPARED WITH FISCAL 1999

Consolidated net sales increased $11.1 million, or 7.1%, from $156.9 million in
Fiscal 1999 to $168.0 million in Fiscal 2000. Consolidated operating income
increased $7.6 million from $6.6 million in Fiscal 1999 to $14.2 million in
Fiscal 2000. Total selling, general and administrative expenses decreased from
17.2% of sales in Fiscal 1999 to 16.3% of sales in Fiscal 2000. Fiscal 2000
included $2.5 million of incentive payments while Fiscal 1999 included $1.7
million of severance and restructuring costs. The percentage decrease results
primarily from cost reduction efforts and a higher revenue base.

JPS Elastomerics

Net sales in Fiscal 2000 in the Elastomerics segment, which includes single-ply
roofing and extruded urethane products, increased $6.6 million, or 8.3%, from
$80.0 million in Fiscal 1999 to $86.6 million in Fiscal 2000. The domestic
roofing market continues to be characterized by intense competition driven by
aggressive entrants into this market. The Company has addressed this challenge
by instituting aggressive pricing strategies, development of new products,
strengthening sales management in key territories, and taking actions to reduce
operating costs. Sales of urethane products increased due to higher demand for
certain of the Company's extruded sheet products used in security glass and
athletic footwear.

Operating profit in Fiscal 2000 for the Elastomerics segment increased $2.6
million from $4.9 million in Fiscal 1999 to $7.5 million in Fiscal 2000. The
increase resulted principally from increased sales and improved margins on
urethane products, implementation of cost reduction measures, and improved
inventory management.

JPS Glass

Net sales in the Glass segment, which includes substrates constructed of
synthetics and fiberglass for lamination, insulation and filtration
applications, increased $3.8 million, or 4.6%, from $83.5 million in Fiscal 1999
to $87.3 million in Fiscal 2000. The electronics industry represents the largest
customer base for the Company's fiberglass products. Strong worldwide demand
resulted in favorable market conditions for the Company's electronic substrates.
Further, strong demand for the Company's patented fitration products boosted
sales along with increased orders for high quality quartz fabrics and certain
other products. The Company has also taken actions to reduce costs, improve
manufacturing productivity and improve the quality of its products and services
which have offset raw material price increases.

Operating profit in Fiscal 2000 for the Glass segment increased $5.0 million
from $1.8 million in Fiscal 1999 to $6.8 million in Fiscal 2000 resulting from
improved margins, higher manufacturing efficiencies and cost reduction efforts.


                                       15
<PAGE>   16

Other

Interest expense in Fiscal 2000 is consistent with the Fiscal 1999 amounts.
Long-term debt was reduced by approximately $28.3 million in Fiscal 2000 as a
result of operating performance and significant working capital improvements.

On November 17, 2000 the Company sold the assets of its greige apparel fabric
business which included three manufacturing facilities in South Boston,
Virginia; Greenville, South Carolina; and Laurens, South Carolina; and
administrative offices in Greenville, South Carolina, New York and Los Angeles,
thereby exiting its apparel business. The business accounted for sales of $182.2
million, $137.6 million, and $125.4 million in Fiscal 1998, 1999 and 2000,
respectively. The consideration for the sale consisted of approximately $27.1
million in cash and future consideration in the form of an earn-out based on
earnings before interest, depreciation and amortization, as defined, for the
24-month period following the transaction plus certain assumed liabilities. The
Company has accounted for the results of the apparel fabric business as a
discontinued operation and a charge for loss on disposal of discontinued
operations of $47.4 million was recorded in Fiscal 2000 related primarily to the
writedown of disposed plant assets and related reorganization value in excess of
amounts allocable to identifiable assets, and other exit costs. The net proceeds
from the sale of $26.2 million were used to reduce the Company's outstanding
indebtedness on its Revolving Credit Facility (as defined below) which was
amended in connection with the transaction to reflect the Company's lower
borrowing requirements.

FISCAL 1999 COMPARED WITH FISCAL 1998

Consolidated net sales increased $0.9 million, or 0.6% from $156.0 million in
Fiscal 1998 to $156.9 million in Fiscal 1999. Operating profit decreased $4.5
million from $11.1 million in Fiscal 1998 to $6.6 million in Fiscal 1999. Total
selling, general and administrative expenses increased from 16.1% of sales in
Fiscal 1998 to 17.2% of sales in Fiscal 1999 primarily as a result of $1.7
million of severance and restructuring costs incurred in Fiscal 1999.

JPS Elastomerics

Net sales in the Elastomerics segment decreased $3.7 million, or 4.4%, from
$83.7 million in Fiscal 1998 to $80.0 million in Fiscal 1999. The domestic
roofing market was again characterized by intense competition and market
consolidation as growth rates receded from the double-digit levels of the mid
1990's. The Company also experienced a decline in demand for certain of the
Company's products used in the manufacture of athletic footwear. The athletic
footwear industry was depressed in Fiscal 1998 as a result of shifting consumer
preference in casual footwear. Liner membrane sales decreased due to declining
unit volume and unit selling prices.

Operating profit in Fiscal 1999 for the Elastomerics segment decreased $1.4
million from $6.3 million in Fiscal 1998 to $4.9 million in Fiscal 1999. This
decrease was attributable to pricing pressures in the domestic roofing segment
and the overall decline in sales volume.

JPS Glass

Net sales in the Glass segment increased $4.1 million, or 5.2%, from $79.3
million in Fiscal 1998 to $83.4 million in Fiscal 1999. The Company benefited
from increased global consumer demand for electronic products in 1999 as
compared with slower demand for certain fiberglass products used in the
manufacture of circuit boards as a result of the Asian economic weaknesses in
1998.


                                       16
<PAGE>   17

Operating profit in Fiscal 1999 for the Glass segment decreased $3.1 million
from $4.9 million in Fiscal 1998 to $1.8 million in Fiscal 1999. This decrease
is directly attributable to the decline in unit sales volume and lower unit
prices.

Other

In 1999, JPS sold substantially all of the assets of its Boger City Plant which
was engaged primarily in the manufacture and sale of home fashion textiles. This
business accounted for sales of $30.9 million, $22.8 million and $7.3 million in
Fiscal 1997, 1998 and 1999, respectively. The consideration for the sale
consisted of approximately $7.9 million cash. The cash proceeds were used by the
Company to reduce outstanding borrowings under its Revolving Credit Facility and
an equipment loan. In accordance with SFAS No. 121, the results of operations
for Fiscal 1998 included a charge for writedowns of certain long-lived assets of
approximately $12.5 million for the excess of the carrying value of the plant
over its fair value and related reorganization value in excess of amounts
allocable to identifiable assets.

In Fiscal 1999, the Company implemented a plan to exit its cotton commercial
products and yarn sales segments. Accordingly, a charge for loss on disposal of
discontinued operations of approximately $18.1 million was recorded in Fiscal
1999. This charge consists primarily of the writedown of disposed plant assets
to net realizable value, the writedown of related reorganization value in excess
of amounts allocable to identifiable assets, employee severance costs and other
exit costs. On July 23, 1999, the Company completed the sale of its Stanley
plant, thereby exiting the yarn sales segment. This business accounted for sales
of $20.3 million, $19.0 million and $11.0 million in Fiscal 1997, 1998 and 1999,
respectively. On August 27, 1999, the Company completed the sale of its Borden
plant, thereby exiting its cotton commercial products segment. This business
accounted for sales of $34.1 million, $33.7 million and $18.4 million in Fiscal
1997, 1998 and 1999, respectively. The proceeds from these sales of $5.2 million
were used to reduce the Company's outstanding indebtedness under its Revolving
Credit Facility and an equipment loan.

Additionally, in Fiscal 1998 and Fiscal 1999, the Company implemented cost
reduction measures which included, among other things, personnel reductions and
the idling of certain manufacturing equipment. The results of operations for
Fiscal 1998 and Fiscal 1999 include restructuring charges of approximately $2.4
million and $2.0 million, respectively. These amounts are now in discontinued
operations except for $1.7 million of severance and restructuring costs in
Fiscal 1999. Interest expense in Fiscal 1999 is consistent with the Fiscal 1998
amounts.

LIQUIDITY AND CAPITAL RESOURCES

The Company's principal sources of liquidity for operations and expansion are
funds generated internally and borrowings under its Revolving Credit Facility
(as defined below). On October 9, 1997, JPS Elastomerics and C&I (the "Borrowing
Subsidiaries") and JPS entered into the Credit Facility Agreement (the "Credit
Agreement"), as amended, by and among the financial institutions party thereto,
Citibank, as agent, and Bank of America, as co-agent. As amended, on November
17, 2000, the Credit Agreement provides for a revolving credit loan facility and
letters of credit (the "Revolving Credit Facility") in a maximum principal
amount equal to the lesser of (a) $45 million and (b) a specified borrowing base
(the "Borrowing Base"), which is based upon eligible receivables, eligible
inventory, and a specified dollar amount (currently $14,000,000 (subject to
reduction) based on fixed assets of the Borrowing Subsidiaries), except that (i)
no Borrowing Subsidiary may borrow an amount greater than the Borrowing Base
attributable to it (less any reserves as specified in the Credit Agreement) and
(ii) letters of credit may not exceed $20 million in the aggregate. The Credit
Agreement contains restrictions on investments, acquisitions and dividends
unless, among other things, the Company satisfies a specified pro forma fixed
charge coverage ratio and maintains a specified minimum availability under the
Revolving Credit Facility for a stated period of time, and no default exists
under the Credit Agreement. The Credit Agreement contains


                                       17
<PAGE>   18

financial covenants relating to minimum levels of EBITDA, minimum interest
coverage ratio, minimum fixed charge coverage ratio, and maximum capital
expenditures. The maturity date of the Revolving Credit Facility is November 12,
2001. Subsequent to October 9, 1997, the Credit Agreement has been amended to,
among other things (i) modify the financial covenants relating to minimum levels
of EBITDA, minimum interest coverage ratio, minimum fixed charge coverage ratio,
and maximum capital expenditures, (ii) modify the interest rate margin and
unused commitment fees, (iii) provide additional reduction of the fixed asset
portion of the Borrowing Base and (iv) allow the Company to repurchase its
common stock under certain circumstances. As of October 28, 2000, the Company
was in compliance with these restrictions and all financial covenants, as
amended. All loans outstanding under the Revolving Credit Facility, as amended,
bear interest at either the Eurodollar Rate (as defined in the Credit Agreement)
or the Base Rate (as defined in the Credit Agreement) plus an applicable margin
(the "Applicable Margin") based upon the Company's fixed charge coverage ratio
(which margin will not exceed 2.50% for Eurodollar Rate borrowings and 1.00% for
Base Rate borrowings). At October 28, 2000, the Company had approximately $17.0
million available for borrowing under the Revolving Credit Facility.

Net cash provided by continuing operations increased by approximately $12.0
million in Fiscal 2000 compared with Fiscal 1999 primarily due to enhanced
profitability. Working capital, excluding assets held for sale, at October 28,
2000 was approximately $28.7 million compared with $29.1 million at October 30,
1999. Fiscal 2000 reflects continued reductions in inventory offset by a slight
increase in receivables as a result of sales increases. Accounts payable and
accrued expenses increased approximately $4.0 million in Fiscal 2000 principally
due to timing differences. The discontinued apparel business generated $17.7
million of net cash provided by operations.

The principal non-operating uses of cash in Fiscal 2000 were for property, plant
and equipment expenditures of $2.6 million for upgrade of the Company's
manufacturing operations and the repayment of long-term debt of approximately
$28.3 million. The Company also used $1.3 million to repurchase outstanding
shares of its common stock. On November 17, 2000, the Company received
approximately $27.1 million in proceeds from the sale of its Apparel division as
discussed under the caption "Fiscal 2000 Compared With Fiscal 1999." Such funds
were used to further reduce the Company's outstanding indebtedness under its
Revolving Credit Facility and certain equipment loans. As of October 28, 2000,
the Company had commitments of $0.3 million for capital expenditures. The
Company anticipates making capital expenditures in Fiscal 2001 of approximately
$5.0 to $6.0 million and expects such amounts to be funded by cash from
operations, bank and other equipment financing sources.

In Fiscal 1998, the Company entered into a seven-year lease agreement
(classified as capital lease) for certain machinery and equipment. The total
cost of assets under lease at October 28, 2000 was approximately $5.0 million.
The lease provides for an early buyout option at the end of six years and
includes purchase and renewal options at fair market value at the end of the
lease term.

Based upon the Company's ability to generate working capital through its
operations and its Revolving Credit Facility, the Company believes that it has
the financial resources necessary to pay its capital obligations and implement
its business plan for at least Fiscal 2001.

INFLATION AND TAX MATTERS

The Company is subject to the effects of changing prices. It has generally been
able to pass along inflationary increases in its costs by increasing the prices
for its products or by increasing manufacturing efficiencies; however, market
conditions sometimes preclude raising prices.


                                       18
<PAGE>   19

For Fiscal 2000, the Company recorded a tax expense from continuing operations
of $4.5 million, a 42% effective rate, and a tax benefit on sale of discontinued
operations of $4.2 million. The Company also reduced the valuation allowance
applicable to net operating losses arising prior to the Plan of Reorganization
by $11.4 million and, under applicable accounting guidelines, reduced excess
reorganization value by this amount. The Company had net operating loss
carryovers of approximately $55 million as of October 28, 2000. A portion of
these losses are subject to limitations on usage as a result of the ownership
change that occurred under the Plan of Reorganization. Additional limitations on
usage could occur on net operating losses or other deferred tax assets should
the Company undergo another ownership change, as determined under the Internal
Revenue Code of 1996, as amended. See Note 7 to the consolidated financial
statements for additional information. The effective tax rates for Fiscal 1999
and 1998 were, 64% and 42%, respectively. The effective rates for all years are
higher than the combined federal and state statutory rate due primarily to the
impact of nondeductible excess reorganization costs.

RECENT ACCOUNTING PRONOUNCEMENTS

On October 29, 2000, the Company adopted SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This statement requires
companies to record derivatives on the balance sheet as assets or liabilities,
measured at fair value. The Company did not have any derivatives which were
required to be recorded on the balance sheet.

On May 12, 1999, the Company repriced certain stock options which, under
Financial Accounting Standards Board Interpretation Number 44 ("FIN 44"),
requires them to be accounted for under variable plan accounting. The
application of FIN 44, which was effective July 1, 2000, can result in the
recognition of non-cash compensation expense. Although there was no compensation
expense in Fiscal Year 2000 as a result of applying FIN 44, FIN 44 could result
in significant future non-cash compensation expense. Any expense will be added
back to operating income to determine the Company's EBITDA, as previously
defined.


                                       19
<PAGE>   20

ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk. The Company has exposure to interest rate changes primarily
relating to interest rate changes under its Revolving Credit Facility. The
Company's Revolving Credit Facility bears interest at rates which vary with
changes in (i) the London Interbank Offered Rate (LIBOR) or (ii) a rate of
interest announced publicly by Citibank in New York, New York. The Company does
not speculate on the future direction of interest rates. As of October 28, 2000,
approximately $48.0 million of the Company's debt bore interest at variable
rates. The Company believes that the effect, if any, of reasonably possible
near-term changes in interest rates on the Company's consolidated financial
position, results of operations or cash flows would not be significant.

Raw material price risk. A portion of the Company's raw materials are
commodities and are, therefore, subject to price volatility caused by weather,
production problems, delivery difficulties, and other factors which are outside
the control of the Company. In most cases, essential raw materials are available
from several sources. For several raw materials, however, branded goods or other
circumstances may prevent such diversification and an interruption of the supply
of these raw materials could have a significant impact on the Company's ability
to produce certain products. The Company has established long-term relationships
with key suppliers and may enter into purchase contracts or commitments of one
year or less for certain raw materials. Such agreements generally include a
pricing schedule for the period covered by the contract or commitment. The
Company believes that any changes in raw material pricing, which cannot be
adjusted for by changes in its product pricing or other strategies, would not be
significant.

General Economic Conditions. Demand for the Company's products is affected by a
variety of economic factors including, but not limited to, the cyclical nature
of the construction industry, demand for electronic and aerospace products which
ultimately utilize components manufactured by the Company, and general consumer
demand. Adverse economic developments could affect the financial performance of
the Company.


                                       20
<PAGE>   21

ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEPENDENT AUDITORS' REPORT

JPS Industries, Inc.

We have audited the accompanying consolidated balance sheets of JPS Industries,
Inc. and subsidiaries (the "Company") as of October 28, 2000 and October 30,
1999, and the related statements of operations, shareholders' equity, and cash
flows for each of the three years in the period ended October 28, 2000. Our
audits also included the financial statement schedule listed in the index at
page S-1. These financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial statement schedule based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company at October 28, 2000 and
October 30, 1999, and the results of its operations and its cash flows for each
of the three years in the period ended October 28, 2000 in conformity with
accounting principles generally accepted in the United States of America. Also,
in our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.



DELOITTE & TOUCHE LLP

Greenville, South Carolina
November 29, 2000


                                       21
<PAGE>   22

JPS INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)


<TABLE>
<CAPTION>
                                                                         October 30,    October 28,
                                                                             1999           2000
                                                                         -----------    -----------
ASSETS

<S>                                                                      <C>           <C>
CURRENT ASSETS:
    Cash                                                                  $    427       $  2,216
    Accounts receivable, less allowance of $659
       in 1999 and $1,024 in 2000                                           26,951         27,640
    Inventories                                                             20,452         18,583
    Prepaid expenses and other                                               4,033          6,993
    Net assets of discontinued operations                                   91,857         27,539
                                                                          --------       --------
          Total current assets                                             143,720         82,971


PROPERTY, PLANT AND EQUIPMENT, net                                          45,743         43,439

REORGANIZATION VALUE IN EXCESS
    OF AMOUNTS ALLOCABLE TO IDENTIFIABLE
    ASSETS, less accumulated amortization of $3,566 in
    1999 and $5,286 in 2000                                                 15,192          2,971

OTHER ASSETS                                                                11,661         18,861

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


          Total assets                                                    $216,316       $148,242
                                                                          ========       ========
</TABLE>

See notes to consolidated financial statements.


                                       22
<PAGE>   23

<TABLE>
<CAPTION>
                                                                               October 30,    October 28,
                                                                                   1999           2000
                                                                               -----------    -----------
<S>                                                                            <C>            <C>
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable                                                            $  11,545       $  13,303
    Accrued interest                                                                  865             759
    Accrued salaries, benefits and withholdings                                     3,092           6,776
    Other accrued expenses                                                          6,238           4,924
    Current portion of long-term debt                                                 975             936
                                                                                ---------       ---------
       Total current liabilities                                                   22,715          26,698

LONG-TERM DEBT                                                                     79,806          51,529

OTHER LONG-TERM LIABILITIES                                                        19,142          17,607
                                                                                ---------       ---------

       Total liabilities                                                          121,663          95,834
                                                                                ---------       ---------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
    Common stock, $.01 par value; authorized - 22,000,000 shares; issued -
       10,000,000 shares; outstanding - 10,000,000 shares in 1999
       and 9,732,500 shares in 2000                                                   100             100
    Additional paid-in capital                                                    123,942         124,190
    Treasury stock (at cost) - 267,500 shares                                          --          (1,263)
    Accumulated deficit                                                           (29,389)        (70,619)
                                                                                ---------       ---------
       Total shareholders' equity                                                  94,653          52,408
                                                                                ---------       ---------

       Total liabilities and shareholders' equity                               $ 216,316       $ 148,242
                                                                                =========       =========
</TABLE>

See notes to consolidated financial statements.


                                       23
<PAGE>   24

JPS INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands Except Per Share Data)

<TABLE>
<CAPTION>
                                                                       Fiscal             Fiscal            Fiscal
                                                                        Year               Year              Year
                                                                       Ended              Ended              Ended
                                                                     October 31,        October 30,       October 28,
                                                                        1998               1999               2000
                                                                   -------------      -------------      ------------
   <S>                                                             <C>                <C>                <C>
   Net sales                                                       $     155,944      $     156,867       $   167,978
   Cost of sales                                                         119,727            121,579           126,380
                                                                   -------------      -------------      ------------
   Gross profit                                                           36,217             35,288            41,598
   Selling, general and administrative expenses                           25,134             26,978            27,368
   Other expense (income), net                                               (67)             1,663               (18)
                                                                   -------------      -------------      ------------
   Operating profit                                                       11,150              6,647            14,248
   Interest expense, net                                                  (2,975)            (3,511)           (3,442)
                                                                   -------------      -------------      ------------
   Income before income taxes and
     discontinued operations                                               8,175              3,136            10,806
   Provision for income taxes                                              3,462              1,997             4,517
                                                                   -------------      -------------      ------------
   Income from continuing operations                                       4,713              1,139             6,289
   Discontinued operations (net of taxes):
     Loss from discontinued operations                                   (15,377)            (4,485)             (104)
     Loss on disposal of discontinued operations                              --            (18,096)          (47,415)
                                                                   -------------      -------------      ------------
   Net loss                                                              (10,664)           (21,442)          (41,230)
   Other comprehensive income (net of tax):
     Minimum pension liability adjustments                                (5,855)             5,855                --
                                                                   -------------      -------------      ------------
   Comprehensive loss                                              $     (16,519)     $     (15,587)     $    (41,230)
                                                                   =============      =============      ============

   Weighted average number of common
    shares outstanding:               Basic                           10,000,000         10,000,000         9,940,000
                                                                   =============      =============      ============
                                      Diluted                         10,000,000         10,000,000        10,045,698
                                                                   =============      =============      ============
   Basic income (loss) per common share:
   Income from continuing operations                               $        0.47      $        0.11      $       0.63
   Discontinued operations (net of taxes):
     Loss from discontinued operations                                     (1.54)             (0.44)            (0.01)
     Loss on disposal of discontinued operations                              --              (1.81)            (4.77)
                                                                   -------------      -------------      ------------
   Net loss                                                        $      (1.07)      $       (2.14)     $      (4.15)
                                                                   =============      =============      ============

   Diluted income (loss) per common share:
   Income from continuing operations                               $       0.47       $        0.11      $       0.63
   Discontinued operations (net of taxes):
     Loss from discontinued operations                                    (1.54)              (0.44)            (0.01)
     Loss on disposal of discontinued operations                             --               (1.81)            (4.72)
                                                                   -------------      -------------      ------------
   Net loss                                                        $      (1.07)      $       (2.14)     $      (4.10)
                                                                   =============      =============      ============
</TABLE>

   See notes to consolidated financial statements.


                                       24
<PAGE>   25

JPS INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Dollars In Thousands)

<TABLE>
<CAPTION>
                                                                                        Accumulated     Retained
                                                              Additional                   Other        Earnings
                                                Common         Paid-In      Treasury   Comprehensive  (Accumulated
                                                Stock          Capital       Stock         Loss          Deficit)
                                               --------      -----------    --------   -------------  ------------
<S>                                            <C>           <C>            <C>        <C>            <C>
Balance - November 1, 1997                     $    100       $123,230      $    --       $    --       $  2,717

Additional minimum pension liability
   adjustment                                                                              (5,855)
Net loss                                                                                                 (10,664)
                                               --------       --------      -------       -------       --------

Balance - October 31, 1998                          100        123,230           --        (5,855)        (7,947)

Stock compensation expense                                         712
Additional minimum pension liability
   adjustment                                                                               5,855
Net loss                                                                                                 (21,442)
                                               --------       --------      -------       -------       --------

Balance - October 30, 1999                          100        123,942           --            --        (29,389)

Stock compensation expense                                         248
Shares reacquired and held in treasury                                       (1,263)
Net loss                                                                                                 (41,230)
                                               --------       --------      -------       -------       --------

Balance - October 28, 2000                     $    100       $124,190      $(1,263)      $    --       $(70,619)
                                               ========       ========      =======       =======       ========
</TABLE>

See notes to consolidated financial statements.


                                       25
<PAGE>   26


JPS INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars In Thousands)


<TABLE>
<CAPTION>
                                                                          Fiscal          Fiscal           Fiscal
                                                                           Year            Year             Year
                                                                          Ended            Ended            Ended
                                                                        October 31,     October 30,      October 28,
                                                                           1998            1999              2000
                                                                        -----------     -----------      -----------
<S>                                                                     <C>             <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                              $(10,664)       $(21,442)         $(41,230)
                                                                         --------        --------          --------
   Adjustments to reconcile net loss
      to net cash provided by operating activities:
      Loss from discontinued operations                                    15,377           4,485               104
      Loss on disposal of discontinued operations                              --          18,096            47,415
      Depreciation and amortization                                         4,688           6,382             6,157
      Amortization of deferred financing costs                                329             414               272
      Deferred income tax provision (benefit)                               2,853          (1,753)            2,532
      Other, net                                                           (3,771)         (1,793)           (3,918)
       Changes in assets and liabilities:
        Accounts receivable                                                 1,600             752              (689)
        Inventories                                                        (4,442)          3,571             1,869
        Prepaid expenses and other assets                                  (1,782)           (156)             (269)
        Accounts payable                                                    2,700          (1,872)            1,758
        Accrued expenses and other liabilities                             (1,799)         (2,062)            2,264
                                                                         --------        --------          --------
   Total adjustments                                                       15,753          26,064            57,495
                                                                         --------        --------          --------
   Net cash provided by continuing
      operating activities                                                  5,089           4,622            16,265
   Net cash from discontinued operations                                    4,668           5,694            17,712
                                                                         --------        --------          --------
   Net cash provided by operating activities                                9,757          10,316            33,977
                                                                         --------        --------          --------

CASH FLOWS FROM INVESTING ACTIVITIES
   Property and equipment additions                                       (15,453)         (4,071)           (2,609)
   Proceeds from disposal of discontinued operations, net                      --           4,658                --
   Proceeds from disposal of certain other operations                          --           8,491                --
   Proceeds from sale of long-term investments                             35,382              --                --
                                                                         --------        --------          --------
   Net cash provided by (used in) investing activities                     19,929           9,078            (2,609)
                                                                         --------        --------          --------
</TABLE>

                                                  (Table continued on next page)


                                       26
<PAGE>   27

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued from previous page) (Dollars In
Thousands)

<TABLE>
<CAPTION>
                                                                        Fiscal           Fiscal           Fiscal
                                                                         Year             Year             Year
                                                                        Ended            Ended            Ended
                                                                      October 31,      October 30,      October 28,
                                                                         1998             1999             2000
                                                                      -----------      -----------      -----------
<S>                                                                   <C>              <C>              <C>
CASH FLOWS FROM FINANCING ACTIVITIES
    Financing costs incurred                                               (146)             (732)              --
    Purchase of treasury stock                                               --                --           (1,263)
    Revolving credit facility borrowings (repayments), net                1,452           (18,628)         (27,394)
    Repayment of other long-term debt                                   (32,679)             (332)            (922)
                                                                       --------          --------         --------
    Net cash used in financing activities                               (31,373)          (19,692)         (29,579)
                                                                       --------          --------         --------

NET INCREASE (DECREASE) IN CASH                                          (1,687)             (298)           1,789
CASH AT BEGINNING OF YEAR                                                 2,412               725              427
                                                                       --------          --------         --------
CASH AT END OF YEAR                                                    $    725          $    427         $  2,216
                                                                       ========          ========         ========

SUPPLEMENTAL INFORMATION ON CASH
    FLOWS FROM CONTINUING OPERATIONS:
    Interest paid                                                      $  7,629          $  7,323         $  6,361
    Income taxes paid, net                                                1,044               570              402
    Non-cash financing activities:
      Capital lease obligation                                            3,519             1,307               --
</TABLE>

See notes to consolidated financial statements.


                                       27
<PAGE>   28
JPS INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.       SIGNIFICANT ACCOUNTING POLICIES

         Principles of Consolidation - The consolidated financial statements
         include JPS Industries, Inc. and its direct subsidiaries, all of which
         are wholly owned. Significant intercompany transactions and accounts
         have been eliminated. Unless the context otherwise requires, the terms
         "JPS" and the "Company" as used in these Consolidated Financial
         Statements mean JPS Industries, Inc. and JPS Industries, Inc. together
         with its subsidiaries, respectively.

         Use of Estimates - The preparation of financial statements in
         conformity with generally accepted accounting principles requires
         management to make estimates and assumptions that affect the reported
         amounts of assets and liabilities and disclosure of contingent assets
         and liabilities at the date of the financial statements and the
         reported amounts of revenues and expenses during the reporting period.
         The Company's most significant financial statement estimates include
         the estimate of the allowance for doubtful accounts, reserve for
         self-insurance liabilities, and the reserve for roofing products sold
         under warranties. Management determines its estimate of the allowance
         for doubtful accounts considering a number of factors, including
         historical experience, aging of the accounts and the current
         creditworthiness of its customers. Management determines its estimate
         of the reserve for self-insurance considering a number of factors,
         including historical experience, third party claims administrator and
         actuarial assessments and insurance coverages. Management determines
         its estimate of the reserve for roofing products sold under warranties
         by reviewing factors such as expected future claims by geographic
         region and roofing compound applied; and the expected costs to repair
         and replace such roofing products. Management believes that its
         estimates provided in the financial statements are reasonable and
         adequate. However, actual results could differ from those estimates.

         Inventories - Inventories are stated at the lower of cost or market.
         Cost, which includes labor, material and factory overhead, is
         determined on the first-in, first-out basis.

         Property, Plant and Equipment - Property, plant and equipment is
         recorded at cost and depreciation is recorded using the straight-line
         method for financial reporting purposes. The estimated useful lives
         used in the computation of depreciation are as follows:

<TABLE>
                <S>                                         <C>
                Land improvements                           10 to 45 years
                Buildings and improvements                  25 to 45 years
                Machinery and equipment                      3 to 15 years
                Furniture, fixtures and other                5 to 10 years
</TABLE>

         The Company assesses its long-lived assets for impairment whenever
         facts and circumstances indicate that the carrying amount may not be
         fully recoverable. If required, an impairment loss is measured based
         upon the difference between the carrying amount and the fair value of
         the assets. Assets under capital leases are amortized in accordance
         with the Company's normal depreciation policy and the charge to
         earnings is included in depreciation expense in the accompanying
         consolidated financial statements.

         Reorganization Value in Excess of Amounts Allocable to Identifiable
         Assets - ("Reorganization Value") in excess of amounts allocable to
         identifiable assets resulted from the application of "fresh start"
         reporting in 1997 and is being amortized over a 20-year period. In
         Fiscal 1998, 1999, and 2000, the Reorganization Value was decreased by
         approximately $6.9 million, $3.7 million and $15.0 million,
         respectively, in relation to the discontinued operations, plant sales
         and plant closure discussed in Notes 2 and 3.


                                       28

<PAGE>   29

         Debt Issuance Costs - Costs incurred in securing and issuing long-term
         debt are deferred and amortized over the terms of the related debt in
         amounts which approximate the interest method of amortization.

         Product Warranties - On certain of its products, the Company provides a
         warranty against defects in materials and workmanship under separately
         priced extended warranty contracts generally for a period of 10 years.
         Revenue from such extended warranty contracts is deferred and
         recognized as income on a straight-line basis over the contract
         period. The cost of servicing such product warranties is charged to
         expense as incurred.

         Fair Value of Financial Instruments - The carrying amounts of all
         financial instruments approximate their estimated fair values in the
         accompanying Balance Sheets. The carrying amounts of cash, accounts
         receivable, accounts payable, and accrued expenses approximate fair
         value because of the short maturity of these items. The carrying value
         of financial instruments such as debt and notes receivable approximates
         fair value because interest rates on these instruments change with
         market rates.

         Revenue Recognition - The Company recognizes revenue from product sales
         when it has shipped the goods or ownership has been transferred by
         contract to the customer for goods to be held for future shipment at
         the customer's request.

         Advertising Costs - The Company defers advertising related costs until
         the advertising is first run in magazines or other publications or in
         the case of brochures, until the brochures are printed and available
         for distribution. Advertising costs expensed were approximately
         $1,554,000 in Fiscal 1998, $1,940,000 in Fiscal 1999, and $1,498,000 in
         Fiscal 2000.

         Income Taxes - The Company accounts for income taxes using the
         principles of SFAS No. 109, "Accounting for Income Taxes." Deferred
         income taxes result primarily from temporary differences between
         financial and tax reporting. Deferred tax assets and liabilities are
         determined based on the difference between the financial statement
         bases and tax bases of assets and liabilities using enacted tax rates.
         A valuation allowance is recorded to reduce a deferred tax asset to
         that portion that is expected to more likely than not be realized.

         Earnings Per Share - Potentially dilutive common shares consist
         primarily of stock options. In the years ended October 31, 1998 and
         October 30, 1999, the inclusion of additional shares assuming the
         exercise of stock options and warrants are antidilutive. Therefore,
         basic and diluted earnings per share are the same for those periods.

         Fiscal Year - The Company's operations are based on a 52 or 53-week
         fiscal year ending on the Saturday closest to October 31. Each of
         fiscal years 1998, 1999, and 2000 had 52 weeks.

         Reclassifications - Certain Fiscal 1998 and 1999 amounts have been
         reclassified to conform to the Fiscal 2000 presentation.

         Effects of Recent Accounting Pronouncements - On October 29, 2000, the
         Company adopted SFAS No. 133, "Accounting for Derivative Instruments
         and Hedging Activities." This statement requires companies to record
         derivatives on the balance sheet as assets or liabilities, measured at
         fair value. The Company did not have any derivatives which were
         required to be recorded on the balance sheet.

2.       SALE OF DISCONTINUED OPERATIONS

         Yarn Sales Business - On July 23, 1999, the Company sold its Stanley
         manufacturing plant, thereby exiting its yarn sales business. This
         business accounted for sales of $20.3 million, $19.0 million and $11.0
         million in Fiscal 1997, 1998 and 1999, respectively. The consideration
         for the Stanley sale


                                       29

<PAGE>   30

         consisted of approximately $2.0 million in cash. A charge for loss on
         disposal of discontinued operations of approximately $9.2 million was
         recorded in Fiscal 1999 related primarily to the writedown of disposed
         plant assets and related Reorganization Value to net realizable value,
         employee severance costs, and other exit costs. The net proceeds from
         the sale were used to reduce the Company's outstanding indebtedness on
         its Revolving Credit Facility and an equipment loan.

         Cotton Commercial Products Business - On August 27, 1999, the Company
         sold its Borden manufacturing plant, thereby exiting its cotton
         commercial products business. This business generated sales of $34.1
         million, $33.7 million and $18.4 million in Fiscal 1997, 1998 and 1999,
         respectively. The consideration for the Borden sale consisted of
         approximately $3.2 million in cash and a $2.0 million subordinated
         promissory note which was recorded at its estimated fair value. A
         charge for loss on disposal of discontinued operations of approximately
         $8.9 million was recorded in Fiscal 1999 related primarily to the
         writedown of disposed plant assets and related Reorganization Value to
         net realizable value, employee severance costs, and other exit costs.
         The net proceeds from the sale were used to reduce the Company's
         outstanding indebtedness on its Revolving Credit Facility.

         Apparel Fabric Business - On November 17, 2000 the Company sold the
         assets of its greige apparel fabric business which included three
         manufacturing facilities in South Boston, Virginia; Greenville, South
         Carolina; and Laurens, South Carolina; and administrative offices in
         Greenville, South Carolina, New York and Los Angeles, thereby exiting
         its apparel business. The business accounted for sales of $182.2
         million, $137.6 million, and $125.4 million in Fiscal 1998, 1999 and
         2000, respectively. The consideration for the sale consisted of
         approximately $27.1 million in cash and future consideration in the
         form of an earn-out based on earnings before interest, depreciation and
         amortization, as defined, for the 24-month period following the
         transaction plus certain assumed liabilities. The Company has accounted
         for the results of the Apparel Fabric Business as a discontinued
         operation and a charge for loss on disposal of discontinued operations
         of $47.4 million was recorded in Fiscal 2000 related primarily to the
         writedown of disposed plant assets and related Reorganization Value to
         realizable value and other exit costs. The net proceeds from the sale
         of $26.2 million were used to reduce the Company's outstanding
         indebtedness on its Revolving Credit Facility which was amended in
         connection with the transaction to reflect the Company's lower
         borrowing requirements.

3.       SALE OF CERTAIN OPERATIONS, PLANT CLOSING, WRITEDOWN OF CERTAIN
         LONG-LIVED ASSETS AND RESTRUCTURING COSTS

         On March 2, 1999, the Company completed the sale of its Boger City
         manufacturing plant, thereby exiting the home fashions woven fabrics
         business. This business accounted for sales of $30.9 million, $22.8
         million and $7.3 million in Fiscal 1997, 1998 and 1999, respectively.
         The consideration for the sale consisted of approximately $7.9 million
         in cash. A charge of approximately $12.5 million related principally to
         the loss on impairment of long-lived assets, including related
         Reorganization Value, is now included in the loss from discontinued
         operations in Fiscal 1998. The net proceeds from the sale were used to
         reduce the Company's outstanding indebtedness on its Revolving Credit
         Facility and an equipment loan.

         The Company closed its Angle manufacturing facility in the Fiscal 1999
         third quarter and sold the plant on September 3, 1999, thereby
         streamlining the apparel business. The determination to close the Angle
         plant resulted in a charge in Fiscal 1998 of approximately $4.3 million
         related principally to a loss on impairment of the long-lived assets
         including related Reorganization Value. The plant closing also resulted
         in an additional charge in Fiscal 1999 of approximately $0.9 million
         related principally to employee severance costs, all of which is now
         included in the loss from discontinued operations in Fiscal 1999. The
         proceeds from the sale of the plant facility of approximately $0.2
         million were used to reduce the Company's outstanding indebtedness
         under its Revolving Credit Facility.


                                       30

<PAGE>   31

         Additionally, in Fiscal 1998 and 1999, the Company implemented cost
         reduction measures which included, among other things, personnel
         reductions and the idling of certain manufacturing equipment. The
         results of operations for Fiscal 1998 includes a "charge for writedown
         of certain long-lived assets" of approximately $1.7 million for the
         impairment of idled equipment and a "charge for restructuring costs" of
         approximately $0.7 million related to employee severance costs. The
         results of operations for Fiscal 1999 include a "charge for writedown
         of certain long-lived assets" of approximately $1.5 million for the
         impairment of idled equipment and a "charge for restructuring costs" of
         approximately $1.7 million related primarily to employee severance
         costs. Except for the $1.7 million of restructuring costs incurred in
         Fiscal 1999, all such costs are now reflected in discontinued
         operations.

4.       BALANCE SHEET COMPONENTS

         The components of certain balance sheet accounts are (in thousands):

<TABLE>
<CAPTION>
                                                                                October 30,       October 28,
                                                                                   1999              2000
                                                                                -----------       -----------
         <S>                                                                    <C>               <C>
         Inventories:
          Raw materials and supplies                                            $     4,929       $     5,796
          Work-in-process                                                             5,207             5,135
          Finished goods                                                             10,316             7,652
                                                                                -----------       -----------
                                                                                $    20,452       $    18,583
                                                                                ===========       ===========
         Prepaid expenses and other:
          Deferred current tax                                                  $     1,509       $     4,200
          Prepaid insurance                                                             527               324
          Other                                                                       1,997             2,469
                                                                                -----------       -----------
                                                                                $     4,033       $     6,993
                                                                                ===========       ===========
         Property, plant and equipment, net:
          Land and improvements                                                 $       927       $       972
          Buildings and improvements                                                  5,332             5,396
          Machinery and equipment                                                    45,967            48,836
          Furniture, fixtures and other                                                 888               890
                                                                                -----------       -----------
                                                                                     53,114            56,094
          Less accumulated depreciation                                              (8,542)          (13,455)
                                                                                -----------       -----------
                                                                                     44,572            42,639
          Construction in progress                                                    1,171               800
                                                                                -----------       -----------
                                                                                $    45,743       $    43,439
                                                                                ===========       ===========
         Other noncurrent assets:
          Deferred financing fees                                               $     1,573       $       237
          Prepaid pension costs                                                       8,486            10,848
          Deferred income tax                                                         1,602             7,756
           Other                                                                         --                20
                                                                                -----------       -----------
                                                                                $    11,661       $    18,861
                                                                                ===========       ===========
         Other accrued expenses:
          Roofing product liability costs                                       $       643       $     1,750
          Taxes payable other than income taxes                                         307               477
          Income taxes                                                                2,487               575
          Other                                                                       2,801             2,122
                                                                                -----------       -----------
                                                                                $     6,238       $     4,924
                                                                                ===========       ===========

         Other long-term liabilities:
          Roofing product liability costs and deferred warranty income          $    15,691       $    14,415
          Accrued postretirement and postemployment benefit plan liability            3,451             3,192
                                                                                -----------       -----------
                                                                                $    19,142       $    17,607
                                                                                ===========       ===========
</TABLE>


                                       31

<PAGE>   32

5.       LONG-TERM DEBT

         Long-term debt consists of (in thousands):

<TABLE>
<CAPTION>
                                                                                October 30,       October 28,
                                                                                   1999               2000
                                                                                -----------       -----------
         <S>                                                                    <C>               <C>
         Senior credit facility, revolving line of credit                       $    75,394       $    48,000
         Equipment financing                                                          1,125               736
         Capital lease obligation                                                     4,262             3,729
                                                                                -----------       -----------
           Total                                                                     80,781            52,465
         Less current portion                                                          (975)             (936)
                                                                                -----------       -----------
         Long-term portion                                                      $    79,806       $    51,529
                                                                                ===========       ===========
</TABLE>

         Senior Credit Facility - On October 9, 1997, JPS Elastomerics and
         Converter & Industrial Corp. ("C&I") (the "Borrowing Subsidiaries") and
         JPS entered into the Credit Facility Agreement (the "Credit
         Agreement"), as amended, by and among the financial institutions party
         thereto, Citibank, as agent, and Bank of America, as co-agent.
         Subsequent to the sale of the Apparel Division on November 17, 2000,
         (which yielded cash proceeds of $26.2 million) and the resulting
         amendment, the Credit Agreement provides for a revolving credit loan
         facility and letters of credit (the "Revolving Credit Facility") in a
         maximum principal amount equal to the lesser of (a) $45 million and (b)
         a specified borrowing base (the "Borrowing Base"). The Borrowing Base
         is based upon eligible receivables, eligible inventory, and a specified
         dollar amount (currently $14,000,000 subject to reduction based on
         fixed assets of the Borrowing Subsidiaries), except that (i) no
         Borrowing Subsidiary may borrow an amount greater than the Borrowing
         Base attributable to it (less any reserves as specified in the Credit
         Agreement) and (ii) letters of credit may not exceed $20 million in the
         aggregate. The Credit Agreement contains restrictions on investments,
         acquisitions and dividends unless, among other things, the Company
         satisfies a specified pro forma fixed charge coverage ratio and
         maintains a specified minimum availability under the Revolving Credit
         Facility for a stated period of time, and no default exists under the
         Credit Agreement. The Credit Agreement also restricts, among other
         things, indebtedness, liens, affiliate transactions, operating leases,
         fundamental changes, and asset sales other than the sale of up to $35
         million of fixed assets, subject to the satisfaction of certain
         conditions. The Credit Agreement contains financial covenants relating
         to minimum levels of EBITDA, minimum interest coverage ratio, minimum
         fixed charge coverage ratio, and maximum capital expenditures.

         The maturity date of the Revolving Credit Facility is November 12,
         2001. As of October 28, 2000, the Company was in compliance with these
         restrictions and all financial covenants, as amended.

         All loans outstanding under the Revolving Credit Facility, as amended,
         bear interest at either the Eurodollar Rate (as defined in the Credit
         Agreement) or the Base Rate (as defined in the Credit Agreement) plus
         an applicable margin (the "Applicable Margin") based upon the Company's
         fixed charge coverage ratio (which margin will not exceed 2.50% for
         Eurodollar Rate borrowings and 1.00% for Base Rate borrowings). The
         weighted average interest rate at October 28, 2000 is approximately
         8.9%. The Company pays an unused commitment fee of .25% per annum and a
         letter of credit fee equal to the Applicable Margin for Eurodollar Rate
         borrowings.

         As of October 28, 2000, unused and outstanding letters of credit
         totaled $1.1 million. The outstanding letters of credit reduce the
         funds available under the Revolving Credit Facility. At October 28,
         2000, the Company had approximately $17.0 million available for
         borrowing under the Revolving Credit Facility.


                                       32

<PAGE>   33

         Capital Lease Obligation - In Fiscal 1998, the Company entered into a
         seven-year lease agreement (classified as a capital lease) for certain
         machinery and equipment. The total costs of assets under lease at
         October 28, 2000 was approximately $4.8 million. The lease provides for
         an early buyout option at the end of six years and includes purchase
         and renewal options at the end of the lease term. The lease has an
         implied interest rate of approximately 7.4%. See Note 8 for obligations
         under capital leases.

         Other - The loans and extensions of credit to the Borrowing
         Subsidiaries under the Credit Agreement are guaranteed by JPS and its
         other existing subsidiaries other than JPS Capital, and are secured by
         the assets of JPS (excluding the stock of JPS Capital) and its existing
         subsidiaries other than JPS Capital. Substantially all of the Company's
         assets are pledged as collateral for the Credit Agreement and the
         equipment financing lease.

         Interest expense includes $329,000 in Fiscal 1998, $414,000 in Fiscal
         1999, and $521,000 in Fiscal 2000 representing amortization of debt
         issuance expenses. Interest expense allocated to discontinued
         operations was $2.9 million in Fiscal 2000, $3.9 million in Fiscal 1999
         and $4.3 million in Fiscal 1998 based upon the ratio of identifiable
         net assets.

         Maturities - Aggregate principal maturities of all long-term debt,
         exclusive of the capital lease obligation, are as follows (in
         thousands):

<TABLE>
<CAPTION>
                        Fiscal Year Ending
                        ------------------
                        <S>                       <C>
                        2001                      $    361
                        2002                        48,375
                                                  --------
                                                  $ 48,736
                                                  ========
</TABLE>

6.       EQUITY SECURITIES

         The Company has one class of stock issued and outstanding.

         Share Repurchase Program

         In 2000, the Board of Directors authorized the expenditure of up to $8
         million for the repurchase of the Company's common stock. In November,
         2000, this authorization was increased to $10 million. As of October
         28, 2000, the Company had repurchased 267,500 shares at an aggregate
         cost of $1.3 million (See Note 12). Management intends to make
         purchases of its common stock from time to time in the open market or
         in negotiated transactions, but there is no assurance that future
         repurchases will be made and the repurchase program may be discontinued
         at any time. There is no time limit on stock repurchases. The Company
         may use the stock to meet its obligations under its employee stock
         option program. There were no reissuances of treasury stock in 2000.

         1997 Incentive and Capital Accumulation Plan

         The 1997 Incentive and Capital Accumulation Plan (the "Incentive Plan")
         provides certain key employees and non-employee directors of the
         Company the right to acquire shares of Common Stock or monetary
         payments based on the value of such shares. Pursuant to the Incentive
         Plan, approximately 853,000 shares of Common Stock were initially
         reserved for issuance to the participants. On April 7, 1999, the
         Shareholders increased the number of shares reserved for issuance from
         853,485 to 1,353,485. These options included a combination of time
         vesting options which vest solely on the lapse of time and performance
         options which vest upon achievement of specified corporate performance
         goals and the lapse of time.


                                       33

<PAGE>   34

         On May 12, 1999 the Compensation Committee of the Board of Directors
         approved a plan to reprice stock options held by certain employees and
         Directors. Effective on that date, 349,150 options with an exercise
         price of $12.33 per share were reissued at an exercise price of $4.375
         per share, the fair market value per share on the date of repricing.
         All repriced options were changed from a combination of performance and
         time vested options to solely time-vested options. The repriced options
         are shown as a separate cancellation and reissuance in the chart below.
         Under the provisions of Financial Accounting Standards Board
         Interpretation 44 (FIN 44), the Company is required to record
         compensation expense on the repriced options if the stock price exceeds
         certain threshold amounts. The provisions of FIN 44 will continue to
         apply until the repriced options are exercised, expire or are
         cancelled. In Fiscal 1999 and 2000, no compensation expense resulted
         from the repriced options.

         Options grants totaling 206,500 shares were made in Fiscal 2000. There
         were no exercises of options. There were cancellations of 135,831
         options during Fiscal 2000 as a result of employees voluntarily
         terminating employment with the Company or lapses in options following
         terminations where an exercise period was allowed. Options for 25,000
         shares at $12.33 per share granted to Mr. Fulbright in October, 1997
         for service as a non-employee director (prior to his appointment as
         President and CEO), were voluntarily cancelled by Mr. Fulbright. As of
         October 28, 2000 option prices ranged from $2.94 to $4.38 per share.

         A summary of the activity in the Company's stock options for the years
         ended October 31, 1998, October 30, 1999 and October 28, 2000 is
         presented below:

<TABLE>
<CAPTION>
                                                                                                        Weighted Average
                                                                                  Number of Shares       Exercise Price
                                                                                  ----------------      ----------------
         <S>                                                                      <C>                   <C>
         Outstanding at November 1, 1997                                                668,990           $     12.33
         Options canceled                                                               (94,009)                12.33
                                                                                    -----------           -----------
         Outstanding at October 31, 1998                                                574,981                 12.33
         Options granted                                                                595,000                  3.29
         Options canceled                                                              (171,665)                12.33
         Options canceled - repriced                                                   (349,150)                12.33
         Options granted - repriced                                                     349,150                  4.38
                                                                                    -----------           -----------
         Outstanding at October 30, 1999                                                998,316                  4.16
         Options granted                                                                206,500                  3.16
         Options cancelled                                                             (160,831)                 6.80
                                                                                    -----------           -----------
         Outstanding at October 28, 2000                                              1,043,985           $      3.56
                                                                                    ===========           ===========
         Exercisable at October 28, 2000                                                644,320
                                                                                    ===========
         Exercisable at October 30, 1999                                                436,996
                                                                                    ===========
         Exercisable at October 31, 1998                                                139,009
                                                                                    ===========
         Weighted average remaining contractual life (years)
            at October 28, 2000                                                               8
                                                                                    ===========
</TABLE>


         The Company applies the principles of APB Opinion 25 in accounting for
         employee stock option plans. The time vesting options are fixed as to
         the number of shares that may be acquired and the amount to be paid by
         the employee. Under APB Opinion 25, the Company generally recognizes no
         compensation expense with respect to such awards because the quoted
         market price and the amount to be paid by the employee are the same on
         the date of grant. The Company's Chief Executive Officer was granted
         500,000 options on February 28, 1999; however, the measurement date was
         April 7, 1999, the date the shareholders approved an amendment to the
         Incentive Plan increasing the number of shares that could be offered.
         As such, compensation expense was measured as the difference in the
         market value of the


                                       34

<PAGE>   35

         Company's stock between the grant date and the measurement date and the
         expense is being recognized over the two-year vesting period. The
         Company recognized compensation expense of approximately $0.7 million
         in Fiscal 1999 and $0.2 million in Fiscal 2000 relating to these
         options.

         The fair value of options granted has been estimated at the date of
         grant using a Black-Scholes option pricing model with the following
         weighted average assumptions:

<TABLE>
<CAPTION>
                                                                                      Stock Option Plan
                                                                                      -----------------
                                                                                      Fiscal     Fiscal
                                                                                       1999       2000
                                                                                      ------     ------
         <S>                                                                          <C>        <C>
         Option life (in years)                                                          4.1        3.0
         Risk-free interest rate                                                         5.2%       6.3%
         Stock price volatility                                                          .50        .66
         Dividend yield                                                                   --         --
         Proforma weighted average value using formula                                $ 1.66     $ 1.53
         Actual weighted average exercise price                                       $ 3.29     $ 3.16
</TABLE>

         Had the Company determined compensation expense based on the fair value
         at the grant date for its options under SFAS No. 123, the Company's net
         loss and net loss per share would have been increased to the amounts
         indicated below (in thousands):

<TABLE>
<CAPTION>
                                   Fiscal           Fiscal           Fiscal
                                    1998             1999             2000
                                 ----------       ----------       ----------
         <S>                     <C>              <C>              <C>
         Net loss

            As reported          $  (10,664)      $  (21,442)      $  (41,230)
            Pro forma            $  (11,242)      $  (22,626)      $  (41,330)

         Net loss per share

            As reported          $    (1.07)      $    (2.14)      $    (4.15)
            Pro forma            $    (1.12)      $    (2.26)      $    (4.16)
</TABLE>

7.       INCOME TAXES

         The provision for income taxes on continuing operations included in the
         consolidated statements of operations consists of the following (in
         thousands):

<TABLE>
<CAPTION>
                                              Fiscal        Fiscal        Fiscal
                                               1998          1999          2000
                                             --------      --------      --------
         <S>                                 <C>           <C>           <C>
         Current federal provision                 --            --      $     10
         Current state provision             $    139      $    285           303
         Deferred federal provision             3,188         1,503         4,150
         Deferred state provision                 135           209            54
                                             --------      --------      --------
         Provision for income taxes          $  3,462      $  1,997      $  4,517
                                             ========      ========      ========
</TABLE>


                                       35

<PAGE>   36

         A reconciliation between income taxes at the 35% statutory Federal
         income tax rate and the provision (benefit) for income taxes for Fiscal
         1998, Fiscal 1999 and Fiscal 2000 is as follows (in thousands):

<TABLE>
<CAPTION>
                                                                   Fiscal              Fiscal             Fiscal
                                                                    1998                1999               2000
                                                                 -----------        -------------      ------------
         <S>                                                     <C>                <C>                <C>
         Income tax provision at Federal statutory rate          $     2,861        $       1,098      $      3,782
         Increase in income taxes arising from effect of:
            State and local income taxes                                 274                  494               357
            Amortization of excess reorganization value                  257                  329               295
            Other                                                         70                   76                83
                                                                 -----------        -------------      ------------
            Provision for income taxes                           $     3,462        $       1,997      $      4,517
                                                                 ===========        =============      ============
</TABLE>


         Presented below are the elements which comprise deferred tax assets and
         liabilities (in thousands):

<TABLE>
<CAPTION>
                                                                                      October 30,       October 28,
                                                                                         1999               2000
                                                                                      -----------       -----------
         <S>                                                                          <C>               <C>
         Gross deferred assets:
              Estimated allowance for doubtful accounts                               $       820       $       959
              Excess of tax over financial statement basis of inventory                       683               549
              Accruals deductible for tax purposes when paid                                  456               278
              Deferred compensation deductible for tax purposes when paid                     456               477
              Postretirement benefits deductible for tax purposes when paid                 1,536             1,587
              Miscellaneous                                                                    28                 0
              Alternative minimum tax credit carryforward available                         1,773             1,783
              Deferred financial statement income recognized for tax purposes
                 when received                                                              5,297             6,143
              Excess of tax over financial statement carrying value of
                 investment in discontinued operation                                       5,444            13,915
              Excess of tax basis of intangibles over financial statement basis             4,553             3,798
              Net operating loss carryforward                                              21,815            22,399
          Less valuation allowance                                                        (30,470)          (29,180)
                                                                                      -----------       -----------

          Gross deferred assets                                                            12,391            22,708
                                                                                      -----------       -----------

          Gross deferred liabilities:
              Pension asset recognized for book purposes                              $    (3,225)      $    (4,123)
              Excess of financial statement over tax basis of property, plant,
                 and equipment                                                             (6,055)           (6,629)
                                                                                      -----------       -----------
          Gross deferred liabilities                                                       (9,280)          (10,752)
                                                                                      -----------       -----------
              Net deferred tax asset                                                  $     3,111       $    11,956
                                                                                      ===========       ===========

          Recognized in the accompanying consolidated balance sheets
              as follows:
              Prepaid expenses and other                                              $     1,509       $     4,200
              Other non-current assets                                                      1,602             7,756
                                                                                      -----------       -----------
                                                                                      $     3,111       $    11,956
                                                                                      ===========       ===========
</TABLE>


                                       36
<PAGE>   37

          For Fiscal 2000, the Company recorded a tax expense on continuing
          operations of $4.5 million. In conjunction with the sale of the
          Apparel Division, the Company evaluated the valuation allowance on its
          deferred tax asset. Based on historical and expected income of the
          continuing operations, a determination was made that the valuation
          allowances established in fresh start accounting should be reversed.
          Accordingly, the Company reduced Reorganization Value by $11.4
          million. The Company also recorded a tax benefit of $4.2 million on
          the loss on sale of discontinued operations. A valuation allowance was
          recorded on the remainder of this loss. The Company recorded tax
          expense on continuing operations of approximately $3.5 in Fiscal 1998
          and $2.0 million in Fiscal 1999.

          At October 28, 2000, the Company had regular federal net operating
          loss carryforwards for tax purposes of approximately $55 million. The
          net operating loss carryforwards expire in years 2003 through 2019.
          The Company also has federal alternative minimum tax net operating
          loss carryforwards of approximately $65 million which expire in 2004
          through 2019. Alternative minimum tax credits can be carried forward
          indefinitely and used as a credit against regular federal taxes,
          subject to limitation.

          The Company's future ability to utilize a portion of its net operating
          loss carryforwards is limited under the income tax laws as a result of
          the change in the ownership of the Company's stock occurring as a part
          of the reorganization. The effect of such an ownership change is to
          limit the annual utilization of the net operating loss carryforwards
          to an amount equal to the value of the Company immediately after the
          time of the change (subject to certain adjustments) multiplied by the
          Federal long-term tax exempt rate. Uncertainties surrounding income
          tax law changes, shifts in operations between state taxing
          jurisdictions and future operating income levels may, however, affect
          the ultimate realization of all or some portion of these deferred
          income tax assets. In addition, a future change in ownership could
          result in additional limitations on the ability of the Company to
          utilize its net operating loss carryforwards.

8.        COMMITMENTS AND CONTINGENCIES

          Leases - The Company leases office facilities, machinery and computer
          equipment under noncancellable operating leases and capital leases.
          Rent expense from continuing operations was approximately $2,077,000
          in Fiscal 1998, $2,066,000 in Fiscal 1999, and $2,141,000 in Fiscal
          2000.

          Future minimum payments, by year and in the aggregate, under the
          noncancellable capital and operating leases with terms of one year or
          more consist of the following at October 28, 2000 (in thousands):

<TABLE>
<CAPTION>
                                                                                       Capital     Operating
                Fiscal Year Ending                                                      Lease        Leases
                ------------------                                                    ---------    ---------
                <S>                                                                   <C>          <C>
                2001                                                                  $     840    $     459
                2002                                                                        840          273
                2003                                                                        840           87
                2004                                                                      1,587            5
                2005                                                                        380            2
                                                                                      ---------    ---------
                Total future minimum lease payments                                       4,487    $     826
                                                                                                   =========
                Less: amount representing interest                                         (758)
                                                                                      ---------
                Present value of net minimum lease payments
                   (included in long-term debt - see Note 6)                          $   3,729
                                                                                      =========
</TABLE>

         Litigation - The Company is exposed to a number of asserted and
         unasserted potential claims encountered in the normal course of
         business including certain asbestos based claims. Except as discussed
         below, management believes that none of this litigation, if determined
         unfavorable to the Company, would have a material adverse effect on the
         financial condition or results of operations of the Company.

                                       37

<PAGE>   38

         In June 1997, Sears Roebuck and Co. ("Sears") filed a multi-count
         complaint against Elastomerics and two other defendants alleging an
         unspecified amount of damages in connection with the alleged premature
         deterioration of the Company's roofing membrane installed on
         approximately 140 Sears stores. No trial date has been established. The
         Company believes it has meritorious defenses to the claims and intends
         to defend the lawsuit vigorously. Management, however, cannot determine
         the outcome of the lawsuit or estimate the range of loss, if any, that
         may occur. Accordingly, no provision has been made for any loss which
         may result. An unfavorable resolution of the actions could have a
         material adverse effect on the business, results of operations or
         financial condition of the Company.

9.       RETIREMENT PLANS

         Defined Benefit Pension Plan - Substantially all of the Company's
         employees are covered by a Company-sponsored defined benefit pension
         plan. The plan also provides benefits to individuals employed by the
         businesses which were sold or plants which were closed by the Company.
         The benefits of these former employees were "frozen" at the respective
         dates of sale of the businesses or closure of the plants. Accordingly,
         these former employees will retain benefits earned through the
         respective disposal dates; however, they will not accrue additional
         benefits. The plan provides pension benefits that are based on the
         employees' compensation during the last 10 years of employment. The
         Company's policy is to fund the annual contribution required by
         applicable regulations.

         Assets of the pension plan are invested in a bond portfolio covering
         specific liabilities and in common and preferred stocks, government and
         corporate bonds, and various short-term investments. During Fiscal
         1999, the pension plan also purchased approximately 1.9 million shares
         of the Company's common stock in open market and negotiated
         transactions. This common stock accounts for less than 10% of the
         pension plan's total assets.

         Components of net periodic pension cost include the following (in
         thousands):

<TABLE>
<CAPTION>
                                                  Fiscal         Fiscal         Fiscal
                                                   1998           1999           2000
                                                 --------       --------       --------
         <S>                                     <C>            <C>            <C>
         Components of net periodic
            pension cost:
         Service cost-benefits earned
            during the period                    $  2,239       $  2,268       $  1,678
         Interest cost on projected
            benefit obligation                      7,505          7,321          7,455
         Return on plan assets                     (8,543)        (9,198)        (9,264)
         Recognized actuarial loss                     --            195             --
                                                 --------       --------       --------
         Net periodic pension cost (income)      $  1,201       $    586       $   (131)
                                                 ========       ========       ========
</TABLE>

         The weighted-average rates used in determining pension cost for the
         plan are as follows:

<TABLE>
         <S>                                  <C>            <C>            <C>
         Discount rate                               6.75%          7.50%          7.75%
         Expected long-term rate of return
           on plan assets                            9.00%          9.00%          9.00%
         Rate of compensation increase        Age-related    Age-related    Age-related
</TABLE>


                                       38


<PAGE>   39


         A reconciliation of the plan's projected benefit obligation, fair value
         of plan assets, funding status, and other applicable information is as
         follows (in thousands):

<TABLE>
<CAPTION>
                                                                                October 30,       October  28,
                                                                                   1999               2000
                                                                                -----------       -----------
         <S>                                                                    <C>               <C>
         Change in benefit obligation:
           Benefit obligation at beginning of year                              $   111,622       $   106,115
             Service cost                                                             2,269             1,678
             Interest cost                                                            7,322             7,455
             Benefits paid                                                           (8,957)           (8,953)
             Actuarial gain                                                          (6,141)           (5,100)
                                                                                -----------       -----------
           Benefit obligation at end of year                                        106,115           101,195
                                                                                -----------       -----------

         Change in plan assets:
           Fair value of plan assets at beginning of year                           103,855           104,788
             Actual return on plan assets                                             4,636             8,096
             Employer contributions                                                   5,254             2,233
             Benefits paid                                                           (8,957)           (8,953)
                                                                                -----------       -----------
           Fair value of plan assets at end of year                                 104,788           106,164
                                                                                -----------       -----------

         Reconciliation of funded status:
           Funded status                                                        $    (1,327)      $     4,969
             Unrecognized actuarial loss                                              9,813             5,879
                                                                                -----------       -----------
               Prepaid benefit cost, included in Other Assets                   $     8,486       $    10,848
                                                                                ===========       ===========
</TABLE>

         401(k) Savings Plan - The Company also has a savings, investment and
         profit sharing plan available to employees meeting eligibility
         requirements. The plan is a tax qualified plan under Section 401(k) of
         the Internal Revenue Code. The Company makes a matching contribution of
         25% of each participant's contribution with a maximum matching
         contribution of 1-1/2% of the participant's base compensation. Company
         contributions, excluding the Apparel Division, were approximately
         $180,000 in Fiscal 1998, $188,000 in Fiscal 1999, and $199,000 in
         Fiscal 2000.

         Postretirement Benefits - The Company has several unfunded
         postretirement plans that provide certain health care and life
         insurance benefits to eligible retirees. The plans are contributory,
         with retiree contributions adjusted periodically, and contain
         cost-sharing features such as deductibles and coinsurance. The
         Company's life insurance plan provides benefits to both active
         employees and retirees. Active employee contributions in excess of the
         cost of providing active employee benefits are applied to reduce the
         cost of retirees" life insurance benefits. The following table sets
         forth the status of the Company's postretirement plans as recorded in
         the accompanying Consolidated Financial Statements:

         Net periodic postretirement benefit expense included the following
         components (in thousands):

<TABLE>
<CAPTION>
                                                                    Fiscal       Fiscal        Fiscal
                                                                     1998         1999          2000
                                                                   --------     --------      --------
              <S>                                                  <C>         <C>            <C>
              Service cost for benefits earned                     $    107    $     143      $     34
              Interest cost on APBO                                     267          294           207
              Recognized actuarial loss                                  --          124           286
                                                                   --------     --------      --------
              Net periodic postretirement cost                     $    374    $     561      $    527
                                                                   ========    =========      ========
</TABLE>


                                       39


<PAGE>   40

         The weighted-average rates used in determining postretirement medical
         and life insurance costs are as follows:

<TABLE>
         <S>                                                          <C>        <C>        <C>
         Discount rate                                                6.75%      7.50%      7.75%
</TABLE>

         A reconciliation of the postretirement medical and life insurance
         plan's projected benefit obligation and funding status is as follows
         (in thousands):

<TABLE>
<CAPTION>
                                                                                October 30,       October 28,
                                                                                   1999              2000
                                                                                -----------       -----------
         <S>                                                                    <C>               <C>
         Change in benefit obligation:
           Benefit obligation at beginning of year                              $     3,723       $     3,262
             Service cost                                                               143                34
             Interest cost                                                              294               207
             Net benefits paid                                                         (456)             (426)
             Actuarial (gain) or loss                                                  (442)              497
                                                                                -----------       -----------
           Benefit obligation at end of year                                    $     3,262       $     3,574
                                                                                ===========       ===========

         Reconciliation of funded status:
           Funded status                                                        $    (3,262)      $    (3,574)
           Unrecognized actuarial (gain) or loss                                        (68)                0
                                                                                -----------       -----------
             Net amount recognized at year-end                                  $    (3,330)      $    (3,574)
                                                                                ===========       ===========
</TABLE>

         Since the Company has capped its annual liability per person and all
         future cost increases will be passed on to retirees, the annual rate of
         increase in health care costs does not affect the postretirement
         benefit obligation.

         Postemployment Benefits - The Company provides certain benefits to
         former or inactive employees after employment but before retirement. In
         accordance with SFAS No. 112, these benefits are recognized on the
         accrual basis of accounting. The liability for postemployment benefits
         at October 30, 1999 and October 28, 2000 is included in other long-term
         liabilities in the accompanying consolidated financial statements.

10.      BUSINESS SEGMENTS

         The Company's reportable segments are JPS Elastomerics and JPS Glass.
         The reportable segments were determined using the Company's method of
         internal reporting, which divides and analyzes the business by the
         nature of the products manufactured and sold, the customer base,
         manufacturing process, and method of distribution. The Elastomerics
         segment principally manufactures and markets extruded products
         including high performance roofing products, environmental
         geomembranes, and various polyurethane products. The Glass segment
         produces and markets specialty substrates mechanically formed from
         fiberglass and other specialty materials for a variety of applications
         such as printed circuit boards, filtration, advanced composites,
         building products, defense, and aerospace.

         The Company previously identified three other segments which met its
         criteria as reportable segments (the cotton commercial products, yarn
         sales and apparel segments), all of which have been exited.

         The Company evaluates the performance of its reportable segments and
         allocates resources principally based on the segment's operating
         profit, defined as earnings before interest and taxes. Indirect
         corporate


                                       40
<PAGE>   41


         expenses allocated to each business segment are based on management's
         analysis of the costs attributable to each segment. The following table
         presents certain information regarding the business segments:

Industry segment information (in thousands):

<TABLE>
<CAPTION>
                                              Fiscal            Fiscal            Fiscal
                                               Year              Year              Year
                                              Ended             Ended             Ended
                                            October 31,       October 30,       October 28,
                                               1998              1999              2000
                                            -----------       -----------       -----------
<S>                                         <C>               <C>               <C>
Net sales:
   Elastomerics                             $    83,708       $    80,035       $    86,595
   Glass                                         79,323            83,453            87,319
                                            -----------       -----------       -----------
                                                163,031           163,488           173,914
Less intersegment sales(1)                       (7,087)           (6,621)           (5,936)
                                            -----------       -----------       -----------
Net sales                                   $   155,944       $   156,867       $   167,978
                                            ===========       ===========       ===========

Operating profit(2)
   Elastomerics                             $     6,290       $     4,889       $     7,458
   Glass                                          4,860             1,758             6,790
                                            -----------       -----------       -----------
Operating profit                                 11,150             6,647            14,248
Interest expense, net                            (2,975)           (3,511)           (3,442)
                                            -----------       -----------       -----------
Income before income taxes and
   discontinued operations                  $     8,175       $     3,136       $    10,806
                                            ===========       ===========       ===========

Depreciation and amortization expense:
   Elastomerics                             $     2,402       $     3,007       $     2,911
   Glass                                          2,286             3,375             3,246
                                            -----------       -----------       -----------
                                            $     4,688       $     6,382       $     6,157
                                            ===========       ===========       ===========
Capital expenditures:
   Elastomerics                             $     5,445       $     2,281       $     1,593
   Glass                                         10,008             1,790             1,016
                                            -----------       -----------       -----------
                                            $    15,453       $     4,071       $     2,609
                                            ===========       ===========       ===========

Identifiable assets:
   Elastomerics                             $   127,128       $   108,365       $    74,801
   Glass                                        129,059           108,823            74,569
   Eliminations                                    (903)             (872)           (1,128)
                                            -----------       -----------       -----------
                                            $   255,284       $   216,316       $   148,242
                                            ===========       ===========       ===========
</TABLE>


(1)      Intersegment sales consist primarily of the transfer of certain scrim
         products manufactured by the Glass segment to the Elastomerics segment.
         All intersegment revenues and profits are eliminated in the
         accompanying condensed consolidated financial statements.

(2)      The operating profit of each business segment includes a proportionate
         share of indirect corporate expenses. The Company's corporate group is
         responsible for finance, strategic planning, legal, tax, and regulatory
         affairs for the business segments. Such expense consists primarily of
         salaries and employee benefits, professional fees, and amortization of
         Reorganization Value.


                                       41


<PAGE>   42

11.      UNAUDITED INTERIM FINANCIAL DATA (in thousands except per share
         amounts)

         The results for each quarter include all adjustments which are, in the
         opinion of management, necessary for a fair presentation of the results
         for interim periods. The consolidated financial results on an interim
         basis are not necessarily indicative of future financial results on
         either an interim or annual basis. Selected consolidated financial data
         for each quarter within Fiscal 1999 and Fiscal 2000 are as follows:

<TABLE>
<CAPTION>
                                                                      First        Second         Third        Fourth
                                                                     Quarter       Quarter       Quarter       Quarter
                                                                    ---------     ---------     ---------     ---------
<S>                                                                 <C>           <C>           <C>           <C>
Year Ended October 30, 1999:
Net sales                                                           $  35,398     $  40,403     $  39,375     $  41,691
Cost of sales                                                          27,205        32,044        30,328        32,002
                                                                    ---------     ---------     ---------     ---------
Gross profit                                                            8,193         8,359         9,047         9,689
Selling, general and administrative expenses                            6,421         7,626         6,145         6,786
Other expense (income), net                                                (3)        1,348           (44)          362
                                                                    ---------     ---------     ---------     ---------
Operating profit (loss)                                                 1,775          (615)        2,946         2,541
Interest expense                                                         (867)         (877)         (887)         (880)
                                                                    ---------     ---------     ---------     ---------
Income (loss) before income taxes and discontinued operations             908        (1,492)        2,059         1,661
Provision (benefit) for income taxes                                      578          (950)        1,312         1,057
                                                                    ---------     ---------     ---------     ---------
Income (loss) from continuing operations                                  330          (542)          747           604
Discontinued operations                                                  (473)      (25,743)        2,785           850
                                                                    ---------     ---------     ---------     ---------
Net income (loss)                                                   $    (143)    $ (26,285)    $   3,532     $   1,454
                                                                    =========     =========     =========     =========

Net income (loss) per common share                                  $   (0.01)    $   (2.63)    $    0.35     $    0.15
                                                                    =========     =========     =========     =========

Year Ended October 28, 2000:
Net sales                                                           $  35,137     $  41,039     $  43,825     $  47,977
Cost of sales                                                          26,767        30,288        32,988        36,337
                                                                    ---------     ---------     ---------     ---------
Gross profit                                                            8,370        10,751        10,837        11,640
Selling, general and administrative expenses                            6,167         6,889         7,090         7,222
Other income, net                                                          (3)           (3)           (6)           (6)
                                                                    ---------     ---------     ---------     ---------
Operating profit                                                        2,206         3,865         3,753         4,424
Interest expense                                                         (853)         (845)         (836)         (908)
                                                                    ---------     ---------     ---------     ---------
Income before income taxes and discontinued operations                  1,353         3,020         2,917         3,516
Provision for income taxes                                                498         1,524           953         1,542
                                                                    ---------     ---------     ---------     ---------
Income from continuing operations                                         855         1,496         1,964         1,974
Discontinued operations                                                  (143)           87          (548)      (46,915)
                                                                    ---------     ---------     ---------     ---------
Net income (loss)                                                   $     712     $   1,583     $   1,416     $ (44,941)
                                                                    =========     =========     =========     =========

Net income (loss) per common share                                  $    0.07     $    0.16     $    0.14     $   (4.56)
                                                                    =========     =========     =========     =========
</TABLE>


12.      SUBSEQUENT EVENT (Unaudited)

         On December 19, 2000, the Company repurchased 575,617 shares of its
         common stock at a cost of $2.1 million.


                                       42

<PAGE>   43



ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
          AND FINANCIAL DISCLOSURE.

   None.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information required by Item 10 of Form 10-K with respect to identification
of directors and executive officers is incorporated by reference from the
information contained in the Company's definitive Proxy Statement for the Annual
Meeting of Stockholders to be held February 27, 2001 (the "Proxy Statement"), a
copy of which will be filed with the Securities and Exchange Commission before
the meeting date.

ITEM 11.  EXECUTIVE COMPENSATION.

The information required by Item 11 of Form 10-K is incorporated by reference
from the information contained in the Proxy Statement.

ITEM 12.  SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT.

The information required by Item 12 of Form 10-K is incorporated by reference
from the information contained in the Proxy Statement.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

   None.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K.

(a)      (1)      The following financial statements are included in Item 8:

                  (i)      Independent Auditors' Report.
                  (ii)     Consolidated Balance Sheets as of October 28, 2000
                           and October 30, 1999.
                  (iii)    Consolidated Statements of Operations for the fiscal
                           years ended October 28, 2000, October 30, 1999 and
                           October 31, 1998.
                  (iv)     Consolidated Statements of Shareholders' Equity for
                           the fiscal years ended October 28, 2000, October 30,
                           1999 and October 31, 1998.
                  (v)      Consolidated Statements of Cash Flows for the fiscal
                           years ended October 28, 2000, October 30, 1999 and
                           October 31, 1998.
                  (vi)     Notes to Consolidated Financial Statements.

The registrant is primarily a holding company and all direct subsidiaries are
wholly owned.

         (2)      The financial statement schedule required by Item 8 is listed
                  on Index to Financial Statement Schedule, starting at page S-1
                  of this report.


                                       43


<PAGE>   44

                  The exhibits required by Item 601 of Regulation S-K are listed
                  in the accompanying Index to Exhibits. Registrant will furnish
                  to any securityholder, upon written request; any exhibit
                  listed in the accompanying Index to Exhibits upon payment by
                  such securityholder of registrant's reasonable expenses in
                  furnishing any such exhibit.

(b)      No reports on Form 8-K were filed during the quarter ended October 28,
         2000.

(c)      Reference is made to Item 14(a)(3) above.

(d)      Reference is made to Item 14(a)(2) above.


                                       44
<PAGE>   45


INDEX TO EXHIBITS

The following is a complete list of Exhibits filed as part of this report, which
are incorporated herein:

<TABLE>
<CAPTION>
Exhibit
Number                               Description
-------                              -----------
<S>           <C>
2.1(i)        Joint Plan of Reorganization for JPS Textile Group, Inc., a
              Delaware corporation ("JPS"), proposed by JPS and JPS Capital
              Corp., a Delaware corporation, pursuant to chapter 11 of title 11
              United States Code (the "Bankruptcy Code"), dated August 1, 1997
              (as amended, the "Plan").(K)

2.1(ii)       Revised Technical and Conforming Amendment to the Plan, dated
              September 4, 1997.(L)

3.1           Amended and Restated By-laws of JPS.(P)

3.2           Certificate of Incorporation of JPS Industries, Inc. (T)

10.4          Agreement of Lease, dated as of June 1, 1988, by and between 1185
              Avenue of the Americas Associates ("1185 Associates") and JCIC.(A)

10.5          Lease Modification and Extension Agreement, dated as of April 2,
              1991, by and between 1185 Associates and JCIC.(A)

10.7          Trademark License Agreement, dated as of May 9, 1988, by and
              between J.P. Stevens and JPS Acquisition Corp. (predecessor to the
              Company.)(B)

10.8          Omnibus Real Estate Closing Agreement, dated as of May 9, 1988, by
              and among J.P. Stevens, JPS Acquisition Corp., JPS Acquisition
              Automotive Products Corp., JPS Acquisition Carpet Corp., JPS
              Acquisition Industrial Fabrics Corp., JPS Acquisition Converter
              and Yarn Corp. and JPS Acquisition Elastomerics Corp.(B)

10.9          Purchase Agreement, dated as of April 24, 1988, by and among JPS
              Holding Corp., the Company, Odyssey Partners, West
              Point-Pepperell, Inc., STN Holdings Inc., Magnolia Partners, L.P.
              and J.P. Stevens.(B)

10.10         Asset Purchase Agreement, dated as of May 25, 1994, by and among
              the Company, JAPC, JCIC, JPS Auto Inc., a Delaware corporation,
              and Foamex International Inc., a Delaware corporation.(C)

10.15         Lease Modification and Extension Agreement, dated as of April 30,
              1993, by and between 1185 Associates and JCIC.(E)

10.18         Lease Modification and Extension Agreement, dated as of November
              17, 1994, by and between 1185 Associates and JCIC.(G)
</TABLE>


                                       45

<PAGE>   46


<TABLE>
<CAPTION>
Exhibit
Number                                 Description
-------                                -----------
<S>           <C>
10.19         Asset Transfer Agreement, dated as of November 16, 1995, by and
              among the Company, JPS Carpet Corp., a Delaware corporation,
              Gulistan Holdings Inc. ("GHI"), a Delaware corporation and
              Gulistan Carpet Inc., a Delaware Corporation and wholly-owned
              subsidiary of GHI.(H)

10.25         Employment Agreement dated October 9, 1997, between the Company
              and David H. Taylor. (P)

10.26         Employment Agreement dated October 9, 1997, between the Company
              and Monnie L. Broome.(P)

10.27         Employment Agreement, dated May 1, 1993 and amended September 11,
              1995 between the Company and Carl Rosen.(J)

10.28         Employment Agreement, dated December 23, 1991 and amended August
              20, 1996 and December 23, 1996 between the Company and Bruce
              Wilby.(G)

10.29         Asset Purchase Agreement, dated as of September 30, 1996 between
              Elastomer Technologies Group, Inc. a Delaware Corporation, and JPS
              Elastomerics Corp., a Delaware Corporation and wholly-owned
              subsidiary of the Company.(G)

10.30         Receivables Purchase Agreement dated as of September 30, 1996
              between The Bank of New York Commercial Corporation, a New York
              Corporation and JPS Elastomerics Corp., a Delaware Corporation and
              wholly-owned subsidiary of the Company.(G)

10.31         Registration Rights Agreement, dated as of October 9, 1997, by and
              among JPS and the holders of JPS's Common Stock.(P)

10.35         Credit Facility Agreement, dated as of October 9, 1997, by and
              among JPS, C&I, Elastomerics, the financial institutions listed on
              the signature pages thereto, and the agent and co-agent party
              thereto.(M)

10.36         1997 Incentive and Capital Accumulation Plan dated as of October
              9, 1997.(P)

10.37         Warrant Agreement dated as of October 9, 1997.(P)

10.38         First Amendment to the Credit Facility Agreement, dated as of
              October 30, 1998, by and among JPS, C&I, Elastomerics, the
              financial institutions listed on the signature pages thereto, and
              the agent and co-agent party thereto.(Q)

10.39         Asset Purchase Agreement, dated as of January 11, 1999, by and
              between C&I and Belding Hausman, Incorporated.(Q)

10.40         Amendment No. 1 to Asset Purchase Agreement, dated as of February
              8, 1999, by and between C&I and Belding Hausman, Incorporated.(Q)

10.41         JPS Guaranty Letter, dated as of January 11, 1999, by and between
              JPS and Belding Hausman, Incorporated.(Q)

10.42         Employment Agreement dated November 11, 1998, between the Company
              and John W. Sanders, Jr. (Q)
</TABLE>


                                       46

<PAGE>   47

<TABLE>
<CAPTION>
Exhibit
Number                                Description
-------                               -----------
<S>           <C>
10.43         Separation Agreement, dated February 27, 1999, between the Company
              and Jerry E. Hunter.(R)

10.44         Employment Agreement, dated February 29, 1999, between the Company
              and Michael L. Fulbright.(R)

10.45         Stock Option Agreement, dated February 28, 1999, between the
              Company and Michael L. Fulbright.(R)

10.46         Amendment to the JPS Textile Group, Inc. 1997 Incentive and First
              Capital Accumulation Plan.(R)

10.47         Second Amendment to the Credit Facility Agreement, dated as of
              April 30, 1999, by and among JPS, C&I, Elastomerics, the financial
              institutions listed on the signature pages thereto, and the agent
              and co-agent thereto.(S)

10.48         Third Amendment to the Credit Facility Agreement, dated as of July
              12, 1999, by and among JPS, C&I, Elastomerics, the financial
              institutions listed on the signature pages thereto, and the agent
              and co-agent thereto.(T)

10.49         Asset Purchase Agreement, dated as of July 2, 1999, by and between
              C&I and Belding Hausman, Incorporated.(T)

10.50         Asset Purchase Agreement, dated as of June 24, 1999, by and
              between C&I and Chiquola Fabrics, LLC.(T)

10.51         Special Warranty Deed, dated as of August 30, 1999, by and between
              C&I and Richard N. Hodges and Jimmy Law.(U)

10.52         Separation Agreement dated September 29, 1999, between the Company
              and John W. Sanders, Jr. (U)

10.53         Employment Agreement dated March 17, 1998, between the Company and
              Reid A. McCarter.(U)

10.54         Fourth Amendment to the Credit Facility Agreement, dated as of
              February 29, 2000, by and among JPS, C&I, Elastomerics, the
              financial institutions listed on the signature pages thereto, and
              the agent and co-agent thereto.(U)

10.55         Asset Purchase Agreement dated as of November 16, 2000, by and
              among JPS Industries, Inc., JPS Converter and Industrial Corp. and
              JPSA Acquisition Corp.(V)

10.56         Employment Agreement dated May 31, 2000, between the Company and
              Charles R. Tutterow.(W)

10.57         Fifth Amendment to the Credit Facility Agreement, dated as of
              November 9, 2000, by and among JPS, C&I, Elastomerics, the
              financial institutions listed on the signature pages thereto, and
              the agent and co-agent thereto.(W)

11.1          Statement re: Computation of Per Share Earnings - not required
              since such computation can be clearly determined from the material
              contained herein.

12.1          Computation of Ratio of Earnings to Fixed Charges - not required
              for Form 10-K per Item 503(d) of Regulation S-K.
</TABLE>


                                       47

<PAGE>   48

<TABLE>
<CAPTION>
Exhibit
Number                                   Description
-------                                  -----------
<S>           <C>
12.2          Computation of Ratio of Earnings to Combined Fixed Charges and
              Preferred Stock Dividends--not required for Form 10-K per Item
              503(d) of Regulation S-K.

21.1          List of Subsidiaries of the Company.(E)

24.1          Power of Attorney relating to JPS (included as part of the
              signature page hereof).(M)
</TABLE>

-------------------
(A)      Previously filed as an exhibit to Registration Statement No. 33-58272
         on Form S-1, declared effective by the SEC on July 26, 1993, and
         incorporated herein by reference.
(B)      Previously filed as an exhibit to the Company's Annual Report on Form
         10-K for the year ended October 30, 1993.
(C)      Previously filed as an exhibit to the Company's Quarterly Report on
         Form 10-Q for the quarter ended April 30, 1994.
(D)      Previously filed as an exhibit to the Company's Quarterly Report on
         Form 10-Q for the quarter ended July 30, 1994.
(E)      Previously filed as an exhibit to the Company's Annual Report on Form
         10-K for the year ended October 29, 1994.
(F)      Previously filed as an exhibit to the Company's Quarterly Report on
         Form 10-Q for the quarter ended April 29, 1995.
(G)      Previously filed as an exhibit to the Company's Annual Report on Form
         10-K for the year ended November 2, 1996.
(H)      Previously filed as an exhibit to the Company's Current Report on Form
         8-K dated December 1, 1995.
(I)      Previously filed as an exhibit to the Company's Quarterly Report on
         Form 10-Q for the quarter ended April 27, 1996.
(J)      Previously filed as an exhibit to the Company's Quarterly Report on
         Form 10-Q for the quarter ended July 27, 1996.
(K)      Previously filed as an exhibit to the Company's Current Report on Form
         8-K dated July 2, 1997.
(L)      Previously filed as an exhibit to the Company's Registration Statement
         on Form 8-A filed on September 8, 1997
(M)      Previously filed.
(N)      Previously filed as an exhibit to the Company's Quarterly Report on
         Form 10-Q for the quarter ended February 1, 1997.
(O)      Previously filed as an exhibit to the Company's Quarterly Report on
         Form 10-Q for the quarter ended May 3, 1997.
(P)      Previously filed as an exhibit to the Company's Annual Report on Form
         10-K for the year ended November 1, 1997.
(Q)      Previously filed as an exhibit to the Company's Annual Report on Form
         10-K for the year ended October 31, 1998.
(R)      Previously filed as an exhibit to the Company's Current Report on Form
         8-K dated March 4, 1999.
(S)      Previously filed as an exhibit to the Company's Quarterly Report on
         Form 10-Q for the quarter ended May 1, 1999.
(T)      Previously filed as an exhibit to the Company's Quarterly Report on
         Form 10-Q for the quarter ended July 31, 1999.
(U)      Previously filed as an exhibit to the Company's Quarterly Report on
         Form 10-Q for the quarter ended January 29, 2000.
(V)      Previously filed as an exhibit to the Company's Current Report on Form
         8-K dated December 4, 2000.
(W)      Filed herewith.


                                       48

<PAGE>   49

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

                                JPS INDUSTRIES, INC.

Date: January 25, 2001          By: /s/ Charles R. Tutterow
                                    -------------------------------------
                                CHARLES R. TUTTEROW
                                Executive Vice President, Chief Financial
                                Officer and Secretary

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons in the capacities and on the dates
indicated.

<TABLE>
<CAPTION>
SIGNATURE                                TITLE                                          DATE
---------                                -----                                          ----
<S>                              <C>                                               <C>
/s/ Michael L. Fulbright         Chairman of the Board, President and              January 25, 2001
---------------------------        Chief Executive Officer
MICHAEL L. FULBRIGHT

/s/ Robert J. Capozzi            Director                                          January 25, 2001
---------------------------
ROBERT J. CAPOZZI


/s/ Jeffrey S. Deutschman        Director                                          January 25, 2001
---------------------------
JEFFREY S. DEUTSCHMAN


/s/ Nicholas P. DiPaolo          Director                                          January 25, 2001
---------------------------
NICHOLAS P. DIPAOLO


/s/ John M. Sullivan, Jr.        Director                                          January 25, 2001
---------------------------
JOHN M. SULLIVAN, JR.


/s/ Charles R. Tutterow          Executive Vice President,                         January 25, 2001
---------------------------       Chief Financial Officer and Secretary
CHARLES R. TUTTEROW
</TABLE>


                                       49

<PAGE>   50

JPS INDUSTRIES, INC.                                           INDEX TO SCHEDULE

INDEX TO FINANCIAL STATEMENT SCHEDULE

For the fiscal years ended October 31, 1998, October 30, 1999, and October 28,
2000.




FINANCIAL STATEMENT SCHEDULE

II.      Valuation and Qualifying Accounts and Reserves                      S-2



Note:    All other schedules are omitted because they are not applicable or not
         required, or because the required information is shown either in the
         consolidated financial statements or in the notes thereto.


                                      S-1

<PAGE>   51



JPS INDUSTRIES, INC.                                                 SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
   (IN THOUSANDS)

<TABLE>
<CAPTION>

                     Column A                          Column B            Column C           Column D      Column E
--------------------------------------------------    ----------   ----------------------    ----------    ----------
                                                                               Charged to
                                                      Balance at   Charged to     Other                    Balance at
                                                      Beginning    Costs and    Accounts     Deductions      End of
                    Classification                    of Period     Expenses    Describe      Describe       Period
--------------------------------------------------    ----------   ----------  ----------    ----------    ----------
                                                                                   (a)          (b)
<S>                                                   <C>          <C>         <C>           <C>           <C>
Allowances Deducted from Asset to Which They Apply:

Fiscal Year Ended October 31, 1998 (52 Weeks)
     Allowance for doubtful accounts                     $ 526       $ (28)       $ 294       $   --         $  792
     Claims, returns and other allowances                  151          --          239          235            155
                                                         -----       -----        -----       ------         ------
                                                         $ 677       $ (28)       $ 533       $  235         $  947
                                                         =====       =====        =====       ======         ======

Fiscal Year Ended October 30, 1999 (52 Weeks)
     Allowance for doubtful accounts                     $ 792       $ 125        $(511)      $    1         $  405
     Claims, returns and other allowances                  155          38          333          272            254
                                                         -----       -----        -----       ------         ------
                                                         $ 947       $ 163        $(178)      $  273         $  659
                                                         =====       =====        =====       ======         ======

Fiscal Year Ended October 28, 2000 (52 Weeks)
     Allowance for doubtful accounts                     $ 405       $ 843        $  --       $  548         $  700
     Claims, returns and other allowances                  254          --          331          261            324
                                                         -----       -----        -----       ------         ------

                                                         $ 659       $ 843        $ 331       $  809         $1,024
                                                         =====       =====        =====       ======         ======
</TABLE>

(a)      Change in various reserves charged to net sales.

(b)      Uncollected receivables written off, net of recoveries.


                                      S-2