SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                    FORM 10-K
(Mark One)
[  X ]            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                  THE SECURITIES AND EXCHANGE ACT OF 1934
                  For the fiscal year ended September 26, 1999
                                       OR
[     ]           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
                  For the transition period from ___________ to __________

                         Commission file number 0-20686

                         UNIROYAL TECHNOLOGY CORPORATION
             (Exact name of registrant as specified in its charter)

                  Delaware                               65-0341868
        (State or other jurisdiction of               (I.R.S. Employer
         incorporation or organization)              Identification No.)

        Two North Tamiami Trail, Suite 900
              Sarasota, Florida                          34236-5568
     (Address of principal executive offices)            (Zip Code)

                                 (941) 361-2100
              (Registrant's telephone number, including area code)

     Securities registered pursuant to Section 12(b) of the Act:

      Title of each class             Name of each exchange on which registered
             None                                 Not Applicable

     Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $.01 per share
                                (Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (29,405 of this chapter) is not contained herein, and will not
be contained,  to the best of  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 November 30, 1999, the aggregate  market value of the voting stock held by
non-affiliates  of the registrant  (assuming for this purpose that all directors
and officers of the registrant and all holders of 5% or more of the common stock
of the registrant are affiliates)  was  approximately  $93,900,000  based on the
closing price for the stock on November 30, 1999.

APPLICABLE  ONLY TO REGISTRANTS  INVOLVED IN BANKRUPTCY  PROCEEDINGS  DURING THE
PRECEDING FIVE YEARS:

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.
 Yes [X]  No [ ]


As of November 30, 1999, 11,878,982 shares of the registrant's common stock were
outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

Part III - Portions of the registrant's  definitive proxy statement to be issued
in connection with the registrant's annual meeting of stockholders to be held in
2000.


<PAGE>

Item 1.  Business

         General

                  Uniroyal Technology Corporation (the "Company") is a leader in
         the  development,  manufacture  and sale of a broad range of  materials
         employing  plastics and specialty  chemicals  technologies  used in the
         production  of  consumer,   commercial  and  industrial  products.  Its
         products,  many of which are based on proprietary  technology,  include
         thermoplastic  sheet for use in the  manufacture  of seating,  interior
         paneling and other  applications in the  transportation,  recreational,
         agricultural   and  industrial   vehicle  and  computer   manufacturing
         industries;  acrylic  sheet  for  use in the  manufacture  of  aircraft
         canopies,  cabin windows and  windshields,  tanning  shields and bullet
         resistant  barriers;  acrylic rods and tubes used in the manufacture of
         orthopedic devices and hard contact lenses; a wide selection of plastic
         vinyl coated fabrics for use in automobile and furniture manufacturing;
         and liquid  adhesives  and sealants for use in the  commercial  roofing
         industry  and in the  manufacture  of  furniture,  truck  trailers  and
         recreational   vehicles.   The  Company's   technologies  allow  it  to
         incorporate into its specialized  materials,  such as thermoplastic and
         acrylic sheets, performance  characteristics,  such as fire retardancy,
         static dissipation,  weatherability,  optical clarity, high strength to
         weight ratio,  light  filtration  capability and others required in the
         specialty  markets  on which  it  focuses.  The  Company  is a  leading
         supplier in such markets due to its ability to provide  materials  with
         such  performance  characteristics,  to customize such materials and to
         provide  technical and customer  support in connection  with the use of
         its products in manufacturing. The Company has also constructed a plant
         in  Tampa,  Florida  for the  production  of  wafers  and dies for high
         brightness  light  emitting  diodes  (LEDs)  for  use in  the  lighting
         industry.  The Company anticipates  commercial  production at the Tampa
         plant during the second quarter of Fiscal 2000.

                  The  manufacturing  operations of the Company are conducted at
         thirteen sites located in Arizona, Florida, Indiana, Iowa, Connecticut,
         New Jersey, California,  Georgia, and Wisconsin,  through four business
         segments:   High  Performance  Plastics,   Coated  Fabrics,   Specialty
         Adhesives and Optoelectronics. The High Performance Plastics Segment of
         the  Company's   business   consists  of  the  Company's   wholly-owned
         subsidiary High Performance Plastics,  Inc. ("HPPI").  High Performance
         Plastics  manufactures  specialty  and  general  purpose  thermoplastic
         sheet, injection molding resins, color concentrates,  extruded profiles
         and fabricates acrylic sheet for the aerospace,  marine,  specialty and
         general  purpose  markets  as well  as  acrylic  rods  and  tubes.  The
         Company's wholly-owned  subsidiary,  Uniroyal Engineered Products, Inc.
         ("UEPI"),  operates two business  segments,  the Coated Fabrics Segment
         and  the  Specialty  Adhesives  Segment.  The  Coated  Fabrics  Segment
         manufactures the Company's line of vinyl coated fabrics.  The Specialty
         Adhesives  Segment   (formerly,   the  Specialty  Foams  and  Adhesives
         Segment),    manufactures   liquid   adhesives   and   sealants.    The
         Optoelectronics  Segment will manufacture  epitaxial  wafers,  dies and
         package-ready  dies  used  in  high  brightness  LEDs.  See  "Corporate
         Developments Completion of the Uniroyal Optoelectronics, LLC Plant.

                  The Company's Fiscal 1999 net sales were approximately  $201.4
         million.  Approximate net sales for each of the Company's four business
         segments during such period were as follows:  High Performance Plastics
         -  $130.2  million,  Coated  Fabrics  - $42.3  million,  and  Specialty
         Adhesives - $28.4  million,  and  Optoelectronics  - $0.5 million.  For
         certain  financial  information with respect to the Company's  business
         segments, see "Note 19 to Consolidated Financial Statements."

         Corporate Developments

                  The  following  are  certain  corporate   developments   which
         occurred in Fiscal 1999. The descriptions of such  developments  should
         be read in conjunction  with the other parts of this Form 10-K and with
         the  Consolidated   Financial  Statements  and  Notes  to  Consolidated
         Financial Statements and other financial information which form a part
         hereof.

                  Investment in Preferred Stock

                  On November 30, 1998, the Company  purchased 642,857 shares of
         the Series I Redeemable Convertible Preferred Stock ("Preferred Stock")
         of Emcore Corporation ("Emcore") for approximately $9.0 million ($14.00
         per share).  The shares were offered pursuant to a private placement by
         Emcore.

                  Dividends  on the  Preferred  Stock  are  cumulative  and  are
         payable at Emcore's  option in cash or  additional  shares of Preferred
         Stock on March 31, June 30,  September 30 and  December 31,  commencing
         December 31, 1998 at the annual rate of 2% per share of Preferred Stock
         on the liquidation preference thereof (equivalent to $0.28 per annum
         per share of Preferred Stock).

                  Shares of the Preferred  Stock are convertible at any time, at
         the  option of the  holders  thereof,  into  shares of common  stock of
         Emcore  on a one for one  basis,  subject  to  adjustment  for  certain
         events.  On  September  24, 1999,  the closing  sales price of Emcore's
         common stock on the Nasdaq National Market was $14.4375.

                  The Preferred Stock is redeemable, in whole or in part, at the
         option of Emcore at any time  Emcore's  common  stock has  traded at or
         above $28.00 per share for 30  consecutive  trading days, at a price of
         $14.00 per share plus  accrued  and unpaid  dividends,  if any,  to the
         redemption  date.  Emcore is  required to provide not less than 30 days
         and not more  than 60 days  notice  of the  redemption.  The  shares of
         Preferred  Stock  are  subject  to  mandatory  redemption  by Emcore on
         November 17, 2003.

                  On November 30, 1998, Emcore also made a capital  contribution
         to Uniroyal Optoelectronics, LLC of $5.0 million. The Company will fund
         its   equivalent   capital   contribution   to  the  joint  venture  of
         approximately $5.2 million as cash is required by the joint venture.

                  In June of 1999, the Company  converted  270,000 shares of the
         Preferred Stock into 270,000 shares of Emcore common stock. The Company
         then sold its 270,000 shares of Emcore common stock for $4.8 million in
         conjunction  with a  public  stock  offering  by  Emcore.  The  Company
         recognized a gain on the sale of approximately $898,000, net of certain
         transaction costs.

                  Subsequent  to  September  26,  1999,  the  Company  converted
         230,657 shares of the Preferred  Stock and sold the  underlying  Emcore
         common stock in the open market for an aggregate of $4.3  million.  The
         Company  will  recognize  a gain  on the  sale  of  approximately  $1.1
         million, net of certain transaction costs, in Fiscal 2000.

                  Acquisition of Happel Marine, Inc.

                  On June 14,  1999,  the  Company  acquired  100% of the common
         stock of Happel  Marine,  Inc.,  an acrylic  sheet  fabricator  for the
         marine  industry,  for $5,193,500.  The purchase price was comprised of
         $909,252 in cash, unsecured promissory notes aggregating $2,911,007 and
         145,078  shares of common  stock of the Company  valued at  $1,373,241,
         which  approximated  the market value of such shares on the acquisition
         date. The promissory notes consist of a $2,400,000 note payable in four
         equal annual  installments  beginning  January 15,  2000,  plus accrued
         interest and a $511,007  note payable in two equal annual  installments
         beginning  January 15, 2000 plus accrued  interest.  The purchase price
         was subsequently increased for changes in working capital between April
         30, 1999 and June 13, 1999 by $122,137.  The increase was  incorporated
         into  the  note  payable  balances.  The  note  balances  increased  to
         $2,500,030  and $533,114,  respectively.  Effective  September 1, 1999,
         Happel  Marine,  Inc. was merged into a  subsidiary  of the Company and
         became a division of HPPI.

                  Uniroyal Engineered Products, Inc.

                  On April  1,  1999,  the  Company  transferred  all of the net
         assets of the Coated  Fabrics  Segment and all of the net assets of the
         Specialty Adhesives Segment to a newly created wholly-owned subsidiary,
         Uniroyal  Engineered   Products,   Inc.  On  that  same  day,  Uniroyal
         Engineered Products,  Inc. assumed the obligations of the Company under
         the revolving credit agreement with the CIT Group/Business Credit, Inc.
         ("CIT").

                  Completion of the Uniroyal Optoelectronics, LLC Plant

                  The  build-out of the Uniroyal  Optoelectronics,  LLC plant in
         Tampa, Florida was substantially completed during Fiscal 1999 at a cost
         of  approximately  $11 million.  Additional  machinery and equipment of
         approximately  $10 million was purchased  during Fiscal 1999. The plant
         will ultimately  manufacture  epitaxial wafers,  dies and package-ready
         devices  for use in  high  brightness  LEDs.  The  Company  anticipates
         commercial  production  at the Tampa  plant in the  second  quarter  of
         Fiscal 2000.  During Fiscal 1999,  the Company  incurred  approximately
         $4.6 million of start-up costs that are included in selling and general
         administrative expenses.

                  Completion of the Disposition of the Automotive Operations

                  On October 17, 1997, the Company agreed to sell certain assets
         of the automotive  operations of the Coated Fabrics  Segment located at
         the  Company's  Port  Clinton,  Ohio  facility for  approximately  $5.3
         million  plus the  value  of  purchased  inventories  and plus or minus
         adjustments   contingent  upon  the  transfer  of  certain   automobile
         programs.  The Company  received $4.9 million in July 1998 and received
         approximately  $1.5 million during Fiscal 1999.  During the fiscal year
         ended September 26, 1999, the Company recognized approximately $617,000
         of  income  relating  to the  sale of the  automotive  operations.  The
         Company  ceased  production  and closed the Port  Clinton  facility  in
         November 1998. The Port Clinton real property and certain machinery and
         equipment  not  purchased  by the buyer are  listed as held for sale at
         September 26, 1999.

<PAGE>


         Business Segments


                  High Performance Plastics Segment


                  The  High  Performance   Plastics  Segment  of  the  Company's
         business accounted for approximately  $130.2 million  (approximately 65
         percent  (65%)) of the  Company's net sales in Fiscal 1999. It consists
         of two  product  groups:  Royalite,  which  manufactures  thermoplastic
         products  and  Polycast,   which  manufactures  acrylic  products.  The
         products of this Segment include:

o                     thermoplastic  sheet  produced by Royalite  for use in the
                      manufacture  of  seating,   interior  paneling  and  other
                      applications   in   the   transportation,    recreational,
                      agricultural   and   industrial   vehicle   and   computer
                      manufacturing industries,

o                     acrylic  sheet   produced  by  Polycast  for  use  in  the
                      manufacture  of  aircraft  canopies,   cabin  windows  and
                      windshields,   tanning  bed  shields,   bullet   resistant
                      barriers and other commercial applications,

o                     acrylic  rods and tubes  produced by Polycast  and used in
                      the manufacture of displays,  orthopedic  devices and hard
                      contact lenses, and

o                     acrylic and  thermoplastic  parts and  fittings  for the
                      marine industry.

         Royalite - Thermoplastic Products

                  General

                  Royalite  is a leading  manufacturer  of custom  thermoplastic
         products.  Royalite manufactures  thermoplastic sheet from a variety of
         polymers,  such as acrylonitrile  butadiene styrene (ABS) and polyvinyl
         chloride (PVC), made from the polymerization of monomers,  which can be
         reshaped after they have been formed by the application of heat and are
         used in the manufacture of a wide assortment of commercial and consumer
         products.  Royalite's products include  thermoplastic sheet,  injection
         molding resins, color concentrates and extruded profiles.

         Royalite thermoplastic sheet is constructed of:

o                     solid plastic,

                      a core of cost  effective  plastic  covered  with a thin
o                     layer of high- quality thermoplastic, or

                      a base or subtrate of plastic foam  surrounded  by solid
o                     thermoplastic.

         Royalite manufactures two general types of thermoplastic sheet:

o                     specialized   sheet,  made  by  varying  the  polymer  and
                      chemical  components  of the  sheet in  order  to  achieve
                      particular performance characteristics, and

o                     general purpose sheet, which Royalite's customers use in a
                      variety of products  that do not require  such  particular
                      performance characteristics.

         Royalite sells its thermoplastic sheet to:

o                     equipment manufacturers,  who incorporate the sheet into
                      their products,

o                     custom  fabricators,  thermoformers and injection molders,
                      who cut,  form  and  process  the  material  for  specific
                      applications  and supply  finished  components to original
                      equipment manufacturers (OEMs), and

o                     distributors,   who  resell  raw  sheet  to  equipment
                      manufacturers or custom fabricators.

                  Royalite    maintains    highly    knowledgeable     technical
         representatives who work directly with customers seeking to ensure that
         the materials used in the  manufacture of a customer's  product conform
         to  the  customer's   specifications  and  work  efficiently  with  the
         customer's manufacturing  processes.  When a customer is in the initial
         stages of  developing a product  requiring a  thermoplastic  component,
         Royalite uses its technological  capabilities and scientific  expertise
         to  design  and  produce  customized  thermoplastic  sheet,  which  the
         customer then generally  "thermoforms"  through the application of heat
         into particular applications to be incorporated into its final product.
         "Thermoforming"   is  used  in  connection   with  the  manufacture  of
         thermoplastic  components  not required in large  volume  manufacturing
         runs.

                  When a customer's  unit volume of a product  attains levels at
         which  it  becomes  economical  for the  customer  to  manufacture  the
         thermoplastic application by injection molding, a process that requires
         greater  up-front  capital  expenditures,  but yields  lower  costs per
         additional unit,  relative to  thermoforming,  Royalite can continue to
         supply the customer  with the polymer  resins and color  thermoforming.
         The  Company   believes  that  such  product  lines  will  enhance  the
         division's  specialty  sheet lines by assuring  customers that Royalite
         will be able to meet their specialized  thermoplastic  needs throughout
         every stage of a product's life cycle.

                  Specialty Thermoplastic Sheet

                  Royalite sells specialty  thermoplastic sheet into a number of
         niche markets,  depending upon the performance  characteristics  of the
         sheet.  The  following  table  sets  forth the  particular  performance
         characteristics  and the  related  principal  uses  of the  specialized
         sheet:

                  Performance Characteristics            Principal Uses
                  ---------------------------           -----------------------
                  Flame and smoke retardancy             Mass     transportation
                                                         vehicle   seating   and
                                                         interior        panels,
                                                         aircraft interior parts
                                                         and  computer and other
                                                         electronic    equipment
                                                         component housings


                  Static dissipation and conductivity    Computer chip carriers,
                                                         hard     disc     drive
                                                         housings and electronic
                                                         tote boxes

                  Weatherability/temperature resistance  Marine and recreational
                                                         vehicle      instrument
                                                         panels,  interior parts
                                                         for   agricultural  and
                                                         other off road vehicles
                                                         and exterior boat parts


                  Buoyant, hydrodynamic and/or           Canoes,  kayaks,  other
                    high strength-to-weight-ratio        watersport      crafts,
                                                         amusement park vehicles
                                                         and   large    exterior
                                                         equipment housings

                  The Company believes that Royalite has a substantial  share of
         the markets in which it competes for specialty  thermoplastic sheet due
         to  Royalite's  ability to  manufacture  sheet with the wide variety of
         performance  characteristics  outlined above.  In many cases,  Royalite
         customizes a product to meet its customers' exact  specifications.  Net
         sales of specialty  thermoplastic  sheet accounted for approximately 67
         percent (67%) of total net sales by Royalite during Fiscal 1999.

                  General Purpose Thermoplastic Sheet

                  By contrast to specialty  thermoplastic sheet, general purpose
         thermoplastic sheet is used in the manufacture of numerous consumer and
         industrial products, such as luggage,  musical instrument and equipment
         cases, tote boxes and vehicle mud flaps,  which do not require that the
         thermoplastic  material  used in their  manufacture  possess any of the
         performance  characteristics  that  distinguish  specialty  sheet.  The
         market for general purpose thermoplastic sheet is significantly broader
         than the market  for  specialty  thermoplastic  sheet due to the almost
         limitless  uses to which one can put such sheet in the  manufacture  of
         products.   Such   market  is   generally   characterized   by  intense
         competition,  high  volume and low  margins.  Royalite  does not have a
         significant share of this market. Sales of general purpose sheet during
         Fiscal 1999 accounted for  approximately  30 percent (30%) of total net
         sales by Royalite.

                  Injection Molding Resins, Color Concentrates and Extruded
                  Profile Products

                  In addition to its extensive list of sheet products,  Royalite
         also  produces  injection  molding  resins,  some of which use the same
         proprietary  formulations as the sheet products,  and extruded  profile
         products.

                  Royalite  introduced  injection molding resin products as part
         of the "life cycle  sourcing"  strategy  that Royalite  implemented  to
         satisfy  each  customer's  needs  for  thermoplastic  material  for any
         particular  product  from  that  product's  development  stage  through
         maturity.   When  an   existing   customer  is  ready  to  switch  from
         thermoforming  to  injection  molding,   the  customer  can  avoid  any
         disruption in its  production  that may result from having to qualify a
         thermoplastic material from another manufacturer by using its injection
         molding  resins  and  color  concentrates,   which  have  already  been
         customized to meet the customer's particular specifications.

                  The Company believes that there are significant  opportunities
         for growth in this market and that such product  lines will enhance the
         division's  specialty  sheet lines by assuring  customers that Royalite
         will be able to meet their specialized  thermoplastic  needs throughout
         every stage of a  product's  life  cycle.  In  addition  to  supporting
         specialty sheet customers, the focus of the injection resin program has
         widened  to the  injection  resin  market  in  total,  not  just  sheet
         conversions.

                  Royalite also produces  extruded profile  products,  including
         both proprietary and general purpose  materials.  The products are used
         for  applications  requiring  flexibility and resilience,  such as boat
         dock  bumpers and  gaskets  that  Polycast  uses in the  production  of
         acrylic  sheet.  This product  line was  implemented  to utilize  fully
         Royalite's  available  production  capacity  at  its  Warsaw,   Indiana
         facility.  Even though sales of extruded  profile  products  constitute
         less than three  percent of net sales of Royalite for Fiscal 1999,  the
         Company believes that there are significant opportunities for growth in
         this market. Extruded profile products sales are also enhanced by sales
         of sheet, as many applications require thermoplastic material in sheet,
         profile and injection resin forms.

                  Competition

                  The market  for  thermoplastic  sheet in the United  States is
         highly competitive,  with companies competing primarily on the basis of
         product specifications,  price, customer service and technical support.
         Royalite  competes  in  this  market   principally  by  maintaining  or
         increasing  its  market  share  in the  specialty  thermoplastic  niche
         markets    described   above.   See   "-   Royalite   -   Thermoplastic
         Products-General."  Royalite  competes  effectively  in this  market by
         providing:

o                   custom product development,

o                   state-of-the-art color technology,

o                   strong customer service through technical support, and

o                   competitive prices.

         Royalite  has polymer  expertise  and  capabilities  to  customize  the
         performance  characteristics  and color of its thermoplastic  products,
         unlike many of its competitors.  Royalite's technological  capabilities
         have also permitted it to develop successful new products which enhance
         its  competitiveness  in this Segment.  For example,  Royalite recently
         introduced low smoke,  low heat,  fire retardant  material for aircraft
         and mass transit  interiors and  graffiti-resistance  seating material,
         developed for the mass  transportation  market.  In addition,  Royalite
         maintains  highly  knowledgeable  technical  representatives  who  work
         directly with customers to ensure that the division's materials used in
         the  manufacture  of a  customer's  product  conform to the  customer's
         specifications  and work efficiently with the customer's  manufacturing
         processes.

                  Royalite is also able to compete  effectively  with respect to
         price due in part to its low production  costs,  its ability to produce
         its own  color  concentrates  and  savings  resulting  from  its use of
         recycled  material  in the  manufacture  of  thermoplastic  sheet.  See
         "-Royalite  -  Thermoplastic  Products - Raw  Materials."  The  Company
         believes that Royalite's  ability to produce internally and to laminate
         a thin layer of high  quality  colored  thermoplastic  film over a less
         costly substrate  allows Royalite to compete  favorably with most other
         specialty thermoplastic sheet manufacturers which use a single layer of
         relatively  expensive  colored plastic sheet to produce the desired end
         product.

                  Royalite's  principal  thermoplastics  competitors,   and  the
         markets in which Royalite competes, are set forth in the table below:

         Market                                Principal Competitors
         -----------------------               ------------------------------
o        Flame and smoke retardancy            Empire Plastics
                                               Kleerdex Company
                                               Spartech Corporation

o        Static dissipation and conductivity   B. F. Goodrich Performance
                                                 Materials
                                               H.M.S.

o        Weatherability/temperature resistance Spartech Corporation

o        Buoyant, hydrodynamic and/or high
         strength-to-weight ratio              Manufacturers of wood and
                                                  fiberglass products

o        General purpose                       Primex Plastics Corp.
                                               Spartech Corporation

                  Royalite's competitors have in the past increased their market
         shares in the thermoplastic industry generally through acquisitions.

                  Marketing

                  Royalite's thermoplastic sheet products are marketed under the
         ROYALITE(R)  and  SPECTRUM(R)  brand  names.  Thermoplastic  sheet with
         specialized  characteristics  is also marketed under  individual  brand
         names, such as ROYALSTAT(R)  (thermoplastic sheet designed to dissipate
         or   conduct   static   electric   charges),   ROYALEX(R)   (multilayer
         thermoplastic sheet with a foam core and highly weather-resistant layer
         on one or both sides,  resulting  in a high  strength-to-weight  ratio,
         designed  for  recreational,  marine and  sporting  applications),  and
         ROYALTHOTIC(R)  (thermoplastic sheet designed to be thermoformed at low
         temperatures  to  permit  orthopedic  medical   practitioners  to  form
         individual patient orthopedic devices).

                  Royalite markets its thermoplastic  products primarily through
         a  national  sales  force  of 14  sales  representatives,  who  are its
         employees, and through wholesale distributors to whom Royalite supplies
         its   products   for   resale   to   fabricators   and   manufacturers.
         Representative  customers  and end  users of  Royalite's  thermoplastic
         products include:

o              American Seating Company,

o              Bombardier, Inc.,

o              Commercial Plastics and Supplies Corp.,

o              Curbell Plastics, a division of Curbell, Inc.,

o              Hewlett-Packard Company,

o              Laird Plastics, Inc.,

o              The Boeing Company,

o              National Railroad Passenger Corp. (Amtrak), and

o              Seagate Technology, Inc.

         Royalite has a broad customer base for its  thermoplastic  products and
         does not believe that it is dependent upon any single customer or group
         of customers for sale of its thermoplastic products.  Pricing and terms
         offered to customers are generally  consistent  with those found in the
         industry.

                  Manufacturing Facilities

                  Royalite  manufactures  its  thermoplastic  products  at three
         wholly-owned  facilities,  the  largest  of which is located in Warsaw,
         Indiana.   The  Company's  other   thermoplastic   sheet  manufacturing
         facilities are located in Rome, Georgia and Redlands,  California.  See
         "Item 2. Properties."

                  Raw Materials

                  The  principal  raw  materials  used  by  the  Company  in the
         manufacture of thermoplastic  sheet,  injection  molding resins,  color
         concentrates  and extruded  profiles  are ABS resins and  polyethylene,
         polypropylene and PVC resins and alloys of such resins. Royalite has no
         long-term  purchasing  agreements  with  any  suppliers  for  such  raw
         materials,  other than GE  Plastics  (a  division  of General  Electric
         Company) from which the Company  acquires a substantial  portion of its
         ABS  resins.  Royalite  is  currently  in the last year of a three year
         contract with GE Plastics.  Royalite purchases PVC resins and other raw
         materials from a variety of domestic and international suppliers. These
         products  are  all  currently  readily  available  from  a  variety  of
         suppliers.

                  Royalite recycles scraps of thermoplastic material that result
         from customers'  forming sheet for their specific  applications for use
         in the manufacture of new sheet. Recycled material is generally used by
         the  Company to replace  the raw  materials  that  would  otherwise  be
         required to manufacture  specialized and general purpose  thermoplastic
         sheet.  Recycled  material is  purchased  from  customers  and brokers.

                  Polycast - Acrylic Products

                  General

                  Polycast manufactures high performance acrylic sheet, rods and
         tubes which are sold  principally  to custom  fabricators  and original
         equipment  manufacturers,  who heat and form the Polycast  product into
         shapes  for  specific  applications,  such as  aircraft  window  units,
         furniture components and orthopedic braces. Polycast's acrylic products
         have a  unique  combination  of  physical  properties  and  performance
         characteristics which are required by the manufacturers who use them as
         a component  of their  products.  For  example,  depending  on customer
         requirements, they:

o                    weigh  considerably  less  than,  but are  superior  in
                     clarity and impact resistance to, common glass,

o                    are thermoformable,

o                    remain stable under sustained exposure to the elements, and

o                    can be processed to transmit or filter ultraviolet light.

               Polycast manufactures acrylic sheet for three markets:

o                    the aerospace  market,  which includes the commercial and
                     military aerospace  industries,  in which the division's
                     products are used for such applications as aircraft cockpit
                     canopies, cabin windows and helicopter windshields,

o                    the specialty  acrylic sheet market,  which  includes a
                     variety of niche  markets in which the  division's
                     products are used in the manufacture of boat  windscreens
                     and enclosures,  bullet-resistant security  barriers for
                     banks, convenience   stores  and  other businesses,
                     hockey rink protective barriers,  furniture,  tanning bed
                     shields and municipal aquarium transparent panels, and

 o                   the general  purpose market for acrylic  sheet,  in which
                     acrylic  sheet  is used  for  such  applications  as  store
                     displays    and    signage,    where    high    performance
                     characteristics  are not  required and which do not require
                     specialized manufacturing techniques.

         Polycast's customers' use their acrylic rods and tubes for a variety of
         applications, including the manufacture of:

o                    lighting fixtures,

o                    furniture,

o                    medical instruments,

o                    orthopedic devices, such as orthopedic braces, and

o                    lens  materials used to replace  defective  lenses of the
                     eye in cataract  surgery and certain  types of hard contact
                     lenses.

                  Sales of acrylic rods and tubes during  Fiscal 1999  accounted
         for  approximately  10 percent  (10%) of total net sales of products by
         Polycast.

                  Polycast  manufactures  acrylic  products  through  cell  cast
         manufacturing,  a process  which  enables  Polycast  to  customize  the
         performance   characteristics   of  its  acrylic  aerospace  sheet  and
         specialized  sheet,  in order to meet the exact  specifications  of its
         customers  and to offer its products  with a broader  range of physical
         characteristics  than  can  be  achieved  through  other  manufacturing
         processes,  such as continuous cast,  extrusion and calender processes.
         For example, Polycast's scientific staff has used the cell cast process
         to develop a  specialized  sheet which  transmits  rather than  filters
         ultraviolet  rays for use in tanning beds and an  aerospace  sheet with
         consistently  high optical  clarity and exact color  shading for use in
         constructing  aerospace  transparencies such as aircraft and helicopter
         window products. Polycast can manufacture acrylic products in more than
         60 colors  and  acrylic  sheet in  gauges  ranging  from  0.030 to 6.00
         inches.  Acrylic sheet manufactured by the cell cast process,  which is
         more labor  intensive  than  continuous  cast,  extrusion  or  calender
         processes,  generally yields higher margins than acrylic sheet produced
         by such other processes.

                  Polycast markets  aerospace  acrylic sheet in the military and
         commercial  aerospace  industries,  which  require  products  that meet
         precise  specifications.  Polycast is one of approximately four acrylic
         manufacturers  in the United States  qualified to produce acrylic sheet
         meeting   military   manufacturing   standards,    specifications   and
         requirements ("MIL SPEC"). MIL SPEC qualification is a designation made
         by  the  U.S.  Navy's  Naval  Air  Development   Center  and  it  is  a
         prerequisite for supplying the military  aerospace  industry.  Polycast
         and its predecessor  companies have maintained this qualification since
         1976.  Polycast's  aerospace acrylic sheet is also qualified by several
         commercial  aerospace  manufacturers,   including  Bell-Helicopter,   a
         division  of  Textron,  Inc.,  The Boeing  Company,  including  its new
         McDonnell-Douglas  Division,  and Sikorsky Aircraft Corporation,  which
         will only include a  supplier's  products on their  "qualified  product
         lists"  only after such  products  have met MIL SPEC  requirements  and
         passed the  manufacturer's  additional and more  stringent  testing and
         approval procedures.  Although unlikely,  any failure of the division's
         aerospace acrylic products to continue to meet required  specifications
         under which they are provided to an aerospace manufacturer could have a
         material adverse effect on the Polycast's  results of operations,  cash
         flows, financial position or prospects.

                  Polycast  sells its specialty  acrylic sheet in a wide variety
         of niche markets, including to manufacturers of:

o              boat windscreens and enclosures,

o              bullet resistant barriers and protective barriers for athletic
               facilities,

o              furniture and tanning bed shields, and

o              aquariums.

                  Polycast  markets  its  acrylic  products  to such  industries
         through customizing the performance and physical characteristics of its
         specialty sheet to meet customer specifications. Sales of specialty and
         aerospace  acrylic sheet during Fiscal 1999 accounted for approximately
         52 percent (52%) of total net sales of products by Polycast.

                  Polycast  sells its general  purpose  acrylic sheet to various
         markets, including to manufacturers of:

o              displays,

o              lighting fixtures,

o              food service, and

o              glazing applications.

                  Sales of general  purpose  acrylic  sheet  during  Fiscal 1999
         accounted  for  approximately  22  percent  (22%) of total net sales of
         products by Polycast.

                  Competition

                  Polycast  faces  continuing  competition  from North  American
         producers and from certain foreign  producers,  particularly from Asian
         and South American  countries.  Many of these  competitors have greater
         resources  than does  Polycast.  These  competitors  primarily  produce
         standard  sizes of general  purpose  acrylic sheet by continuous  cast,
         extrusion  or calender  processes.  The  division  concentrates  on the
         production of aerospace and specialty  acrylic sheet,  which in certain
         cases has unique  characteristics that cannot be obtained by such other
         manufacturing processes.

                  The Company believes that Polycast has a significant  share of
         the niche markets in which it sells its aerospace and specialty acrylic
         sheet.  See  "-  Polycast  -Acrylic  Products-   General."   Polycast's
         principal  competitors,  and the markets in which it competes,  are set
         forth in the table below:

         Market                            Principal Competitors
         --------------------              ----------------------------------
o        Aerospace acrylic sheet           Cyro Industries, a division of Cytec
                                             Industries, Inc.

                                           Nordam, Inc.

                                           Pilkington Aerospace Swedlow
                                             Division, a subsidiary  of
                                             Pilkington plc.

                                           Rohm Darmstadt GmbH

o        Specialty acrylic sheet           Cyro Industries, a division of Cytec
                                             Industries, Inc.

                                           Elf Atochem North America, Inc.

o        Acrylic rod and tube              Pilkington Aerospace Swedlow
                                             Division, a subsidiary of
                                             Pilkington plc.

o        General purpose acrylic sheet     Elf Atochem North America, Inc.

                                           Cyro Industries, a division of Cytec
                                             Industries, Inc.

                                           Rohm Darmstadt GmbH

                  In order to compete with  vertically  integrated  companies in
         the  aerospace  acrylic sheet  market,  such as Pilkington  and Nordam,
         Polycast has formed alliances with certain customers to market products
         for sale into the commercial  aerospace  markets that compete  directly
         with these vertically integrated companies.

                  Elf  Atochem,  Cyro and Ineos  Acrylics,  Inc.  (formerly  ICI
         Acrylics,  Inc.),  which are North American producers of acrylic sheet,
         also produce methyl  methacrylate  monomer  ("MMA"),  the principal raw
         material used in the  manufacture of acrylic sheet,  rods and tubes, or
         certain  of the  components  thereof,  making it  possible  for them to
         absorb  increases  in the  cost  of MMA and  buy in  large  quantities,
         thereby  availing  themselves  of volume  discounts  not  available  to
         Polycast.  Since  Polycast  does not itself  produce  MMA,  Polycast is
         unable to  compete  effectively  with the low  prices  charged by these
         companies for general purpose acrylic sheet.  See "- Polycast - Acrylic
         Products - Raw Materials."

                  Marketing

                  Polycast markets acrylic products under the POLYCAST(R)  brand
         name.  Polycast also markets acrylic products with special  performance
         characteristics under individual brand names, such as:

o        PILOTS' CHOICE(TM) (aerospace sheet with high optical clarity) for
          helicopter windshields,

o        SOLACRYL(R) (specialty sheet which transmits ultraviolet rays) for
          tanning bed shields,

o        POLYDOR(R) (thermoformable sheet) used for orthopedic product,

o        S-A-R-coatings for specialty acrylic applications,

o        VIPLEX(TM)  (specialized fabrication of acrylic products) used in high
          end marine applications, and

o        TOWNSEND/GLASFLEX(TM) (acrylic rods and tubes) used in display and
          medical applications.

                  Polycast markets its acrylic sheets,  rods and tubes primarily
         through  five sales  representatives,  who are  employees,  and through
         wholesale distributors.

                  Representative  domestic customers and end users of Polycast's
         acrylic products include:

o        Beech Aircraft Corp.,

o        Bell-Helicopter Textron, Inc.,

o        The Boeing Company,

o        Cadillac Plastic and Chemical Co.,

o        The Cessna Aircraft Company,

o        Chris-Craft Industries, Inc.,

o        Commercial Plastics and Supplies Corp.,

o        Laird Plastics, Inc.,

o        Llamas Plastics, Inc.,

o        Sensormatic Electronics Corporation,

o        Sierracin/Sylmar Corporation,

o        Sikorsky Aircraft Corporation,

o        Texstar, Inc.,

o        Thunderbird Products Corp., and

o        Wellcraft Marine.

                  Representative  foreign  customers and end users of Polycast's
         acrylic products include:

o        Airbus Industries,

o        Agusta Helicopters,

o        Embraer - Empresa Brasileira de Aeronautica S.A., and

o        Hindustan Aeronautics Limited.

                  Polycast is not dependent  upon a single  customer or group of
         customers for sales of its acrylic products.

                  Manufacturing Facilities

                  Polycast   manufactures  acrylic  sheet  at  its  facility  in
         Stamford,  Connecticut and finishes and further processes acrylic sheet
         for  certain  applications  at its  facilities  in  Goodyear,  Arizona,
         Hackensack, New Jersey, Melbourne, Florida and Rockledge,  Florida. The
         Hackensack  facility also serves as the principal warehouse for acrylic
         sheet  products.  Acrylic  rods and tubes are produced at a facility in
         Pleasant Hill, Iowa. The Company owns the  manufacturing and processing
         facilities  in Stamford,  Hackensack  and Pleasant  Hill and leases its
         facilities in Goodyear,  Melbourne  and  Rockledge.  The  manufacturing
         operations  formerly  carried on in  Stirling,  New Jersey and Newport,
         Delaware  have  been  substantially  consolidated  into  the  Stamford,
         Connecticut and Pleasant Hill,  Iowa facilities  during Fiscal 1998 and
         Fiscal  1999.  The division  leases  office space used for its division
         headquarters  adjacent  to  its  Stamford,   Connecticut  manufacturing
         facility. See "Item 2. Properties."

                  Raw Materials

                  Since October 1, 1991, all of the division's  requirements  of
         MMA have been purchased from Ineos  Acrylics,  Inc. or its  predecessor
         owners of the monomer business,  ICI Acrylics,  Inc. and E.I. duPont de
         Nemours & Co., currently pursuant to a supply agreement which obligates
         the  division to purchase  from Ineos and Ineos to supply the  division
         with its  requirements  for MMA  through  March 16,  2005,  subject  to
         termination by the division upon eighteen  months' advance notice or by
         Ineos upon a three years' advance notice.  Under the supply  agreement,
         the  division is entitled to  purchase  MMA from other  suppliers  that
         offer the product at prices lower than those Ineos is willing to match.
         In addition, the supply agreement requires that any party that acquires
         all or  substantially  all of Ineos's  assets used to  manufacture  MMA
         assume  the  obligations  of Ineos  under  the  agreement  and  further
         requires that any party that acquires all or  substantially  all of the
         Company's assets used to manufacture its acrylic sheet,  rods and tubes
         assume the obligations of the division under the agreement.

                  In the  event  that  Ineos  elects  to  terminate  the  supply
         agreement, the Company believes that the division could obtain MMA from
         one or more alternate sources. However, each of the two major alternate
         domestic  manufacturers  and  certain  other  major  alternate  foreign
         manufacturers  of MMA compete (as does Ineos) with the  division in the
         manufacture and sale of acrylic sheet.  Thus, there can be no assurance
         that the  division  would be able to obtain  MMA from  these  alternate
         sources  at  satisfactory  prices,  on a  reliable  basis  or on  terms
         otherwise satisfactory to the division.

                  Coated Fabrics Segment

                  The Company's  Coated  Fabrics  Segment,  which  accounted for
         approximately  $42.3  million (21 percent  (21%)) of the  Company's net
         sales for  Fiscal  1999,  is a  leading  manufacturer  of vinyl  coated
         fabrics and was a leading  manufacturer  of laminated  composites.  The
         Segment's  product  lines  consisted  of  products  for the  automobile
         manufacturing  industry,  which accounted for 31 percent (31%) of total
         net  sales  of  the  Segment  for  Fiscal  1999,  and  the  well  known
         Naugahyde(R)  brand name vinyl coated fabric products,  which accounted
         for 69 percent  (69%) of total net sales of the Segment for such fiscal
         year.  See  Item  1.  "Corporate   Developments  -  Completion  of  the
         Disposition of the Automotive  Operations" and "Note 15 to Consolidated
         Financial Statements."

                  General

                  The  Segment's  automotive  product line  consisted of plastic
         vinyl  coated   fabrics  and  vinyl   laminated   composites   used  by
         manufacturers and custom fabricators in the production of:

o        vehicle seat coverings,

o        door panels,

o        arm rests,

o        consoles, and

o        instrument panels.

         The  coated  fabrics  were  durable,  stain  resistant,  cost-effective
         alternatives  to leather  and cloth  coverings.  The  Company  sold the
         remaining  business of the automotive  operation of this Segment during
         the last quarter of Fiscal 1998.  The operation  consisted of the vinyl
         laminated  composite  line  manufactured  in Port  Clinton,  Ohio.  The
         Segment  continued to operate the Port Clinton,  Ohio facility  under a
         supply agreement until November 11, 1998.

                  The Segment's  Naugahyde(R) vinyl coated fabrics products have
         varying  performance  characteristics  and are sold in various  markets
         depending upon the performance  characteristics  required by end users.
         For example, for recreational products which are used outdoors, such as
         boats,  personal  watercraft,  golf carts and snowmobiles,  the Segment
         sells  a   Naugahyde(R)   product  that  is  designed   primarily   for
         weatherability.  It also  manufactures  Naugahyde(R)  products that can
         withstand powerful cleaning agents,  which are widely used in hospitals
         and in other medical facilities. Flame and smoke retardant Naugahyde(R)
         vinyl  coated  fabrics  are  used  for  a  variety  of  commercial  and
         institutional furniture applications,  including hospital furniture and
         school bus seats.

                  The  Segment  has a  state-of-the-art  production  line  which
         produces  coated  fabrics  and  laminated  composites  in more than 600
         colors and 45 textures and patterns.

                  Competition

                  The  Coated  Fabrics  Segment  competes  with  respect  to its
         Naugahyde(R)  products  primarily  on the  basis of  style,  color  and
         quality,  as well as  price  and  customer  service  through  technical
         support and performance characteristics which meet customer needs.

                  The  Segment's  principal  competitors  with  respect  to  its
         Naugahyde(R) products are:

o        C. G. Spradling & Company,

o        OMNOVA Solutions (formerly a part of GenCorp, Inc.), and

o        Mobern, Inc.

                  Marketing

                  The Segment's  coated fabrics  products were introduced by one
         of its predecessors more than 50 years ago and today are marketed under
         several  nationally  recognized  brand names,  including  NAUGAHYDE(R),
         NAUGAFORM(R)  and DURAN(R).  BEAUTYGARD(R)  is the name under which the
         Segment markets its cleaning  agent-resistant  coated fabrics,  and its
         flame and smoke  retardant  coated fabrics are marketed under the brand
         name FLAME BLOCKER(TM).

                  The  Segment  markets and sells its coated  fabrics  primarily
         through 12 national  sales  representatives,  who are  employees of the
         Company,  and  independent  sales  representatives.  In  the  furniture
         manufacturing market, it generally sells its coated fabrics through its
         sales  representatives  and  to  distributors  who  sell  to  furniture
         manufacturers,  upholsterers and fabric distributors.  Approximately 32
         percent  (32%) of the Segment's  non-automotive  market sales in Fiscal
         1999 were to distributors.

                  Representative customers and end users of the Segment's coated
         fabrics include:

o        Bombardier, Inc.,

o        Club Car, Inc.,

o        Deere & Co.,

o        Freightliner Corporation,

o        Harley-Davidson, Inc.,

o        Kawasaki Heavy Industries, Inc.,

o        Lazy-Boy, Incorporated,

o        Michigan Seat Co.,

o        Monaco Coach Corporation,

o        Okamoto USA, Inc.,

o        Polaris Industries, Inc.,

o        Shelby Williams Industries, Inc., and

o        Yamaha Motor Corporation, USA.

                  Manufacturing Facilities

                  The Segment  manufactures  its coated  fabrics at its
          facility  located in Stoughton,  Wisconsin.  The Segment  ceased
          manufacturing  at its facility in Port  Clinton,  Ohio on November 11,
          1998.  Both of these facilities are owned by the Company.  See "Item
          2. Properties."

                  Raw Materials

                  The principal raw materials for the Segment's  coated  fabrics
         are casting paper,  knit fabric,  PVC plastic resins and  plasticizers.
         The Segment generally has multiple sources for these materials.

                  Specialty Adhesives Segment

                  The  Company's   Specialty  Adhesives  Segment  accounted  for
         approximately  $28.4 million  (approximately  14% percent (14%)) of the
         Company's total net sales for Fiscal 1999.

                  General

                  The  Specialty   Adhesives  Segment  comprises  three  general
         product lines: roofing adhesives and sealants, industrial adhesives and
         sealants  and mirror  mastics and  sealants.  The Segment is one of the
         leading  manufacturers of adhesives for  fully-bonded,  EPDM commercial
         roofs. The Company supports  Firestone  Building  Products  Company,  a
         division  of  Bridgestone/Firestone,  Inc.  ("Firestone"),  an industry
         leader in the supply of Rubber Gard(R) EPDM single ply membrane, with a
         full line of bonding, splice, primer and sealer products. Approximately
         68 percent  (68%) of the  Segment's  Fiscal  1999  sales  were  roofing
         product shipments to Firestone. The fully-bonded adhesive products sold
         to  Firestone  pass  through  a  rigorous  development  and  production
         qualification  process,   resulting  in  an  applied  roof  capable  of
         withstanding  exposure to  environmental  extremes.  The  Segment  also
         produces  and sells  more than 200  industrial  and  commercial  mirror
         adhesives  and sealants  under the brand names of  Silaprene(R),  Hydra
         Fast-En(R),    Ultra/Bond(R),    Extra/Build(R),    SolidSeal(TM)   and
         SolidBond(TM).  These  products  are  marketed  to  the  transportation
         (non-automotive),  furniture,  foam  fabrication and commercial  mirror
         installation industries.

                  The  Segment  has  doubled  the size of its  industrial  sales
         force,  introduced new Silaprene(R) products and packaging that feature
         the well-recognized  brand name, and expanded its water-based  adhesive
         line  to  position  itself  for   increasingly   stringent   government
         legislation regarding health and safety requirements.

                  In addition,  the Company acquired,  on March 31, 1997, the C.
         Gunther Company ("Gunther"),  a major marketer of mirror mastics to the
         residential  and  commercial  construction  industry  located  in Cary,
         Illinois.  All  Gunther  operations  were  subsequently  moved  to  the
         Company's South Bend facility.

                  The Segment  sells splice and bonding  adhesives  for the EPDM
         rubber roofing market  exclusively to Firestone pursuant to a five-year
         contract  which was entered into in Fiscal 1995 and extended on June 9,
         1998,  by an  additional  34 months to expire on December 31, 2002 (the
         "Firestone  Agreement").  Under the terms of the  Firestone  Agreement,
         Firestone  is  obligated  to purchase  from the Segment a minimum of 80
         percent (80%) of its annual volume  requirements  of splice and bonding
         adhesives for the EPDM rubber roofing market.  In Fiscal 1999, 1998 and
         1997,  Firestone  purchased 68 percent  (68%),  67 percent (67%) and 79
         percent  (79%),  respectively,  of the  Segment's  total  net  sales of
         adhesives and sealants for such periods.  Sales to Firestone during the
         fiscal year ended September 26, 1999, represented 9.5 percent (9.5%) of
         the Company's net sales for such fiscal year.  The loss of Firestone as
         a  customer  would have an adverse  effect on the  Company's  Specialty
         Adhesives  Segment.  Firestone  will acquire the  Company's  patent for
         splice adhesive on February 22, 2000.

                  Competition

                  Pursuant to the exclusivity terms of the Firestone  Agreement,
         the Company does not compete with respect to its roofing  adhesives and
         sealants.  As to its  industrial  adhesives and  sealants,  the Company
         competes  principally  on  the  basis  of  price  and  the  performance
         characteristics of its products.

                  The  Segment's  principal  competitors  in the  adhesives  and
         sealants market for EPDM rubber roofing applications are:

o        Adco Technologies, Inc.,

o        Ashland Chemical Company,  and

o        TACC International Corp.

                  Carlisle Syntec Systems supplies these adhesives primarily for
         its own single-ply roofing system and consequently  competes indirectly
         with the Segment.

                  In  the  industrial   adhesives  and  sealants  markets,   the
         Segment's primary competitors include:

o        Imperial Adhesives, Inc.,

o        Manus Corporation,

o        Minnesota Mining and Manufacturing Corporation,

o        Palmer Products Corp., and

o        Sika Corporation.

                  Marketing

                  The Segment's  industrial  adhesives and sealants are marketed
         under the brand name Silaprene(R).  Its water-based  adhesives are also
         marketed  under  the  brand  name  Hydra   Fast-En(R).   The  Segment's
         Silaprene(R)  products have  established  name  recognition  in and are
         important in the recreational  vehicle and truck trailer  manufacturing
         markets.  Hydra Fast-En(R)  adhesives are beginning to establish market
         share  in  the  foam  fabrication,  plastic  fabrication,  recreational
         vehicle and marine  markets.  Recognized  trademarks  in the mirror and
         glass industry,  purchased as part of the C. Gunther  acquisition,  are
         Ultra/Bond(R), Extra/Build(R),  Prime-N-Seal(TM), Premier(TM), Mirror &
         More Cleaner(TM) and Seal-Kwik(TM).

                  The  Segment's  roofing  adhesives  and  sealants are marketed
         under  Firestone's  brand  names.  The  Company   indirectly  holds  an
         important position in the splice adhesives and bonding adhesives market
         through Firestone,  which continues to control significant market share
         of the EPDM rubber roofing market.

                  The Segment  markets its  industrial  adhesives  and  sealants
         throughout  the United  States and Canada  primarily  to  manufacturers
         through  a  network  of 200  authorized  distributors,  19  independent
         representatives and five sales  representatives  located throughout the
         United  States  and  Canada.  Pursuant  to  its  obligation  under  the
         Firestone Agreement, the Segment does not market its splice and bonding
         adhesives for the EPDM rubber roofing market.

                  The  Segment's   roofing   adhesives   business  is  seasonal,
         increasing  in the  warmer  months  of the year due to an  increase  in
         roofing  and  other  construction  activities  in such  months,  and is
         sensitive to adverse weather conditions.

                  Manufacturing Facilities

                  On  July  17,  1996,  the  Company  acquired  a  manufacturing
         facility in South Bend,  Indiana  consisting of  approximately  240,000
         square feet for $1.8 million and spent an  additional  $6.7 million for
         building renovations,  new equipment and moving expenses.  The move was
         completed on February 18, 1997 and now provides a modern and  efficient
         manufacturing plant with significant  additional capacity, an excellent
         research  center and  office  space for the High  Performance  Plastics
         Segment's  headquarters  and certain other  corporate  operations.  See
         "Item 2. Properties."

                  Raw Materials

                  The  division's  adhesives  and  sealants use a variety of raw
         materials  such as rubber,  resins and  solvents,  which are  generally
         available from multiple sources.  The division's principal suppliers of
         such raw materials and containers include:

o        Bayer Corporation,

o        Cleveland Steel Container Corp.,

o        Citgo Petroleum Corporation,

o        duPont Dow Elastomers,

o        Elf Atochem North America, Inc.

o        Schenectady International,

o        Ashland Chemical, and

o        Sun Chemical Company, Inc.

         The Company has long-term supply agreements with:

o        Elf Atochem North America, Inc.,

o        Cleveland Steel Container Corporation,

o        duPont Dow Elastomers,

o        Federal Packaging, and

o        Sun Chemical Company, Inc.,

         The Company  believes that  adequate  supplies of raw materials for its
         adhesives and sealants will be available to the division from alternate
         suppliers.  However,  if the  division  is  required  to use  alternate
         suppliers,  production  could  be  affected  while  the  raw  materials
         produced by such  alternate  suppliers are qualified by the division to
         meet the product specifications of its customers.

         Employees

                  The  Company  has  approximately  1,210  employees,  including
         approximately 830 hourly wage employees and 380 salaried employees. The
         Company  believes that at the present time its workforce is adequate to
         conduct  its  business  and  that  its  relations  with  employees  are
         generally satisfactory.

                  The  Company is a party to a number of  collective  bargaining
         agreements.  Approximately  130 hourly wage  employees of the Company's
         acrylic sheet manufacturing  facility located in Stamford,  Connecticut
         are covered by an agreement  expiring on March 31, 2000 with  Teamsters
         Local 191, which is affiliated  with the  International  Brotherhood of
         Teamsters,  Chauffeurs,   Warehousemen  and  Helpers  of  America  (the
         "Teamsters").  Approximately 40 employees at the Company's  Hackensack,
         New Jersey  acrylic  sheet  manufacturing  and  warehouse  facility are
         covered by an  agreement  expiring on February 3, 2002 with UNITE,  New
         York/New  Jersey  Regional Joint Board  ALF-CIO,  CLC. At the Company's
         coated fabrics manufacturing facility located in Stoughton,  Wisconsin,
         another  approximately  150 hourly employees of the Company are covered
         by an  agreement  expiring  on  September  17,  2001 with Local 1207 of
         P.A.C.E.  (formerly  known  as the  United  Paperworkers  International
         Union). A separate agreement expiring on April 25, 2003 with the United
         Steel Workers of America,  United Rubber Workers  Division (the "USWA")
         covers   approximately  40  hourly  wage  employees  at  the  Company's
         adhesives and sealants  manufacturing  facility  located in South Bend,
         Indiana.  In  connection  with the Fiscal  1998 sale of the  automotive
         operations at Port Clinton,  Ohio (see "Item 1. Corporate  Developments
         Completion  of the  Disposition  of  the  Automotive  Operations")  the
         Company  terminated  the 85 hourly wage  employees at the Port Clinton,
         Ohio facility in Fiscal 1999.

                  On July 20, 1995 the National Labor  Relations Board certified
         the United Paperworkers  International Union, now known as P.A.C.E., as
         the   exclusive   collective   bargaining    representative   for   the
         approximately 160 hourly wage employees at the Company's  thermoplastic
         products plant in Warsaw,  Indiana. The Company challenged the election
         which led to such certification and, accordingly, did not recognize the
         union.  On October 24, 1996, the United States Court of Appeals for the
         Seventh  Circuit  denied the  Company's  appeal.  The Company has since
         recognized  the union and on December 18,  1999,  ratified a three year
         contract that will expire on December 18, 2002.

                  During July 1999,  negotiations with the United Rubber Workers
         Union, in connection with the collective  bargaining agreement covering
         the hourly wage  employees  at the  Company's  adhesives  and  sealants
         manufacturing  facility located in South Bend, Indiana, broke down, and
         a strike ensued for approximately  three weeks. The strike did not have
         an adverse effect on operations of the Specialty Adhesives Segment.

                  Richard D.  Kimbel,  the  former  President  of United  Rubber
         Workers Union Local 65 (Mishawaka), is a director of the Company.

         Trademarks and Patents

                  The  Company  owns  and  controls   patents,   trade  secrets,
         trademarks, trade names, copyrights and confidential information, which
         in the  aggregate  are  material  to its  business.  The Company is not
         materially dependent, however, upon any single patent or trademark. The
         Company  has  several  trademarks  that have wide  recognition  and are
         valuable to its  business.  Among the  trademarks  that are of material
         importance  to the Company are  NAUGAHYDE(R),  NAUGAFORM(R),  DURAN(R),
         ROYALITE(R), PILOTS' CHOICE(TM), POLYCAST(R), VIPLEX(TM). SILAPRENE(R),
         HYDRA FAST-EN(R), GUNTHER ULTRA/BOND(R) and GUNTHER EXTRA/BUILD(R). The
         Company's  trademarks  are  registered  in the  United  States and in a
         number of foreign  jurisdictions  with terms of  registration  expiring
         generally between 2000 and 2004. No trademark  registration of material
         importance  to the Company  expired  during  Fiscal  1999.  The Company
         intends  to renew in a timely  manner  all  those  trademarks  that are
         required for the conduct of its  business.  The Company also holds more
         than 20 patents and pending patents worldwide.

                  The  Company  uses the  trade  name and  trademark  "Uniroyal"
         pursuant to a license from Uniroyal Goodrich Licensing Services, Inc.

         Research and Development

                  The Company is actively  engaged in research  and  development
         programs  designed to develop new  products,  manufacturing  processes,
         systems and  technologies  and to enhance  its  existing  products  and
         processes.  Research and development is conducted  within each business
         segment of the Company. Investment in research and development has been
         an important  factor in  establishing  and  maintaining  the  Company's
         competitive  position in many of the specialized niche markets in which
         its products are  marketed.  For example,  the  Company's  research and
         development   efforts  have  led  to  the  development  of  water-based
         adhesives  (see  "Business  Segments -  Specialty  Adhesives"),  bullet
         resistant  acrylic  sheet  and  acrylic  sheet  for  use in  commercial
         aquariums  (see  "Business  Segments  -  High  Performance  Plastics  -
         Polycast  Acrylic  Products").  The Company  spent  approximately  $2.2
         million for research and  development  during  Fiscal 1999  compared to
         approximately  $2.7 million during Fiscal 1998. The decline in research
         and development expenditures is primarily attributable to the exit from
         the automotive operations of the Coated Fabrics Segment.

                  The Company  currently  employs a staff of 27  individuals  in
         connection with its research and development  efforts.  The individuals
         include  chemists,   process   development   engineers  and  laboratory
         technicians  and  are  responsible  for  new  product  development  and
         improvement  of production  processes.  The  allocation of research and
         development staff among the Company's  business segments is as follows:
         12 at High Performance  Plastics,  eight at Coated Fabrics and seven at
         Specialty Adhesives.

         Backlog

         At  September  26,  1999,  the Company had backlog  orders  aggregating
         approximately $22.4 million, as compared to approximately $25.1 million
         as of September 27, 1998.  Management  presently  anticipates  that all
         backlog orders will be filled within the next 12 months. Backlog orders
         for each of the Company's  business  segments were as follows as of the
         indicated dates:
<PAGE>

                                      September 26,               September 27,
                                          1999                         1998
                                      -------------               -------------
                                                   (in thousands)

         High Performance Plastics    $  13,604                    $  14,994
         Coated Fabrics                   4,434                        5,368
         Specialty Adhesives              4,394                        4,747
                                      ---------                    ---------
         Total                        $  22,432                    $  25,109
                                      =========                    =========

         Working Capital Items

                  Many of the markets in which the Company  competes,  including
         the aerospace acrylic sheet market and the optoelectronics  market, are
         characterized by long lead times for new products requiring significant
         working  capital  investment  by the  Company  and  extensive  testing,
         qualification and approval by the Company's  customers and end users of
         its products.  The Company faces a significant  risk that customers and
         end users in such  markets may not select the  Company's  new  products
         after it has  incurred  significant  costs  for,  among  other  things,
         research  and  development,   manufacturing  equipment,   training  and
         facility-related overhead expenses to develop such products.

                  Moreover,  even  if  the  Company's  products  are  eventually
         approved and purchased by customers and end users in such markets,  the
         working  capital  investment made by the Company could fail to generate
         revenues for several years while the Company develops such products and
         its customers and end users conduct their  testing,  qualification  and
         approval  procedures for such products.  Although the Company  believes
         that cash  from its  operations  and its  ability  to borrow  under its
         revolving  credit agreement (see "Item 7.  Management's  Discussion and
         Analysis of Financial Condition and Results of Operations Liquidity and
         Capital Resources") will provide it sufficient liquidity to finance its
         efforts to develop new  products,  there can be no  assurance  that the
         Company's   operations   together  with  amounts  available  under  its
         revolving  credit   agreements  will  be  sufficient  to  finance  such
         development efforts and to meet the Company's other obligations.

         Environmental Matters

                  The  Company is subject to  federal,  state and local laws and
         regulations  designed to protect the  environment and worker health and
         safety. The Company's management  emphasizes  compliance with such laws
         and regulations and has instituted  programs  throughout the Company to
         provide  education  and training in  compliance  at and auditing of all
         Company facilities. Whenever required under applicable law, the Company
         has  implemented  product or process  changes or invested in  pollution
         control systems to ensure compliance with such laws and regulations.

                  In  Fiscal  1999,   1998  and  1997,  the  amount  of  capital
         expenditures  related to  environmental  matters was immaterial and the
         amount of such  expenditures  is  expected to be  immaterial  in Fiscal
         2000. In the future,  as the requirements of applicable law impose more
         stringent  controls  at  Company  facilities,  expenditures  related to
         environmental  and worker  health and safety are  expected to increase.
         While the  Company  does not  currently  anticipate  having to make any
         material  capital  expenditures  in order to comply with these laws and
         regulations,  if the Company is  required  to do so, such  expenditures
         could have a material impact on its earnings or competitive position in
         the future.

                  In connection with its acquisition of a manufacturing facility
         in South Bend,  Indiana on July 17, 1996, the Company assumed the costs
         of remediation of soil and groundwater contamination resulting from the
         leaking of solvents  used in the  operation  of the plant by its former
         owner. The Company is conducting the remediation  voluntarily  pursuant
         to  an  agreement   with  the  Indiana   Department  of   Environmental
         Management.  The  Company  estimates  that such  remediation  will cost
         approximately  $1.0  million  over  a  five-to-seven-year   period.  In
         connection with its acquisition of the facility,  the Company placed in
         escrow,  in accordance with the terms of the purchase  agreement,  $1.0
         million  of the  $1.8  million  purchase  price to be  applied  to such
         remediation costs.  Through Fiscal 1999, the Company has incurred costs
         of approximately $615,000 in connection with such remediation.

                  Pursuant to a 1992 settlement agreement with the United States
         Environmental   Protection  Agency  (the  "EPA"),   the  United  States
         Department of the Interior and the States of Wisconsin and Indiana (the
         "EPA  Settlement  Agreement")  in the  event  that the  United  States,
         Wisconsin or Indiana  asserts a claim  against the Company for response
         costs  associated  with  pre-petition  disposal  activities  at certain
         sites, the  governmental  party will be entitled to pursue its claim in
         the ordinary course,  and the Company will be entitled to assert all of
         its defenses.  However,  if and when the Company is held liable, and if
         the  liability  is  determined  to  arise  from  pre-petition  disposal
         activities  of its  predecessors,  the Company may pay the liability in
         discounted  "plan dollars" (i.e., the value of the  consideration  that
         the party  asserting  such claim would have  received if the  liability
         were  treated  as  a  general   unsecured   claim  under  the  Plan  of
         Reorganization of the  predecessors).  Such payment may be made in cash
         or in the Company's stock, or a combination  thereof,  at the Company's
         option.  Claims arising from real property owned by the Company are not
         affected by the EPA Settlement Agreement.

                  The Company received a letter dated October 30, 1997, from the
         EPA,  Region 5,  informing  the  Company  that it might be  financially
         responsible  for a pollution  incident at the plant formerly  leased by
         the Company at 312 North Hill Street, Mishawaka, Indiana. The EPA later
         notified  the Company  that it expected  the Company to pay for part or
         all of the  approximately  $1.7  million of costs  associated  with the
         clean-up  of a portion  of such  plant.  The  Company  and the EPA have
         negotiated a settlement under the EPA Settlement Agreement, whereby the
         EPA was given an allowed unsecured claim of $1.7 million under the Plan
         of  Reorganization  of the Company's  predecessors and the Company paid
         $525,000 to the EPA in Fiscal 1999.

                  In October 1996, the EPA sent the Company a General Notice and
         Special  Notice of Liability  concerning the Refuse  Hideaway  Landfill
         Superfund Site at Middleton,  Wisconsin. While a unit of Uniroyal, Inc.
         is believed to have sent  non-hazardous  waste to the site between 1978
         and 1984,  the Company is not aware that the  Uniroyal,  Inc. unit sent
         any  hazardous  materials to the site.  The Company has entered into an
         Administrative  Order  on  Consent  with  the  EPA  and  a  Potentially
         Responsible   Parties   Agreement   with  certain   other   potentially
         responsible  parties.  The Company does not  presently  anticipate  any
         material  liability in connection  with the site, and in any event,  if
         the Company is found to have  liability  in  connection  with the site,
         such  liability  will be  subject  to the  terms of the EPA  Settlement
         Agreement.

                  The Company's  acquisition of the assets of Townsend  Plastics
         in September 1997 included the building in which the business  operates
         in  Pleasant  Hill,  Iowa.  The seller  retained  the  underlying  real
         property,  which is leased to the Company for a term of ten years.  The
         Company  also  has an  option  to  acquire  such  real  property  until
         September  30, 2007.  The real  property is subject to a RCRA  Facility
         Investigation/Corrective  Measures Study with Interim  Measures ordered
         by the EPA  pursuant to RCRA.  Two former  lessees of the  property are
         performing  corrective  measures on the real property to remediate soil
         and ground water  contamination.  The Company does not anticipate  that
         such  corrective  measures will interfere with the Company's use of the
         property.  The Company does not anticipate any liability to the Company
         in connection with such contamination or corrective measures as long as
         the Company remains a lessee of the property.

                  Based upon information available as of September 26, 1999, the
         Company believes that the costs of environmental  remediation for which
         it may be  liable  have  either  been  adequately  reserved  for or are
         otherwise  unlikely to have a material  adverse effect on the Company's
         operations, cash flows or financial position.

         History of Company

                  Predecessor Companies

                  The  Company's  businesses  trace their origins to a number of
         predecessor companies which eventually were reorganized pursuant to the
         Third  Amended Plan of  Reorganization  under the  Bankruptcy  Code for
         Polycast   Technology   Corporation  and  Its  Affiliated  Debtors  (as
         subsequently modified, the "Plan of Reorganization").

                  The Company's acrylic sheet business  originated in the 1960's
         in a  company  known  as  Polycast  Technology  Corporation  ("Polycast
         Technology"),  which subsequently  changed its name to The Jesup Group,
         Inc.  ("Jesup").  In 1984, Polycast Technology acquired the business of
         Shenandoah Plastics ("Shenandoah"), a company engaged since 1967 in the
         manufacture   of   thermoplastic   sheet,   and  Glasflex   Corporation
         ("Glasflex"),  a  manufacturer  since 1954 of acrylic  sheet,  rods and
         tubes.  These businesses  eventually became part of what is known today
         as the Company's High Performance Plastics Segment.

                  A substantial  portion of the thermoplastic  sheet business of
         the High  Performance  Plastics  Segment (other than that acquired from
         Shenandoah),  as well as the businesses of the Coated  Fabrics  Segment
         and the Specialty  Adhesives  Segment (formerly the Specialty Foams and
         Adhesives Segment),  originated in the chemical and plastics operations
         of  the  U.S.   Rubber   Company   (later  known  as   Uniroyal,   Inc.
         ("Uniroyal")).  These operations were conducted by segments of Uniroyal
         until 1985, when Uniroyal Plastics Company,  Inc. ("UPC") was formed by
         Uniroyal as a  wholly-owned  subsidiary  to hold these  operations.  In
         October 1986, Jesup,  indirectly,  through its wholly-owned subsidiary,
         Uniroyal  Plastics  Acquisition  Corp.  ("UPAC"),   acquired  UPC  from
         Uniroyal.   Following  its  acquisition  of  UPC,  Jesup  combined  the
         thermoplastic  sheet  operations  acquired  from UPC with its  existing
         thermoplastic  sheet and acrylic  sheet,  rod and tube  businesses in a
         subsidiary known as Polycast  Technology  Corporation ("Old Polycast").
         Jesup also  transferred  what is now the Coated Fabrics  Segment of the
         Company's business into Uniroyal Engineered Products,  Inc. ("Old UEP")
         and the  adhesives  and sealants  business of what is now its Specialty
         Adhesives Segment into Uniroyal  Adhesives and Sealants  Company,  Inc.
         ("Old UAS"). The assets of the specialty foam business were transferred
         from UPC to Ensolite, Inc. ("Old Ensolite"). Old Polycast, Old UEP, Old
         Ensolite  and  Old UAS  are  referred  to  herein  as the  "Predecessor
         Companies."  UPC is  currently  in  bankruptcy  liquidation  and was an
         affiliate of the Predecessor  Companies.  UPAC's plan of reorganization
         was substantially implemented in November 1993.

                  In October and November  1991, the  Predecessor  Companies and
         one other subsidiary of Jesup filed voluntary bankruptcy petitions with
         the  United  States  Bankruptcy  Court  for the  Northern  District  of
         Indiana,  South Bend Division (the "Bankruptcy Court") for relief under
         Chapter  11 of Title 11 of the United  States  Code,  as  amended  (the
         "Bankruptcy Code").

                  The plan of  reorganization  of the Predecessor  Companies was
         substantially  consummated on September 27, 1992.  Pursuant to the Plan
         of  Reorganization,  each  of  the  Predecessor  Companies  transferred
         substantially all of its assets to a newly organized  subsidiary of the
         Company with a name that was substantially identical to the name of its
         corresponding  Predecessor  Company.  In  exchange,  each of these  new
         subsidiaries,  including Polycast Technology Corporation  ("Polycast"),
         Uniroyal  Engineered  Products,  Inc. ("UEP"),  Uniroyal  Adhesives and
         Sealants Company, Inc. ("UAS") and Ensolite, Inc. ("Ensolite"),  agreed
         to assume certain of the liabilities of its  corresponding  Predecessor
         Company.  In addition,  the Company issued, or authorized for issuance,
         9,575,000  shares of its Common  Stock to holders of allowed  unsecured
         claims  against  the  Predecessor  Companies  and 50 shares of Series A
         Preferred  Stock  and 50  shares  of  Series B  Preferred  Stock to the
         Pension Benefit Guaranty Corporation (the "PBGC"). The Bankruptcy Court
         issued its final  decree  closing  the  bankruptcy  of the  Predecessor
         Companies on September 27, 1999.

                  On June 7, 1993, in  conjunction  with the public  offering of
         the Company's  11.75% Senior Secured Notes,  the Company merged each of
         its operating  subsidiaries  into the Company.  In May 1993 the Company
         called and repurchased  from the PBGC all of the outstanding  shares of
         Series A  Preferred  Stock and 15 shares of the  outstanding  shares of
         Series B Preferred stock. On December 16, 1996, the Company repurchased
         an  additional  15 shares of such stock,  and on February 4, 1997,  the
         Company  repurchased  the  remaining 20 shares of preferred  stock.  On
         November 13, 1997, the Company,  certain  officers and directors of the
         Company and certain  other  persons  purchased  all of the common stock
         held by the PBGC.

                  On April 14, 1998, the Company  transferred  all of the assets
         of  its  High   Performance   Plastics   Segment  to  a  newly  created
         wholly-owned  subsidiary,  High Performance  Plastics,  Inc. (HPPI). On
         that same day HPPI, as borrower  entered into a credit  agreement  with
         Uniroyal  HPP  Holdings,  Inc.  (the parent of HPPI and a  wholly-owned
         subsidiary of the Company),  the Company and certain  banks,  including
         Fleet National Bank. The credit agreement provided, among other things,
         for the  borrowing  by HPPI of an aggregate  principal  amount of up to
         $110 million. On April 14, 1998, HPPI paid approximately $95 million to
         the Company.  The Company  used this amount to defease the  outstanding
         11.75%  Senior  Secured  Notes  due June 1,  2003,  including  the call
         premium and interest  accrued through the call date and to pay down its
         revolving  line of credit with CIT. The  redemption of the  outstanding
         Senior Secured Notes was completed by June 1, 1998 at a call premium of
         4.41%.



<PAGE>


Item 2. Properties

         The following table sets forth the location,  size,  general  character
         and nature of the Company's facilities:

<TABLE>
<CAPTION>


                                    SQUARE FEET       GENERAL CHARACTER
LOCATION AND ENTITY                 OF FACILITY          OF PROPERTY                         LEASED OR OWNED
-------------------                 -----------       ------------------                     ---------------
<S>                                 <C>                <C>                                     <C>
Corporate
-----------
Sarasota, Florida                         11,000      Corporate offices                             Leased
Stirling, New Jersey                      50,000      Manufacture of acrylic sheet, rods & tubes    Owned (Leased
                                                        - currently for sale                           to HPPI)
Port Clinton, Ohio                       240,000      Previously manufactured coated fabrics        Owned
                                                        products - currently for sale
High Performance Plastics Segment
----------------------------------
Goodyear, Arizona                         25,000      Fabrication of acrylic sheet                  Leased
Redlands, California                      60,000      Manufacture of thermoplastic products         Owned
Stamford, Connecticut                     81,000      Manufacture of cell cast acrylics             Owned
Stamford, Connecticut                      5,500      Offices                                       Leased
Melbourne, Florida                        46,250      Fabrication of acrylic sheet                  Leased
Rockledge, Florida                        39,772      Fabrication of acrylic sheet                  Leased
Rome, Georgia                             45,000      Manufacture of thermoplastic products         Owned
South Bend, Indiana                       12,000      Offices                                       Leased from UEPI
Warsaw, Indiana                          225,000      Manufacture of thermoplastic products,        Owned
                                                        custom compounding and warehouse
Pleasant Hill, Iowa                       49,000      Manufacture of acrylic rods & tubes           Owned (Ground Lease
                                                                                                       on Real Estate)
Hackensack, New Jersey                    46,000      Manufacture of cell cast acrylics             Owned
Stirling, New Jersey                      50,000      Manufacture of acrylic sheet, rods & tubes    Leased from Corporate

Coated Fabrics Segment
----------------------
Stoughton, Wisconsin                     198,275      Manufacture of coated fabrics products        Owned

Specialty Adhesives Segment
---------------------------
South Bend, Indiana                      240,000      Manufacture of adhesives and sealants         Owned (Portion
                                                                                                      leased to HPPI)
Optoelectronics Segment
-----------------------
Tampa, Florida                            77,000      Manufacture of epitaxial wafers and
                                                        package-ready die                           Leased
</TABLE>


All of the properties owned by the High Performance Plastics Segment are subject
to the liens of mortgages  securing HPPI's credit  agreement with Fleet National
Bank. See "Note 10 to Consolidated Financial Statements."

                  In  conjunction  with  plant  consolidations  at the  Polycast
         division,  see "Note 2 to Consolidated  Financial  Statements,"  and in
         order to address concerns of the Federal Trade Commission, see "Item 3.
         Legal Proceedings",  the Company plans to sell the Stirling, New Jersey
         facility which is owned by the Company and leased to HPPI.

Item 3. Legal Proceedings

                  By letter dated January 30, 1998, the Denver  Regional  Office
         of the U.S. Federal Trade Commission  ("FTC") notified the Company that
         it  was  conducting  a  non-public  investigation  into  the  Company's
         acquisition of the Townsend Plastics Division of Townsend Industries in
         September  1997.  The  purpose of the  investigation  was to  determine
         whether  the  transaction  violated  Section 7 of the  Clayton  Act, 15
         U.S.C.  Section 18, Section 5 of the Federal Trade  Commission  Act, 15
         U.S.C.  Section 45, or any other law  enforced by the FTC.  The Company
         has been cooperating with the FTC in its investigation. The Company has
         been in  discussions  with  the  staff of the FTC  seeking  to meet the
         concerns of both the Company  and the FTC.  Management  does not expect
         the cost of compliance with the FTC requests to have a material adverse
         effect  upon  the  Company's  results  of  operations,  cash  flows  or
         financial  position.  The Company is currently  seeking to sell certain
         assets to another entity that could compete with  Townsend/Glasflex  in
         order   to   increase    competition   in   the   markets   served   by
         Townsend/Glasflex.

                  The Company is involved in certain proceedings in the ordinary
         course of its business  which,  if determined  adversely to the Company
         would, in the opinion of management, not have a material adverse effect
         on the Company or its operations.

                  In connection with its reorganization, the Company entered
         into a  number  of  settlement agreements,  including  certain
         agreements  relating to  environmental  matters.  See "Item 1.
         Business - History of the Company - Predecessor Companies."

Item 4. Submission of Matters to a Vote of Security Holders

                  No matter was  submitted  during the fourth  quarter of Fiscal
         1999 to a vote of security holders, through the solicitation of proxies
         or otherwise.

Part II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

                  Prior to the  effective  date of the  Plan of  Reorganization,
         none of the  Company's  common  stock,  par value  $.01 per share  (the
         "Common  Stock"),  was  issued,  and  consequently  there was no public
         market for the Common  Stock.  The Common Stock was admitted to trading
         on the NASDAQ National  Market System  ("NASDAQ") on September 28, 1992
         and trades under the symbol "UTCI." At the close of trading on November
         30, 1999, the price per share of Common Stock was $16.50.

                  As of November 30, 1999, there were 1,048 holders of record of
         shares of Common Stock.

                  The  following  table sets forth the high and low sales  price
         per share of the  Company's  Common Stock as reported by NASDAQ for the
         indicated dates:
<TABLE>
<CAPTION>

                                    -----------------------------           -----------------------------
                                          Fiscal Year Ended                        Fiscal Year Ended
                                         September 26, 1999                       September 27, 1998
                                    -----------------------------           -----------------------------

                Quarter               High                 Low                 High                 Low
                --------------      ---------          ----------            ---------       -------------
                <S>                 <C>                <C>                   <C>                 <C>
                --------------      ---------          ----------            ---------          ----------
                First               $  10.750          $    9.000            $   6.625           $   3.938
                --------------      ---------          ----------            ---------           ---------
                Second              $  10.125          $    7.938            $   9.000           $   5.313
                --------------      ---------          ----------             --------            --------
                Third               $   9.938          $    7.250            $  10.250           $   7.750
                --------------       --------          ----------            ---------            --------
                Fourth              $  12.625          $    9.500            $  10.875           $   9.000
                --------------      ---------          ----------            ---------           ---------
</TABLE>


                  The holders of record of shares of Common  Stock are  entitled
         to receive  dividends when and as declared by the Board of Directors of
         the Company,  provided that the Company has funds legally available for
         the  payment  of  such  dividends  and is not  otherwise  contractually
         restricted  from making payment  thereof.  The Company has not paid any
         cash dividends on the common stock in the last three fiscal years.  The
         Company's  ability to pay cash dividends on Common Stock was previously
         restricted  by the indenture in  connection  with the Company's  Senior
         Secured Notes. See "Note 10 to Consolidated Financial Statements."



<PAGE>


Item 6. Selected Financial Data

                  The following  historical  financial  data as of September 26,
         1999 and  September  27,  1998 and for each of the  three  years in the
         period ended  September  26, 1999 have been  derived from  consolidated
         financial  statements  of the Company  audited by Deloitte & Touche LLP
         and  contained  elsewhere in this Form 10-K.  The  selected  historical
         financial data presented below as of September 28, 1997,  September 29,
         1996 and October 1, 1995 and for the fiscal years ended  September  26,
         1996 and  October  1, 1995 have been  derived  from  audited  financial
         statements of the Company.  All of the  financial  data set forth below
         should  be  read  in  conjunction  with  the   Consolidated   Financial
         Statements and related notes and other financial  information contained
         in this Form 10-K.
<TABLE>
<CAPTION>

                                                                        SELECTED FINANCIAL DATA
                                          ----------------- ---------------- ----------------- ---------------- --------------
                                           September 26,     September 27,    September 28,     September 29,    October 1,
                                                1999             1998              1997             1996            1995
                                          ----------------- ---------------- ----------------- ---------------- --------------
                                                            (in thousands, except share and per share data)
Operating Data:
<S>                                         <C>               <C>              <C>               <C>             <C>
Net Sales                                   $   201,433       $   220,616      $   208,524       $   209,348     $  214,951
Depreciation and other amortization1              9,157             8,720            8,304             9,848          9,521
Income (loss) before interest, income
  taxes, minority interest and extra-
  ordinary item                                  12,836            22,817           10,594           (12,749)         9,549
Interest expense - net                           (9,352)           (9,382)          (9,384)           (9,773)       (10,029)

Income tax (expense) benefit                       (155)           (5,607)            (831)            8,121            189
Income (loss) before minority interest
  and extraordinary item                          3,329             8,027              379           (14,401)          (291)
Minority interest                                 2,191               199                -                 -              -
Extraordinary (loss) gain                             -            (5,637)               -                 -            363
Net income (loss)                           $     5,520       $     2,390      $       379       $   (14,401)    $       72
Income (loss) per common share -
  basic:2
  Income (loss) before extraordinary
    item                                    $      0.45       $      0.61      $      0.01       $     (1.13)    $    (0.06)
  Extraordinary (loss) gain                           -             (0.43)               -                 -           0.03
                                            -----------       -----------      -----------       -----------     ----------
  Net income (loss) per share               $      0.45       $      0.18      $      0.01       $     (1.13)    $    (0.03)
                                            ===========       ===========      ===========       ===========     ==========
Average number of shares used in
computation3                                 12,157,996        13,231,542       13,316,965        13,167,466      13,014,910
                                            ===========        ==========       ==========        ==========      ==========
Income (loss) per common share -
  assuming dilution:2
  Income (loss) before extraordinary
    item                                    $      0.42       $      0.55      $      0.01       $     (1.13)    $    (0.06)
  Extraordinary (loss) gain                           -             (0.39)               -                 -           0.03
                                            -----------       -----------      -----------       -----------     ----------
  Net income (loss) per share               $      0.42       $      0.16      $      0.01       $     (1.13)    $    (0.03)
                                            ===========       ===========      ===========       ===========     ==========
Average number of shares used in
computation                                  13,286,334       14,631,068        13,423,554        13,167,466     13,014,910
                                            ===========       ==========       ===========       ===========     ==========
Balance Sheet Data:
Cash and cash equivalents                   $     4,182       $     5,585      $       244       $     2,023     $      291
Working capital                                  20,294            36,146           33,358            29,148         31,292
Total assets                                    213,201           186,351          181,491           170,786        180,483
Long-term debt (including current
  portion)                                      123,008           105,658           89,647            72,775         76,763
Stockholders' equity                             31,133            32,311           40,032            43,499         57,669



         (1) Excludes  amortization of reorganization value in excess of amounts
         allocable to  identifiable  assets of $377,000,  $754,000,  $765,00 and
         $769,000 for the fiscal years ended  September 27, 1998,  September 28,
         1997, September 29, 1996 and October 1, 1995, respectively.

         (2) Includes effect of preferred stock dividends of $220,000,  $420,000
         and $420,000  declared for the Fiscal years ended  September  28, 1997,
         September 29, 1996 and October 1, 1995, respectively.

         (3) See Exhibit 11.1,  "Statement Regarding Computation of Earnings Per
         Share."
</TABLE>


<PAGE>


Item 7.  Management's  Discussion  and Analysis of Financial  Condition  and
         Results of Operations

                  The  following   discussion  and  analysis  by  the  Company's
         management  should  be read  in  conjunction  with  "Item  6.  Selected
         Financial  Data" and "Item 8.  Consolidated  Financial  Statements  and
         Supplementary Data" appearing elsewhere in this Form 10-K.

         Results Of Operations

                  Comparison of Fiscal 1999 with Fiscal 1998

                  Net Sales. The Company's net sales decreased  approximately 9%
         in Fiscal 1999 to $201.4  million  from $220.6  million in Fiscal 1998.
         The decrease is primarily  attributable  to the sale of the  automotive
         operations of the Coated Fabrics Segment in Fiscal 1998 and the gradual
         phase-out of those  operations.  Excluding  automotive  operations from
         both periods, sales increased  approximately 5% in Fiscal 1999 compared
         to Fiscal 1998.

                  Net sales in the High Performance  Plastics Segment  increased
         in Fiscal  1999 by  approximately  1% to  $130.2  million  from  $128.6
         million  in  Fiscal   1998.   Declines   in  unit  volume  of  Royalite
         thermoplastic products and Polycast acrylic sheet were more than offset
         by  incremental   sales   resulting  from  the  acquisition  of  ViPlex
         Corporation in the third quarter of Fiscal 1998 and the  acquisition of
         Happel Marine, Inc. in the third quarter of Fiscal 1999.

                  The Coated Fabrics Segment's net sales decreased approximately
         38% in Fiscal 1999 to $42.3  million from $67.9 million in Fiscal 1998.
         The decrease resulted  primarily from a decline in automotive sales due
         to the gradual  phase-out of its  automotive  operations.  See "Item 1.
         Business - Corporate  Developments  - Completion of the  Disposition of
         the Automotive Operations." Automotive sales approximated $13.1 million
         during  Fiscal 1999 compared to  approximately  $40.4 million in Fiscal
         1998.   Excluding   automotive  sales  from  both  periods,   sales  of
         Naugahyde(R) vinyl coated fabrics increased  approximately 6% in Fiscal
         1999 as  compared  to Fiscal  1998 as a result of an  increase  in unit
         volume and selling prices.

                  Net sales in the  Specialty  Adhesives  Segment  increased  in
         Fiscal 1999 by approximately 18% to $28.4 million from $24.1 million in
         Fiscal 1998. This increase in sales is primarily  attributable a strong
         demand for roofing  adhesives  and  sealants and  increased  sales as a
         result of a tolling agreement with a major adhesives company.

                  Net sales in the Optoelectronics  Segment were $485,000 during
         Fiscal 1999. The Segment is in the developmental  stage.  Inventory was
         provided to the Segment  under a supply  agreement  with the  Segment's
         joint  venture  partner.  The Tampa,  Florida  production  facility  is
         expected to begin production for commercial  applications in the second
         quarter of Fiscal 2000.  The Segment did not have sales  during  Fiscal
         1998.

                  Income Before Interest,  Income Taxes,  Minority  Interest and
         Extraordinary  Item.  In Fiscal  1999,  the Company  had income  before
         interest,  income taxes,  minority interest and  extraordinary  item of
         $12.8  million as compared to income  before  interest,  income  taxes,
         minority  interest and  extraordinary  item of $22.8 million for Fiscal
         1998.  The decrease is primarily  due to a loss of revenues  associated
         with the gradual  phase-out of the automotive  operations of the Coated
         Fabrics Segment,  temporary production  inefficiencies as a result of a
         major plant consolidation at the High Performance  Plastics Segment and
         start-up costs for the Optoelectronics Segment.

                  Income before interest,  income taxes,  minority  interest and
         extraordinary item for the High Performance  Plastics Segment decreased
         in Fiscal 1999 by  approximately 4% to $15.5 million from $16.1 million
         in  Fiscal  1998.   The   decrease  is  due  to  temporary   production
         inefficiencies  as a  result  of a  major  plant  consolidation  at the
         Polycast  acrylic  division  as well as reduced  sales  volume for both
         Royalite thermoplastic products and Polycast acrylic products.

                  The Coated Fabrics  Segment's income before  interest,  income
         taxes,  minority  interest  and  extraordinary  item in Fiscal 1999 was
         approximately  $4.2 million compared to income before interest,  income
         taxes,  minority  interest  and  extraordinary  item of $8.9 million in
         Fiscal 1998.  The decrease of $4.7 million was  principally  due to the
         loss  of  revenues  from  the  gradual   phase-out  of  its  automotive
         operations, as well as certain incremental costs related to the closure
         of the Port Clinton, Ohio facility used to produce automotive products.

                  Income before interest,  income taxes,  minority  interest and
         extraordinary  item  for  the  Specialty  Adhesives  Segment  increased
         approximately  42% to $2.7  million in Fiscal 1999 from $1.9 million in
         Fiscal 1998.  The  increase is  primarily a result of  increased  sales
         volume.

                  Loss before  interest,  income  taxes,  minority  interest and
         extraordinary item for the Optoelectronics  Segment was $5.1 million in
         Fiscal 1999 compared to a loss of $398,000 in Fiscal 1998.  The loss is
         attributable  to  start-up  expenses  incurred  by the  Optoelectronics
         Segment.

                  Amortization  of  reorganization  value in excess  of  amounts
         allocable to  identifiable  assets in Fiscal 1999 was zero  compared to
         $377,000 in Fiscal 1998.  The decrease  resulted  from the write-off of
         the remaining  reorganization  value in excess of amounts  allocable to
         identifiable  assets in the third quarter of Fiscal 1998. The write-off
         was in  conjunction  with the  reduction of the deferred tax  valuation
         allowance relating to the acquired tax loss carryforward benefits.

                  Approximately $4.5 million of miscellaneous  expense in Fiscal
         1999  was  not  allocated  to any  segment  of the  Company's  business
         compared to $3.3 million in Fiscal 1998.

                  Interest  Expense. Interest expense in Fiscal 1999 and Fiscal
         1998  approximated  $9.4 million.  Overall,  the effect of the increase
         in debt was offset by a decrease in overall  interest  rates obtained
         through the Fiscal 1998 refinancing. See "Note 10 to Consolidated
         Financial Statements."

                  Income  Tax  Expense.  Income tax  expense in Fiscal  1999 was
         approximately  $155,000  compared to $5.6 million in Fiscal  1998.  The
         provisions  for income  tax  benefit  were  calculated  by the  Company
         through  use of the  effective  income tax rates  based upon its actual
         income.  The Fiscal 1999 tax expense  was  reduced  approximately  $2.3
         million due to a tax benefit recognized through the carryback effect of
         a Fiscal 1999 capital loss.

                  Extraordinary   Loss  on  the   Extinguishment  of  Debt.  The
         extraordinary loss on the extinguishment of debt during Fiscal 1998 was
         $5.6  million.  This amount  represents  the loss  recognized  when the
         Company early retired the remaining  $72.3 million of its 11.75% Senior
         Secured Notes,  including a call premium payment of 4.41% and write-off
         of applicable debt issuance cost and unamortized debt discount,  net of
         income  tax  benefit of  approximately  $2.8  million.  See "Note 10 to
         Consolidated Financial Statements."

                  Comparison of Fiscal 1998 with Fiscal 1997

                  Net Sales.  The Company's net sales increased  approximately
          6% in Fiscal 1998 to $220.6 million from $208.5 million in Fiscal
          1997.

                  Net sales in the High Performance  Plastics Segment  increased
         in Fiscal  1998 by  approximately  8% to  $128.6  million  from  $118.8
         million in Fiscal  1997.  The  increase  is due to the net effect of an
         increase  in unit  volume at Royalite  which was  slightly  offset by a
         small decline in overall  average unit selling prices combined with the
         net effect of a slight  decline in unit  volume at  Polycast  which was
         more than offset by an increase in average  unit  selling  prices.  The
         High Performance  Plastics Segment also benefited from the acquisitions
         of the  Lucite(R)  S-A-R  business  and  Townsend  Plastics  which were
         acquired  during the fourth quarter of Fiscal 1997, and the acquisition
         of ViPlex Corporation, which was acquired on May 22, 1998.

                  The Coated Fabrics Segment's net sales decreased approximately
         1% in Fiscal 1998 to $67.9  million from $68.8  million in Fiscal 1997.
         The decrease resulted  primarily from a decline in automotive sales due
         to the gradual phase-out of its automotive operations.  The decline was
         partially  offset by an  increase in selling  prices for the  Segment's
         Naugahyde(R) vinyl coated fabrics.

                  Net sales in the  Specialty  Adhesives  Segment  increased  in
         Fiscal 1998 by approximately 15% to $24.1 million from $20.9 million in
         Fiscal 1997.  This increase in sales is primarily  attributable  to the
         acquisition of C. Gunther Company on March 31, 1997, increased sales of
         Hydra Fast-En(R) products, increased sales of Silaprene(R) primarily in
         the truck body and trailer markets and increased sales as a result of a
         tolling agreement with a major adhesives company.

                  Income Before Interest,  Income Taxes,  Minority  Interest and
         Extraordinary  Item.  In Fiscal  1998,  the Company  had income  before
         interest,  income taxes,  minority interest and  extraordinary  item of
         $22.8  million as compared to income  before  interest,  income  taxes,
         minority  interest and  extraordinary  item of $10.6 million for Fiscal
         1997. All of the Company's major business segments recorded significant
         increases in Fiscal 1998.

                  Income before interest,  income taxes,  minority  interest and
         extraordinary item for the High Performance  Plastics Segment increased
         in Fiscal 1998 by approximately 54% to $16.1 million from $10.5 million
         in Fiscal 1997. The increase was a result of a more favorable sales mix
         leading to higher margins for both the Royalite and Polycast divisions,
         incremental  earnings from prior year and current year acquisitions and
         a change  in  methodology  for the  allocation  of  corporate  overhead
         expenses.

                  The Coated Fabrics  Segment's income before  interest,  income
         taxes,  minority  interest  and  extraordinary  item in Fiscal 1998 was
         approximately  $8.9 million compared to income before interest,  income
         taxes,  minority  interest  and  extraordinary  item of $2.1 million in
         Fiscal 1997.  The increase of $6.8 million was  principally  due to the
         net result of lower  manufacturing  costs for the Segment's  automotive
         operations as a result of the gradual phase-out, the reversal of rebate
         accruals  applicable to such  business and a change in the  methodology
         for the  allocation of corporate  overhead  expenses.  Also,  increased
         production  costs  were  incurred  in Fiscal  1997 as a result of a raw
         materials  supplier's  decision to exit its business.  As a result, the
         Segment  incurred  additional  costs  in  Fiscal  1997 to  qualify  its
         products  using  comparable  raw materials  available from other supply
         sources.

                  Income before interest,  income taxes,  minority  interest and
         extraordinary item for the Specialty Adhesives Segment was $1.9 million
         in Fiscal 1998 as compared to a loss  before  interest,  income  taxes,
         minority  interest and  extraordinary  item of $346,000 in Fiscal 1997.
         The  income  before  interest,  income  taxes,  minority  interest  and
         extraordinary  item in Fiscal 1998 was due to  significantly  increased
         sales,  the  incremental  earnings from the  acquisition  of C. Gunther
         Company,  operating  efficiencies  as a result of the relocation to the
         new South Bend facility and a change in methodology  for the allocation
         of corporate overhead expenses.

                  Loss before  interest,  income  taxes,  minority  interest and
         extraordinary  item for the  Optoelectronics  Segment  was  $398,000 in
         Fiscal 1998. The loss is attributable to start-up  expenses incurred by
         the Optoelectronics  Segment. Planned principal operations have not yet
         commenced. The Segment was not in existence during Fiscal 1997.

                  Amortization  of  reorganization  value in excess  of  amounts
         allocable to  identifiable  assets in Fiscal 1998 decreased to $377,000
         from $754,000 in Fiscal 1997. The decrease  resulted from the write-off
         of the remaining reorganization value in excess of amounts allocable to
         identifiable  assets in the third quarter of Fiscal 1998. The write-off
         was in  conjunction  with the  reduction of the deferred tax  valuation
         allowance relating to the acquired tax loss carryforward benefits.

                  Approximately $3.3 million of miscellaneous  expense in Fiscal
         1998  was  not  allocated  to any  segment  of the  Company's  business
         compared  to $958,000 in Fiscal  1997.  During  Fiscal 1998 the Company
         changed  its  methodology  for the  allocation  of  corporate  overhead
         expenses from an allocation  of 100% of certain  corporate  costs to an
         allocation  of costs  based  upon 3.0% - 3.5% of segment  sales.  Prior
         fiscal year amounts were not restated.

                  Interest  Expense.  Interest expense in Fiscal 1998 and
         Fiscal 1997  approximated  $9.4 million.  Overall,  the effect of the
         increase in debt was offset by a decrease in overall  interest  rates
         obtained through the Fiscal 1998 refinancing. See "Note 10 to
         Consolidated Financial Statements."

                  Income  Tax  Benefit.  Income tax  expense in Fiscal  1998 was
         approximately  $5.6  million as  compared  to an expense of $831,000 in
         Fiscal 1997. The  provisions for income tax benefit were  calculated by
         the Company  through use of the  effective  income tax rates based upon
         its actual income.

                  Extraordinary   Loss  on  the   Extinguishment  of  Debt.  The
         extraordinary loss on the extinguishment of debt during Fiscal 1998 was
         $5.6  million.  This amount  represents  the loss  recognized  when the
         Company early retired the remaining  $72.3 million of its 11.75% Senior
         Secured Notes,  including a call premium payment of 4.41% and write-off
         of applicable debt issuance cost and unamortized debt discount,  net of
         income  tax  benefit of  approximately  $2.8  million.  See "Note 10 to
         Consolidated Financial Statements."

                  Liquidity and Capital Resources

                  For   Fiscal   1999,   the   Company's   operations   provided
         approximately  $20.4 million of cash as compared to approximately $12.4
         million of cash  provided  during  Fiscal  1998.  The  increase in cash
         provided by operating activities is primarily due to an increase in net
         income and trade accounts payable.

                  Net cash used in investing activities of the Company in Fiscal
         1999 was approximately  $13.9 million as compared to approximately $3.8
         million used during Fiscal 1998.  The primary use of cash during Fiscal
         1999 and Fiscal 1998 was to purchase property, plant and equipment. The
         Fiscal 1999 capital spending is primarily  related to the modernization
         of the  Polycast  acrylics'  facility  in  Stamford,  Connecticut.  The
         Company also spent approximately $20 million on the new Optoelectronics
         Segment  facility  in Tampa,  Florida;  however,  the  majority  of the
         capital  expenditures  for the Tampa  facility  were  financed  through
         capitalized leases.  Fiscal 1999 investing activities also included the
         purchase of preferred stock of Emcore Corporation  (partially offset by
         a sale of a portion of the  preferred  stock)  and the  receipt of cash
         related to the sale of the automotive  operations of the Coated Fabrics
         Segment. The Company also used $732,000 in Fiscal 1999 and $1.8 million
         in Fiscal 1998 for business acquisitions.

                  Net cash used in financing  activities was $7.8 million during
         Fiscal 1999 as compared to $3.3 million used during  Fiscal 1998.  Cash
         used in  financing  activities  for Fiscal 1999 was  primarily to repay
         long-term  debt as well as to  repurchase  Company  stock for treasury.
         Cash was  provided  in Fiscal 1999  through  capital  contributions  by
         minority interests in consolidated subsidiaries.

                  The Company at September  26,  1999,  had  approximately  $4.2
         million in cash and cash equivalents as compared to approximately  $5.6
         million at September  27, 1998.  Working  capital at September 26, 1999
         was approximately $20.3 million compared to approximately $36.1 million
         at  September  27,  1998.  At  September  26,  1999,  the  Company  had
         borrowings  of  approximately   $7.6  million  under  its  $20  million
         revolving  credit  agreement  with Fleet  National  Bank  (subject to a
         borrowing base limitation of approximately $20 million at September 26,
         1999) and $6.9 under its $10.0 million  revolving credit agreement with
         CIT  (subject  to a  borrowing  base  limitation  of  $8.2  million  at
         September  26,   1999).   See  "Note  10  to   Consolidated   Financial
         Statements."

                  During  Fiscal 2000,  the Company plans to spend an additional
         $10.0  -  $15.0  million  related  to  capital   expenditures  for  the
         Optoelectronics   Segment  and  $1.5  -  $2.0  million  to  finish  the
         modernization  of its Stamford,  Connecticut  facility.  The Company is
         also  required  to  fund  a  capital   contribution  of   approximately
         $5,700,000  as cash is required  by the  Optoelectronics  Segment.  The
         Company  plans to fund the  expenditures  with cash from  operations as
         well as its ability to borrow under its revolving credit agreements.

                  The Company  believes  that cash from its  operations  and its
         ability to borrow under the revolving credit facilities mentioned above
         provide it  sufficient  liquidity  to  finance  its  existing  level of
         operations and meet its debt service obligations. However, there can be
         no  assurance  that the  Company's  operations  together  with  amounts
         available  under its revolving  credit  facilities  will continue to be
         sufficient  to finance its existing  level of  operations  and meet its
         debt  service  obligations.  The  Company's  ability  to meet  its debt
         service and other obligations depends on its future performance,  which
         in turn, is subject to general  economic  conditions  and to financial,
         business and other  factors,  including  factors  beyond the  Company's
         control. If the Company is unable to generate sufficient cash flow from
         operations,  it may be  required to  refinance  all or a portion of its
         existing debt or obtain additional financing. There can be no assurance
         that the Company will be able to obtain such  refinancing or additional
         financing.

         Effects of Inflation

                  The  markets  in  which  the  Company   sells   products   are
         competitive.  In  particular,  the  Company has  encountered  effective
         resistance to price  increases in connection with its sales of acrylics
         to the aerospace  industry.  Thus, in an  inflationary  environment the
         Company might not in all instances be able to pass through to consumers
         general price increases, in which event the Company's operations may be
         materially  impacted if such conditions were to occur.  The Company has
         not in the past been adversely impacted by general price inflation.

         Year 2000

                  Many software applications and operational programs written in
         the past were not designed to recognize calendar dates beginning in the
         Year 2000.  The  failure of such  applications  or systems to  properly
         recognize  the  dates  beginning  in the  Year  2000  could  result  in
         miscalculations  or system  failures  which could  result in an adverse
         impact on the Company's operations.

                  The Company has instituted a Year 2000 task force that reports
         to the Audit Committee of the Board of Directors.  The Company has also
         initiated a  comprehensive  project,  overseen  by the task  force,  to
         prepare   its    computer    systems,    communication    systems   and
         manufacturing/testing   equipment  for  the  Year  2000.   The  project
         primarily  includes  three  phases  which are:  1)  identification  and
         assessment  of  all  software,   hardware  and  equipment   that  could
         potentially  be  affected by the Year 2000  issue,  2) remedial  action
         necessary to bring such systems into compliance and 3) further testing,
         if  necessary.  The Company has  completed  all phases of its Year 2000
         project   related   to   facilities,    manufacturing   processes   and
         communications. Central system modifications have been largely complete
         since  June of 1999 with  final  completion  of all Year 2000  remedies
         scheduled by December 31, 1999. The Company has primarily used internal
         resources in its Year 2000  project thus far and has incurred  costs of
         less than $800,000.

                  The Company has also contacted  critical suppliers of products
         and services and customers to determine the extent to which the Company
         might be vulnerable to such parties'  failure to resolve their own Year
         2000 issues. The Company does not have a concentration of dependence on
         these  parties.  The  effect,  if  any,  on the  Company's  results  of
         operations  from the  failure of such  parties to be Year 2000 ready is
         not reasonably estimable.

                  The Company has formulated  contingency  plans with respect to
         its reasonably  likely worst case scenario which is the  unavailability
         of critical  raw  materials.  The  contingency  plans for  critical raw
         materials include alternate  materials or sources and advance inventory
         purchases of certain materials.

         Forward Looking Information

                  The information  provided  herein may contain  forward-looking
         statements   relating  to  future   events  that   involve   risks  and
         uncertainties.  Among the  important  factors  which could cause actual
         results  to  differ  materially  from  those  in  the   forward-looking
         statements  are  cancellations,   rescheduling  or  delays  in  product
         shipments;   manufacturing  capacity  constraints;  lengthy  sales  and
         qualification  cycles;  difficulties  in the  production  process;  the
         effectiveness of the Company's capital expenditure programs; the future
         financial  performance  of  the  Company;   delays  in  developing  and
         commercializing new products; increased competition; the variability of
         future operating  results of the Company,  changes in the industries in
         which the Company  competes or plans to  compete,  especially  the high
         performance   plastics  and  high  brightness,   light  emitting  diode
         industries,   including  overall  growth  of  the  industries  and  the
         continued acceptance of the Company's products.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

                  The  Company is exposed to  various  market  risks,  including
         changes in interest  rates.  The Company's  earnings and cash flows are
         subject  to  fluctuations  due to  changes  in  interest  rates  on its
         floating  rate  long-term  debt  and  revolving  credit  advances.  The
         Company's  risk  management  policy  includes  the  use  of  derivative
         financial instruments (interest rate swaps) to manage its interest rate
         exposure.  The counter  parties are major financial  institutions.  The
         Company does not enter into derivatives or other financial  instruments
         for trading or speculative purposes.

                  The  Company's  interest  rate swaps  involve the  exchange of
         fixed and  variable  interest  rate  payments  without  exchanging  the
         notional  principal amount.  Payments or receipts on the agreements are
         recorded as adjustments to interest expense. At September 26, 1999, the
         Company had  outstanding  swap  agreements,  maturing at various  dates
         through 2003, with an aggregate notional amount of $80.0 million. Under
         these  agreements  the  Company  receives  a  floating  rate  based  on
         USD-LIBOR-BBA and pays a fixed weighted average interest rate of 5.80%.
         These swaps  effectively  change the  Company's  payment of interest on
         $80.0 million of its $99.5 million  variable rate debt at September 26,
         1999 to fixed rate debt.

                  The  fair  value  of  these  interest  rate  swap   agreements
         represents  the  estimated  receipts or payments  that would be made to
         terminate the agreements. At September 26, 1999, the Company would have
         received approximately $195,000 to terminate the agreements. A decrease
         of 100 basis points in the yield curve would result in a payment by the
         Company of approximately  $1.3 million to terminate the agreement.  The
         fair  value is based on dealer  quotes,  considering  current  interest
         rates.

                  At September  26,  1999,  approximately  $19.5  million of the
         Company's  floating rate long-term debt and revolving  credit  advances
         was not covered  under an interest  swap  agreement.  For floating rate
         debt,  interest  changes  generally do not affect the fair market value
         but do impact future earnings and cash flows assuming other factors are
         held constant.  Based upon this balance, a change of one percent in the
         interest rate would cause a change in interest expense of approximately
         $195,000 on an annual basis.

Item 8.  Consolidated Financial Statements and Supplementary Data

         See Index to Consolidated Financial Statements on Page F-1.

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

                  Information  with  respect  to  the  directors  and  executive
         officers  of the Company is  incorporated  herein by  reference  to the
         Company's  definitive proxy statement pursuant to Regulation 14A, which
         statement  will be filed not later  than 120 days  after the end of the
         fiscal year covered by this Report.

Item 11. Executive Compensation

                  Information   with  respect  to  executive   compensation   is
         incorporated  herein by reference  to the  Company's  definitive  proxy
         statement pursuant to Regulation 14A, which statement will be filed not
         later than 120 days after the end of the  fiscal  year  covered by this
         Report.

Item 12. Security Ownership of Certain Beneficial Owners and Management

                  Information   with  respect  to  the  security   ownership  of
         directors and executive  officers and  substantial  stockholders of the
         Company is incorporated herein by reference to the Company's definitive
         proxy  statement  pursuant to Regulation  14A, which  statement will be
         filed not later than 120 days after the end of the fiscal year  covered
         by this Report.

Item 13. Certain Relationships and Related Transactions

                  Information   with  respect  to  certain   relationships   and
         transactions  between  directors,  executive  officers and  substantial
         stockholders of the Company with the Company is incorporated  herein by
         reference  to the  Company's  definitive  proxy  statement  pursuant to
         Regulation  14A, which  statement will be filed not later than 120 days
         after the end of the fiscal year covered by this Report.

Part IV

Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K

              (a)   Consolidated  Financial  Statements as of September 26, 1999
                    and September 27, 1998 and for the Years Ended September 26,
                    1999, September 27, 1998 and September 28, 1997:

                    Independent Auditors' Report                             F-2

                    Consolidated Balance Sheets as of September 26, 1999
                    and September 27, 1998                                   F-3

                    Consolidated  Statements of Operations for the Years
                    Ended September  26, 1999,  September  27, 1998 and
                    September 28, 1997                                       F-5

                    Consolidated  Statements  of  Comprehensive  Income
                    for the Years  Ended  September  26,  1999,  September
                    27, 1998 and September 28, 1997                          F-6

                    Consolidated Statements of Changes in Stockholders'
                    Equity  for the Years Ended September 26, 1999,
                    September 27, 1998 and September 28, 1997                F-7

                    Consolidated  Statements  of Cash Flows for the Years
                    Ended September  26, 1999,  September  27, 1998 and
                    September 28, 1997                                       F-8

                    Notes to Consolidated Financial Statements              F-10

              (b)   Consolidated Financial Statement Schedule:

                    Independent Auditors' Report                             S-1

                    Schedule II - Valuation and Qualifying Accounts          S-2

              (c)  Exhibits:

                     2.1     Certificate of Ownership and Merger,  dated June 7,
                             1993, of Polycast Technology Corporation,  Uniroyal
                             Engineered  Products,  Inc., Uniroyal Adhesives and
                             Sealants, Inc. and Ensolite, Inc. with the Company.
                             (2)

                     3.1     Amended and Restated  Certificate of  Incorporation
                             of the Company as  corrected  by a  Certificate  of
                             Correction of the Amended and Restated  Certificate
                             of Incorporation of the Company.
                             (1)

                     3.2     By-Laws of the Company, as amended to March 28,
                             1997.  (9)

                     4.2     Warrant  Agreement,  dated  as  of  June  1,  1993,
                             between the  Company  and The Bank of New York,  as
                             warrant agent. (2)

                    10.7     Amended  and  Restated  Employment  Agreement,
                             dated as of April  25,  1995,  between Howard R.
                             Curd and the Company. (3)

                    10.8     Amended  and  Restated  Employment  Agreement,
                             dated as of April  25,  1995,  between Oliver J.
                             Janney and  the Company. (3)

                    10.9     Amended  and  Restated  Employment  Agreement,
                             dated as of April  25,  1995,  between Robert L.
                             Soran and the  Company. (3)

                    10.10    Amended  and  Restated  Employment  Agreement,
                             dated as of April  25,  1995,  between George J.
                             Zulanas, Jr.  and the Company. (3)

                    10.16    Amended and Restated Uniroyal Technology
                             Corporation 1992 Stock Option Plan. (12)

                    10.28    Amended and Restated Uniroyal  Technology
                             Corporation 1992 Non-Qualified Stock Option
                             Plan. (12)

                    10.34    Uniroyal Technology  Corporation Deferred
                             Compensation Plan Effective as of August 1,
                             1995. (4)

                    10.35    Split-Dollar  Insurance  Agreement dated as of
                             August 15, 1995 by and between Uniroyal Technology
                             Corporation and Howard R. Curd. (5)

                    10.39    Financing  Agreement  dated as of June 5, 1996 by
                             and between  The CIT  Group/Business Credit, Inc.
                             and  Uniroyal Technology Corporation. (6)

                    10.40    Amended and Restated Uniroyal Technology
                             Corporation 1994 Stock Option Plan. (12)

                    10.41    Amended and Restated Uniroyal Technology
                             Corporation 1995 Non-Qualified Stock Option
                             Plan. (12)

                    10.44    Shareholder Rights Agreement,  dated as of December
                             18, 1996, between Uniroyal  Technology  Corporation
                             and The Bank of New York, as rights agent. (7)

                    10.45    First  Amendment to  Financing  Agreement  dated
                             September 5, 1997 by and between The CIT
                             Group/Business Credit, Inc. and Uniroyal
                             Technology Corporation. (10)

                    10.46    Credit Agreement between High Performance Plastics,
                             Inc., as Borrower, Uniroyal Technology Corporation,
                             Uniroyal HPP Holdings,  Inc., the banks,  financial
                             institutions and other institutional  lenders named
                             therein,  Fleet  National Bank (as Initial  Issuing
                             Bank, Swing Line Bank and Administrative Agent) and
                             DLJ Capital Funding,  Inc., as Document Agent dated
                             April 14, 1998. (11)

                    10.47    Amendment and Consent Agreement dated April 14,
                             1998 by and between the CIT  Group/Business
                             Credit,  Inc. and Uniroyal Technology
                             Corporation. (11)

                    10.48    Consent  Agreement  dated April 1, 1999 by and
                             between The CIT  Group/Business  Credit,  Inc. and
                             Uniroyal Technology Corporation. (12)

                    10.49    Assumption  Agreement dated April 1, 1999 by and
                             between The CIT  Group/Business  Credit,  Inc.,
                             Uniroyal Technology Corporation and Uniroyal
                             Engineered Products, Inc. (12)

                    10.50    Guaranty  dated  April 1, 1999  between  The CIT
                             Group/Business  Credit,  Inc.  and  Uniroyal
                             Technology Corporation. (12)

                    11.1     Statement Regarding Computation of Per Share
                             Earnings

                    21.1     Subsidiaries of Uniroyal Technology Corporation

                    23.1     Independent Auditors' Consent (12)

                    27.1     Financial Data Schedule (Filed for EDGAR only)

(1)     Incorporated  by reference to Amendment  No. 2 to the Company's
        Registration  Statement on Form 10, dated September 25, 1992.

(2)     Incorporated by reference to the Company's Form 8-K, dated June 9, 1993.

(3)     Incorporated  by reference to the  Company's  Quarterly  Report on Form
        10-Q for the  quarterly  period  ended  April 2, 1995  filed on May 12,
        1995.

(4)     Incorporated  by reference to the  Company's  Quarterly  Report on Form
        10-Q for the  quarterly  period  ended July 2, 1995 filed on August 14,
        1995.

(5)     Incorporated  by reference to the Company's Form 10-Q for the quarterly
        period ended July 2, 1995 filed August 14,  1995.  Virtually  identical
        agreements  were entered into between the Company and each of Robert L.
        Soran, George J. Zulanas, Jr., Oliver J. Janney and Martin J.
        Gutfreund.

(6)     Incorporated  by reference to the  Company's  Quarterly  Report on Form
        10-Q for the  quarterly  period  ended June 30,  1996 filed  August 13,
        1996.

(7)      Incorporated  by reference to the Company's  Registration  Statement on
         Form 8-A, dated December 20, 1996.

(8)      Incorporated  by reference to the Company's  Annual Report on Form 10-K
         for the year ended September 29, 1996 filed on December 27, 1996.

(9)      Incorporated  by reference to the  Company's  Quarterly  Report on Form
         10-Q for the quarterly period ended March 30, 1997 filed May 9, 1997.

(10)     Incorporated  by reference to the Company's  Annual  Report on Form
         10-K for the year ended  September 28, 1997 filed on December 22, 1997.

(11)     Incorporated  by reference to the  Company's  Annual  Report on Form
         8-K/A dated April 22, 1998.

(12)     Filed with this report.






              (d) Reports on Form 8-K:

                  No reports on Form 8-K were filed  during the last  quarter of
         Fiscal 1999.


<PAGE>




Item 8.  Consolidated Financial Statements and Supplementary Data.

<TABLE>
<CAPTION>
         Index to Consolidated Financial Statements

         Consolidated   Financial  Statements  as  of  September  26,  1999  and
         September  27,  1998  and for  the  Years  Ended  September  26,  1999,
         September 27, 1998 and September 28, 1997:

            <S>                                                                                   <C>
            Independent Auditors' Report                                                          F-2

            Consolidated Balance Sheets as of September 26, 1999 and September 27,1998            F-3

            Consolidated Statements  of  Operations  for the  Years  Ended September 26, 1999,
              September 27, 1998 and September 28, 1997                                           F-5

            Consolidated Statements of Comprehensive  Income for the Years Ended
              September 26, 1999, September 27, 1998 and September 28, 1997                       F-6

            Consolidated Statements of Changes in Stockholders' Equity for the Years Ended
              September 26, 1999, September 27, 1998 and September 28, 1997                       F-7

            Consolidated Statements of Cash Flows for the Years Ended September 26,1999,
              September 27, 1998 and September 28, 1997                                           F-8

            Notes to Consolidated Financial Statements                                            F-10


          Consolidated Financial Statement Schedule:

            Independent Auditors' Report                                                          S-1

            Schedule II - Valuation and Qualifying Accounts                                       S-2

            Schedules  Omitted - Certain other  schedules have been omitted
              because  they  are not  required  or  because  the  information
              required  therein has been  included  in Notes to  Consolidated
              Financial Statements.

</TABLE>
<PAGE>


INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
   Uniroyal Technology Corporation


We have  audited  the  accompanying  consolidated  balance  sheets  of  Uniroyal
Technology Corporation and subsidiaries (the "Company") as of September 26, 1999
and September 27, 1998, and the related  consolidated  statements of operations,
comprehensive income, changes in stockholders' equity and cash flows for each of
the three years in the period  ended  September  26,  1999.  These  consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of the Company as of
September 26, 1999 and September 27, 1998 and the results of its  operations and
its cash flows for each of the three  years in the period  ended  September  26,
1999, in conformity with generally accepted accounting principles.




DELOITTE & TOUCHE LLP
Certified Public Accountants

Tampa, Florida
December 20, 1999


<PAGE>
<TABLE>
<CAPTION>


                UNIROYAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)


                                     ASSETS

                                                                            September 26,      September 27,
                                                                                 1999               1998
                                                                            -------------      -------------
    Current assets:
<S>                                                                            <C>                <C>
       Cash and cash equivalents (Note 2)                                      $     4,182        $     5,585

       Trade accounts receivable (less estimated reserve for
        doubtful accounts of $238 and $246, respectively) (Notes 2 and 10)          23,069             26,320

       Inventories (Notes 2, 3 and 10)                                              38,627             38,139

       Deferred income taxes (Notes 2 and 11)                                        4,809              5,837

       Prepaid expenses and other current assets                                     3,125              1,008
                                                                               -----------         ----------
         Total current assets                                                       73,812             76,889

    Property, plant and equipment - net (Notes 2, 4 and 10)                         88,653             65,551

    Property, plant and equipment held for sale (Note 2)                             4,467              5,924

    Investment in preferred stock (Notes 2 and 5)                                    5,383                  -

    Note receivable (Note 6)                                                         5,000              5,000

    Goodwill - net (Notes 2 and 7)                                                  12,452              8,951

    Deferred income taxes - net (Notes 2 and 11)                                     9,028              7,759

    Other assets - net (Notes 2, 8 and 10)                                          14,406             16,277
                                                                               -----------        -----------
    TOTAL ASSETS                                                               $   213,201        $   186,351
                                                                               ===========        ===========
</TABLE>
<PAGE>
<TABLE>


                UNIROYAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (Continued)
                        (In thousands, except share data)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                            September 26,        September 27,
                                                                                1999                 1998
                                                                            -------------        -------------
      Current liabilities:
         <S>                                                                   <C>                <C>
         Current portion of long-term debt (Note 10)                           $    14,087        $     7,713
         Trade accounts payable                                                     23,011             15,302
         Accrued expenses:
           Compensation and benefits                                                11,662              9,743
           Interest                                                                  1,512                149
           Taxes, other than income                                                    961              1,258
           Accrued income taxes                                                          -                921
           Other                                                                     2,285              5,657
                                                                               -----------        -----------
             Total current liabilities                                              53,518             40,743

      Long-term debt, net of current portion  (Note 10)                            108,921             97,945
      Other liabilities (Note 9)                                                    15,804             15,061
                                                                               -----------        -----------
           Total liabilities                                                       178,243            153,749
                                                                               -----------        -----------
      Commitments and contingencies (Note 14)

      Minority interest (Notes 1, 2 and 16)                                          3,825                291

      Stockholders' equity (Note 12):
         Preferred stock:
           Series C - 0 shares issued and outstanding; par value
           $0.01; 450 shares authorized                                                  -                  -
         Common stock:
           14,681,419   and   14,182,956   shares   issued  or  to  be   issued,
           respectively; par value $0.01; 35,000,000 shares
           authorized                                                                  147                142
         Additional paid-in capital                                                 57,671             54,613
         Deficit                                                                    (6,112)           (11,632)
         Unrealized gain on securities held for sale - net                             100                  -
                                                                               -----------        -----------
                                                                                    51,806             43,123
         Less treasury stock at cost - 2,671,987 and 1,499,868
           shares, respectively                                                    (20,673)           (10,812)
                                                                               -----------        -----------
             Total stockholders' equity                                             31,133             32,311
                                                                               -----------        -----------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                               $   213,201        $   186,351
                                                                               ===========        ===========

                 See notes to consolidated financial statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                UNIROYAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)

                                                                                 Fiscal Years Ended
                                                                 ---------------------------------------------------
                                                                 September 26,      September 27,      September 28,
                                                                     1999               1998               1997
                                                                 -------------     -------------       -------------

<S>                                                              <C>                  <C>                <C>
  Net sales                                                      $ 201,433            $ 220,616          $ 208,524
  Costs, expenses and (other income):
     Costs of goods sold                                           147,047              160,506            161,122
     Selling and administrative                                     33,814               28,075             27,750
     Amortization of reorganization value in excess of
       amounts allocable to identifiable assets                          -                  377                754
     Depreciation and other amortization                             9,157                8,720              8,304
     Gain on sale of preferred stock                                  (898)                   -                  -
     Gain on sale of division (Note 15)                               (667)                (512)                 -
     Loss on assets to be disposed of (Notes 2 and 15)                 144                  633                  -
                                                                 ---------            ---------          ---------
  Income before interest, income taxes, minority interest
     and extraordinary item                                         12,836               22,817             10,594

  Interest expense - net                                            (9,352)              (9,382)            (9,384)
                                                                 ---------            ---------          ---------
  Income before income taxes, minority interest and
     extraordinary item                                              3,484               13,435              1,210

  Income tax expense (Notes 2 and 11)                                 (155)              (5,607)              (831)
                                                                 ---------            ---------          ---------
  Income before minority interest and extraordinary item             3,329                7,828                379

  Minority interest in net losses of consolidated joint
     venture                                                         2,191                  199                  -
                                                                 ---------            ---------          ---------
  Income before extraordinary item                                   5,520                8,027                379

  Extraordinary loss on the extinguishment of debt - net
     of income tax of $2,787 (Note 10)                                   -               (5,637)                 -
                                                                 ---------            ---------          ---------
  Net income                                                     $   5,520            $   2,390          $     379
                                                                 =========            =========          =========
  Net income per common share - basic (Notes 2 and 17)
     Income before extraordinary item                            $    0.45            $    0.61          $    0.01
     Extraordinary loss                                                  -                (0.43)                 -
                                                                 ---------            ---------          ---------
     Net income                                                  $    0.45            $    0.18          $    0.01
                                                                 =========            =========          =========
  Net income per common share - assuming dilution
   (Notes 2 and 17)
     Income before extraordinary item                            $    0.42            $    0.55          $    0.01
     Extraordinary loss                                                  -                (0.39)                 -
                                                                 ---------            ---------          ---------
     Net income                                                  $    0.42            $    0.16          $    0.01
                                                                 =========            =========          =========

                 See notes to consolidated financial statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                UNIROYAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                 (In thousands)

                                                                             Fiscal Years Ended
                                                             ------------------------------------------------------
                                                             September 26,        September 27,       September 28,
                                                                 1999                 1998                1997
                                                             -------------        -------------       -------------

     <S>                                                      <C>                  <C>                 <C>
      Net income                                              $ 5,520              $ 2,390             $   379

      Unrealized gain on securities available for sale,
         net of income taxes:

         Unrealized gain on securities available for
         sale                                                     648                    -                   -

         Less: reclassification adjustment for gains
         realized in net income                                  (548)                   -                   -
                                                              -------              -------             -------
      Net unrealized gain                                         100                    -                   -
                                                              -------              -------             -------
      Comprehensive income (Note 2)                           $ 5,620              $ 2,390             $   379
                                                              =======              =======             =======

                 See notes to consolidated financial statements.
</TABLE>
<PAGE>


<TABLE>
<CAPTION>


                UNIROYAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                 (In thousands)

                                                                                             Accumulated
                                                Preferred            Additional                 Other
                                                  Stock     Common    Paid-In                Comprehensive   Treasury  Stockholders'
                                                 Series B    Stock    Capital      Deficit      Income         Stock      Equity
                                                ---------   ------   ---------    --------   -------------   --------  ------------
<S>                                             <C>         <C>       <C>         <C>            <C>           <C>         <C>
Balance at September 29, 1996                   $ 5,250     $ 133     $52,517     $(14,401)      $     -       $      -    $ 43,499
Common stock issued for acquisitions                  -         4       1,483            -             -              -       1,487
Stock dividends paid                                  -         1           -            -             -              -           1
Redemption of Series B preferred stock           (5,250)        -           -            -             -              -      (5,250)
Amounts received pursuant to Directors'
 stock option plan                                    -         -          37            -             -              -          37
Purchases of treasury stock                           -         -           -            -             -           (121)       (121)
Net income                                            -         -           -          379             -              -         379
                                                -------     -----     -------     --------       -------       --------    --------
Balance at September 28, 1997                         -       138      54,037      (14,022)            -           (121)     40,032
Common stock issued under stock option plans          -         4       1,509            -             -           (894)        619
Common stock issued to employee benefit plan          -         -         191            -             -              -         191
Amounts received pursuant to Directors' stock
 option plan                                          -         -          73            -             -              -          73
Purchases of treasury stock                           -         -           -            -             -         (9,797)     (9,797)
Tax benefit from exercise of stock options            -         -         117            -             -              -         117
Purchases of warrants                                 -         -      (1,314)           -             -              -      (1,314)
Net income                                            -         -           -        2,390             -              -       2,390
                                                -------     -----     -------     --------       -------       --------    --------
Balance at September 27, 1998                         -       142      54,613      (11,632)            -        (10,812)     32,311
Common stock issued for acquisitions                  -         -         775            -             -            598       1,373
Common stock issued under stock option plans          -         5       1,693            -             -         (1,345)        353
Common stock issued to employee benefit plan          -         -         199            -             -              -         199
Amounts received pursuant to Directors' stock
 option plan                                          -         -         121            -             -              -         121
Purchases of treasury stock                           -         -           -            -             -         (9,114)     (9,114)
Tax benefit from exercise of stock options            -         -         562            -             -              -         562
Purchases of warrants                                 -         -        (292)           -             -              -        (292)
Net income                                            -         -           -        5,520             -              -       5,520
Comprehensive income                                  -         -           -            -           100              -         100
                                                -------     -----     -------      -------       -------       --------    --------
Balance at September 26, 1999                   $     -     $ 147     $57,671      $(6,112)      $   100       $(20,673)   $ 31,133
                                                =======     =====     =======      =======       =======       ========    ========

                 See notes to consolidated financial statements.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                UNIROYAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

                                                                                Fiscal Years Ended
                                                              -------------------------------------------------------
                                                               September 26,      September 27,      September 28,
                                                                     1999             1998                1997
                                                              --------------      -------------      ---------------
OPERATING ACTIVITIES:
<S>                                                               <C>               <C>                <C>
   Net income                                                     $  5,520          $  2,390           $    379
   Adjustments to reconcile net income to net cash provided
     by operating activities:
       Depreciation and other amortization                           9,157             8,720              8,304
       Deferred tax expense                                            247             1,908                547
       Provision for doubtful accounts                                  73                87                  -
       Amortization of debt issuance costs                             568               513                431
       Amortization of reorganization value in excess of
         amounts allocable to identifiable assets                        -               377                754
       Amortization of Senior Secured Notes discount                     -                63                114
       Gain on sale of division                                       (667)             (512)                 -
       Gain on sale of preferred stock                                (898)                -                  -
       Minority interest in net losses of consolidated
         joint venture                                              (2,191)             (199)                 -
       Loss on assets to be disposed of                                144               633                  -
       Extraordinary loss on the extinguishment of debt                  -             5,637                  -
       Other                                                           336               118                351
       Changes in assets and liabilities:
         Decrease (increase) in trade accounts receivable            3,998             2,834             (2,845)
         Increase in inventories                                       (27)           (3,110)              (398)
         (Increase) decrease in prepaid expenses and other
           assets                                                   (2,907)           (6,131)               567
         Increase (decrease) in trade accounts payable               7,441              (435)            (1,080)
         Decrease in accrued expenses                               (1,175)             (841)            (2,804)
         Increase (decrease) in other liabilities                      743               306               (884)
                                                                  --------          --------           --------
   Net cash provided by operating activities                        20,362            12,358              3,436
                                                                  --------          --------           --------
INVESTING ACTIVITIES:
   Purchases of property, plant and equipment                      (10,445)           (7,288)           (12,200)
   Purchase of preferred stock                                      (9,144)                -                  -
   Proceeds from sale of preferred stock                             4,822                 -                  -
   Proceeds from sale of division                                    1,567             5,306              4,657
   Business acquisitions, net of cash acquired
   Business acquisitions, net of cash acquired                        (732)           (1,768)            (7,986)
                                                                  --------          --------           --------
   Net cash used in investing activities                           (13,932)           (3,750)           (15,529)
                                                                  --------          --------           --------
 FINANCING ACTIVITIES:
   Repayment of term loans                                         (10,173)           (2,372)              (741)
   Proceeds from term loans                                          2,582                 -              1,500
   Net increase (decrease) in revolving loan balances                3,086            (3,827)            15,169
   Proceeds from refinancing                                             -            90,000                  -
   Repurchase of Senior Secured Notes                                    -           (72,253)              (243)
   Redemption costs for Senior Secured Notes                             -            (3,718)                 -
   Refinancing costs                                                     -            (3,545)                 -
   Minority interest capital contributions                           5,725               490                  -
   Redemption of Series B preferred stock                                -                 -             (5,250)
   Stock options exercised                                             353               619                  -
   Purchases of warrants                                              (292)           (1,314)                 -
   Purchases of treasury stock                                      (9,114)           (7,347)              (121)
                                                                  --------          --------           --------
   Net cash (used in) provided by financing activities              (7,833)           (3,267)            10,314
                                                                  --------          --------           --------
Net (decrease) increase in cash and cash equivalents                (1,403)            5,341             (1,779)
Cash and cash equivalents at beginning of year                       5,585               244              2,023
                                                                  --------          --------           --------
Cash and cash equivalents at end of year                          $  4,182          $  5,585           $    244
                                                                  ========          ========           ========
</TABLE>

<PAGE>


                UNIROYAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Continued)

Supplemental Disclosures:

Payments for income taxes and interest were as follows (in thousands):
<TABLE>
<CAPTION>

                                                                      Fiscal Years Ended
                                              -----------------------------------------------------------------
                                                September 26,            September 27,            September 28,
                                                      1999                   1998                     1997
                                                -------------            -------------            -------------
<S>                                              <C>                       <C>                      <C>
      Income tax payments                        $   1,109                 $    392                 $    82
      Interest payments (net of capitalized
        interest)                                    7,569                   12,658                   9,356
</TABLE>
<TABLE>
<CAPTION>


Non-cash investing activities were as follows (in thousands):

                                                                      Fiscal Years Ended
                                              -------------------------------------------------------------------
                                                  September 26,          September 27,            September 28,
                                                      1999                   1998                     1997
                                              -----------------          -------------            ---------------
<S>                                                 <C>                   <C>                      <C>
      Business acquisitions purchased with
        Company common stock                       $   1,373             $      -                 $  1,488
      Business acquisitions purchased with
        notes payable                                  3,033                1,000                    1,000
</TABLE>


The proceeds  from term loans for the fiscal year ended  September 27, 1998 does
not include a $2,450,000  note payable issued for the purchase of 300,000 shares
of treasury stock (Notes 10 and 12).

The purchases of property,  plant and equipment and the proceeds from term loans
for the fiscal  years ended  September  26, 1999 and  September  28, 1997 do not
include  $20,372,000 and $77,000,  respectively,  related to property held under
capitalized  leases (Note 14). The Company did not enter into any capital  lease
agreements during the fiscal year ended September 27, 1998.

Net cash used in financing  activities  for the fiscal year ended  September 28,
1997 does not include  the  dividends  declared on the Series B Preferred  Stock
since they were paid with the issuance of 73,448 shares of the Company's  common
stock.  No dividends were paid during the fiscal years ended  September 26, 1999
or September 27, 1998.

During the fiscal years ended  September 26, 1999 and  September  27, 1998,  the
Company made matching  contributions  to its 401(k) Savings Plan of $199,000 and
$191,000,  respectively,  through the  re-issuance  of 19,672  shares and 30,260
shares of its common stock from treasury, respectively. No such contribution was
made during the fiscal year ended September 28, 1997.


                 See notes to consolidated financial statements.



<PAGE>


                UNIROYAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For the Fiscal Years Ended September 26, 1999,
                    September 27, 1998 and September 28, 1997


1.       THE COMPANY

         The accompanying  consolidated  financial statements relate to Uniroyal
         Technology  Corporation,  its wholly-owned  subsidiaries,  Uniroyal HPP
         Holdings,   Inc.,   Uniroyal   Engineered   Products,   Inc.,  Uniroyal
         Optoelectronics,  Inc.  and  UnitechNJ,  Inc.,  and its  majority-owned
         subsidiary,  Uniroyal Liability Management Company  (collectively,  the
         "Company").  Uniroyal HPP  Holdings,  Inc.  includes  its  wholly-owned
         subsidiary,  High  Performance  Plastics,  Inc.  ("HPPI"),  and  HPPI's
         operating divisions,  Royalite  Thermoplastics  ("Royalite"),  Polycast
         Technology ("Polycast"),  Townsend/Glasflex and ViPlex/Happel. Uniroyal
         Engineered Products,  Inc. includes its operating  divisions,  Uniroyal
         Engineered   Products  ("UEP")  and  Uniroyal  Adhesives  and  Sealants
         ("UAS").  Uniroyal  Optoelectronics,  Inc. includes its  majority-owned
         joint venture, Uniroyal Optoelectronics, LLC.

         On April 1, 1999 the Company  transferred  all of the net assets of its
         Coated  Fabrics  Segment  and  Specialty  Adhesives  Segment to a newly
         created wholly-owned subsidiary, Uniroyal Engineered Products, Inc.

         Uniroyal  Liability  Management  Company,  Inc.  ("ULMC")  is a special
         purpose  subsidiary created in the fiscal year ended September 26, 1999
         to  administer  the  Company's  employee  and retiree  medical  benefit
         programs.  The  Company  owns  a  controlling  interest  (69%)  in  the
         subsidiary;   therefore,   the  accompanying   consolidated   financial
         statements include the subsidiary's results of operations.

         UnitechNJ,  Inc. is a special purpose  subsidiary created in the fiscal
         year ended  September 26, 1999 to hold the Company's plant in Stirling,
         New Jersey.

         The Company is principally  engaged in the manufacture and sale of high
         performance  plastics,  coated  fabrics  and  specialty  adhesives.  In
         addition,  the Company has a majority  ownership of a joint  venture in
         the  development  stage  that  will  ultimately  manufacture  and  sell
         epitaxial   wafers,   dies  and   package-ready   devices  for  use  in
         optoelectronics applications.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Consolidation

         The consolidated  financial statements include the accounts of Uniroyal
         Technology Corporation, its subsidiaries, its majority-owned subsidiary
         and its  majority-owned  joint venture.  All  significant  intercompany
         transactions  and  balances  have been  eliminated.  Minority  interest
         represents the minority shareholders' proportionate share of the equity
         of the Company's majority-owned entities.

         Fiscal Year End

         The Company's  fiscal year ends on the Sunday following the last Friday
         in  September.  The dates on which the  fiscal  year ended for the past
         three fiscal years were September 26, 1999 ("Fiscal  1999"),  September
         27, 1998 ("Fiscal 1998") and September 28, 1997 ("Fiscal 1997").

         Use of Estimates

         The preparation of consolidated 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  consolidated  financial  statements  and the  reported
         amounts of revenues and expenses  during the reporting  period.  Actual
         results could differ from those estimates.

         Cash and Cash Equivalents

         Cash  and cash  equivalents  includes  all  highly  liquid  investments
         purchased with an original maturity of three months or less.


         Financial Instruments

         Interest  rate  swap  agreements  are  used  to  manage  interest  rate
         exposures. The interest rate differentials to be paid or received under
         such  swaps  are  recognized   over  the  life  of  the  agreements  as
         adjustments to interest expense.

         The  estimated  fair  value of  amounts  reported  in the  consolidated
         financial  statements  have  been  determined  using  available  market
         information and valuation  methodologies,  as applicable.  The carrying
         value of all current assets and liabilities approximates the fair value
         because of their  short-term  nature.  The fair  values of  non-current
         assets and liabilities approximate their carrying value.

         Trade Accounts Receivable

         The Company  grants  credit to its  customers  generally in the form of
         short-term trade accounts receivable. The creditworthiness of customers
         is evaluated  prior to the sale of inventory.  There are no significant
         concentrations  of credit  risk to the  Company  associated  with trade
         accounts receivable.

         Inventories

         Inventories  are  stated  at the  lower  of  cost  or  market.  Cost is
         determined  using a monthly  average  basis or  standard  costs  (which
         approximates  actual  average costs) for raw materials and supplies and
         the first-in,  first-out ("FIFO") basis of accounting or standard costs
         (which approximates actual FIFO costs) for work in process and finished
         goods.

         Property, Plant and Equipment

         Property, plant and equipment are stated at cost. The cost of property,
         plant and equipment  held under capital leases is equal to the lower of
         the net present value of the minimum  lease  payments or the fair value
         of the leased  asset at the  inception  of the lease.  Depreciation  is
         computed under the straight-line method based on the cost and estimated
         useful lives of the related assets  including assets held under capital
         leases.  Interest costs  applicable to the  construction of major plant
         and expansion projects have been capitalized to the cost of the related
         assets.  Interest  capitalized  during  Fiscal  1999  and  Fiscal  1998
         approximated $995,000 and $64,000, respectively.

         Statement  of  Financial   Accounting   Standards   ("SFAS")  No.  121,
         Accounting for the  Impairment of Long-Lived  Assets and for Long-Lived
         Assets to be Disposed  Of,  establishes  accounting  standards  for the
         impairment of long-lived assets,  certain identifiable  intangibles and
         goodwill related to those assets to be held and used and for long-lived
         assets and certain identifiable intangibles to be disposed of. SFAS No.
         121 requires that long-lived assets be renewed for impairment  whenever
         events or changes in circumstances  indicate that the book value of the
         asset may not be  recoverable.  The Company  evaluates  at each balance
         sheet date whether events and circumstances have occurred that indicate
         possible impairment.  In accordance with SFAS No. 121, the Company uses
         an  estimate of the future  undiscounted  net cash flows of the related
         assets  over the  remaining  life in  measuring  whether the assets are
         recoverable.

         Property, Plant and Equipment Held for Sale

         The  Company  has  classified  certain  property,  plant and  equipment
         related to its Port  Clinton,  Ohio ("Port  Clinton")  facility and its
         Stirling, New Jersey ("Stirling") facility as held for sale.

         In November of 1998, the Company ceased  operations at its Port Clinton
         facility in connection  with its sale of the  automotive  operations of
         the Coated Fabrics Segment (Note 15). The Company expects to dispose of
         the remaining Port Clinton assets, including real property,  during the
         fiscal year ending October 1, 2000 ("Fiscal  2000") and is carrying the
         property at fair value less cost to sell based upon an appraisal  and a
         current offer for the property. The fair value less cost to sell of the
         property approximates $3,217,000 at September 26, 1999.

         The Company had  previously  recorded an  impairment  loss for the Port
         Clinton  assets in Fiscal 1996 based upon a decision to sell the plant.
         The  Port  Clinton  facility  incurred  operating  (losses)  income  of
         ($74,000),  $3,263,000 and ($2,490,000) in Fiscal 1999, Fiscal 1998 and
         Fiscal 1997, respectively.

         During Fiscal 1998, in  conjunction  with plant  consolidations  at the
         Polycast division and in order to address concerns of the Federal Trade
         Commission  ("FTC")  (Note 14,  "Townsend  Acquisition"),  the  Company
         decided to sell its Stirling  facility  and certain  assets used in the
         manufacture of acrylic rods and tubes. In accordance with SFAS No. 121,
         the  Company  recorded a  write-down  of the  related  assets  totaling
         approximately  $144,000 and  $633,000,  in Fiscal 1999 and Fiscal 1998,
         respectively,  related  to  this  decision.  The  Company  expects  the
         disposition of the Stirling facility and certain assets to be completed
         in Fiscal  2000.  The  Company is carrying  the related  assets at fair
         value  less cost to sell based upon an  appraisal  and a current  sales
         offer.  The fair value  less cost to sell  approximates  $1,250,000  at
         September 26, 1999. The Stirling facility incurred  operating  (losses)
         income of  ($261,000)  and  $196,000  in Fiscal  1998 and Fiscal  1997,
         respectively.  Separate operating results were not maintained in Fiscal
         1999.

         Investment in Preferred Stock

         The  Company   accounts  for  the  investment  in  preferred  stock  in
         accordance with SFAS No. 115,  "Accounting  for Certain  Investments in
         Debt and Equity Securities."  Management has classified this investment
         as available for sale and, in accordance with SFAS No. 115, carries the
         investment at fair value with the unrealized  gains and losses,  net of
         income taxes, reported as a separate component of stockholders' equity.
         The fair value is determined  by the most recently  traded price of the
         underlying common stock at the balance sheet date.

         Amortization

         Debt issuance  costs are amortized  using the interest  method over the
         life of the related debt.  Debt  discount for the Senior  Secured Notes
         was  amortized  using the interest  method over the life of the related
         debt until the debt was repaid in Fiscal  1998 (Note 10).  Patents  and
         trademarks are amortized  using the  straight-line  method over periods
         ranging from 7 to 20 years.  Reorganization  value in excess of amounts
         allocable to identifiable assets was amortized on a straight-line basis
         over 15 years until Fiscal 1998 when the remaining reorganization value
         was reduced to zero in  connection  with the  reduction of the deferred
         tax  valuation  allowance  related to  acquired  tax loss  carryforward
         benefits (Note 11). Goodwill is amortized on a straight-line basis over
         25 years.  Goodwill  is reported  net of  accumulated  amortization  of
         $784,000  and $372,000 at September  26, 1999 and  September  27, 1998,
         respectively.

         Research and Development Expenses

         Research  and  development   expenditures  are  expensed  as  incurred.
         Research and development  expenditures were $2,201,000,  $2,657,000 and
         $3,674,000 in Fiscal 1999, Fiscal 1998 and Fiscal 1997, respectively.

         Employee Compensation

         The cost of post-retirement  benefits is recognized in the consolidated
         financial  statements  over an  employee's  term of  service  with  the
         Company.

         Income Taxes

         The Company  utilizes the asset and liability  method of accounting for
         income taxes.  Under the asset and liability  method,  deferred  income
         taxes  are   recognized   for  the  tax   consequences   of  "temporary
         differences"  by applying  enacted  statutory  tax rates  applicable to
         future years to differences  between the financial  statement  carrying
         amounts  and the tax basis of  existing  assets  and  liabilities.  The
         effect on  deferred  taxes of a change in tax  rates is  recognized  in
         income in the period that includes the enactment date.

         The  Company  has  recorded  a  deferred  tax  asset  of  approximately
         $27,539,000.  A valuation allowance of $13,702,000 has been established
         due to  uncertainty  regarding  the ability to utilize the capital loss
         carryforward against capital gains which may or may not be generated in
         the  future.  Realization  of  the  remaining  asset  is  dependent  on
         generating  sufficient  taxable  income  prior  to  expiration  of loss
         carryforwards  available to the Company.  Although  realization  is not
         assured, management believes it is more likely than not that all of the
         remaining  deferred  tax  asset  will be  realized.  The  amount of the
         deferred tax asset considered realizable,  however, could be reduced in
         the  near  term if  estimates  of  future  taxable  income  during  the
         carryforward period are reduced.

         Stock-Based Compensation

         In Fiscal 1997, the Company  adopted only the disclosure  provisions of
         SFAS No. 123,  Accounting for  Stock-Based  Compensation.  As permitted
         under this  standard,  the  Company  has  elected to follow  Accounting
         Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to
         Employees,  in accounting for its stock options.  Proforma  information
         regarding net income and earnings per share,  as  calculated  under the
         provisions of SFAS 123, are disclosed in Note 12.

         Comprehensive Income

         The Company  adopted SFAS No. 130,  "Reporting  Comprehensive  Income,"
         during  Fiscal  1999.  SFAS  No.  130  establishes  standards  for  the
         reporting  and  display of  comprehensive  income  and its  components.
         Comprehensive  income is  defined as the change in equity of a business
         during a period from  transactions  and other events and  circumstances
         from  non-owner  sources.  It includes  all changes in equity  during a
         period  except  those   resulting   from   investments  by  owners  and
         distributions  to owners.  SFAS No.  130  requires  that the  Company's
         change in unrealized  gains and losses on equity  securities  available
         for sale be included in comprehensive  income.  The net unrealized gain
         on securities available for sale is shown net of tax expense of $63,000
         for the year ended September 26, 1999. The adoption of SFAS No. 130 had
         no impact on the Company's net income or stockholders' equity in Fiscal
         1998 and Fiscal 1997.

         Income Per Common Share

         The Company has adopted and  retroactively  applied the requirements of
         SFAS No. 128, Earnings Per Share, to all periods presented. This change
         did not have a material  impact on the  computation of the earnings per
         share data (Note 17).

         New Accounting Pronouncements

         In June 1998,  FASB  issued  SFAS No. 133,  Accounting  for  Derivative
         Instruments and Hedging Activities. SFAS No. 133 establishes accounting
         and  reporting   standards  for  derivative   instruments  and  hedging
         activities.  It requires that an entity  recognize all  derivatives  as
         either assets or liabilities in the statement of financial position and
         measure those  instruments at fair value. The accounting for changes in
         the fair value of a derivative (that is, gains and losses) depends upon
         the intended use of the derivative and resulting designation.  SFAS No.
         133 is  effective  for all fiscal  quarters of fiscal  years  beginning
         after June 15, 2000. The Company has not evaluated the effect,  if any,
         that the adoption of SFAS 133 will have on the  Company's  consolidated
         financial statements.

         Reclassifications

         Certain prior years' amounts have been reclassified to conform with the
         current year's presentation.

3.       INVENTORIES

         Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
                                                                 September 26,           September 27,
                                                                     1999                    1998
                                                                 -------------           -------------
<S>                                                                <C>                     <C>
         Raw materials, work in process and supplies               $ 24,324                $ 22,844
         Finished goods                                              14,303                  15,295
                                                                   --------                --------
                Total                                              $ 38,627                $ 38,139
                                                                   ========                ========
</TABLE>


4.       PROPERTY, PLANT AND EQUIPMENT

         Property,   plant  and   equipment   consisted  of  the  following  (in
         thousands):

<TABLE>
<CAPTION>
                                            Estimated          September 26,        September 27,
                                           Useful Lives             1999                 1998
                                           ------------         ------------         ------------

<S>                                                              <C>                  <C>
          Land and improvements                       -          $  5,620             $  5,465
          Buildings and improvements         5-40 years            28,872               21,969
          Machinery, equipment and office
            furnishings                      3-20 years            78,826               70,259
          Construction in progress                    -            18,992                3,645
                                                                 --------             --------
                                                                  132,310              101,338
          Accumulated depreciation                                (43,657)             (35,787)
                                                                 --------             --------
          Total                                                  $ 88,653             $ 65,551
                                                                 ========             ========
</TABLE>

         Depreciation  expense was  $8,395,000,  $8,047,000  and  $7,906,000 for
         Fiscal 1999, Fiscal 1998 and Fiscal 1997, respectively.

5.       INVESTMENT IN PREFERRED STOCK

         On November  30,  1998,  the Company  purchased  642,857  shares of the
         Series I Redeemable  Convertible Preferred Stock ("Preferred Stock") of
         Emcore Corporation ("Emcore") for approximately  $9,000,000 ($14.00 per
         share).  The shares were  offered  pursuant to a private  placement  by
         Emcore.

         Dividends  on the  Preferred  Stock are  cumulative  and are payable at
         Emcore's  option,  in cash or additional  shares of Preferred  Stock on
         March 31, June 30,  September 30 and December 31,  commencing  December
         31, 1998 at the annual rate of 2% per share of  Preferred  Stock on the
         liquidation preference thereof (equivalent to $0.28 per annum per share
         of Preferred Stock).

         Shares of the  Preferred  Stock  are  convertible  at any time,  at the
         option of the holders thereof, into shares of common stock of Emcore on
         a one for one basis,  subject to  adjustment  for  certain  events.  On
         September 24, 1999, the closing sales price of Emcore's common stock on
         the Nasdaq National Market was $14.4375.

         The Preferred  Stock is redeemable,  in whole or in part, at the option
         of  Emcore at any time  Emcore's  common  stock has  traded at or above
         $28.00 per share for 30 consecutive  trading days, at a price of $14.00
         per share plus accrued and unpaid dividends,  if any, to the redemption
         date.  Emcore is required to provide not less than 30 days and not more
         than 60 days notice of the  redemption.  The shares of Preferred  Stock
         are subject to mandatory redemption by Emcore on November 17, 2003 at a
         price of $14.00 per share plus accrued and unpaid dividends.

         In June of 1999, the Company  converted 270,000 shares of the Preferred
         Stock into 270,000 shares of Emcore common stock. The Company then sold
         its 270,000 shares of Emcore common stock for $4,822,200 in conjunction
         with a public stock offering by Emcore.  The Company  recognized a gain
         on the  sale of  approximately  $898,000,  net of  certain  transaction
         costs.

         The remaining Preferred Stock and the underlying common stock of Emcore
         have been registered under the Securities Act of 1933.

         Subsequent  to  September  26, 1999 and as of December  10,  1999,  the
         Company  converted  230,657 shares of the Preferred  Stock into 230,657
         shares of Emcore common stock. The Company then sold its 230,657 shares
         of Emcore common stock in the open market for approximately $4,288,000,
         and will recognize a gain of approximately  $1,059,000,  net of certain
         transaction costs, in the first quarter of Fiscal 2000.

6.       NOTE RECEIVABLE

         On June 10, 1996, the Company sold  substantially all the assets net of
         certain  liabilities  of its  Ensolite  closed  cell foam  division  to
         Rubatex Corporation ("Rubatex") for $25,000,000.  Proceeds consisted of
         cash of $20,000,000  and an unsecured  promissory  note receivable (the
         "Note") in the amount of $5,000,000  of RBX Group,  Inc.  ("RBX"),  the
         parent of  Rubatex.  Interest on the Note is payable  semi-annually  at
         11.75% per annum. The Note matures on May 1, 2006.

         In January  1998,  the  Company  brought  suit to compel RBX to honor a
         mandatory early redemption obligation under the terms of the $5,000,000
         Note. In March 1998,  Rubatex filed a  counterclaim  asserting that the
         Ensolite machinery purchased was in breach of the Company's  warranties
         when Rubatex  purchased it in June 1996. The Company  believes that the
         Rubatex  counterclaim  is wholly  without  merit.  RBX did not make the
         semi-annual  interest  payment on the Note of  $293,750 on May 1, 1998.
         The Company stopped accruing  interest on the Note as of June 29, 1998.
         As of  September  26,  1999 and  September  27,  1998,  the Company has
         accrued  interest  receivable  related  to the  Note  of  approximately
         $387,000.  Accrued  interest  of  approximately  $739,000  has not been
         accrued by the Company.  The Note represents a concentration  of credit
         risk to the Company.

7.       BUSINESS ACQUISITIONS

         On June 14,  1999,  the Company  acquired  100% of the common  stock of
         Happel  Marine,  Inc.,  a  fabricator  for  the  marine  industry,  for
         $5,193,500.  The  purchase  price was  comprised  of  $909,252 in cash,
         unsecured  promissory  notes  aggregating  $2,911,007  (Note  10),  and
         145,078  shares of common  stock of the  Company  valued at  $1,373,241
         which  approximated  the market value of such shares on the acquisition
         date.  The purchase  price was adjusted for changes in working  capital
         between April 30, 1999 and June 13, 1999.  This resulted in an increase
         of the purchase  price of $122,137,  which was paid through an increase
         in the promissory notes.  Happel Marine,  Inc. was merged into Uniroyal
         HPP Holdings on September 1, 1999,  which in turn  contributed  the net
         assets to HPPI.

         On May 22,  1998,  HPPI  acquired  100% of the  common  stock of ViPlex
         Corporation,  an acrylic sheet fabricator for the marine industry,  for
         $2,700,000  consisting of  $1,700,000 in cash and unsecured  promissory
         notes aggregating $1,000,000 (Note 10). The purchase price was adjusted
         for changes in working capital  between  September 30, 1997 and May 22,
         1998.  This resulted in an increase in the purchase  price of $114,000,
         which was paid in cash.  ViPlex  Corporation was merged into HPPI as of
         December 31, 1998.

         The above  business  combinations  were  accounted  for by the purchase
         method in accordance with APB Opinion No. 16. The results of operations
         of  the  above  named  businesses  are  included  in  the  consolidated
         financial  statements  from their  respective  purchase dates in Fiscal
         1999 and Fiscal 1998.

         In Fiscal 1999 and Fiscal  1998,  the Company  acquired  the  following
         assets and  liabilities  (net of cash received of $177,000 and $46,000,
         respectively,) in the above transactions (in thousands):
<TABLE>
<CAPTION>

<PAGE>

                                                        September 26,                  September 27,
                                                            1999                           1998
                                                        -------------                  -------------
<S>                                                       <C>                            <C>
        Accounts receivable                               $   820                        $   457
        Inventory                                             461                            501
        Prepaids and other assets                              24                             32
        Property, plant and equipment                         870                            188
        Goodwill                                            3,894                          1,841
        Notes payable                                      (3,280)                        (1,000)
        Other liabilities                                    (684)                          (251)
                                                          -------                        -------
        Net value of purchased assets                       2,105                          1,768
        Value of common stock issued                       (1,373)                             -
                                                          -------                        -------
        Cash paid for acquisitions                        $   732                        $ 1,768
                                                          =======                        =======
</TABLE>
         The acquired  goodwill will be amortized over its estimated useful life
         of 25 years.

         The pro forma effect of these  acquisitions on the Company's net sales,
         income before  extraordinary  item,  net income and earnings per share,
         had the  acquisitions  occurred on September 28, 1998 and September 29,
         1997, respectively,  is not considered material - either quantitatively
         or qualitatively.

8.       OTHER ASSETS

         Other assets consisted of the following (in thousands):
<TABLE>
<CAPTION>
                                                       September 26,              September 27,
                                                           1999                       1998
                                                       -------------              -------------
<S>                                                    <C>                        <C>
        Patents and trademarks                         $   4,521                  $   4,871
        Technology license                                 5,000                      4,500
        Debt issuance costs                                2,725                      3,268
        Deposits                                             472                      2,802
        Other                                              1,688                        836
                                                       ---------                  ---------
        Total                                          $  14,406                  $  16,277
                                                       =========                  =========
</TABLE>
         Patents and trademarks are reported net of accumulated  amortization of
         $3,191,000 and $2,841,000 at September 26, 1999 and September 27, 1998,
         respectively.

         During the fiscal year ended  September  27,  1998,  the  Company  paid
         $4,500,000  to  Emcore  Corporation  ("Emcore")  in  connection  with a
         technology  license dated  September 29, 1997,  for certain  technology
         relating to the manufacture of epitaxial wafers used in high brightness
         light emitting diodes ("LEDs") for lamps and display devices (Note 16).
         During the fiscal year ended  September 26, 1999,  the Company paid the
         final  installment of $500,000 related to the technology  license.  The
         technology  license will be amortized  over the  estimated  life of the
         technology once sales from internal production have commenced.

         During  the  fiscal  year  ended   September  27,  1998,   the  Company
         capitalized approximately $3,545,000 of debt issuance costs incurred in
         connection  with  the  Fleet  Financing  (Notes  10 and 18).  Also,  in
         connection   with  the  Fleet   Financing,   the   Company   wrote  off
         approximately  $3,439,000 of debt issuance  costs  associated  with its
         Senior  Secured  Notes  which  is  included  in the  loss on the  early
         extinguishment  of debt during the fiscal year ended September 27, 1998
         (Note  10).   Debt  issuance   costs  are  shown  net  of   accumulated
         amortization  of  $846,000  and  $278,000  at  September  26,  1999 and
         September 27, 1998, respectively.

         At September 27, 1998,  deposits  include  $1,797,000 paid to Emcore in
         Fiscal 1998 as a down  payment  for  machinery  ordered  from Emcore by
         Uniroyal  Optoelectronics,  LLC.  During  Fiscal 1999,  the deposit was
         reclassed  to  property,  plant  and  equipment  upon  delivery  of the
         machines from Emcore.

9.       OTHER LIABILITIES

         Other liabilities consisted of the following (in thousands):
<TABLE>
<CAPTION>
                                                     September 26,                 September 27,
                                                          1999                          1998
                                                     -------------                 -------------
<S>                                                    <C>                           <C>
         Accrued retirement benefits                   $    15,047                   $    13,841
         Taxes, other than income                              180                           745
         Other                                                 577                           475
                                                       -----------                   -----------
         Total                                         $    15,804                   $    15,061
                                                       ===========                   ===========
</TABLE>
<PAGE>

10.      LONG-TERM DEBT

         Long-term debt consisted of the following (in thousands):
<TABLE>
<CAPTION>

                                                     September 26,                 September 27,
                                                          1999                          1998
                                                     -------------                 -------------
<S>                                                    <C>                           <C>
        Term A Advance                                 $    25,500                   $    30,000
        Term B Advance                                      59,550                        60,000
        Revolving credit agreements                         14,428                        11,342
        Unsecured promissory notes                           5,174                         4,117
        Capital lease obligations                           18,356                           199
                                                       -----------                   -----------
                                                           123,008                       105,658
        Less current portion                               (14,087)                       (7,713)
                                                       -----------                   -----------
        Long-term debt, net of current portion         $   108,921                   $    97,945
                                                       ===========                   ===========
</TABLE>

         Debt  amounts  become  due during  subsequent  fiscal  years  ending in
         September as follows (in thousands):
<TABLE>
<CAPTION>
                           <S>                         <C>
                           2000                        $    14,087
                           2001                             18,086
                           2002                              9,625
                           2003                             11,635
                           2004                             10,024
                           Subsequent years                 59,551
                                                       -----------
                           Total debt                  $   123,008
                                                       ===========
</TABLE>

         Interest  expense  for  Fiscal  1999,  1998 and 1997 was  approximately
         $9,588,000, $9,927,000 and $10,061,000, respectively.

         HPPI Credit Agreement
         ---------------------
         On April 14,  1998,  the Company  transferred  all of the assets of its
         High  Performance  Plastics  Segment  to a newly  created  wholly-owned
         subsidiary,  HPPI. On that same day HPPI,  as borrower,  entered into a
         credit  agreement with Uniroyal HPP Holdings,  Inc. (the parent of HPPI
         and a wholly-owned  subsidiary of the Company), the Company, the banks,
         financial  institutions and other institutional  lenders named therein,
         Fleet  National  Bank (as  Initial  Issuing  Bank,  Swing Line Bank and
         Administrative  Agent)  ("Fleet")  and DLJ  Capital  Funding,  Inc.  as
         Documentation  Agent (the "Credit  Agreement"),  providing  among other
         things,  for the borrowing by HPPI of an aggregate  principal amount of
         up to $110,000,000 (the "Fleet Financing"). The $110,000,000 line under
         the Credit  Agreement is composed of a  $30,000,000  Term A Advance,  a
         $60,000,000 Term B Advance and a $20,000,000 Revolving Credit Advance.

         The Term A  Advance  is  payable  in equal  quarterly  installments  of
         $1,500,000  beginning on December 31, 1998 and ending on September  30,
         2003.  Interest on the Term A Advance is initially  payable  monthly at
         the Prime  Rate (as  defined in the  Credit  Agreement)  plus 1.25% for
         Prime  Rate  advances  or not  later  than the end of each  three-month
         period at the Eurodollar Rate (as defined in the Credit Agreement) plus
         2.25% for Eurodollar  Rate advances  during the first six months of the
         Credit Agreement. After the first six months, the applicable margin for
         each  Prime Rate  advance  and each  Eurodollar  Rate  advance  will be
         determined  quarterly by reference to HPPI's ratio of Consolidated Debt
         to EBITDA (as defined in the Credit Agreement).  The applicable margins
         on the Term A Advance  range  from  0.50% - 1.25%  for the  Prime  Rate
         advances and 1.50% - 2.25% for Eurodollar  Rate advances and were 1.25%
         and 2.25%,  respectively,  at September 26, 1999. The weighted  average
         interest rate on the Term A Advance  during Fiscal 1999 and Fiscal 1998
         was 7.36% and 7.84%, respectively.

         The Term B Advance is payable in  quarterly  installments  of  $150,000
         beginning on December 31, 1998 through  September 30, 2003,  semiannual
         installments of $5,000,000 on March 31, 2004 and September 30, 2004 and
         a final payment of $47,000,000 on March 31, 2005.  Interest on the Term
         B Advance  is  initially  payable  monthly at Prime Rate plus 1.50% for
         Prime  Rate  advances  or not  later  than the end of each  three-month
         period at the Eurodollar  Rate plus 2.50% for Eurodollar  Rate advances
         during the first six months of the  Credit  Agreement.  After the first
         six  months,  the  applicable  margin for each Prime Rate  advance  and
         Eurodollar  Rate advance will be  determined  quarterly by reference to
         HPPI's ratio of  Consolidated  Debt to EBITDA (as defined in the Credit
         Agreement).  The applicable margins on Term B Advances range from 1.00%
         - 1.50% for Prime Rate advances and 2.00% - 2.50% for  Eurodollar  Rate
         advances and were 1.50% and 2.50%, respectively, at September 26, 1999.
         The weighted  average interest rate on the Term B Advance during Fiscal
         1999 and Fiscal 1998 was 7.57% and 8.09%, respectively.

         Under the  Revolving  Credit  Advance,  HPPI may  borrow  the lesser of
         $20,000,000 or the sum of 85% of Eligible  Receivables  plus 50% of the
         value  of  Eligible  Inventory  as  defined  in the  Credit  Agreement.
         Interest  is payable  under the same  terms as the Term A Advance.  The
         Revolving  Credit  Advance  matures on September 30, 2003. At September
         26,  1999,  the Company had  approximately  $7,550,000  of  outstanding
         borrowings  under  the  Revolving  Credit  Advance  and   approximately
         $12,450,000 of availability.  The weighted average interest rate on the
         Revolving  Credit  Advance during Fiscal 1999 and Fiscal 1998 was 8.31%
         and 8.20%, respectively.

         The advances under the Credit Agreement are collateralized by a lien on
         substantially  all of the non-cash assets of HPPI. The Credit Agreement
         contains  certain  covenants  which limit,  among other things,  HPPI's
         ability to incur additional debt, sell its assets,  pay cash dividends,
         make certain other  payments and redeem its capital  stock.  The Credit
         Agreement  also contains  covenants  which require the  maintenance  of
         certain  ratios.  HPPI  was  in  compliance  with  these  covenants  at
         September 26, 1999. The Credit Agreement also contains annual mandatory
         pre-payments  of principal  equal to 50% of HPPI's  annual  Excess Cash
         Flow (as defined in the Credit Agreement) beginning September 26, 1999.
         No such prepayment was due on September 26, 1999.

         Under the terms of the Credit Agreement, HPPI is required to obtain and
         keep in effect  one or more  interest  rate Bank Hedge  Agreements  (as
         defined in the Credit  Agreement)  covering  at least 50% of the Term A
         and Term B  Advances,  for an  aggregate  period of not less than three
         years.  On May 14, 1998,  HPPI entered  into three  interest  rate swap
         agreements with two banks.  The first agreement is a fixed rate swap on
         $30,000,000  notional amount that expires on May 14, 2003. HPPI's fixed
         LIBOR rate of  interest  on this swap is 5.985%.  HPPI pays or receives
         interest  based upon the  differential  between HPPI's fixed LIBOR rate
         and the bank's  floating LIBOR rate. The bank's  floating LIBOR rate is
         adjusted  monthly.  The second agreement is a cancelable  interest rate
         swap on  $30,000,000  notional  amount  that  expires on May 14,  2003.
         HPPI's fixed LIBOR rate of interest on this swap is 5.7375%.  HPPI pays
         or receives  interest based upon the differential  between HPPI's fixed
         LIBOR rate and the bank's  floating  LIBOR  rate.  The bank's  floating
         LIBOR  rate is  adjusted  quarterly.  The bank has the option to cancel
         this swap on May 14, 2001. The third agreement is a cancelable interest
         rate swap on $20,000,000  notional amount that expires on May 14, 2000.
         HPPI's fixed LIBOR rate of interest on this swap is 5.6725%.  HPPI pays
         or receives  interest based upon the rate  differential  between HPPI's
         fixed  LIBOR  rate and the  bank's  floating  LIBOR  rate.  The  bank's
         floating LIBOR rate is adjusted  quarterly.  The bank had the option to
         cancel  this  swap on May 14,  1999  which  it did  not  exercise.  The
         differential on interest rate swaps is accrued as interest rates change
         and is recognized as an adjustment to interest expense over the life of
         the  agreements.  The fair value of these interest rate swap agreements
         represents  the  estimated  receipts or payments  that would be made to
         terminate the agreements. At September 26, 1999, the Company would have
         received approximately $195,000 to terminate the agreements.

         On April 14, 1998,  HPPI paid  $94,944,000 to the Company which in turn
         used such amount to defease the outstanding 11.75% Senior Secured Notes
         due June 1, 2003 ("Senior  Secured  Notes")  including the call premium
         and  interest  accrued  through  the  call  date  and to pay  down  its
         revolving   line  of  credit  and  secured   term  loan  with  the  CIT
         Group/Business  Credit,  Inc.  ("CIT").  The  redemption  of the Senior
         Secured  Notes was completed on June 1, 1998 at a call premium of 4.41%
         ($3,264,000).  In  connection  with the June 1,  1998  redemption,  the
         Company incurred an extraordinary loss on the extinguishment of debt of
         approximately   $5,637,000   (net  of   applicable   income   taxes  of
         approximately $2,787,000).

         CIT Credit Agreement
         --------------------
         On April 14, 1998 the Company  entered  into an  Amendment  and Consent
         Agreement  with CIT whereby the  Company's  existing  revolving  credit
         arrangement  was  amended to permit the Company to borrow the lesser of
         $10,000,000  or the  sum of 85% of  Eligible  Receivables  plus  55% of
         Eligible Inventories as defined in the agreement.  On April 1, 1999, in
         connection with the creation of Uniroyal Engineered Products, Inc., the
         CIT  revolving  credit  agreement  was assumed by  Uniroyal  Engineered
         Products,  Inc. The  collateral  securing the credit line includes only
         the assets of Uniroyal  Engineered  Products,  Inc. Interest on the CIT
         revolving  credit  agreement  is payable  monthly at Prime plus .5% per
         annum or at the LIBOR rate plus 2.75% per annum if the  Company  elects
         to borrow  funds  under a LIBOR loan as defined in the  agreement.  The
         loan matures on June 5, 2001. All of Uniroyal Engineered Products, Inc.
         trade accounts  receivables  and  inventories are pledged as collateral
         for  this  loan.  The  agreement  restricts  the  creation  of  certain
         additional  indebtedness.  The  Company  was  in  compliance  with  the
         covenants  under this agreement at September 26, 1999. At September 26,
         1999,   the  Company  had   approximately   $6,878,000  of  outstanding
         borrowings  under the  revolving  credit  agreement  and  $1,369,000 of
         availability.  The Company had $4,000 of outstanding  borrowings  under
         this  agreement at September 27, 1998.  The weighted  average  interest
         rates on the CIT  revolving  credit  agreement  was 8.28% during Fiscal
         1999 and 9.00% during Fiscal 1998.

         Unsecured Promissory Notes

         On June 14, 1999,  in  connection  with the purchase of Happel  Marine,
         Inc.  (Note 7),  the  Company  issued  unsecured  promissory  notes for
         $2,400,000 and $511,007.  The $2,400,000  note is payable in four equal
         annual  installments  beginning January 15, 2000, plus accrued interest
         at the stated rate of 7.75% per annum.  The $511,007 note is payable in
         two equal annual installments  beginning January 15, 2000, plus accrued
         interest  at the  stated  rate of 7.75%.  The notes  were  adjusted  to
         $2,500,030 and $533,114,  respectively, in connection with a subsequent
         purchase price adjustment in September, 1999.

         The  Company  has  entered  into  various  unsecured  promissory  notes
         aggregating   approximately   $1,470,000   at  September  26,  1999  in
         connection with prior year business  acquisitions  and a treasury stock
         purchase at stated rates  ranging from 5.5% to 8.0%.  To the extent the
         stated  rates were below  current  market  rates,  the Company  imputed
         interest  at the  market  rate in effect on the date of the  respective
         transaction.

         Capital Lease Obligations
         -------------------------
         The Company leases certain machinery and equipment under non-cancelable
         capital leases which extend for varying periods up to 5 years.  Capital
         lease  obligations  entered  into  during  Fiscal  1999 were  primarily
         related  to  the  Company's  majority  owned  joint  venture,  Uniroyal
         Optoelectronics,  LLC.  The  Company  is a  guarantor  of the  Uniroyal
         Optoelectrics,  LLC capital  lease  obligations.  The weighted  average
         interest rate on these obligations was 8.8% (Note 14).


11.      INCOME TAXES

         The effective tax rate differs from the  statutory  federal  income tax
         rate for the following reasons (in thousands):
<TABLE>
<CAPTION>

                                                                              Fiscal Years Ended
                                                         --------------------------------------------------------
                                                         September 26,        September 27,         September 28,
                                                              1999                 1998                  1997
                                                         -------------        -------------         -------------
<S>                                                      <C>                    <C>                  <C>
         Income tax calculated at the statutory
           rate applied to income before income
           tax and extraordinary item                     $     1,925          $     4,636          $       408
         Increase (decrease) resulting from:
           Exclusion of extraordinary loss on the
             extinguishment of debt                                 -               (2,787)                   -
           Amortization of reorganization value
             in excess of amounts allocable to
             identifiable assets                                    -                  101                  155
           Capital loss from medical benefits
             subsidiary                                        (15,980)                  -                    -
           Valuation allowance                                  13,702                   -                    -
           State income tax                                        309                 515                  354
           Other                                                   199                 355                  (86)
                                                           -----------         -----------          -----------
         Income tax expense                                $       155         $     2,820          $       831
                                                           ===========         ===========          ===========

</TABLE>
<PAGE>

         Allocation of income tax expense is as follows (in thousands):
<TABLE>
<CAPTION>

                                                                              Fiscal Years Ended
                                                         --------------------------------------------------------
                                                         September 26,        September 27,         September 28,
                                                              1999                 1998                1997
                                                         -------------        -------------         -------------
<S>                                                       <C>                  <C>                  <C>
         Income before extraordinary item                 $       155          $     5,607          $       831
         Extraordinary item                                         -               (2,787)                   -
                                                          -----------          ------------         -----------
         Income tax expense                               $       155          $     2,820          $       831
                                                          ===========          ===========          ===========

</TABLE>

         Income tax expense (benefit) consisted of the following  components (in
         thousands):
<TABLE>
<CAPTION>
                                                                              Fiscal Years Ended
                                                          --------------------------------------------------------
                                                          September 26,       September 27,          September 28,
                                                               1999                  1998                   1997
                                                          -------------       -------------          -------------
<S>                                                       <C>                  <C>                    <C>
         Current:
           Federal                                        $      (80)          $       397            $         -
           State                                                 (12)                  515                    284
                                                          ----------           -----------            -----------
              Total                                       $      (92)          $       912            $       284
                                                          ==========           ===========            ===========

         Net deferred tax expense:
           Federal                                        $      (75)          $     1,908            $       477
           State                                                 322                     -                     70
                                                          ----------           -----------            -----------
              Total                                       $      247           $     1,908            $       547
                                                          ==========           ===========            ===========
         Total:
           Federal                                        $     (155)          $     2,305            $       477
           State                                                 310                   515                    354
                                                          ----------           -----------            -----------
              Total                                       $      155           $     2,820            $       831
                                                          ==========           ===========            ===========

</TABLE>

         The  components  of the  deferred  tax assets and  liabilities  were as
         follows (in thousands):
<TABLE>
<CAPTION>
                                                                          September 26, 1999
                                                     -----------------------------------------------------------
                                                          Assets             Liabilities             Total
                                                     -----------------    -----------------     ----------------
<S>                                                     <C>                   <C>                 <C>
        Current
        Accrued expenses deductible in future
          periods                                       $    4,809            $       -           $    4,809
                                                        ==========            =========           ==========
        Non-Current
          Acquired tax loss carryforward
            benefits                                    $    4,951            $       -           $    4,951
          Net operating loss carryforward                    5,496                    -                5,496
          Capital loss                                      13,702                    -               13,702
          Valuation allowance                              (13,702)                   -              (13,702)
          Book basis in excess of tax basis of
            assets                                               -               (8,044)              (8,044)
          Long-term accrual of expenses
            deductible in future periods                     6,286                    -                6,286
           AMT credit carryforward                             339                    -                  339
                                                        ----------            ----------          ----------
             Total                                      $   17,072            $  (8,044)          $    9,028
                                                        ==========            ==========          ==========

</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                                                           September 27, 1998
                                                     -----------------------------------------------------------
                                                          Assets             Liabilities             Total
                                                     -----------------    -----------------     ----------------
<S>                                                     <C>                   <C>                 <C>
        Current
        Accrued expenses deductible in future
          periods                                       $    5,837            $       -           $    5,837
                                                        ==========            =========           ==========
        Non-Current
          Acquired tax loss carryforward
            benefits                                    $    3,078            $       -           $    3,078
          Net operating loss carryforward                    5,731                    -                5,731
          Book basis in excess of tax basis of
            assets                                               -               (8,115)              (8,115)
          Long-term accrual of expenses
            deductible in future periods                     7,065                    -                7,065
                                                        ----------            ---------           ----------
             Total                                      $   15,874            $  (8,115)          $    7,759
                                                        ==========            =========           ==========
</TABLE>

         The net operating and acquired tax loss carryforward benefits expire in
         various  years  ending  in 2010.  The  acquired  tax loss  carryforward
         benefits  consist of tax net operating loss  carryforwards  and pension
         contribution deductions.  The acquired net operating loss carryforwards
         are subject to an annual limitation arising from the September 27, 1992
         bankruptcy  reorganization  of the Company's  predecessors.  The annual
         limitation  on   utilization   of  the  acquired  net  operating   loss
         carryforward for tax purposes is approximately $1,600,000 per year.

         In  Fiscal  1998,  the  Company  reduced  the  deferred  tax  valuation
         allowance  relating  to acquired  tax loss  carryforward  benefits.  In
         accordance  with  SFAS  No.  109,  Accounting  for  Income  Taxes,  the
         reduction  was  applied  to  reduce  reorganization  value in excess of
         amounts  allocable to identifiable  assets which resulted in such asset
         being reduced to zero in Fiscal 1998.

         In Fiscal 1999, the Company  established a subsidiary to administer the
         Company's  employee  medical benefits  program.  The Company realized a
         one-time  combined  federal  and  state  capital  loss tax  benefit  of
         approximately  $15,980,000  arising  from the sale of a portion  of the
         stock of this subsidiary. However, due to the uncertainty regarding the
         Company's ability to utilize this capital loss in the future, only $2.3
         million of this  benefit  was  recognized  in Fiscal  1999 as an offset
         against current and previous capital gains.


12.      STOCKHOLDERS' EQUITY

         The Company's certificate of incorporation provides that the authorized
         capital stock of the Company  consists of  35,000,000  shares of common
         stock and 1,000 shares of preferred  stock,  each having a par value of
         $0.01 per share. At September 26, 1999, approximately 14,681,419 shares
         of common stock were issued.

         On December  18, 1996,  the Board  designated a new series of preferred
         stock of the Company  termed  Series C Junior  Participating  Preferred
         Stock, $.01 par value ("Series C Preferred") and reserved 450 shares of
         the  Series C  Preferred  for  issuance.  At the same  time,  the Board
         declared  a  dividend  of a right to  acquire  1/100,000  of a share of
         Series C  Preferred  to the holder of each  share of common  stock (the
         "Rights")  under a Shareholder  Rights Plan. The Rights will trade with
         the  common  stock  and  be  detachable   from  the  common  stock  and
         exercisable  only in the  event  of an  acquisition  of or grant of the
         right to acquire 15% or more of the common stock by one party or common
         group or a tender offer to acquire 15% or more of the common stock.

         Common Stock

         The holders of record of shares of common stock are entitled to receive
         dividends  when  and as  declared  by the  Board  of  Directors  of the
         Company,  provided that the Company has funds legally available for the
         payment of dividends and is not otherwise contractually restricted from
         the payment of dividends. The Company declared no such dividends during
         Fiscal 1999, Fiscal 1998 and Fiscal 1997.

         Treasury Stock Transactions

         During Fiscal 1999 and Fiscal 1998,  the Company  received  130,382 and
         92,285  shares of its common stock,  respectively,  in lieu of cash for
         the  exercise of stock  options  from  officers  and  employees  of the
         Company. These shares were valued at approximately $1,345,000 in Fiscal
         1999 and  $894,000 in Fiscal 1998 (which were  calculated  based on the
         closing  market  value of the  stock on the day  prior to the  exercise
         dates) and are included as treasury shares as of September 26, 1999 and
         September 27, 1998.

         During Fiscal 1999 and Fiscal 1998, the Company repurchased 905,485 and
         502,000  shares of its common stock,  respectively,  in the open market
         for approximately $8,451,000 and $4,479,000, respectively.

         During Fiscal 1999, the Company  received  253,290 shares of its common
         stock in  connection  with the final  distributions  of the  bankruptcy
         proceedings,  18,271 of which were purchased at a cost of approximately
         $181,000.
         No such shares were received or purchased during Fiscal 1998.

         During Fiscal 1999, the Company repurchased 47,712 shares of its common
         stock from the Uniroyal Technology Corporation Employee Stock Ownership
         Plan for approximately $482,000. No such shares were repurchased during
         Fiscal 1998.

         During  Fiscal  1998,  the Company  repurchased  500,000  shares of its
         common stock for $2,187,500 in connection  with the sale by the Pension
         Benefit  Guaranty  Corporation  ("PBGC") of all of its  holdings of the
         Company's   common  stock.   Also  during  Fiscal  1998,   The  Company
         repurchased  300,000 shares of its common stock,  previously  issued in
         connection  with the Fiscal 1997  purchase of  Townsend  Plastics,  for
         $250,000 cash and an unsecured promissory note for $2,450,000 (Note 10)
         and repurchased 50,000 shares of its common stock, previously issued in
         connection with the Fiscal 1997 acquisition of C. Gunther Company,  for
         $431,250.

         Subsequent  to the  fiscal  year  ended  September  26,  1999 and as of
         December 10, 1999, the Company repurchased approximately 132,450 shares
         of its common stock in the open market for approximately $1,263,000.

         Warrants

         The Company has 537,535  warrants  outstanding to purchase an aggregate
         of 537,535  shares of its common  stock at a price  equal to $4.375 per
         share,  subject  to  adjustments  under  certain   circumstances.   All
         outstanding warrants are exercisable at any time on or prior to June 1,
         2003, at which time they will  terminate  and become void.  The Company
         originally  issued 800,000 warrants to purchase an aggregate of 800,000
         shares of its  common  stock in  connection  with the  issuance  of its
         Senior  Secured  Notes.  The warrants were  detachable  from the Senior
         Secured Notes and, therefore,  were allocated a portion of the proceeds
         in the amount of approximately $1,566,000, which was their market value
         at the time they  were  issued.  This  amount  was added to  additional
         paid-in  capital.  During  Fiscal  1999 and Fiscal  1998,  the  Company
         repurchased  45,615  and  216,850,  respectively,  of  its  outstanding
         warrants for approximately $292,000 and $1,314,000, respectively. As of
         September 26, 1999, no warrants had been exercised.

         Stock Compensation Plans

         At September 26, 1999,  the Company has four  stock-based  compensation
         plans,  which are described  below. The Company applies APB Opinion No.
         25  and  related   interpretations   in   accounting   for  its  plans.
         Accordingly,  no compensation  cost has been recognized for these plans
         except as indicated below. Had compensation  cost been determined based
         on the fair  value at the grant  dates for  awards  under  those  plans
         consistent with the method of FASB Statement No. 123, the Company's net
         income and  earnings per share would have been reduced to the pro forma
         amounts  indicated  below  (in  thousands,  except  earnings  per share
         information):
<TABLE>
<CAPTION>
                                                                              Fiscal Years Ended
                                                         -----------------------------------------------------------
                                                         September 26,          September 27,          September 28,
                                                              1999                   1998                   1997
                                                         -------------          -------------          -------------
<S>                                                      <C>                   <C>                     <C>
         Net income
           As reported                                   $    5,520             $    2,390             $      379
           Pro forma                                     $    4,778             $    2,175             $      308
         Earnings per share - basic
           As reported                                   $     0.45             $     0.18             $     0.01
           Pro forma                                     $     0.39             $     0.16             $     0.01
         Earnings per share - assuming dilution
           As reported                                   $     0.42             $     0.16             $     0.01
           Pro forma                                     $     0.36             $     0.15             $     0.01


</TABLE>

         The fair value of each  option  grant is  estimated  on the date of the
         grant using the Black-Scholes  option-pricing  model with the following
         weighted-average assumptions used for grants for the fiscal years ended
         September  26,  1999,  September  27,  1998  and  September  28,  1997,
         respectively:   expected  volatility  of  44.16%,  45.46%  and  45.89%,
         dividend yield of 0% for all years, risk-free interest rates of 6.014%,
         4.523% and 6.042% and expected lives of 3 to 10 years.

         The Company has reserved  1,363,636 shares of common stock to be issued
         and sold pursuant to the 1992 Stock Option Plan that was adopted by the
         Company on September 27, 1992. Generally,  of the options granted under
         this  plan,  60%  vested  on May 1,  1994 and the  remainder  vested on
         November 1, 1995. Vesting provisions for any additional options will be
         determined  by the Board of Directors of the Company at the time of the
         grant of such options.  The stock options are exercisable over a period
         determined by the Board of Directors or its Compensation Committee, but
         no longer than ten years after the date granted.

         During the fiscal year ended  September 26, 1993,  the Company  adopted
         the 1992  Non-Qualified  Stock Option Plan  available  for  non-officer
         directors.  This plan provides  that  directors who are not officers of
         the Company are entitled to forego up to 100% of their annual  retainer
         in exchange  for options to purchase the  Company's  common stock at an
         option price of 50% of the market price of the underlying  common stock
         at the date of grant.  The options are  exercisable  for a period of 10
         years from the date of the grant of each option.  Compensation  expense
         related to these  options was  $109,000,  $64,000  and  $28,000  during
         Fiscal 1999, Fiscal 1998 and Fiscal 1997, respectively.

         During the fiscal year ended October 2, 1994,  the Company  adopted the
         1994 Stock  Option Plan  available  for certain  key  employees  of the
         Company.  The  Company has  reserved  approximately  812,000  shares of
         common stock to be issued under this plan,  provided that the aggregate
         number of options that may be granted  under the 1994 Stock Option Plan
         and all other stock option plans of the Company for  employees  may not
         at  any  time  exceed  in the  aggregate  15%  of  the  then  currently
         authorized common stock  outstanding,  on a fully diluted basis.  Stock
         options  granted under this plan are  exercisable  until not later than
         January 1, 2004.

         During the fiscal year ended  September 29, 1996,  the Company  adopted
         the 1995 Non-Qualified Stock Option Plan available for directors.  Each
         director  is  granted  an  option  to  purchase  10,000  shares  of the
         Company's  common  stock in the case of the  initial  grant  and  5,000
         shares for any  subsequent  grant.  The initial grant occurred upon the
         adoption of this plan or, in the case of new  directors,  30 days after
         becoming an eligible  director of the Company.  Options  granted  under
         this plan have a term of three years and may be  exercised  nine months
         after the date of the grant. This plan terminates on February 14, 2006.
         No director who is not an officer of the Company may receive options to
         purchase more than an aggregate of 30,000 shares of Common Stock in any
         calendar year under all of the Company's  Stock Option Plans.  The plan
         was amended by the  Stockholders  in 1999 to increase the annual amount
         from 10,000 to 17,500 shares of the Company's common stock.

         The following table  summarizes all stock option  transactions  for the
         fiscal years ended September 26, 1999 and September 27, 1998:

<TABLE>
<CAPTION>
                                                                         Fiscal Years Ended
                                            -------------------------------------------------------------------------
                                                    September 26, 1999                     September 27, 1998
                                            ---------------------------------       ---------------------------------
                                                             Weighted-Average                        Weighted-Average
                                              Shares          Exercise Price          Shares          Exercise Price
                                            ----------       ----------------       ----------       ----------------

<S>                                           <C>                 <C>                <C>                 <C>
      Outstanding at Beginning of Year        2,176,393           $    5.05          1,895,250           $    3.36
      Grants                                    187,100           $    7.76            762,658           $    8.09
      Exercised                                (498,463)          $    3.41           (475,595)          $    3.19
      Forfeited                                 (17,500)          $    7.84             (5,920)          $    3.57
                                              ---------                              ---------
      Outstanding at End of Year              1,847,530           $    5.74          2,176,393           $    5.05
                                              =========                              =========
      Exercisable at End of Year              1,029,605                              1,295,815
                                              =========                              =========
      Weighted-average fair value of
      options granted during the year        $     3.69                             $     3.38

</TABLE>
<PAGE>

         The  following  table  summarizes  information  about stock  options at
         September 26, 1999:
<TABLE>
<CAPTION>

                              Options Outstanding                                           Options Exercisable
   ----------------------------------------------------------------------------     --------------------------------
                             Number        Weighted-Average        Weighted-            Number           Weighted-
      Range of            Outstanding          Remaining            Average          Exercisable          Average
   Exercise Prices          at 9/26/99      Contractual Life     Exercise Price        at 9/26/99     Exercise Price
   ----------------       ------------     -----------------     --------------      ------------     --------------
<S>                          <C>                 <C>                  <C>              <C>                <C>
   $1.470 - $ 2.063             51,633           5.41 Years           $  1.66             51,633           $   1.66
   $2.625 - $ 3.156            481,949           5.17 Years           $  2.82            403,757           $   2.81
   $3.250 - $ 4.000            228,832           3.22 Years           $  3.48            225,892           $   3.48
   $4.125 - $ 5.063            323,768           4.41 Years           $  4.21            298,348           $   4.14
   $7.000 - $ 8.625            182,000           2.31 Years           $  7.87             37,310           $   7.09
   $9.125 - $10.000            579,348           8.77 Years           $  9.62             12,665           $   9.60
                             ---------                                                 ---------
                             1,847,530           5.65 Years           $  5.74          1,029,605           $   3.52
                             =========                                                 =========
</TABLE>
         Employee Stock Ownership Plan

         The Company  established the Uniroyal Technology  Corporation  Employee
         Stock  Ownership  Plan (the "ESOP") in 1992. The ESOP was a stock bonus
         plan  intended  to  encourage  eligible  employees  to save  for  their
         retirement and to increase their proprietary interest in the Company by
         accumulating  the Company's  common stock.  Employees  eligible for the
         initial  distribution  generally  were all  employees  employed  by the
         Company on or after January 1, 1993,  excluding  executive  officers of
         the Company.

         The Company made an initial  contribution to the ESOP of 425,000 shares
         of  common   stock.   Future   contributions   by  the   Company   were
         discretionary.  The  initial  contribution  was  allocated  to eligible
         employees of the Company ratably based upon the respective compensation
         levels of the eligible employees.  Shares allocated to each participant
         account under the ESOP became vested upon the participant's  completion
         of three years of cumulative service with the Company.  The Company did
         not make  any  contributions  to the  ESOP  nor did they  have any ESOP
         expense during Fiscal 1999,  Fiscal 1998 and Fiscal 1997. During Fiscal
         1999,  the  Company  merged the ESOP into the three  existing  employee
         savings plans effective February 6, 1998. No further  contributions are
         to be  made  to the  Plan,  no  further  benefits  will  accrue  to any
         participants  in the Plan and the accounts of all  participants  in the
         Plan as of February 6, 1998 are vested.


13.      EMPLOYEE COMPENSATION

         Post-retirement Health Care and Life Insurance Benefits

         Certain retired employees are currently  provided with specified health
         care and life  insurance  benefits.  Generally,  the plan  provides for
         reimbursement of approved medical and prescription drug costs not fully
         covered by Medicare. The plan also provides for certain deductibles and
         co-payments. The life insurance benefits provide for amounts based upon
         the retirees' compensation at the time of their retirement. Eligibility
         requirements for such benefits vary by division,  but generally provide
         that benefits are available to employees who retire after a certain age
         with specified years of service or a combined total of age and years of
         service.  The Company has the right to modify or  terminate  certain of
         these  benefits.  The  Company's  policy is to pay the actual  expenses
         incurred  by the  retirees;  the  Company  does not  intend to fund any
         amounts in excess of those  obligations.  The Company is also obligated
         to provide benefits to certain salaried  retirees of Uniroyal  Plastics
         Company,  Inc. ("UPC"),  which is currently in liquidation  proceedings
         under Chapter 7 of the U.S.  Bankruptcy Code and is an affiliate of the
         Predecessor  Companies (Note 14), and Uniroyal,  Inc. ("Uniroyal") (not
         affiliated  with the  Company)  who are class  members  under a federal
         district  court order.  The Company and  Uniroyal  agreed to share on a
         35%-65%   basis,   respectively,   the  costs  of  providing   medical,
         prescription  drug and life insurance  benefits to these retirees.  The
         Company is further  obligated to make payments to a Voluntary  Employee
         Benefits  Association  ("VEBA")  established  to  provide  benefits  to
         certain  retirees of the  Predecessor  Companies and UPC. The Company's
         post-retirement benefit plans are not funded.

         The  Company  adopted  SFAS No. 106 as of  September  27,  1992,  which
         requires that the cost of the  foregoing  benefits be recognized in the
         Company's  consolidated financial statements over an employee's service
         period with the Company.  The Company  determined  that the accumulated
         post-retirement benefit obligation  ("Transition  Obligation") of these
         plans  upon  adoption  of SFAS No.  106 was  $28,085,000.  The  Company
         elected  to defer the  recognition  of the  Transition  Obligation  and
         amortize it over the greater of the average remaining service period or
         life expectancy  period of the  participants,  which was expected to be
         approximately 16 years.

         The  components  of net  periodic  benefit  costs  are as  follows  (in
         thousands):
<TABLE>
<CAPTION>
<PAGE>
                                                       September 26,            September 27,           September 28,
                                                           1999                     1998                    1997
                                                       -------------            -------------           -------------
<S>                                                     <C>                      <C>                     <C>
          Service cost                                  $      61                $      52               $      67
          Interest cost                                     1,864                    2,212                   2,315
          Amortization of prior service credit                (14)                     (14)                    (14)
          Amortization of transition obligation             1,114                    1,114                   1,134
          Recognized actuarial loss                           151                      289                     205
                                                        ---------                ---------               ---------
          Net periodic benefit cost                     $   3,176                $   3,653               $   3,707
                                                        =========                =========               =========
</TABLE>
<PAGE>

         A  reconciliation  of the  beginning  and  ending  balances  of benefit
         obligations  and the  funded  status of the plans  are as  follows  (in
         thousands):
<TABLE>
<CAPTION>
                                                            September 26,            September 27,
                                                                1999                     1998
                                                            -------------            -------------
<S>                                                           <C>                      <C>
         Change in benefit obligations:
         Benefit obligation at beginning of year              $    34,163              $    34,221
         Service cost before expenses                                  61                       52
         Interest cost                                              1,864                    2,212
         Benefit payments                                          (2,649)                  (2,752)
         Actuarial (gain)/loss                                     (4,788)                     430
                                                               -----------             -----------
         Benefit obligation at end of year                     $    28,651             $    34,163
                                                               ===========             ===========

         Reconciliation of funded status:
         Benefit obligation at end of year                    $    28,651              $    34,163
         Unrecognized actuarial loss                               (2,762)                  (7,701)
         Unrecognized prior service credit                            247                      261
         Unrecognized transition obligation                       (10,022)                 (11,137)
                                                              -----------              -----------
         Net amount recognized at year-end                    $    16,114              $    15,586
                                                              ===========              ===========
</TABLE>
         The weighted  average discount rate assumptions were 6.75% at September
         26, 1999, 6.25% at September 27, 1998 and 7.0% at September 28, 1997.

         The  assumed  health  care  cost  trend  rate  used  in  measuring  the
         healthcare  benefits for Fiscal 1999 was a 6.0% average  annual rate of
         increase  in the per capita cost  health  care  benefits.  This rate is
         assumed to change over the years as follows:  5.8% for the fiscal years
         beginning in 2000,  5.3% for the fiscal years  beginning in 2003,  5.1%
         for the fiscal  years  beginning  in 2005,  4.9% for the  fiscal  years
         beginning in 2010, 4.8% for the fiscal years beginning in 2015 and 4.8%
         for the fiscal years beginning in 2020 and later.

         Assumed  health care cost trend rates have a significant  effect on the
         amounts  reported  for the  health  care plan.  A  one-percentage-point
         change in assumed  cost  trend  would have the  following  effects  for
         Fiscal 1999 (in thousands):

<TABLE>
<CAPTION>
                                                                              1% Point Increase       1% Point Decrease
                                                                              -----------------       -----------------
<S>                                                                                <C>                     <C>
         Effect on total of service and interest cost components for 1999          $    172                $   (165)
         Effect on year-end 1999 post-retirement benefit obligation                   2,476                  (2,131)
</TABLE>

         Post-retirement Benefit Plan
         ----------------------------
         Effective  October  1,  1998,  the  Company   established  an  unfunded
         post-retirement  defined  benefit  plan for  officers  and  certain key
         employees of the Company.  The net periodic  benefit cost recognized in
         Fiscal  1999 was  approximately  $525,000  and  consisted  entirely  of
         service cost.  The following  tables  provide a  reconciliation  of the
         changes in the plan's benefit  obligations and a reconciliation  of the
         funded status for Fiscal 1999 (in thousands):
<TABLE>


<S>                                                                            <C>
         Accrued benefit obligation at September 27, 1998                      $        -
         Service cost                                                                 525
         Benefits paid                                                                  -
                                                                               ----------
         Accrued benefit obligation at September 26, 1999                      $      525
                                                                               ==========

         Projected benefit obligation                                          $      484
         Unrecognized prior service cost                                                -
         Unrecognized loss                                                             41
                                                                               ----------
         Accrued benefit obligation at September 26, 1999                      $      525
                                                                               ==========
</TABLE>

         The discount rate used as of September 26, 1999 was 7.75%.

         In  connection  with the  post-retirement  defined  benefit  plan,  the
         Company purchased life insurance contracts on the lives of officers and
         certain key employees of the Company during Fiscal 1999. Life insurance
         premiums of  approximately  $383,000 were paid by the Company in Fiscal
         1999 with respect to these policies. As of September 26, 1999, $303,000
         has  been  capitalized  to  reflect  the  cash  surrender  value of the
         contracts.

         Other Benefit Plans
         -------------------
         The  Royalite,  UEP and UAS  divisions  provide  additional  retirement
         benefits  to  substantially  all of their  employees  and the  Polycast
         division  provides such  benefits to certain of its  employees  through
         three  defined  contribution  savings  plans.  The  plans  provide  for
         employee  contributions and employer matching contributions to employee
         savings. Employer contributions are generally either 2% of salaried and
         certain non-union hourly participants' gross earnings or rates per hour
         ranging  generally  from $.05 to $.66  based on years of  service.  The
         expenses pertaining to these plans amounted to approximately  $334,000,
         $618,000  and  $649,000  for the fiscal  years ended in 1999,  1998 and
         1997, respectively.

         In addition,  the Company  provides a savings plan under Section 401(k)
         of the  Internal  Revenue  Code.  The savings  plan covers all eligible
         salaried and non-union wage employees of the Company.  The savings plan
         allows all  eligible  employees to defer up to 15% of their income on a
         pre-tax basis  through  contributions  to the savings  plan.  For every
         dollar an employee  contributes,  the Company may  contribute an amount
         equal to 25% of each  participant's  before-tax  obligation up to 6% of
         the participant's compensation.  Such employer contribution may be made
         in cash or in Company  common  stock.  The expenses  pertaining to this
         savings plan were approximately $242,000, $168,000 and $141,000 for the
         fiscal years ended 1999,  1998 and 1997.  During Fiscal 1999 and Fiscal
         1998 the  Company  contributed  19,672 and 30,260  shares of its common
         stock  with a market  value of  approximately  $199,000  and  $191,000,
         respectively,  to the savings  plan.  The Company did not make any such
         contributions during Fiscal 1997.

14.      COMMITMENTS AND CONTINGENCIES

         Bankruptcy Proceedings
         ----------------------
         On September  27, 1992 the Company  acquired the  businesses of certain
         direct and indirect subsidiaries of The Jesup Group, Inc. ("Jesup") for
         $54,400,000  of  the  Company's  common  and  preferred  stocks.  These
         subsidiaries  (collectively,   the  "Predecessor  Companies")  are  the
         current operating divisions of the Company.  The Predecessor  Companies
         previously filed petitions with the United States  Bankruptcy Court for
         the Northern District of Indiana,  South Bend Division (the "Bankruptcy
         Court") seeking protection from their creditors under Chapter 11 of the
         United States  Bankruptcy Code. On August 20, 1992 the Bankruptcy Court
         approved the Third Amended Plan of  Reorganization  under Chapter 11 of
         the  Bankruptcy  Code  for  Polycast  Technology  Corporation  and  its
         Affiliated Debtors (the "Plan"). The Plan was substantially consummated
         at the close of business on September 27, 1992 (the "Effective Date").

         As a  result  of the  bankruptcy  and the  consummation  of the Plan at
         September 27, 1992, the Company recorded certain adjustments to present
         its  consolidated   financial  statements  at  September  27,  1992  in
         conformity  with  Statement of Position  90-7  "Financial  Reporting by
         Entities in Reorganization  Under the Bankruptcy Code" ("SOP 90-7"), of
         the  American  Institute  of Certified  Public  Accountants.  Under the
         provisions  of SOP 90-7,  the Company was required to adopt fresh start
         reporting as of September 27, 1992 because (i) the reorganization value
         of the Company  (approximate fair value on the Effective Date) was less
         than  the  total  of all  post-petition  liabilities  and  pre-petition
         allowed claims and (ii) holders of the voting shares of the Predecessor
         Companies before the Effective Date received less than 50 percent (50%)
         of the voting shares of the Company.

         As of September 26, 1999, all 10,000,000 shares of the Company's common
         stock  allocated for the  disposition  of  bankruptcy  claims have been
         issued for full  settlement to the holders of unsecured  claims against
         the estates of the Predecessor Companies and to the Company's ESOP. The
         Bankruptcy  Court issued its final decree closing the bankruptcy of the
         Predecessor Companies on September 27, 1999.

         Townsend Acquisition
         --------------------
         By letter dated January 30, 1998, the Denver Regional Office of the FTC
         notified the Company that it was conducting a non-public  investigation
         into the Company's  acquisition  of the Townsend  Plastics  Division of
         Townsend  Industries,  Inc.  in  September  1997.  The  purpose  of the
         investigation was to determine whether the transaction violated Section
         7 of the Clayton Act, 15 USC Section 18, Section 5 of the Federal Trade
         Commission  Act, 15 USC  Section  45, or any other law  enforced by the
         FTC.   The   Company  has  been   cooperating   with  the  FTC  in  its
         investigation.  The Company has been in  discussions  with the staff of
         the FTC  seeking to meet the  concerns of both the Company and the FTC.
         Management does not expect the cost of compliance with the FTC requests
         to have a  material  adverse  effect  upon  the  Company's  results  of
         operations,  cash flows or financial position. The Company is currently
         seeking to sell  certain  assets to another  entity that could  compete
         with  Townsend/Glasflex in order to increase competition in the markets
         served by Townsend/Glasflex.

         Litigation
         ----------
         The Company is also  engaged in  litigation  arising  from the ordinary
         course of business.  Management  believes the ultimate  outcome of such
         litigation  will not have a material  adverse effect upon the Company's
         results of operations, cash flows or financial position.

         Environmental Factors
         ---------------------
         The Company is subject to a wide range of federal, state and local laws
         and  regulations  designed to protect the environment and worker health
         and safety. The Company's management  emphasizes  compliance with these
         laws and  regulations.  The Company has instituted  programs to provide
         guidance and training and to audit compliance with  environmental  laws
         and  regulations at Company owned or leased  facilities.  The Company's
         policy is to  accrue  environmental  and  clean-up  related  costs of a
         non-capital  nature when it is probable  both that a liability has been
         incurred and that the amount can be reasonably estimated.

         The  Company  may  become   subject  to  claims   relating  to  certain
         environmental  matters. The operations of the Predecessor Companies and
         certain of their  affiliates  produced waste materials  that,  prior to
         1980, were disposed of at some 36 known  unregulated  sites  throughout
         the United  States.  After 1980,  waste  disposal  was limited to sites
         permitted under federal and state  environmental  laws and regulations.
         If any of the disposal sites (unregulated or regulated) are found to be
         releasing  hazardous  substances  into the  environment,  under current
         federal and state  environmental laws, the appropriate company might be
         subject to liability for clean-up and containment costs.

         Prior to the Effective Date of the Predecessor Companies' Plan, several
         sites were  identified  where there were potential  liabilities for the
         cost of  environmental  clean-up.  In most  instances,  this  potential
         liability  resulted  from  the  alleged  arrangement  for the  off-site
         disposal of hazardous substances by Uniroyal, Inc.

         Pursuant to a settlement agreement with the United States Environmental
         Protection Agency ("EPA"), the United States Department of the Interior
         and  the  States  of  Wisconsin   and  Indiana  (the  "EPA   Settlement
         Agreement"),  entered into in connection with the Plan, the Predecessor
         Companies  compromised and settled (in exchange for common stock of the
         Company)  substantially  all of  the  pre-petition  liabilities  of the
         Predecessor  Companies and the Company relating to disposal  activities
         under Sections 106 and 107 of the Comprehensive  Environmental Response
         Compensation and Liability Act ("CERCLA"), Section 3008 of the Resource
         Conservation  and  Recovery  Act  ("RCRA")  and similar  state laws for
         clean-up of the remaining  unsettled 20  designated  sites not owned by
         any of the  Predecessor  Companies  (the "Known Sites") and for natural
         resource  damages  at 15 of the 20  Known  Sites.  Pursuant  to the EPA
         Settlement  Agreement,   the  Predecessor  Companies  and  the  Company
         received from the United States and the States of Indiana and Wisconsin
         a covenant not to sue for  response  costs and,  with the  exception of
         five Known Sites,  natural resource damages at each of the Known Sites.
         In addition,  pursuant to Section 113(f)(2) of CERCLA,  and as provided
         under the EPA Settlement  Agreement,  the Predecessor Companies and the
         Company will be protected against  contribution claims filed by private
         parties  for any Known Site for matters  covered by the EPA  Settlement
         Agreement. The EPA Settlement Agreement established a mechanism for the
         Company to resolve its liability for any other sites,  except for those
         owned  by  the  Company   (the   "Additional   Sites"),   arising  from
         pre-petition  disposal activity.  The Company also agreed to share with
         such  parties the  proceeds of claims  relating to the known sites made
         against  certain  insurers  of  the  Predecessor  Companies  and  their
         affiliates.

         In the event that the United  States,  or the State of Wisconsin or the
         State  of  Indiana  asserts  a  claim  against  any of the  Predecessor
         Companies  or  the  Company  for   response   costs   associated   with
         pre-petition   disposal   activities  at  any   Additional   Site,  the
         governmental party will be entitled to pursue its claim in the ordinary
         course, and the Company and the Predecessor  Companies will be entitled
         to assert all of their  defenses.  However,  if and when the Company or
         any of the Predecessor  Companies is held liable,  and if the liability
         is  determined  to arise from  pre-petition  disposal  activities,  the
         Company or such  Predecessor  Company may pay the claims in  discounted
         "plan dollars"  (i.e.,  the value of the  consideration  that the party
         asserting  such claim would have received if the liability were treated
         as a general  unsecured claim under the Plan). Such payment may be made
         in cash or securities,  or a combination  thereof,  at the Company's or
         such Predecessor Company's option.

         The Company  received a letter dated  October 30,  1997,  from the EPA,
         Region  5,   informing  the  Company  that  it  might  be   financially
         responsible for a pollution incident at the facility formally leased by
         the  Company  at 312 North Hill  Street,  Mishawaka,  Indiana.  The EPA
         notified  the Company  that it expected  the Company to pay for part or
         all of the  approximately  $1,700,000  of  costs  associated  with  the
         clean-up of a portion of such plant. The Company and the EPA negotiated
         a settlement  whereby the EPA was given an allowed  unsecured  claim of
         $1,700,000  under the Plan,  and the Company made a payment of $525,000
         to the EPA in March of 1999.  The  liability had been fully accrued for
         in a prior fiscal year.

         In October 1996,  the EPA sent the Company a General Notice and Special
         Notice of Liability  concerning the Refuse Hideaway landfill  Superfund
         Site  at  Middleton,  Wisconsin.  While  a unit of  Uniroyal,  Inc.  is
         believed to have sent non-hazardous  waste to the site between 1978 and
         1984,  the Company is not aware that the  Uniroyal,  Inc. unit sent any
         hazardous  materials  to the site.  The  Company  has  entered  into an
         Administrative  Order  on  Consent  with  the  EPA  and  a  Potentially
         Responsible   Parties   Agreement   with  certain   other   potentially
         responsible  parties.  The Company does not  presently  anticipate  any
         material  liability in connection  with the site, and in any event,  if
         the Company is found to have  liability  in  connection  with the site,
         such  liability  will be  subject  to the  terms of the EPA  Settlement
         Agreement.

         Claims arising from real property owned by the Company are not affected
         by the EPA Settlement Agreement.  In connection with the acquisition of
         a manufacturing  facility in South Bend,  Indiana,  the Company assumed
         costs of remediation of soil and ground water  contamination  which the
         Company   estimates  will  cost  not  more  than   $1,000,000   over  a
         five-to-seven  year  period.  The Company had placed  $1,000,000  in an
         escrow  account to be used for such  clean-up  in  accordance  with the
         terms  of  the  agreement  for  the  purchase  of the  facility.  As of
         September 26, 1999, the Company had incurred  approximately $615,000 of
         related remediation costs.

         The Company's  acquisition of assets of Townsend  Plastics in September
         1997,  included the building in which the business operates in Pleasant
         Hill, Iowa. The seller retained the underlying real property,  which is
         leased to the Company for a term of ten years.  The Company also has an
         option to acquire such real property until September 30, 2007. The real
         property  is  subject  to  a  RCRA  Facility   Investigation/Corrective
         Measures  Study with  Interim  Measures  ordered by the EPA pursuant to
         RCRA.  Two former  lessees of the  property are  performing  corrective
         measures  on the real  property  to  remediate  soil and  ground  water
         contamination.  The Company does not  anticipate  that such  corrective
         measures will  interfere  with the  Company's use of the property.  The
         Company does not  anticipate any liability to the Company in connection
         with such  contamination or corrective  measures as long as the Company
         remains a lessee of the property.

         Based on  information  available as of September 26, 1999,  the Company
         believes that the costs of known environmental matters either have been
         adequately  provided  for or are  unlikely  to have a material  adverse
         effect on the Company's operations, cash flows or financial position.

         Leases
         ------
         The Company is a party to  non-cancelable  lease  agreements  involving
         equipment.  The  leases  extend for  varying  periods up to 5 years and
         generally  provide for the payment of taxes,  insurance and maintenance
         by the lessee.
         Generally these leases have options to purchase at varying dates.

         The  Company's  property  held under  capitalized  leases,  included in
         property,  plant and  equipment  (Note 4) consists of the following (in
         thousands):
<TABLE>
<CAPTION>
                                                                 September 26,          September 27,
                                                                      1999                   1998
                                                                 -------------          -------------
<S>                                                               <C>                    <C>
         Buildings and improvements                               $    5,426             $        -
         Machinery, equipment and office furnishings                   5,662                  1,153
         Construction in progress                                      9,755                      -
                                                                  ----------             ----------
                                                                      20,843                  1,153
         Less accumulated amortization                                  (479)                  (351)
                                                                  ----------             ----------
         Total                                                    $   20,364             $      802
                                                                  ==========             ==========
</TABLE>

         The   approximate   minimum  future  lease   obligations  on  long-term
         non-cancelable  capital lease  obligations  included in long-term  debt
         (Note 10) during  subsequent  fiscal years  ending in September  are as
         follows (in thousands):
<PAGE>
<TABLE>
<CAPTION>
                                   Fiscal Year
                                   -----------
                                     <S>                                         <C>
                                     2000                                        $  5,023
                                     2001                                           4,549
                                     2002                                           4,772
                                     2003                                           4,768
                                     2004                                           3,464
                                                                                  -------
                                                                                   22,576
                                     Less imputed interest                         (4,220)
                                                                                 --------
                                     Total                                       $ 18,356
                                                                                 ========
</TABLE>

         Interest is imputed  using the rate that would equate the present value
         of  the  minimum  lease  payments  to the  fair  value  of  the  leased
         equipment.

         The Company leases  equipment,  vehicles and warehouse and office space
         under  various  lease  agreements,  certain  of which  are  subject  to
         escalations  based upon  increases in specified  operating  expenses or
         increases in the Consumer Price Index.  The approximate  future minimum
         rentals under non-cancelable  operating leases during subsequent fiscal
         years ending in September are as follows (in thousands):
<TABLE>
<CAPTION>

                                   Fiscal Year
                                   -----------
                                     <S>                                         <C>
                                     2000                                        $  2,639
                                     2001                                           1,906
                                     2002                                           1,769
                                     2003                                           1,664
                                     2004                                           1,534
                                     Subsequent years                               2,606
                                                                                 --------
                                     Total                                       $ 12,118
                                                                                 ========
</TABLE>

         Rent expense was  approximately  $2,027,000,  $1,463,000 and $1,264,000
         for Fiscal 1999, Fiscal 1998 and Fiscal 1997, respectively.

         Officers' Compensation

         On August 1, 1995 the Company implemented a Deferred  Compensation Plan
         providing  certain key employees the  opportunity  to participate in an
         unfunded deferred compensation program. Under the program, participants
         may defer a portion of their base  compensation and bonuses earned each
         year. Amounts deferred will earn interest at 12% per annum. The program
         is not  qualified  under  Section 401 of the Internal  Revenue Code. At
         September 26, 1999 and September 27, 1998 participant deferrals,  which
         are  included  in accrued  liabilities,  were  $726,000  and  $519,000,
         respectively.  The  expense  during the Fiscal  1999,  Fiscal  1998 and
         Fiscal 1997 was $208,000, $184,000 and $161,000, respectively.

         Also during the fiscal year ended  October 1, 1995,  split  dollar life
         insurance  contracts  were purchased on the lives of the five executive
         officers. Annual insurance premiums of $186,000 are paid by the Company
         with respect to these policies.  As of September 26, 1999 and September
         27, 1998, $929,000 and $717,000,  respectively, has been capitalized to
         reflect the cash  surrender  value of these  contracts due the Company,
         net of loan balances.

         As of September 26, 1999,  the Company had  employment  contracts  with
         four officers of the Company,  providing  for total annual  payments of
         approximately $1,509,000 plus bonuses through September 1, 2000.

15.      SALE OF THE AUTOMOTIVE DIVISION OF THE COATED FABRICS SEGMENT

         During the fourth  quarter of Fiscal  1996,  management  of the Company
         concluded  that,  based not only on its  decision to sell,  but also on
         discussions with interested buyers, a sale of the automotive operations
         of the Coated Fabrics Segment was probable.  The automotive  operations
         were  comprised of 100% of the  operations  at the Port  Clinton,  Ohio
         ("Port  Clinton")  facility and a portion of overall  operations at the
         Stoughton,  Wisconsin facility ("Stoughton").  Further, on December 11,
         1996,  the Board of Directors  approved the closure of the Port Clinton
         operation of the Coated  Fabrics  Segment during the fiscal year ending
         September 28, 1997 in the event a sale did not occur.  Port Clinton had
         incurred  operating losses of  approximately  $7,640,000 and $5,540,000
         during the fiscal years ended September 29, 1996 and October 1, 1995.

         In accordance  with SFAS No. 121, the Company  recorded a write-down of
         long-lived  assets  related  to  the  automotive   operations  totaling
         approximately  $8,900,000  during the fiscal year ended  September  29,
         1996.  The  related  assets  were  classified  as  held  for  sale  and
         depreciation  ceased on September 29, 1996.  The carrying  value of the
         remaining  long-lived  assets to be  disposed of was  $3,217,000  as of
         September 26, 1999 and $4,530,000 as of September 27, 1998. The Company
         expects to dispose of the remaining  automotive assets, the majority of
         which represent the real property at Port Clinton, in Fiscal 2000.

         On May 15,  1997 the  Company  agreed  to sell  certain  assets  of the
         automotive  division  of the  Coated  Fabrics  Segment  located  at the
         Company's Stoughton,  Wisconsin, facility ("Stoughton") to Textileather
         Corporation,  a subsidiary of Canadian  General-Tower,  Limited ("CGT")
         for   $6,657,500.   The  Company   received   $4,657,500  in  cash  and
         Textileather  retained  $2,000,000 which was to be paid pursuant to the
         terms of a supply  agreement and to bear interest at the rate of 9% per
         annum.  Under the terms of the supply agreement,  the Company agreed to
         continue to manufacture and supply Stoughton automotive products to its
         customers until Textileather  Corporation could transfer  production of
         the Stoughton  automotive products to its own facility.  The $2,000,000
         plus  accrued  interest was payable in stages and  contingent  upon the
         successful  transfer of certain  automotive  programs  to  Textileather
         Corporation.  The first  installment  was due September  30, 1997.  The
         Company requested payment and was denied payment by CGT. On October 10,
         1997, the Company filed suit against CGT and  Textileather  Corporation
         in the Dane County, Wisconsin Circuit Court. The Company sought damages
         for non-payment of the holdback and declaratory and injunctive  relief.
         On October 30,  1997,  the  defendants  filed their  answer,  basically
         denying  the  claims.   Textileather  Corporation  later  commenced  an
         arbitration  in  Madison,   Wisconsin  in  connection  with  claims  by
         Textileather  Corporation under the asset purchase  agreement.  The two
         cases were  settled on July 17,  1998.  As part of the  settlement  the
         Company  retained  in  perpetuity  certain  automotive  programs it had
         previously  sold,  and two programs  were retained  until  February 28,
         1999. In addition,  Textileather  made a cash payment to the Company of
         approximately $379,000 which was recorded by the Company as a gain, and
         also  transferred  ownership back to the Company of an asset located at
         the Company's Port Clinton, Ohio facility.

         On October 17, 1997 the Company  further  agreed to sell certain assets
         at Port  Clinton  to CGT for  $5,325,000  plus the  value of  purchased
         inventories and plus or minus adjustments  contingent upon the transfer
         of certain automotive  programs to CGT as defined in the agreement.  On
         July 10,  1998,  the Company  received  $4,930,000  from CGT under this
         agreement  relative  to assets  related  to the  Company's  door  panel
         program.  Under the terms of a supply agreement,  the Company agreed to
         continue to manufacture and supply customers of the door panel programs
         until CGT could  transfer the  production of the door panels to its own
         facility.  The  Company  stopped  producing  door  panels  at its  Port
         Clinton,  Ohio  facility in  November,  1998.  The Company  received an
         additional  $800,000  when CGT secured  purchase  orders for the twelve
         months  following  the door panel  closing  from  certain  customers as
         identified  in the  agreement.  The Company also received an additional
         $900,000 on July 19, 1999 for certain customer  approvals and resulting
         transfer  to CGT of  purchased  assets  that  relate  to the  Company's
         instrument  panel  programs.  During  Fiscal 1999 and Fiscal 1998,  the
         Company  recognized a gain of $667,000 and $133,000,  respectively,  in
         connection with this transaction.

         Management  believes  that  the  Company  will  not  have  any  further
         significant  gain or loss  upon  the  disposal  of the  remaining  Port
         Clinton assets.

16.      JOINT VENTURE

         As of  September  29,  1997,  the  Company  entered  into a  technology
         agreement with Emcore to acquire certain technology for the manufacture
         of epitaxial  wafers used in high brightness LEDs for lamps and display
         devices.  Included in other  assets at  September  26, 1999 are license
         fees relating to the technology  agreement of $5,000,000 paid to Emcore
         during the fiscal year ended  September 26, 1999 and September 27, 1998
         (Note  8).  On the date of the  transaction,  Thomas  J.  Russell,  the
         Chairman of the Board of Directors of Emcore,  was a director and major
         stockholder  of the  Company  and Howard R. Curd,  the  Chairman of the
         Board of Directors and Chief  Executive  Officer of the Company,  was a
         director and  stockholder  of Emcore.  Subsequent  to the  transaction,
         Thomas J. Russell  resigned  from the Board of Directors of the Company
         and Howard R. Curd resigned from the Board of Directors of Emcore.

         Uniroyal  Optoelectronics,  Inc.,  a  wholly-owned  subsidiary  of  the
         Company, entered into a joint venture (Uniroyal  Optoelectronics,  LLC)
         with Emcore which Uniroyal Optoelectronics, Inc. manages and owns a 51%
         interest.   Emcore  is  the  49%  owner.  In  July  1998,  both  owners
         capitalized the joint venture through cash contributions of $510,000 by
         the Company and $490,000 by Emcore.

         During Fiscal 1999, Emcore made additional capital contributions to the
         joint  venture  of  $5,500,000.  The  Company is  required  to fund its
         equivalent contribution of approximately $5,700,000 as cash is required
         by the joint venture.

         Included in selling and general administrative  expenses of the Company
         for  Fiscal  1999  and  Fiscal  1998  are   $4,345,000   and  $302,000,
         respectively, of joint venture start-up costs.

         In July 1998,  the joint venture  entered into a supply  agreement with
         Emcore  whereby  Emcore  agreed to supply  epitaxial  wafers,  dies and
         package-ready  devices to the joint venture until the joint venture was
         ready  to  produce  its own  products.  During  Fiscal  1999,  Uniroyal
         Optoelectronics,  LLC sales of approximately  $479,000 were a result of
         product supplied by Emcore.

         In July 1998,  the joint venture  entered into a lease  agreement for a
         facility in Tampa, Florida and has completed  construction of leasehold
         improvements.  It is  anticipated  that the joint  venture  will  begin
         production for commercial  applications in the second quarter of Fiscal
         2000.

17.      INCOME (LOSS) PER COMMON SHARE

         FASB has issued SFAS No. 128, Earnings Per Share, which was required to
         be adopted for financial  statement  periods  ending after December 15,
         1997. SFAS No. 128 requires that the primary and fully diluted earnings
         per share be  replaced  by "basic" and  "diluted"  earnings  per share,
         respectively.  The basic calculation  computes earnings per share based
         only on the weighted  average number of shares  outstanding as compared
         to primary earnings per share which included common stock  equivalents.
         The diluted  earnings per share  calculation  is computed  similarly to
         fully diluted  earnings per share. The Company has adopted SFAS No. 128
         for the fiscal years ended  September 26, 1999,  September 27, 1998 and
         September 28, 1997.
<PAGE>

         The  reconciliation of the numerators and denominators of the basic and
         diluted earnings per share computation is as follows:
<TABLE>
<CAPTION>

                                                         For the Fiscal Year Ended September 26, 1999
                                           -------------------------------------------------------------------------

                                             Income (Numerator)        Shares (Denominator)        Per Share Amount
                                           --------------------      ----------------------      -------------------
<S>                                              <C>                           <C>                  <C>
          Income before extraordinary item
            item                                 $     5,520,000
          Basic EPS
          ---------
            Income available to
              common stockholders                      5,520,000               12,157,996           $     0.45
                                                                                                    ==========
          Effect of Dilutive Securities
          -----------------------------
            Stock options                                                         828,460
            Warrants                                                              299,878
                                                                               ----------
          Diluted EPS
          -----------
            Income available to common
              stockholders                       $     5,520,000               13,286,334           $     0.42
                                                 ===============               ==========           ==========
</TABLE>
<TABLE>
<CAPTION>
                                                         For the Fiscal Year Ended September 27, 1998
                                           -----------------------------------------------------------------------

                                             Income (Numerator)      Shares (Denominator)        Per Share Amount
                                           ----------------------- ------------------------- ---------------------
<S>                                              <C>                           <C>                  <C>
          Income before extraordinary
            item                                 $     8,027,000
          Basic EPS
          ----------
            Income available to
              common stockholders                      8,027,000               13,231,542           $     0.61
                                                                                                    ==========
          Effect of Dilutive Securities
          -----------------------------
            Stock options                                                       1,070,122
            Warrants                                                              329,404
                                                                               ----------
          Diluted EPS
          -----------
            Income available to common
              stockholders                       $     8,027,000               14,631,068           $     0.55
                                                 ===============               ==========           ==========
</TABLE>
<TABLE>
<CAPTION>
                                                         For the Fiscal Year Ended September 28, 1997
                                           ---------------------------------------------------------------------------

                                             Income (Numerator)      Shares (Denominator)        Per Share Amount
                                           ----------------------- ------------------------- -------------------------
<S>                                              <C>                           <C>                  <C>
          Income before extraordinary
            item                                 $       379,000
          Less: Preferred stock dividends               (220,000)
                                                 ---------------
          Basic EPS
          ---------
            Income available to
              common stockholders                        159,000               13,316,965           $     0.01
                                                                                                    ==========
          Effect of Dilutive Securities
          -----------------------------
            Stock options                                                         106,589
                                                                               ----------
          Diluted EPS
          -----------
            Income available to common
              stockholders                       $       159,000               13,423,554           $     0.01
                                                 ===============               ==========           ==========

</TABLE>
         Additional  stock  options to purchase  578,848,  577,848 and 1,224,478
         shares of common stock at various prices were  outstanding at September
         26, 1999,  September  27, 1998 and  September  28, 1997,  respectively.
         These shares were not included in the  computation of diluted  earnings
         per share  because  the  exercise  price was  greater  than the average
         market price of the common shares.  Warrants to purchase 800,000 shares
         of  common  stock  at  $4.375  per  share  were  not  included  in  the
         computation of diluted earnings per share at September 28, 1997 because
         the  exercise  price was greater  than the average  market price of the
         common shares.

         The calculation for earnings per share for Fiscal 1997 has been revised
         to include the effect of the dividends  paid to the owners of preferred
         stock paid in common stock.

18.      RELATED PARTY TRANSACTIONS

         The Company  has an  agreement  with an  investment  banking  firm that
         employs  relatives  of one of the  Company's  executive  officers.  The
         investment banking firm has provided financial advisory services to the
         Company  for fees of  approximately  $157,000,  $732,000  and  $274,000
         during Fiscal 1999, Fiscal 1998 and Fiscal 1997,  respectively.  Of the
         $732,000  incurred  during  Fiscal  1998,   $650,000  was  incurred  in
         connection with the Fleet Financing.

         During the fiscal  years ended  September  26, 1999 and  September  27,
         1998,  the Company  incurred legal fees of  approximately  $299,000 and
         $326,000,  respectively,  with a law firm of which one of the Company's
         directors is a senior partner. Approximately $231,000 of the legal fees
         incurred in Fiscal 1998,  were  incurred in  connection  with the Fleet
         Financing.  No legal fees were paid to this firm during the fiscal year
         ended September 28, 1997.

19.      SEGMENT INFORMATION

         The  Company  adopted  SFAS No.  131,  "Disclosures  About  Segments of
         Enterprise and Related  Information,"  which establishes  standards for
         reporting  information  about a Company's  operating  segments,  in the
         fourth  quarter  of Fiscal  1999.  Operating  segments  are  defined as
         components of an enterprise for which separate financial information is
         available  that is evaluated on a regular basis by the chief  operating
         decision  maker,  or decision making group, in deciding how to allocate
         resources to an individual segment and in assessing  performance of the
         Segment.

         The Company's  operations are classified into four reportable segments:
         High  Performance  Plastics,  Coated Fabrics,  Specialty  Adhesives and
         Optoelectronics.  The High Performance  Plastics  Segment  manufactures
         thermoplastic  and  acrylic   products.   The  Coated  Fabrics  Segment
         manufactures  vinyl coated fabric  products.  The  Specialty  Adhesives
         Segment   manufactures   industrial   adhesives   and   sealants.   The
         Optoelectronics  Segment will manufacture  epitaxial  wafers,  dies and
         package-ready dies used in high brightness light-emitting diodes (LEDs)
         once  operations  commence.

         The Company's  reportable  segments are strategic  business  units that
         offer  different   products  and  are  managed   separately   based  on
         fundamental differences in their operations.

         The High Performance  Plastics Segment includes  Uniroyal HPP Holdings,
         Inc. and its subsidiary,  High  Performance  Plastics,  Inc. The Coated
         Fabrics Segment includes Uniroyal Engineered Products, Inc.'s operating
         division, Uniroyal Engineered Products. The Specialty Adhesives Segment
         includes  Uniroyal  Engineered  Products,  Inc.'s  operating  division,
         Uniroyal Adhesives and Sealants.  The Optoelectronics  Segment includes
         Uniroyal  Optoelectronics,  Inc.  and  its  majority-owned  subsidiary,
         Uniroyal  Optoelectronics,  LLC. All other  subsidiaries are considered
         part of corporate.

         The Company's  assets and  operations are located in the United States.
         The  principal  markets for the  Company's  products  are in the United
         States.  Export  sales to  foreign  countries,  based  upon  where  the
         products are shipped to, were approximately $8,758,000, $11,639,000 and
         $7,189,000 in Fiscal 1999,  Fiscal 1998 and Fiscal 1997,  respectively.
         No  single  customer  accounted  for 10% or more of the  Company's  net
         sales.

         The accounting policies of the segments are the same as those described
         in the summary of significant accounting policies. Management evaluates
         a  Segment's  performance  based  upon  profit or loss from  operations
         before   interest  and  income  taxes.   Intersegment   sales  are  not
         significant.

<PAGE>


         Segment data for Fiscal 1999, Fiscal 1998 and Fiscal 1997 is as follows
         (in thousands):
<TABLE>
<CAPTION>

                                               September 26,          September 27,          September 28,
                                                    1999                   1998                   1997
                                               -------------          -------------          -------------
<S>                                              <C>                   <C>                    <C>
        Net Sales:
           High Performance Plastics             $   130,219           $   128,580            $   118,847
           Coated Fabrics                             42,341                67,906                 68,772
           Specialty Adhesives                        28,388                24,130                 20,905
           Optoelectronics                               485                     -                      -
                                                 -----------           -----------            -----------
        Total                                    $   201,433           $   220,616            $   208,524
                                                 ===========           ===========            ===========

        Operating Income (loss):
           High Performance Plastics             $    15,518           $    16,109            $    10,547
           Coated Fabrics                              4,202                 8,868                  2,105
           Specialty Adhesives                         2,686                 1,911                   (346)
           Optoelectronics                            (5,080)                 (398)                     -
           Corporate                                  (4,490)               (3,673)                (1,712)
                                                 -----------           -----------            -----------
        Total                                    $    12,836           $    22,817            $    10,594
                                                 ===========           ===========            ===========

        Identifiable assets:
           High Performance Plastics             $   111,067           $   101,490            $    92,034
           Coated Fabrics                             23,547                35,959                 43,654
           Specialty Adhesives                        15,972                15,755                 15,012
           Optoelectronics                            22,474                 2,677                      -
           Corporate                                  40,141                30,470                 30,791
                                                 -----------           -----------            -----------
        Total                                    $   213,201           $   186,351            $   181,491
                                                 ===========           ===========            ===========

        Depreciation and amortization:
           High Performance Plastics             $     5,652           $     5,481            $     4,941
           Coated Fabrics                              1,702                 1,704                  1,847
           Specialty Adhesives                           873                   842                    882
           Optoelectronics                               210                     1                      -
           Corporate                                     720                 1,069                  1,388
                                                 -----------           -----------            -----------
        Total                                    $     9,157           $     9,097            $     9,058
                                                 ===========           ===========            ===========

        Capital Expenditures:
           High Performance Plastics             $     7,564           $     5,399            $     2,951
           Coated Fabrics                                535                   448                  1,213
           Specialty Adhesives                           578                   911                  7,311
           Optoelectronics                            21,353                   292                      -
           Corporate                                     787                   238                    802
                                                 -----------           -----------            -----------
        Total                                    $    30,817           $     7,288            $    12,277
                                                 ===========           ===========            ===========
</TABLE>

         Included  in each  Segment's  operating  income  in  Fiscal  1999 is an
         allocation of corporate  overhead based upon 3.5% of Segment sales with
         the  exception of the  Optoelectronics  Segment for which the corporate
         overhead allocation was $876,000.

         During  Fiscal  1998,  the  Company  changed  its  methodology  for the
         allocation of corporate  overhead from an allocation of 100% of certain
         corporate  costs to an  allocation  of costs  based  upon 3.0 - 3.5% of
         Segment sales.  Prior fiscal year  allocations  were not restated.  Had
         prior year  allocations been restated for consistency with current year
         allocations,  it would have resulted in additional  corporate  overhead
         allocation  to  the  High  Performance  Plastics,  Coated  Fabrics  and
         Specialty Adhesives  Segments' in Fiscal 1998 of $245,000,  $177,00 and
         $48,000,  respectively.  It would have  resulted  in (less)  additional
         corporate overhead allocation to the High Performance Plastics,  Coated
         Fabrics   and   Specialty   Adhesives   Segments   in  Fiscal  1997  of
         ($2,386,000), $273,000 and ($772,000), respectively.


<PAGE>

20.      QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (in thousands):
<TABLE>
<CAPTION>

                                               First Quarter    Second Quarter    Third Quarter     Fourth Quarter
    1999                                       -------------    --------------    -------------     --------------
    ----
<S>                                             <C>                <C>               <C>               <C>
    Net sales                                   $   49,089         $  49,273         $  51,086         $  51,985
    Gross profit                                    11,298            14,022            14,798            14,268
    Income before extraordinary item                    19             1,059             1,931             2,511
    Net Income                                          19             1,059             1,931             2,511

    Earnings per common share:
       Basic:
         Income before extraordinary item       $        -         $    0.09         $    0.16         $    0.21
         Net income                             $        -         $    0.09         $    0.16         $    0.21
       Diluted:
         Income before extraordinary item       $        -         $    0.08         $    0.15         $    0.19
         Net income                             $        -         $    0.08         $    0.15         $    0.19

    1998
    ----
    Net sales                                   $   51,182         $  54,533         $  56,905         $  57,996
    Gross profit                                    14,281            14,774            15,731            15,324
    Income before extraordinary item                 1,363             1,744             2,618             2,302
    Net income                                       1,363             1,744            (3,019)            2,302

    Earnings per common share:
       Basic:
         Income before extraordinary item       $     0.10         $    0.13         $    0.20         $    0.18
         Net income                             $     0.10         $    0.13         $   (0.23)        $    0.18
       Diluted:
         Income before extraordinary item       $     0.10         $    0.12         $    0.18         $    0.16
         Net income                             $     0.10         $    0.12         $   (0.20)        $    0.16


</TABLE>


21.      Subsequent to the Company's year end, a nonbinding letter of intent was
         signed  with  a  potential  buyer  of  HPPI,  which  may  result  in  a
         substantial  gain if  consummated.  The potential  sale is subject to a
         number  of   conditions   including  the   negotiation   of  definitive
         agreements,  approval  by the  Board of  Directors  of both  companies,
         clearance by the appropriate  governmental  agencies and additional due
         diligence   and   investigation.   Either  party  may   terminate   the
         discussions.  Due to the contingencies  involved, the Company is unable
         to predict whether or when a transaction  with the potential buyer will
         be consummated.
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
   Uniroyal Technology Corporation

We  have  audited  the  consolidated   balance  sheets  of  Uniroyal  Technology
Corporation  and  subsidiaries  (the  "Company")  as of  September  26, 1999 and
September  27, 1998,  and the related  consolidated  statements  of  operations,
comprehensive  income,  changes in  stockholders'  equity and cash flows for the
years ended  September  26, 1999,  September 27, 1998 and September 28, 1997 and
have issued our report  thereon dated  December 20, 1999  (included in this Form
10-K).  Our  audits  also  included  the  accompanying   consolidated  financial
statement  schedule  listed  in Item 14 of this  Form  10-K.  This  consolidated
financial statement schedule is the responsibility of the Company's  management.
Our responsibility is to express an opinion based on our audits. In our opinion,
such consolidated  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
Certified Public Accountants

Tampa, Florida
December 20, 1999





<PAGE>

<TABLE>
<CAPTION>

                                                                                                        SCHEDULE II


                 UNIROYAL TECHNOLOGY CORPORATION AND SUBSIDIARY
                        VALUATION AND QUALIFYING ACCOUNTS
                                 (in thousands)




                                          COLUMN A          COLUMN B          COLUMN C        COLUMN D       COLUMN E
                                          --------          --------          --------        --------       --------
                                                                              ADDITIONS
                                         BALANCE AT     CHARGED (CREDITED)     CHARGED
                                        BEGINNING OF      TO COSTS AND        TO OTHER                       BALANCE AT
              DESCRIPTION                 PERIOD            EXPENSES           ACCTS.         DEDUCTION     END OF PERIOD
                                                                                (a)             (b)

<S>                                      <C>              <C>                <C>             <C>            <C>
  Year ended September 26, 1999
    Estimated reserve for doubtful
      accounts                           $   246          $    73            $    21         $  (102)       $   238
                                         =======          =======            =======         =======        =======
  Year ended September 27, 1998
    Estimated reserve for doubtful
      accounts                           $   257          $    87            $    27         $  (125)       $   246
                                         =======          =======            =======         =======        =======
  Year ended September 28, 1997
    Estimated reserve for doubtful
      accounts                           $   369          $     -            $    53         $  (165)       $   257
                                         =======          =======            =======         =======        =======
</TABLE>

(a)  Amount represents  recovery of amounts  previously  written-off and reserve
     established for receivables of an acquired business.

(b) Amount includes write-off of uncollectible accounts.



<PAGE>




                                                    SIGNATURES

Pursuant to the  requirements  of Section 13 or 15(d) of the  Securities  Act of
1934,  the  Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                         UNIROYAL TECHNOLOGY CORPORATION



Date:  December 23, 1999                   /s/ Howard R. Curd
                                          ---------------------
                                      By: Howard R. Curd, Chief
                                            Executive Officer

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




  /s/ Robert L. Soran                         /s/ Richard D. Kimbel
  -------------------                         ---------------------------
  Robert L. Soran, Director, President        Richard D. Kimbel, Director
    and Chief Operating Officer               Date:  December 23, 1999
  Date:  December 23, 1999



  /s/ George J. Zulanas, Jr.                  /s/ Curtis L. Mack
  --------------------------                  ----------------------------
  George J. Zulanas, Jr., Vice President,     Curtis L. Mack, Director
    Treasurer and Chief Financial Officer     Date:  December 23, 1999
  Date:  December 23, 1999



  /s/ Howard R. Curd                          /s/ Roland H. Meyer
  -------------------                         ----------------------------
  Howard R. Curd, Director, Chairman of       Roland H. Meyer, Director
    the Board and Chief Executive Officer     Date:  December 23, 1999
  Date:  December 23, 1999



 /s/ Peter C. B. Bynoe                        /s/ John A. Porter
 ----------------------                       ----------------------------
 Peter C. B. Bynoe, Director                  John A. Porter, Director
 Date:  December 23, 1999                     Date:  December 23, 1999



 /s/ Thomas E. Constance
 ------------------------
  Thomas E. Constance, Director
  Date:  December 23, 1999






<PAGE>



                                POWER OF ATTORNEY

Each person whose  signature to this report appears below hereby appoints Howard
R. Curd, Robert L. Soran and Oliver J. Janney, and each individually, any one of
whom  may  act  without   the   joinder  of  the   others,   as  his  agent  and
attorney-in-fact  to sign on his behalf  individually and in the capacity stated
below and to file all  amendments  to this report,  which  amendments  make such
changes and additions to this report as such agent and attorney-in-fact may deem
necessary and appropriate.




  /s/ Howard R. Curd                               /s/ Peter C.B Bynoe
  -------------------                              --------------------
  Howard R. Curd, Director, Chairman of the        Peter C.B. Bynoe, Director
    Board and Chief Executive Officer              Date:  December 23, 1999
  Date:  December 23, 1999



  /s/ Robert L. Soran                              /s/ Thomas E. Constance
  --------------------                             ------------------------
  Robert L. Soran, Director, President and         Thomas E. Constance, Director
    Chief Operating Officer                        Date:  December 23, 1999
  Date:  December 23, 1999



                                                   /s/ Richard D. Kimbel
                                                   ------------------------
                                                   Richard D. Kimbel, Director
                                                   Date: December 23, 1999



                                                   /s/ Curtis L. Mack
                                                   -------------------------
                                                   Curtis L. Mack, Director
                                                   Date: December 23, 1999



                                                   /s/ Roland H. Meyer
                                                   -------------------------
                                                   Roland H. Meyer, Director
                                                   Date: December 23, 1999



                                                   /s/ John A. Porter
                                                   -------------------------
                                                   John A. Porter, Director
                                                   Date: December 23, 1999