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 30, 2001

                                       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, 2001, 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 $71,199,000 based on the
closing price for the stock on November 30, 2001.

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, 2001, 27,867,742 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
2002.

<PAGE>

Item 1.  Business

         General

                  Uniroyal Technology Corporation ("Uniroyal") is engaged in
         the development, manufacture and sale of a broad range of materials
         employing compound semiconductor technologies, plastic vinyl coated
         fabrics and specialty chemicals used in the production of consumer,
         commercial and industrial products.

                  We are organized into two primary business segments: Compound
         Semiconductor and Optoelectronics and Coated Fabrics.

         o     The   Compound   Semiconductor   and   Optoelectronics    segment
               manufactures wafers, epitaxial wafers and package-ready dies used
               in high brightness  light emitting diodes  ("HB-LEDs"),  switches
               and  transformers.  It was formerly known as the  Optoelectronics
               segment  until  May 31,  2000  when we  changed  the  name of the
               segment to the Compound Semiconductor and Optoelectronics segment
               to  reflect  the   acquisition   of  the   business  of  Sterling
               Semiconductor, Inc. ("Sterling").

         o     The Coated Fabrics segment manufactures a wide selection of
               plastic vinyl coated fabrics for use in furniture and seating
               applications. The Coated Fabrics business is a leading supplier
               in its markets because of its ability to provide specialized
               materials with performance characteristics customized to the end
               user and its ability to provide technical and customer support in
               connection with the use of its products in manufacturing.

                  Uniroyal is a Delaware corporation. Our principal executive
         offices are located at Two North Tamiami Trail, Suite 900, Sarasota,
         Florida 34236, and our telephone number at that address is (941)
         361-2100.

         Recent Developments

                  On June 26, 2001, we entered into a letter of intent to sell
         certain net assets of our Uniroyal Adhesives and Sealants division
         ("UAS"), which comprised our Specialty Adhesives segment. Then on
         August 24, 2001, we entered into an asset purchase agreement for the
         sale of UAS. The transaction closed on November 9, 2001 for a purchase
         price of $21.6 million. Proceeds from the sale consisted of $14.6
         million in cash, $3.5 million in subordinated promissory notes of the
         purchaser, $1.5 million in preferred stock of the purchaser's parent
         and $2.0 million of payments contingent on the future earnings
         achievements of the UAS business. We expect to record a gain of
         approximately $2.5 million on the sale of UAS in the first quarter of
         fiscal 2002 after the settlement of certain purchase price adjustments
         and the calculation of transaction costs. The consolidated financial
         statements at Part II, Item 8, Consolidated Financial Statements and
         Supplementary Data, have been restated to reflect the discontinued
         operations of the Specialty Adhesives segment. See Note 6 to the
         Consolidated Financial Statements for further details.

                  On August 27, 2001, we reached a settlement with Spartech
         Corporation ("Spartech") regarding the final purchase price adjustment
         related to the fiscal 2000 sale of certain net assets of the High
         Performance Plastics segment (the "Spartech Sale"). The settlement
         resulted in the loss of the $5.0 million holdback as well as an
         additional $1.0 million payment to Spartech. The $1.0 million payment
         is in the form of a promissory note at prime rate. The note is
         repayable in four increments of $250,000 plus accrued interest thereon.
         The payments are due November 1, 2001, February 1, 2002, May 1, 2002
         and August 1, 2002. In connection with the settlement, we recorded a
         loss of approximately $522,000 (net of taxes of approximately $306,000)
         in the fourth quarter of fiscal 2001. In fiscal 2000, we had estimated
         and provided for an ultimate reduction in the purchase price of
         approximately $5.1 million.

                  On August 2, 2001, we purchased Emcore Corporation's
         ("Emcore") 35.7% minority interest in Uniroyal Optoelectronics, LLC.
         The purchase was consummated through the issuance of 1,965,924 shares
         of our common stock valued at approximately $15.1 million, net of
         approximately $67,000 in stock registration costs. On August 2, 2001,
         we received a $5.0 million loan, at prime rate, from Emcore. The
         maturity date for this loan was the earlier of the completion of the
         sale of UAS and August 2, 2003. Additional interest of 433 shares of
         our common stock per day was due Emcore beginning September 28, 2001
         until the note was repaid. The loan was evidenced by a convertible
         note, the principal and accrued interest of which were convertible into
         our common stock after September 20, 2001. The conversion price for
         this note was based upon the trading price of our common stock, but
         would be no more than $8.39 or less than $6.87 per share subject to
         customary antidilution adjustments. The loan was repaid with cash on
         November 9, 2001 concurrent with the closing of the sale of UAS. See
         Note 8 to the Consolidated Financial Statements.

         Coated Fabrics Segment

                  The Coated Fabrics segment accounted for approximately $27.8
         million (85%) of our net sales from continuing operations for the
         fiscal year ended September 30, 2001. It is a leading manufacturer of
         vinyl coated fabrics. The coated fabrics are durable, stain resistant,
         cost-effective alternatives to leather and cloth coverings. The
         segment's product lines include the well-known Naugahyde(R) brand name
         in vinyl coated fabric products.

                  The Coated Fabrics segment previously made products for the
         automobile manufacturing industry. The segment's automotive products
         line consisted of plastic vinyl coated fabrics and vinyl laminated
         composites used by manufacturers and custom fabricators in the
         production of vehicle seat coverings, door panels, arm rests, consoles
         and instrument panels. On October 17, 1997, we agreed to sell certain
         assets of the automotive operations of the Coated Fabrics segment
         located at our 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. We received $4.9 million in July 1998 and received
         approximately $1.5 million during fiscal 1999. During fiscal 1999 and
         1998, we recognized approximately $667,000 and $512,000, respectively,
         of income relating to the sale of the automotive operations. We ceased
         production and closed the Port Clinton facility in November 1998. The
         Port Clinton real property is listed as held for sale at September 30,
         2001 and is expected to be sold in fiscal 2002.

                  General

                  The Coated Fabrics segment's Naugahyde(R) vinyl coated fabrics
         products have various performance characteristics. We sell these
         products 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 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 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, quality
         and technology 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     Morbern, Inc.; and
         o     OMNOVA Solutions.

                  Marketing

                  A predecessor of the segment introduced the segment's coated
         fabrics products more than 50 years ago. Today, we market these
         products under several nationally recognized brand names, including
         NAUGAHYDE(R), NAUGASOFT(TM), NAUGAFORM(R) and DURAN(R). We market our
         coated fabrics with a protective top finish under the name
         BEAUTYGARD(R), and our flame and smoke retardant coated fabrics under
         the brand name FLAME BLOCKER(R).

                  We market and sell our coated fabrics primarily through 12
         national sales representatives, who are employees of Uniroyal, and
         independent sales representatives. In the contract furniture
         manufacturing market, we generally sell our coated fabrics through our
         sales representatives and to distributors who sell to furniture
         manufacturers, upholsterers and fabric distributors. Approximately 34%
         of the segment's sales in fiscal 2001 were to distributors.

                  Representative customers and end users of the Coated Fabrics
         segment 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

                  We manufacture our coated fabrics products at our facility
         located in Stoughton, Wisconsin. The segment ceased manufacturing at
         the facility in Port Clinton, Ohio on November 11, 1998. We own both of
         these facilities. The Port Clinton facility is listed as held for sale.

                  Trademarks and Patents

                  We own and control patents, trade secrets, trademarks, trade
         names, copyrights and confidential information, which in the aggregate
         are material to our business. We are not materially dependent, however,
         upon any single patent or trademark. We have several trademarks that
         have wide recognition and are valuable to our business. Among the
         trademarks that are of material importance to us are NAUGAHYDE(R),
         NAUGAFORM(R) and DURAN(R). Our trademarks are registered in the United
         States and in a number of foreign jurisdictions with terms of
         registration expiring generally between 2001 and 2016. No trademark
         registration of material importance to us expired during fiscal 2001.
         We intend to renew in a timely manner all those trademarks that are
         required for the conduct of our business. We also hold 6 patents
         (either current or pending) in the United States and Canada.

                  We use the trade name and trademark "Uniroyal" pursuant to a
         license from Uniroyal Goodrich Licensing Services, Inc.

                  Raw Materials

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

         Compound Semiconductor and Optoelectronics Segment

                  The Compound Semiconductor and Optoelectronics segment is
         vertically integrated and engaged in the design, development and
         manufacture of compound semiconductor materials and electronic devices
         made from silicon carbide (SiC), gallium nitride (GaN) and aluminum
         indium gallium phosphide (AllnGaP). The segment's products include
         substrate wafers, epitaxial thin film coated wafers and package-ready
         devices used in the rapidly expanding solid-state lighting market and
         for high frequency wireless communications, high voltage/power and high
         temperature applications.

                  In early 1998, UTC management began repositioning the Company
         away from mature, industrial-based activities and into the high-growth
         compound semiconductor technology industry. The Company undertook
         several transactions to secure its position within the semiconductor
         marketplace:

         o     In February 1998, Uniroyal formed a joint venture with Emcore
               (Uniroyal Optoelectronics, LLC; "UOE") to manufacture, sell and
               distribute HB-LED wafers and package-ready dies. Uniroyal owned,
               through a wholly-owned subsidiary, the majority interest in the
               joint venture company. The joint venture was formed to leverage
               the relative strengths of Uniroyal and Emcore, expedite the
               scaling to commercial production levels and enter the marketplace
               rapidly. On August 2, 2001, Uniroyal purchased Emcore's 35.7%
               minority interest in the joint venture. See "Item 1. Business -
               Recent Developments." UOE emerged from the development stage on
               October 1, 2001.

         o     In May  2000,  Uniroyal  acquired  Sterling  Semiconductor,  Inc.
               ("Sterling")  for  stock and  employee  stock  options  valued at
               approximately   $40.6  million.   Sterling  is  a  developer  and
               manufacturer  of silicon carbide (SiC)  semiconductor  substrates
               with silicon carbide epitaxial thin film coatings.  Our objective
               was  to  leverage  Sterling's  strong  research  and  development
               capability  and SiC  expertise  in  order  to  capitalize  on the
               emerging  SiC  marketplace.   See  Note  9  to  the  Consolidated
               Financial Statements for further details.

         o     In May 2000,  Uniroyal  formed NorLux Corp.  ("NorLux") to design
               and  manufacture   custom  lighting  solutions  and  applications
               utilizing  HB-LED  technology.  NorLux brings our  technology one
               step closer to the end-user and  provides  valuable  insight into
               the  needs  of  the  marketplace.  NorLux  is  currently  in  the
               development  stage and expects to reach commercial  production in
               2002.

                  General

                  Compound semiconductors have emerged as an enabling technology
         to meet the complex requirements of today's highly advanced electronic
         devices. Many compound semiconductor materials have unique physical
         properties that allow electrons to move at least four times faster
         through them than through silicon-based devices. Advantages of compound
         semiconductor devices over silicon devices include:

         o     higher operating speeds;
         o     lower power consumption;
         o     higher heat tolerance;
         o     reduced noise and distortion; and
         o     light emitting and detecting optoelectronics properties.

                  Compound semiconductors are composed of two or more elements
         and usually consist of a metal, such as gallium, aluminum or indium,
         and a non-metal, such as arsenic, phosphorous or nitrogen. The
         resulting compounds include gallium arsenide, indium phosphide, gallium
         nitride, indium antimonide and indium aluminum phosphide. The
         performance characteristics of compound semiconductors are dependent on
         the composition of these compounds. Many of the unique properties of
         compound semiconductor materials are achieved by layering different
         compound semiconductor materials in the same device. This layered
         structure creates an optimal configuration to permit the emission or
         detection of light and the detection of magnetic fields.

                  Although compound semiconductors are more expensive to
         manufacture than silicon-based devices, electronics manufacturers are
         increasingly integrating compound semiconductor devices into their
         products in order to achieve higher performance applications targeted
         for a wide variety of markets. These include solid-state lighting,
         wireless communications and consumer and automotive electronics.

                  HB-LEDs are solid-state compound semiconductor devices that
         emit light when direct current is applied. The advantages of HB-LEDs
         over conventional light sources include:

         o     Efficiency - LEDs  efficiently  convert  electricity to light and
               require  approximately  90% less energy than  conventional  light
               sources.

         o     Longevity - LEDs have an  expected  life span of 50 times  longer
               than  incandescent  bulbs.  LEDs also  operate on low voltage and
               qualify for UL low-wattage certification.

         o     Design Flexibility -LEDs can be arranged in virtually an infinite
               number of configurations, making the use of lines, points, fields
               and  curves  possible.  LEDs can be easily  programmed  to create
               subtle changes in color and quality of light.

         o     Range of Colors - LEDs produce high-purity colored light that can
               be mixed to create millions of colors.

                  SiC-based devices offer significant advantages over competing
         products made from silicon, gallium, arsenide, sapphire and other
         materials for certain electronic applications. SiC is a third
         generation compound semiconductor material possessing unique physical
         and electrical properties that far exceed those of silicon and GaAs,
         the first and second generation materials, respectively. Electronic
         devices made from this material can operate more efficiently and at
         much higher temperatures than devices made from other common
         semiconductor materials. SiC devices operate at much higher voltage
         levels and allow power devices to be significantly smaller while
         carrying power levels the same as or greater than comparable silicon
         and GaAs-based devices. SiC is an excellent thermal conductor compared
         to other commercially available semiconductor materials. This feature
         enables SiC-based devices to operate at higher power levels and still
         dissipate the excess heat generated. SiC has an extremely high melting
         point and is one of the hardest known materials in the world. As a
         result, SiC can withstand much higher electrical pulses and is much
         more radiation-resistant than silicon or GaAs. SiC is also extremely
         resistant to chemical breakdown and can operate in harsh environments.

                  Current product offerings include:

         o     Gallium  nitride  (GaN)-based  blue,  green and  ultraviolet  LED
               products;
         o     4H and 6H  poly  type  SiC  substrates  in  diameters  of  50.8mm
               (2-inch)  and  a  recent   introduction  of  76.2mm  (3-inch)  6H
               substrates;
         o     SiC substrates with epitaxial thin film coatings; and
         o     custom lighting products.

                  Future product offerings on a commercial basis include:

         o     semi-insulating SiC wafers useful in the manufacture of microwave
               devices and
         o     SiC devices.

                  Competition

                  The semiconductor industry is intensely competitive and is
         characterized by rapid technological change, price erosion and intense
         foreign competition. Both SiC bulk crystal growth and SiC epitaxy
         technology, however, involve substantial barriers to entry.

                  In the LED marketplace, our primary competitor is Cree, Inc.,
         a leading developer and manufacturer of compound semiconductor
         materials and electronic devices, and currently the market leader in
         the segment. Other competitors include:

         o     Hewlett Packard Corporation;
         o     LumiLeds Lighting,  a joint venture between Agilent Technologies
               and Philips Lighting;
         o     Nichia Chemical Industries, Ltd.;
         o     Siemens AG's subsidiary, Osram;
         o     Toshiba Corporation; and
         o     Toyoda Gosei Co. Ltd.

         In addition, AXT, Inc., Lucky Goldstar and other Asian-based companies
         have announced intentions to begin production of blue and green LEDs.

                  In the custom lighting arena, traditional light source
         manufacturers are the main competition. Solid-state lighting, however,
         will probably displace incandescent, fluorescent, neon and other
         sources over time. Three multinationals, Philips Lighting, General
         Electric and Osram, control 80% to 90% of the worldwide market. Each
         has created joint ventures to address solid-state lighting.

                  In the SiC marketplace, Cree, Inc. is currently the dominant
         supplier of SiC wafers, commanding approximately 90% of the market.
         SiCrystal, a German-based company that entered the wafer market in 1998
         and has limited capacity, produces low commercial volumes and presently
         lacks epitaxy capability. Sixon Ltd, a development stage company
         affiliated with the Kyota Institute of Technology in Japan, has been
         active commercially for two years and has limited production
         capability. II-VI, Inc., a U.S.-based company, produces a variety of
         compound semiconductor crystals and has announced its intentions to
         enter the SiC market.

                  Marketing

                  We market our optoelectronics products generally through an
         executive sales approach, relying predominantly on the efforts of
         senior management and a small direct sales staff for domestic product
         sales. We believe that this approach is preferable in view of our
         current customer base and product mix, particularly since the
         production of lamp and display products incorporating LED chips is
         concentrated among a relatively small number of manufacturers. Sales in
         Japan, Taiwan, Hong Kong and Europe are made by distributors and
         independent sales representatives.

                  Customers for epitaxy and device dies include distributors
         with value-added chip processing and testing capabilities, packagers on
         a stand-alone basis and integrated packagers. Customers for packaged
         components include original equipment manufacturers and various
         suppliers.

                  Initial efforts have been focused on EPI wafers and die, while
         introduction of packaged components has begun only in the first quarter
         of fiscal 2002. New representatives and distributors have been signed
         on for this effort. In addition, efforts to partner with other LED
         producers who lack a die and/or epitaxial capability are ongoing. A
         partner would provide the economical solution to package our die into
         lamps and provide our customers a high brightness die (blue, green,
         yellow and red) at a cost-effective price. It would also be our intent
         to market the finished product in that producer's home market through
         their distribution channel. This marketing effort would allow us to
         obtain greater visibility in the market for our lamps.

                  In North America, we sell SiC substrates and epitaxy directly
         to the customers and track customer needs through a database designed
         for this purpose. In Europe, we are represented by a European
         distributor based in England, and with offices in Germany and Sweden.
         The distributor sells the company's SiC wafers in addition to other
         compound semiconductor wafers manufactured in the United Kingdom. The
         distributor has been in the semiconductor business since the late
         1950s.

                  In Japan, we established a sales presence in 1997 for our SiC
         substrates through a representation agreement with a Japanese
         distributor with sales offices in Tokyo and Osaka. The distributor has
         a 41-year track record in selling U.S. and European materials to the
         Japanese electronics industry on behalf of Fortune-500 firms as well as
         small producers of specialty products. We also sell through
         representatives in Korea and Taiwan.

                  Manufacturing Facility

                  We have recently completed construction of a 77,000 square
         foot, state-of-the-art facility in Tampa, Florida, for the development
         and manufacture of HB-LEDs. The infrastructure and capital equipment
         were completed in two phases with a total investment of approximately
         $54 million. The second phase of construction, completed in August
         2001, provided the infrastructure and necessary space for future
         capacity expansion. Additional reactors for blue, green and UV HB-LEDs
         will be staged in as required to further increase the production
         capacity. The estimated cost of machinery for this additional capacity
         is approximately $25.0 million. This is a leased facility.

                  Our primary SiC facilities and executive offices are located
         in Sterling, Virginia. At this location, the Company conducts research
         and development in SiC crystal growth and SiC epitaxy. The Company's
         main SiC production facility is in Danbury, Connecticut, where it
         manufactures SiC in an ISO-9002 certified facility and performs
         research and development. Both facilities are leased.

                  The Company's NorLux Corp. subsidiary also established a
         12,000 square foot facility with a state-of-the-art 2,000 square foot
         manufacturing section dedicated to HB-LED assembly. The facility houses
         an engineering design and development lab, administrative offices and
         warehouse to support the supply of custom and standard products. The
         production environment provides for the appropriate atmosphere to
         manufacture microelectronic products and LED assemblies. The facility
         supports high-quality prototype, pre-production and stocking builds as
         well as continuous pilot production in low- to mid-volumes. This is a
         leased facility.

                  In September 2000, we entered into a lease agreement for the
         construction of a 50,000 square foot new manufacturing facility
         approximately two miles from our current Virginia location with the
         objective of consolidating our Connecticut and Virginia facilities.
         During fiscal 2001, we made a decision to terminate this lease as a
         result of construction delays and breach of contract. We are currently
         involved in litigation regarding the lease termination. See "Item 3.
         Legal Proceedings." As a result of the lease termination, we are no
         longer planning to consolidate our Connecticut and Virginia facilities
         in the near term. A portion of the Virginia operations has been
         relocated to the Tampa, Florida facility.

                  Intellectual Property

                  Currently, our SiC substrate, epitaxy and device production
         and research development processes are not patented. As a general rule,
         we believe that disclosing process technology in a patent could
         potentially help competitors gain insight into our processes in a way
         that could adversely affect the benefits of the patent. Therefore, we
         retain our processes as trade secrets and seek to maintain them, along
         with other trade secrets, in confidence through appropriate
         non-disclosure agreements with employees and others to whom the
         information needs to be disclosed. However, we may in the future patent
         certain discrete elements of our processes in cases in which the
         benefits of doing so outweigh the risk of disclosing process
         information. We cannot give assurances that non-disclosure agreements
         or any future patents will provide meaningful protection against
         unauthorized or use of our proprietary technology know-how, or that it
         will not otherwise become known or independently discovered by others.

                  Our current licenses include a license to Russian silicon
         carbide technology through the year 2046. This licensing agreement
         covers the manufacture and sale of SiC substrates worldwide based upon
         technology developed by Russian scientists who were among the
         co-founders of Sterling Semiconductor. In addition, we have a license
         from ATMI, Inc., related to SiC substrate manufacture and sale which is
         exclusive and worldwide, until a 2% royalty has been paid up to $1.0
         million. The ownership of the ATMI technology would then be transferred
         to us.

                  Raw Materials

                  We depend on a limited number of suppliers for certain raw
         materials, components and equipment used in the Optoelectronics
         business, including certain key materials and equipment used in our
         wafering, polishing, epitaxial deposition, device fabrication and
         device test processes. In addition, the availability of these
         materials, components and equipment to us is dependent in part on our
         ability to provide our suppliers with accurate forecasts of our future
         requirements. We endeavor to maintain ongoing communication with our
         suppliers to guard against interruptions in supply and, to date,
         generally have been able to obtain adequate supplies in a timely manner
         from our existing sources. However, any interruption in the supply of
         these key materials, components or equipment could have a significant
         adverse effect on our operations.

         General

                  Employees

                  The Company has approximately 405 employees, including
         approximately 182 hourly wage employees and 223 salaried employees. We
         believe that at the present time our workforce is adequate to conduct
         our business and that our relations with employees are generally
         satisfactory.

                  The Company is a party to one collective bargaining agreement.
         At our coated fabrics manufacturing facility located in Stoughton,
         Wisconsin, approximately 90 hourly employees are covered by an
         agreement expiring on September 17, 2003 with Local 7-1207 of P.A.C.E.
         International Union (formerly known as the United Paperworkers
         International Union).

                  Research and Development

                  We are actively engaged in research and development programs
         designed to develop new products, manufacturing processes, systems and
         technologies and to enhance our existing products and processes.
         Research and development is conducted within each of our business
         segments. Investment in research and development has been an important
         factor in establishing and maintaining our competitive position in many
         of the specialized niche markets in which our products are marketed.
         Recent expansion at the Tampa, Florida facility includes a
         state-of-the-art research and development center. We spent
         approximately $4.4 million for research and development during fiscal
         2001 compared to approximately $1.1 million during fiscal 2000
         (excluding expenditures for capital equipment).

                  We currently employ a staff of 30 individuals in connection
         with our 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 our business segments is as follows: 21 at Compound Semiconductor
         and Optoelectronics and nine at Coated Fabrics.

                  Backlog

                  At September 30, 2001, we had backlog orders from continuing
         operations aggregating approximately $7.9 million, as compared to
         approximately $7.1 million as of October 1, 2000. We presently
         anticipate that all backlog orders will be filled within the next 12
         months. Backlog orders for each of our business segments were as
         follows as of the indicated dates:

                                            September 30,            October 1,
                                               2001                    2000
                                            -------------            ----------
                                                       (in thousands)

         Coated Fabrics                     $   3,430                $   3,187
         Compound Semiconductor
          and Optoelectronics                   4,477                    3,929
                                            ---------                ---------
         Total                              $   7,907                $   7,116
                                            =========                =========

                  Environmental Matters

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

                  In fiscal 2001, 2000 and 1999, the amount of capital
         expenditures for environmental matters related to ongoing operations
         was immaterial and the amount of such expenditures is expected to be
         immaterial in fiscal 2002. In the future, as the requirements of
         applicable law impose more stringent controls at our facilities,
         expenditures related to environmental and worker health and safety are
         expected to increase. While we do not currently anticipate having to
         make any material capital expenditures in order to comply with these
         laws and regulations, if we are required to do so, such expenditures
         could have a material impact on our earnings or competitive position in
         the future.

                  In connection with our acquisition of the manufacturing
         facility in South Bend, Indiana on July 17, 1996, we 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. We are conducting the remediation voluntarily pursuant to an
         agreement with the Indiana Department of Environmental Management. We
         estimate that such remediation will cost approximately $1.0 million
         over a five-to-seven-year period. In connection with our acquisition of
         the facility, we 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 2001, we have
         incurred costs of approximately $746,000 in connection with such
         remediation. In connection with the sale of UAS, see "Item 1. Business
         - Recent Developments," we have placed an additional $300,000 in escrow
         pending a Phase II environmental assessment.

                  In connection with the Spartech Sale, the Company conducted
         environmental assessments on two of the plants of the High Performance
         Plastics segment in compliance with the laws of the states of
         Connecticut and New Jersey relating to transfers of industrial real
         property. The asset purchase agreement provided that Spartech could
         defer taking title to certain parcels of real property until the
         Company provides evidence that environmental contamination had been
         remediated to the satisfaction of Spartech. The environmental
         assessment of the Connecticut property indicated that a separate parcel
         purchased by the Company in 1995 was contaminated with total petroleum
         hydrocarbons, DDT and other pesticide chemicals. The Company had
         removed approximately 60% of the soil on the property in fiscal 2000 at
         a cost of approximately $1,600,000. Fiscal 2001 expenditures
         approximated $50,000. The Company has retained environmental
         consultants to review its options with regard to the remaining soil on
         the premises and expects to complete remediation under a program
         approved by the Connecticut Department of Environmental Protection in
         December, 2001. The environmental assessment of the Hackensack, New
         Jersey facility is still underway. At September 30, 2001, the Company
         has estimated the clean-up costs for both facilities to approximate
         $1,000,000. At September 30, 2001, the estimates for environmental
         clean-up costs are included in the net liabilities of discontinued
         operations. Spartech has agreed to lease the parcels for a nominal
         amount until after remediation is complete.

                  Based upon information available as of September 30, 2001, we
         believe that the costs of environmental remediation for which we may be
         liable have either been adequately reserved for or are otherwise
         unlikely to have a material adverse effect on our operations, cash
         flows or financial position.

         History of Company

                  Our 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").

                  In October and November 1991, the predecessor companies 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 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, we issued, or authorized for issuance, 19,150,000 (post-split
         basis) shares of our 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
         our 11.75% Senior Secured Notes, we merged each of our operating
         subsidiaries into the Company. In May 1993 we 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, we repurchased an additional 15 shares of such
         stock, and on February 4, 1997, we 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, we transferred all of the assets of our
         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 $110.0 million. On April
         14, 1998, HPPI paid approximately $95.0 million to the Company. We 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%.

                  On February 28, 2000, we sold substantially all of the assets
         of our High Performance Plastics segment to Spartech Corporation.



<PAGE>


         Certain Business Risks and Uncertainties

         General

         The Market Price of Our Common Stock Has Fluctuated Widely in the Past
         and Might Fluctuate Widely in the Future.

                  The market price of Uniroyal's common stock has been and may
         continue to be subject to wide fluctuations. Factors affecting the
         stock price may include:

         o     variations in our operating results and those of our competitors
               from quarter to quarter;
         o     changes in earnings estimates by securities analysts;
         o     market conditions in the compound semiconductor and coated
               fabrics industries;
         o     cash flow constraints;
         o     our ability to obtain orders for products in our Compound
               Semiconductor and Optoelectronics segment; and
         o     general economic conditions.

                  Uniroyal's stock price has fluctuated widely. For example,
         between January 1, 2000 and September 30, 2001, the high and low sale
         prices of our common stock fluctuated between approximately a high of
         $36.44 and a low of $2.54 per share. The prices have been adjusted to
         give effect to the 100% stock dividend declared on March 10, 2000 for
         stockholders of record on March 20, 2000. The current market price of
         our common stock may not be indicative of future market prices, and
         investors may not be able to sustain or increase the value of their
         investment in the common stock.

         We May Soon Face a Liquidity Crisis If Our Plans to Reduce Operating
         Costs and to Sell Certain Assets are Unsuccessful

                  We have experienced losses from continuing operations in each
         of the three years ended September 30, 2001 and have an accumulated
         deficit of $11.3 million as of September 30, 2001. Cash used in
         operations for the years ended September 30, 2001 and October 1, 2000
         was $25.0 million and $30.7 million, respectively, and it is likely
         that cash flow from operations will be negative throughout Fiscal 2002.
         We had a working capital deficiency at September 30, 2001 of $2.8
         million compared to working capital of $49.0 million as of October 1,
         2000. At September 30, 2001, our principal source of liquidity is $2.0
         million of cash and cash equivalents and $1.1 million of availability
         under a revolving credit facility. Such conditions raise substantial
         doubt that we will be able to continue as a going concern for a
         reasonable period of time without receiving additional funding.

                  The operating results for Fiscal 2001 and Fiscal 2000 have
         occurred while we have been repositioning our operations away from the
         mature, industrial-based activities and into the high-growth compound
         semiconductor technology industry. The transition to this business
         segment has required significant investment spending related to
         start-up costs and capital expenditures. Many of the markets in this
         business segment are characterized by long lead times for new products
         requiring significant working capital investments and extensive
         testing, qualification and approval by our customers and end users.
         This business segment is marked by intense competition requiring us to
         introduce new products in a timely and cost-effective manner. This
         business segment started operations in the second quarter of Fiscal
         2000 and has a limited operating history. The segment faces risks and
         difficulties as an early stage business in a high-growth and rapidly
         evolving industry. These factors have placed a significant strain on
         our financial resources. We have sought to generate additional
         financial resources by reducing operating costs and selling certain
         assets and by seeking additional sources of financing, including bank
         and other lender financing as well as private placements. Our ultimate
         success depends on our ability to obtain additional financing, to
         continue reducing operating costs and, ultimately to generate higher
         sales levels to attain profitability.

                  On August 24, 2001, we agreed to sell certain net assets of
         UAS and closed this transaction on November 9, 2001. Net cash proceeds
         from the sale approximated $8.0 million after repayment of
         approximately $6.5 million of debt and preliminary purchase price
         adjustments. The cash proceeds are exclusive of $1.5 million of
         preferred stock of the purchaser's parent and $3.5 million of
         subordinated notes of the purchaser.

                  Our future results of operations involve a number of
         significant risks and uncertainties. Factors that could affect our
         future operating results and cause actual results to vary materially
         from expectations include, but are not limited to, dependence on key
         personnel, product obsolescence, ability to generate consistent sales,
         ability to finance research and development, government regulation,
         technological innovations and acceptance, competition, reliance on
         certain vendors and credit risks. Our historical sales results and our
         current backlog cannot ensure that we will be able to achieve the
         higher sales levels required for profitability. We currently believe
         that sales will increase from the fourth quarter of fiscal 2001 levels
         and increase at higher growth rates quarterly thereafter; however,
         there can be no assurance thereof. If such quarterly sales increases do
         not materialize, we will have to reduce our expenses and capital
         expenditures to maintain cash levels necessary to sustain our
         operations. Our future success will depend on increasing our revenues
         and reducing our expenses to enable us to reach profitability.

         The Markets in Which We Compete are Highly Competitive. An Increase in
         Competition Would Limit Our Ability to Maintain and Increase Our Market
         Share.
                  The coated fabrics, compound semiconductor and optoelectronics
         industries, in general, are highly competitive. Many of our competitors
         have substantially greater resources than we do. Oversupply and intense
         price competition periodically characterize the coated fabrics
         industry.

                  We believe that our reputation for high quality products,
         innovative technology and strong customer technical service permits us
         to compete successfully in the markets that we presently serve.
         However, we may not be able to continue to compete successfully in such
         markets or to apply such strengths successfully to additional markets.
         In addition, new entrants may come into the markets that we serve.
         Companies may offer products based on alternative technologies and
         processes that may be superior to ours in price, performance or
         otherwise.

                  We have devoted and will be required to continue to devote
         significant funds and technologies to the Compound Semiconductor and
         Optoelectronics segment to develop and enhance its products. In
         addition, we require some of our employees to devote much of their time
         to the segment's projects. This could place a strain on our management
         and financial employees. If the Compound Semiconductor and
         Optoelectronics segment is unsuccessful in developing and marketing its
         products, our business, financial condition and results of operations
         may be materially and adversely affected.

         Our Continued Success Depends in Part on Our Ability to Attract and
         Retain Certain Key Personnel

                  The continued success of Uniroyal depends in part on our
         ability to attract and retain certain key personnel, including
         scientific, operational and management personnel. For example, some of
         the equipment used in the production of HB-LED and SiC products must be
         modified before it is put to use, and only a limited number of
         employees possess the expertise needed to perform these modifications.
         Furthermore, the number of individuals with experience in the
         production of HB-LED and SiC products is limited. Accordingly, the
         future success of the Compound Semiconductor and Optoelectronics
         segment depends in part on retaining those individuals who are already
         employees.

                  The competition for attracting and retaining employees,
         especially scientists for the Compound Semiconductor and
         Optoelectronics segment, is intense. Because of this intense
         competition for these skilled employees, we may be unable to retain our
         existing personnel or attract additional qualified employees in the
         future. Specifically, we may experience increased costs in order to
         attract and retain skilled employees. Failure to retain senior
         management and skilled employees and attract additional qualified
         employees could have a material adverse effect on our business,
         financial condition and results of operations.

         Protecting Our Trade Secrets and Securing Patent Protections is
         Critical to Our Ability Effectively to Compete for Business

                  Trade Secrets. Our success and competitive position depend on
         protecting our trade secrets and other intellectual property.
         Particularly with respect to the business of our Compound Semiconductor
         and Optoelectronics segment our strategy is to rely more on trade
         secrets than patents to protect our manufacturing and sales processes
         and products. Reliance on trade secrets is only an effective business
         practice insofar as trade secrets remain undisclosed and a proprietary
         product or process is not reverse engineered or independently
         developed. We take certain measures to protect our trade secrets,
         including executing non-disclosure agreements with our employees,
         customers and suppliers. If parties breach these agreements or the
         measures we take are not properly implemented, we may not have an
         adequate remedy. Disclosure of our trade secrets or reverse engineering
         of our proprietary products, processes or devices could materially and
         adversely affect Uniroyal's business, financial condition and results
         of operations.

                  Patent Protection. Although we currently hold six U.S. patents
         and patents pending, these patents do not protect any material aspects
         of the current or planned commercial versions of our products for our
         Compound Semiconductor and Optoelectronics business segment. We are
         actively pursuing patents on some of our recent inventions, but these
         patents may not be issued. Even if these patents are issued, they may
         be challenged, invalidated or circumvented. In addition, the laws of
         certain other countries may not protect our intellectual property to
         the same extent as U.S. laws.

         Enforcement of Intellectual Property Rights By or Against Us Could be
         Costly and Could Impair Our Business

                  Other companies may hold or obtain patents on inventions or
         may otherwise claim proprietary rights to technology necessary to our
         business, especially with respect to the business of our Compound
         Semiconductor and Optoelectronics segment. We cannot be sure that third
         parties will not attempt to assert infringement claims against us with
         respect to our current or future products, including our core products.
         We cannot predict the extent to which such assertions may require us to
         seek licenses or, if required, whether such licenses will be offered or
         offered on acceptable terms or that disputes can be resolved without
         litigation. Litigation against us or any of our customers could impair
         our ability to sell our products. Litigation to determine the validity
         of infringement claims alleged by third parties could result in
         significant expense to us and divert the efforts of our technical and
         management personnel, whether or not the litigation is ultimately
         determined in our favor. We cannot predict the occurrence of future
         intellectual property claims that could prevent us from selling
         products, result in litigation or give rise to indemnification
         obligations or damage claims.

         Due to Protracted Product Qualification Periods, We May Incur
         Significant Costs to Develop Products that May Ultimately be
         Unsuccessful

                  Many of the markets in which we compete are characterized by
         long lead times for new products requiring significant working capital
         investment by Uniroyal and extensive testing, qualification and
         approval by our customers and the end users of products. We face a
         significant risk that we will incur significant costs for research and
         development, manufacturing equipment, training, facility-related
         overhead and other expenses to develop such products, only to have our
         customers or end users not select them.

                  Even if our products are eventually approved and purchased by
         customers and end users, our investment may fail to generate revenues
         for several years while we develop and test such products.

         Unsuccessful Control of Hazardous Materials Used in Our Manufacturing
         Processes Could Result in Costly Remediation Fees, Penalties or Damages
         Under Environmental and Safety Regulations.

                  Our operations are subject to extensive federal, state and
         local laws and regulations: (1) controlling the discharge of materials
         into the environment or otherwise relating to the protection of the
         environment; and (2) regulating conditions which may affect the health
         and safety of workers.

                  The operation of any manufacturing plant in the industries in
         which we participate entails risks under such laws and regulations,
         many of which provide for substantial fines and criminal sanctions for
         violation. For example, our manufacturing processes involve the use of
         certain hazardous raw materials, including, but not limited to,
         ammonia, phosphine and arsene. If the control systems are unsuccessful
         in preventing a release of these materials into the environment or
         other adverse environmental conditions occur, we could experience
         interruptions in our operations and incur substantial remediation and
         other costs. We believe that our current legal and environmental
         compliance and safety programs adequately address such concerns and
         that we are in substantial compliance with applicable laws and
         regulations. However, compliance with, or any violation of, current and
         future laws or regulations could require us to make material
         expenditures or otherwise have a material adverse effect on our
         business, financial condition and results of operations.

         Certain Provisions of Our Charter and Our Stockholder Rights Plan May
         Adversely Effect the Stock Price and Make it More Difficult for a Third
         Party to Acquire Uniroyal Even if Such Acquisition Could be Beneficial
         to Some of Our Shareholders

                  Provisions of Uniroyal's charter documents may have the effect
         of delaying or preventing a change in control of Uniroyal or its
         management, which could have a material adverse effect on the market
         price of the common stock. These include provisions:

         o     eliminating the ability of stockholders to take actions by
               written consent and
         o     limiting the ability of stockholders to raise matters at a
               meeting of stockholders without giving advance notice.

                  In addition, the Board of Directors has authority to issue up
         to 1,000 shares of preferred stock and to fix the rights, preferences,
         privileges and restrictions, including voting rights, of these shares
         without any further vote or action by the stockholders. The rights of
         the holders of common stock will be subject to, and could be adversely
         affected by, the rights of the holders of any preferred stock that
         Uniroyal may issue in the future. The issuance of preferred stock,
         while providing desirable flexibility in connection with possible
         acquisitions and other corporate purposes, could have the effect of
         making it more difficult for a third party to acquire a majority of
         Uniroyal's outstanding voting stock, thereby delaying, deferring or
         preventing a change in control of Uniroyal.

                  Uniroyal's Stockholder Rights Plan has certain anti-takeover
         effects. The plan grants to holders of common stock the right, when
         exercisable, to purchase from Uniroyal a fraction of a share of
         Uniroyal's Series C preferred stock. This right will cause substantial
         dilution to a person or group that attempts to acquire Uniroyal without
         conditioning the offer on the rights being redeemed or a substantial
         number of rights being acquired.

         Risk Factors Associated with Uniroyal's Coated Fabrics Business Segment

         If Labor Relations at our Coated Fabrics Business Segment were
         Materially Impaired, Our Business Would be Adversely Affected.

                  We are a party to a collective bargaining agreement at our
         coated fabrics manufacturing facility located in Stoughton, Wisconsin.
         Approximately 90 hourly employees are covered by an agreement expiring
         on September 17, 2003 with Local 1207 of P.A.C.E. (formerly known as
         the United Paperworkers International Union).

                  Although we believe our relationships with employees are good,
         we can give no assurance that we will successfully negotiate the hourly
         wages and/or benefits of employees at our coated fabrics manufacturing
         facility when the applicable collective bargaining agreement expires.
         Moreover, the wages and/or benefits we may agree upon might adversely
         affect the Coated Fabrics segment's profitability. Furthermore, if we
         were the subject of a strike, we could incur significant costs.

         Growth is Difficult in Our Coated Fabrics Segment Due to the Maturity
         of the Business Sector in Which it Operates

                  Our Coated Fabrics segment competes in a mature business
         sector. We believe the key to generating growth in this sector (besides
         acquiring other businesses) is to introduce new products or product
         innovations that address unsatisfied market needs. We believe we will
         need to significantly increase revenues from product sales and increase
         profitability in this sector. We can give no assurance that we will
         have resources available for, or otherwise be successful in, any
         efforts to achieve such growth.

         Our Coated Fabrics Segment is Particularly Sensitive to Changes in
         General Economic Conditions

                  The recreational vehicle and upholstery markets, among others
         in which the Coated Fabrics segment competes, are sensitive to changes
         in general economic conditions which affect demand for the commercial
         and consumer items that the Coated Fabrics segment manufactures.

         Risk Factors Associated with Uniroyal's Compound Semiconductor and
         Optoelectronics Business Segment

         The Future Success of Our Compound Semiconductor and Optoelectronics
         Segment Depends on Development of New Products

                  The future success of the Compound Semiconductor and
         Optoelectronics segment depends on our ability to develop new products
         and technology in the optoelectronics and SiC industries. We must
         introduce new products in a timely and cost-effective manner and secure
         production orders from our customers. The development of new HB-LED and
         SiC products involves highly complex processes. The successful
         development and introduction of these products depends on a number of
         factors, including the following:

         o     achievement of technology breakthroughs required to make
               commercially viable devices;
         o     the accuracy of our predictions of market requirements and
               evolving standards;
         o     acceptance of our new product designs;
         o     our ability to recruit qualified research and development
               personnel;
         o     timely completion of product designs and development;
         o     our ability to develop repeatable processes to manufacture new
               products in sufficient quantities for commercial sales;
         o     acceptance by the market of the products of the Compound
               Semiconductor and Optoelectronics segment's customers;
         o     consistent cost-effective manufacturing processes; and
         o     cash flow constraints.

                  If any of these or other factors become problematic, we may
         not be able to develop and introduce these new products in a timely or
         cost-effective manner.

         Our Compound Semiconductor and Optoelectronics Segment Has a Limited
         Operating History and We Expect Operating Losses to Continue

                  The Compound Semiconductor and Optoelectronics business
         segment started operations in the second quarter of fiscal 2000 and has
         a limited operating history. The segment faces risks and difficulties
         as an early stage business in a high growth and rapidly evolving
         industry. Some of the specific risks and difficulties for the segment
         include the following:

         o     building out our operational infrastructure;
         o     expanding our sales structure and marketing programs;
         o     increasing awareness of our products;
         o     providing services to our customers that are reliable and
               cost-effective;
         o     securing sales of our products;
         o     responding to technological development or product offerings by
               competitors;
         o     attracting and retaining qualified personnel; and
         o     cash flow constraints.

                  As of September 30, 2001, the Compound Semiconductor and
         Optoelectronics segment had an accumulated deficit of approximately
         $60.4 million. It incurred net losses of approximately $46.5 million in
         fiscal 2001 and $27.0 million in fiscal 2000. See "Item 1. Business -
         Recent Developments." We expect it to continue to incur losses in 2002.
         To support the segment's growth, we have increased our expense levels
         and our investments in inventory and capital equipment. As a result, we
         will need to significantly increase revenues and profit margins for the
         Compound Semiconductor and Optoelectronics segment to become and stay
         profitable. If the segment's sales and profit margins do not increase
         to support the higher levels of operating expenses and if its product
         offerings are not successful, our business, financial condition and
         results of operations could be materially and adversely affected.

         The Rapid Expansion of Our Compound Semiconductor and Optoelectronics
         Segment Places a Strain on Our Resources

                  The Compound Semiconductor and Optoelectronics segment is
         experiencing rapid growth. We have added a significant number of new
         employees to our Compound Semiconductor and Optoelectronics business.
         We have a newly-constructed plant in Tampa, Florida to manufacture
         epitaxial wafers and package-ready dies for use in HB-LEDs. Various
         startup issues, including equipment and process issues, have delayed
         commercial production at this facility. We have not yet reached high
         volume commercial production levels. We are planning to build
         additional capacity at the Tampa facility within the next year. We are
         also planning to expand the physical facilities for Sterling in the
         next year. Expansion activities such as these are subject to a number
         of risks, including the following:

         o     unforeseen environmental or engineering problems relating to the
               existing facilities;
         o     unavailability or late delivery of the advanced, and often
               customized, equipment used in the production of the segment's
               products;
         o     attracting and retaining qualified personnel;
         o     work stoppages and delays;
         o     delays in bringing production equipment on-line; and
         o     cash flow constraints.

                  This expansion has placed and will continue to place a
         significant strain on our management, financial, sales and other
         employees and on our internal systems and controls. If we are unable to
         effectively manage the rapid expansion of the Compound Semiconductor
         and Optoelectronics segment, our business, financial condition and
         results of operations could be materially and adversely affected.

         The Industries in Which Our Compound Semiconductor and Optoelectronics
         Segment Operates are Rapidly Changing

                  The Compound Semiconductor and Optoelectronics segment
         competes in markets characterized by rapid technological change,
         evolving industry standards and continuous improvements in products.
         Due to constant changes in these markets, its future success depends on
         our ability to improve our manufacturing processes and tools and our
         products. To remain competitive, we must continually introduce
         manufacturing tools with higher capacity and better production yields
         and refine production processes to meet ever higher customer
         requirements.

                  Because we generally are unable to predict the amount of time
         required and the costs involved to achieve certain research,
         development and engineering objectives, actual development costs could
         exceed budgeted amounts, and estimated product development schedules
         could be extended. Our business, financial condition and results of
         operations could be materially and adversely affected if with respect
         to the Compound Semiconductor and Optoelectronics business:

         o     we are unable to improve our existing products on a timely basis;
         o     our new products are not introduced on a timely basis;
         o     we incur budget overruns or delays in our research and
               development efforts;
         o     our new products experience reliability or quality problems; or
         o     we experience cash flow constraints that interfere with any of
               the foregoing.

         Our Operating Results Could be Harmed if We Lose Access to Certain
         Limited Sources of Materials, Components or Equipment Used in Our
         Compound Semiconductor and Optoelectronics Segment

                  We depend on a limited number of suppliers for certain raw
         materials, components and equipment used in the Compound Semiconductor
         and Optoelectronics segment, including certain key materials and
         equipment used in our wafering, polishing, epitaxial deposition, device
         fabrication and device test processes. In addition, the availability of
         these materials, components and equipment to us is dependent in part on
         our ability to provide our suppliers with accurate forecasts of our
         future requirements. We endeavor to maintain ongoing communication with
         our suppliers to guard against interruptions in supply and, to date,
         generally have been able to obtain adequate supplies in a timely manner
         from our existing sources. However, any interruption in the supply of
         these key materials, components or equipment could have a significant
         adverse effect on our operations.

         The Manufacture of the Compound Semiconductor and Optoelectronics
         Segment's Products is a Highly Complex and Precise Process and
         Production Could be Impaired or Disrupted if We Experience
         Manufacturing Difficulties

                  The manufacture of the Compound Semiconductor and
         Optoelectronics segment's products is a highly complex and precise
         process. We now manufacture nearly all of our HB-LED epitaxial wafers
         and dies at our Tampa, Florida facility. Minute impurities,
         difficulties in the production process, defects in the layering of the
         wafers' and dies' constituent compounds, wafer breakage or other
         factors can cause a substantial percentage of wafers and dies to be
         rejected or numerous dies on each wafer to be non-functional. These
         factors can result in lower than expected production yields, which
         would delay product shipments and could materially and adversely affect
         our operating results. Because the majority of the manufacturing costs
         for the Optoelectronics business are relatively fixed, the number of
         shippable dies per wafer for a given product is critical to the
         segment's financial results.

                  Additionally, because we manufacture most of our HB-LEDs at
         our facility in Tampa, Florida, any interruption in manufacturing
         resulting from fire, natural disaster, equipment failures or otherwise
         could materially and adversely affect the Compound Semiconductor and
         Optoelectronics segment's business, financial condition and results of
         operations.

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      Previously manufactured acrylic sheet,        Owned
                                                        rods & tubes - currently for sale
Port Clinton, Ohio                       240,000      Previously manufactured coated fabrics        Owned
                                                        products - currently for sale
Coated Fabrics Segment
Stoughton, Wisconsin                     198,275      Manufacture of coated fabrics products        Owned

Compound Semiconductor and
   Optoelectronics Segment
Danbury, Connecticut                      11,070      Manufacture of SiC wafers                     Leased
Tampa, Florida                            77,000      Manufacture of epitaxial wafers and
                                                        package-ready die                           Leased
Carol Stream, Illinois                    12,000      Development of optoelectronic devices         Leased
Sterling, Virginia                        14,000      Research and development, SiC technology      Leased

</TABLE>


<PAGE>

Item 3.  Legal Proceedings

                  On February 23, 2001, the Company and its wholly owned
         subsidiary, Sterling Semiconductor, Inc., were served with a complaint
         by AFG-NVC, LLC in the Loudoun County, Virginia Circuit Court. The
         complaint seeks approximately $8,106,000 for alleged default under a
         lease and benefits that the landlord believes it would have received
         under such lease. The Company has filed an answer seeking not less than
         $7,000,000 for breach of contract, fraud and constructive fraud on the
         part of the plaintiff. The case is currently in discovery. At the
         present time, the amount of liability, if any, cannot be reasonably
         estimated.

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

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

                  No matter was submitted during the fourth quarter of fiscal
         2001 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 a plan of reorganization on
         September 27, 1992, 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, 2001, the price per share of Common Stock was $4.40.

                  As of November 30, 2001, there were 1,203 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. The prices have been adjusted to give effect to the
         two-for-one stock split declared on March 10, 2000 for stockholders of
         record on March 20, 2000:
<TABLE>
<CAPTION>
                                       Fiscal Year Ended                            Fiscal Year Ended
                                       September 30, 2001                            October 1, 2000
                                    ---------------------------               ----------------------------
                Quarter               High                 Low                  High                 Low
                -------               ----                 ---                  ----                 ---
<S>                                 <C>               <C>                     <C>                <C>
                First               $  15.13          $    5.25               $  13.18           $    4.41
                Second              $   8.75          $    5.88               $  36.44           $   10.28
                Third               $  10.11          $    6.94               $  26.88           $   10.25
                Fourth              $   8.50          $    2.54               $  18.88           $   11.00
</TABLE>

                  We have never paid cash dividends on our common stock. The
         payment of any future dividends will be subject to the discretion of
         our Board of Directors and will depend on our results of operations,
         financial position and capital requirements, general business
         conditions, legal restrictions on the payment of dividends and other
         factors our Board of Directors deem relevant. We currently do not
         anticipate paying cash dividends on the common stock in the foreseeable
         future.

<PAGE>
Item 6.  Selected Financial Data

                  The following historical financial data as of September 30,
         2001 ("Fiscal 2001) and October 1, 2000 ("Fiscal 2000") and for each of
         the three years in the period ended September 30, 2001 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 26,
         1999 ("Fiscal 1999") September 27, 1998 and September 28, 1997 and for
         the fiscal years ended September 27, 1998 and September 28, 1997 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
                                                                (in thousands, except share and per share data)
                                                                                 Fiscal Year Ended
                                          ------------------------------------------------------------------------------------------
                                          September 30,         October 1,         September 26,     September 27,     September 28,
                                              2001                2000(1)              1999              1998              1997
                                          -------------       ------------        --------------     -------------    --------------
Operating Data:
<S>                                       <C>                 <C>                 <C>                 <C>               <C>
Net sales                                 $    32,862         $    36,674         $    42,826         $    67,907       $    68,773
Depreciation and other amortization (2)        15,737               7,201               2,632               2,776             2,498
(Loss) income  before interest, income
  taxes, minority interest, discontinued
  operations and extraordinary item           (54,281)            (48,496)             (5,368)              4,797               393
Interest (expense) income - net                  (156)              1,052                (796)             (1,709)           (2,679)
Income tax (expense) benefit                   (6,692)             26,876               3,214              (1,847)              599
(Loss) income before minority interest,
  discontinued operations and
  extraordinary item                          (61,129)            (20,568)             (2,950)              1,241            (1,687)
Minority interest                               8,246               7,918               2,191                 199                 -
(Loss) income from continuing operations
  before discontinued operations and
  extraordinary item                          (52,883)            (12,650)               (759)              1,440            (1,687)
Income from discontinued operations and
  disposition of discontinued operations,
  net of income tax expense                     1,048              59,337               6,279               6,587             2,066
Extraordinary loss                                  -                   -                   -              (5,637)                -
Net (loss) income                         $   (51,835)        $    46,687         $     5,520         $     2,390       $       379

(Loss) income per common share -
  basic:(3,4)
  (Loss) income from continuing
    operations                            $     (2.01)        $     (0.51)        $     (0.03)        $      0.05       $     (0.07)
  Income from discontinued operations            0.04                2.38                0.26                0.25              0.08
  Extraordinary loss                                -                   -                   -               (0.21)              -
                                          -----------         -----------         -----------         -----------       -----------
  Net (loss) income per share             $     (1.97)        $      1.87         $      0.23         $      0.09       $      0.01
                                          ===========         ===========         ===========         ===========       ===========
Average number of shares used in
  computation (4)                          26,286,148          24,937,364          24,315,992          26,463,084        26,633,930
                                          ===========         ===========         ===========         ===========       ===========
(Loss) income per common share -
  assuming dilution:(3,4)
  (Loss) income  from continuing
     operations                           $     (2.01)        $     (0.51)        $     (0.03)        $      0.05       $     (0.07)
  Income from discontinued operations            0.04                2.38                0.26                0.22              0.08
  Extraordinary loss                                -                   -                   -               (0.19)                -
                                          -----------         -----------         -----------         -----------       -----------
  Net (loss) income per share             $     (1.97)        $      1.87         $      0.23         $      0.08       $      0.01
                                          ===========         ===========         ===========         ===========       ===========
Average number of shares used in
  computation (4)                          26,286,148          24,937,364          24,315,992          29,262,136        26,633,930
                                          ===========         ===========         ===========         ===========       ===========
Balance Sheet Data:
Cash and cash equivalents                 $     2,037         $    36,625         $     4,143         $     4,097       $       229
Working capital (deficiency)                   (2,765)             48,988               2,054              (1,032)           87,858
Total assets                                  144,262             184,518             102,112              84,834           163,082
Long-term debt (including current portion)     30,605              22,163              29,629               2,592            86,753
Stockholders' equity                           63,446             106,849              31,133              32,311            40,032
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1 Our fiscal year ends on the Sunday following the last Friday in September.  As
  a result, Fiscal 2000 encompassed a 53-week period compared to 52-week periods
  for all other fiscal years presented.

2 Includes  amortization of reorganization  value in excess of amounts allocable
  to  identifiable  assets of $377,000  and  $754,000 for the fiscal years ended
  September 27, 1998 and September 28, 1997, respectively.

3 Includes  effect of preferred  stock  dividends  of $220,000  declared for the
  fiscal year ended September 28, 1997.

4 Includes the retroactive effect of a two-for-one stock split declared on March
  10, 2000 for stockholders of record on March 20, 2000.
<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 2001 with Fiscal 2000

                 Net Sales. The Company's net sales from continuing operations
         decreased in Fiscal 2001 by approximately 10% to $32.9 million from
         $36.7 million in Fiscal 2000. The decrease is due to economic
         conditions at the Coated Fabrics segment and is partially offset by an
         increase in sales at the Compound Semiconductor and Optoelectronics
         segment.

                 Net sales by the Coated Fabrics segment decreased approximately
         17% in Fiscal 2001 to $27.8 million from $33.7 million in Fiscal 2000.
         The decrease is due to a lower sales volume as a result of the
         softening in the transportation, industrial equipment and recreational
         vehicle markets. The comparison of net sales to the prior year is also
         affected by the inclusion of $836,000 of net sales from its
         discontinued automotive operation in Fiscal 2000 and the inclusion of
         53 weeks in Fiscal 2000 versus 52 weeks in Fiscal 2001.

                 Net sales by the Compound Semiconductor and Optoelectronics
         segment were $5.1 million in Fiscal 2001 versus $3.0 million in Fiscal
         2000. The increase in sales is primarily due to the acquisition of
         Sterling Semiconductor, Inc. in May of Fiscal 2000 and the effect of
         including a full year of sales in Fiscal 2001 versus four months of
         sales in Fiscal 2000. Also, in the fourth quarter of Fiscal 2001, sales
         of optoelectronic wafers became more consistent as the segment begins
         to ramp-up its commercial production levels.

                 Loss Before Interest, Income Taxes, Minority Interest and
         Discontinued Operations. Loss before interest, income taxes, minority
         interest and discontinued operations for Fiscal 2001 was $54.3 million
         compared to a loss of $48.5 million in Fiscal 2000. The increase in the
         loss is attributable to start-up costs for the Compound Semiconductor
         and Optoelectronics segment and a decline in sales associated with the
         Coated Fabrics segment. There were also a number of unusual items in
         both fiscal years that are explained below.

                 The Coated Fabrics segment had a loss before interest, income
         taxes, minority interest and discontinued operations in Fiscal 2000 of
         $216,000 versus income of $227,000 in Fiscal 2000. The decrease was
         primarily a result of the decline in sales revenues for Fiscal 2001
         versus Fiscal 2000. Fiscal 2000 was also negatively impacted by a
         $657,000 write-down to fair value of certain machinery and equipment to
         be disposed of at the Port Clinton, Ohio facility and a $506,000 charge
         related to a special contribution to the 401(k) plan for eligible
         participants of the Coated Fabrics segment.

                 The Compound Semiconductor and Optoelectronics segment's loss
         before interest, income taxes, minority interest and discontinued
         operations in Fiscal 2001 was $45.5 million versus $25.8 million in
         Fiscal 2001. The increase in the loss relates to the following factors:

         o     start-up costs of the segment which have increased as the segment
               moves closer to  commencement  of commercial  operations  for the
               optoelectronics products;

         o     the inclusion of the operations of Sterling  Semiconductor,  Inc.
               for a full year in Fiscal  2001 versus four months in Fiscal 2000
               after its acquisition in May 2000;

         o     the  impairment  and related  write-down of Sterling  goodwill in
               Fiscal 2001 of $9.8 million;

         o     the  amortization  of  approximately  $6.9 million of  intangible
               assets  associated  with the prior year  acquisition of Sterling;
               Fiscal 2000  amortization  of Sterling  intangibles  approximated
               $2.3 million;

         o     the Fiscal  2001  acquisition  of Emcore's  minority  interest in
               Uniroyal  Optoelectronics,  LLC and the related  amortization  of
               intangible assets of approximately $100,000;

         o     the impairment and related write-down of assets in Fiscal 2001 at
               a facility for which the lease was  terminated  of  approximately
               $686,000; and

         o     the recognition of $250,000 of acquired  in-process  research and
               development  expense ("IPR&D") in Fiscal 2001 versus $6.6 million
               in Fiscal 2000.

         In addition to items identified above, Fiscal 2000 loss at the Compound
         Semiconductor and Optoelectronics segment was also negatively impacted
         by a special contribution to the 401(k) plan of Company common stock of
         approximately $638,000.

                  Approximately $8.6 million of net costs and unusual items
         recorded in Fiscal 2001 were not allocated to any business segment
         compared to $22.9 million of unallocated costs for Fiscal 2000.
         Included in the non-allocated items in Fiscal 2001 is the following
         unusual item:

         o     a  reduction  in the fair value of real  property  related to the
               Company's Port Clinton, Ohio and Stirling,  New Jersey facilities
               of approximately $703,000.

                  Fiscal 2000  non-allocated  costs were negatively  impacted by
         the net effect of the following unusual items:

         o     gain  realized  on the sale of the  investment  in the  preferred
               stock of Emcore ($2.9 million);

         o     the write-off of the RBX Group, Inc. note and related  accrued
               interest ($5.4 million);

         o     a  reduction  in the fair value of real  property  related to the
               Company's Port Clinton, Ohio facility ($1.1 million);

         o     incentive  payments  and benefit  costs to and for  officers  and
               directors   related  to  the  achievement  of  certain  strategic
               initiatives ($5.3 million);

         o     the write-down of a technology license of $4.0 million related to
               the future transfer of technology for HB-LEDs from Emcore; and

         o     a special contribution to the 401(k) of Company stock to eligible
               participants of the corporate office ($554,000).

         After the elimination of unusual items from both fiscal periods,
         unallocated costs decreased approximately $1.6 million primarily due to
         a reduction in the amount of management incentive payments in Fiscal
         2001 versus Fiscal 2000.

                  Interest Income (Expense). Interest income in Fiscal 2001 was
         $1.6 million compared to $3.2 million in Fiscal 2000. The decrease is
         attributable to the overall decline in the average balance of cash,
         cash equivalents and investments from Fiscal 2000 to Fiscal 2001 due to
         the start-up cash requirements of the Compound Semiconductor and
         Optoelectronics segment. Interest expense was $1.7 million in Fiscal
         2001 compared to $2.1 million in Fiscal 2000. The decrease in interest
         expense is primarily due to a higher level of interest capitalization
         in Fiscal 2001 ($810,000) versus Fiscal 2000 ($287,000). Interest
         capitalization relates to the build-out of facilities in the Compound
         Semiconductor and Optoelectronics segment. After consideration of the
         effect of capitalized interest, interest expense increased slightly due
         to an overall increase in outstanding debt balances.

                  Income Tax (Expense) Benefit. Income tax expense in Fiscal
         2001 was $6.7 million compared to an income tax benefit of $26.9
         million in Fiscal 2000. The provisions for income tax were calculated
         through the use of the estimated income tax rates based upon annualized
         income. Fiscal 2001 was impacted by the establishment of a $17.9
         deferred tax valuation allowance recognized due to the uncertainty
         regarding the ability to realize the benefit of the deferred tax
         assets. Fiscal 2000 benefited from the reversal of $13.7 million of
         deferred tax valuation allowance related to capital loss carryforwards.
         The reversal was due to the use of the capital losses to offset capital
         gains resulting from the sale of the preferred stock of Emcore and the
         sale of substantially all of the net assets of the High Performance
         Plastics segment.

                  Discontinued Operations. Net income from discontinued
         operations and the disposition of discontinued operations of the High
         Performance Plastics segment and the Specialty Adhesives segment
         decreased to $1.0 million in Fiscal 2001 compared to $59.3 million in
         Fiscal 2000. Fiscal 2001 net income from discontinued operations
         includes approximately $2.3 million of net income from the discontinued
         operations of the Specialty Adhesives segment as well as a $1.3 net
         loss related to the disposition of the High Performance Plastics
         segment. Fiscal 2000 net income from discontinued operations includes
         approximately $2.0 million of net income from the discontinued
         operations of the Specialty Adhesives segment and $57.3 million of net
         income related to the operations and sale of the High Performance
         Plastics segment.

                 Comparison of Fiscal 2000 with Fiscal 1999

                 Three non-recurring events materially affected our financial
         performance discussed below. On February 28, 2000, we sold
         substantially all of the net assets of our High Performance Plastics
         segment to Spartech. That segment accounted for approximately 65% of
         our Fiscal 1999 revenues and 77% of our Fiscal 1999 net income. On May
         31, 2000, we acquired Sterling Semiconductor, Inc. This acquisition
         expanded our commitment to the compound semiconductor business.
         Finally, in Fiscal 2000 the effects of the 1998 sale of the automotive
         portion of the Coated Fabrics segment were fully realized. The runoff
         revenues from that operation of $13.1 million in Fiscal 1999 declined
         to $836,000 in Fiscal 2000.

                 Net Sales. The Company's net sales decreased in Fiscal 2000 by
         approximately 14% to $36.7 million from $42.8 million in Fiscal 1999,
         primarily due 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 sales from both periods, sales
         increased 21% in Fiscal 2000 compared to Fiscal 1999. The 21% increase,
         excluding automotive sales from both periods, was due to an increase in
         sales from the Compound Semiconductor and Optoelectronics segment and
         the inclusion of fifty-three weeks in Fiscal 2000 versus fifty-two
         weeks in Fiscal 1999.

                  The Coated Fabrics segment's net sales decreased approximately
         21% in Fiscal 2000 to $33.7 million from $42.3 million in Fiscal 1999.
         The decrease resulted primarily from a decline in automotive sales due
         to the gradual phase-out of its automotive operations. Automotive sales
         approximated $836,000 during Fiscal 2000 compared to approximately
         $13.1 million in Fiscal 1999. Excluding automotive sales from both
         periods, sales of Naugahyde(R) vinyl coated fabrics increased
         approximately 12% in Fiscal 2000 as compared to Fiscal 1999 as a result
         of an increase in unit volume and selling prices and the inclusion of
         fifty-three weeks in Fiscal 2000 versus fifty-two weeks in Fiscal 1999.

                  Net sales by the Compound Semiconductor and Optoelectronics
         segment for Fiscal 2000 were $3.0 million compared to $485,000 in
         Fiscal 1999. The increase is attributable to the acquisition of
         Sterling in Fiscal 2000 and Fiscal 2000 net sales from Sterling of
         approximately $1.2 million, as well as an increase in the sales at the
         joint venture. The Compound Semiconductor and Optoelectronics segment
         began limited commercial sales and production in Fiscal 2000 but is
         still in the development stage.

                  (Loss) Income Before Interest, Income Taxes, Minority Interest
         and Discontinued Operations. Loss before interest, income taxes,
         minority interest and discontinued operations for Fiscal 2000 was $48.5
         million, compared to a loss of $5.4 million for Fiscal 1999. The
         greater loss is due to the net effect of a number of non-recurring and
         unusual items including:

         o     the gain realized on the sale of the  investment in the preferred
               stock of Emcore Corporation ($2.9 million);

         o     the write-off of a note receivable and related accrued interest
               related to the sale of the  Ensolite  closed cell foam  division,
               due to the deterioration of the financial  condition of the buyer
               (RBX Group,  Inc.) as a result of a prolonged strike at its major
               facility and the ultimate  settlement of the note with RBX Group,
               Inc. ($5.4 million);

         o     a  reduction  in the fair  value of certain  property,  plant and
               equipment  related to the Company's  Port Clinton,  Ohio facility
               which  was  expected  to be  disposed  of in  Fiscal  2001  ($1.8
               million);

         o     payments  made in  connection  with the sale of the net assets of
               the  High  Performance  Plastics  segment,   including  incentive
               payments  and benefit  costs to and for  officers  and  directors
               related to the achievement of certain strategic initiatives ($5.3
               million)  and a  special  contribution  of  Company  stock to the
               401(k) plan for incentives to retain key personnel  ($1.7 million
               related to continuing operations);

         o     the write-down of a technology license of $4.0 million related to
               the future  transfer  of  technology  for high  brightness  light
               emitting diodes (HB-LEDs) from Emcore  Corporation;  (the Company
               has added highly qualified  scientists to internally  advance and
               develop certain technology for HB-LEDs);

         o     the write-off of IPR&D of $6.6 million related to the acquisition
               of Sterling on May 31, 2000;

         o     a reduction of revenues  associated with the gradual phase-out of
               the automotive operations of the Coated Fabrics segment; and

         o     start-up    losses   for   the   Compound    Semiconductor    and
               Optoelectronics segment.

         Also during Fiscal 2000, there were no corporate allocations to the
         discontinued operations of the High Performance Plastics segment. The
         corporate allocations for Fiscal 1999 were $4.6 million.

                  The Coated Fabrics segment's income before interest, income
         taxes, minority interest and discontinued operations in Fiscal 2000 was
         $227,000 compared to $4.8 million in Fiscal 1999. The decrease is
         attributable 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 previously used to
         produce automotive products, the write-down to fair value of certain
         machinery and equipment to be disposed of at the Port Clinton, Ohio
         facility of approximately $657,000, and a special contribution to the
         401(k) plan for eligible participants of the Coated Fabrics segment of
         approximately $506,000.

                  The Compound Semiconductor and Optoelectronics segment's loss
         before interest, income taxes, minority interest and discontinued
         operations in Fiscal 2000 was $25.8 million compared to a loss of $5.1
         million in Fiscal 1999. The losses relate to the start-up and training
         costs of the Compound Semiconductor and Optoelectronics segment and a
         special contribution to the 401(k) plan for eligible participants of
         the Compound Semiconductor and Optoelectronics segment of approximately
         $638,000. Also contributing to the increase in loss is a charge of $6.6
         million related to acquired IPR&D and goodwill and intangible
         amortization of $2.3 million during Fiscal 2000 attributable to the
         purchase of certain assets of Sterling which were acquired by the
         Company on May 31, 2000. The goodwill and intangible assets associated
         with the acquisition of approximately $34.5 million are being amortized
         over five years.

                  The identifiable intangible assets and IPR&D of Sterling were
         valued on the acquisition date using an income approach and, in the
         case of the trained workforce intangible asset, a cost to replicate
         approach. In the income approach, a cash flow was developed associated
         with the respective asset after charges for the use of existing assets
         (as applicable) and consideration of the economic life of the asset
         (reflected by the obsolescence factor). The income stream was
         discounted to its present value based upon the estimated discount rate.
         The discount rate was based upon our required rate of return, useful
         life of the technology and risks associated with the timely completion
         of the product lines. In the case of IPR&D, the "exclusionary rule" was
         applied by which the indicated value was multiplied by the estimate of
         the percentage of the total technology that was complete as of the
         valuation date. Percentage of completion was determined based upon the
         relative number of critical issues solved to the total number of
         critical issues identified. Significant appraisal assumptions include
         revenue projections, margins and expense levels and the risk adjusted
         discount rate applied to the project's expected cash flows.

                  As of the acquisition date, Sterling had developed a
         commercial production capability for 2-inch 4H and 6H poly type SiC
         wafers. Sterling was also engaged in concurrent efforts to develop
         potential product lines for large diameter (3-inch and 4-inch 4H and
         6H) wafers, semi-insulating wafers, epitaxial coatings and device
         designs that would produce an economical device die for discrete
         semiconductor devices.



                  The purchased IPR&D is summarized as follows (in thousands):
<TABLE>
<CAPTION>

                                                                                               Expected Date for
                                           Discount     Economic     Percent                    Full Commercial
           IPR&D Technology Description      Rate         Life       Complete    Fair Value       Viability
          -----------------------------    --------   ----------     --------    ----------    -----------------
<S>                                         <C>        <C>             <C>         <C>                 <C>
          3" and 4" large diameter:
            SiC wafers                      32.7%      11 years        70%         $    858            2004
            Semi-insulating wafers          32.7%      11 years        75%              456            2004
            Epitaxy coatings                32.7%      11 years        40%              723            2005
            Devices                         32.7%      11 years        40%            4,553            2005
                                                                                   --------
          Total IPR&D                                                              $  6,590
                                                                                   ========
</TABLE>

                  The cost to complete all projects approximated $13.2 million
         in May of 2000 and $10.9 million at September 30, 2001. Progress has
         been made on purchased IPR&D projects during Fiscal 2001. The expected
         dates for full commercial viability remain the same. The nature of the
         efforts required to develop the acquired IPR&D into technologically
         feasible and commercially viable products principally relate to the
         completion of all planning, design and testing activities necessary to
         establish a product that can be produced to meet its design
         requirements including functions, features and technical performance
         requirements. We currently expect the acquired IPR&D will be
         successfully developed but there can be no assurance the technological
         feasibility or commercial viability of these products will be achieved.
         If none of these products are successfully developed, our sales and
         profitability may be adversely affected in future periods.

                  Approximately $22.9 million of net costs, non-recurring and
         unusual items recorded in Fiscal 2000 were not allocated to any
         business segment compared to $5.1 million of unallocated costs for
         Fiscal 1999. Included in the non-allocated items in Fiscal 2000 are the
         following:

         o     gain  realized  on the sale of the  investment  in the  preferred
               stock of Emcore Corporation ($2.9 million);

         o     the write-off of the RBX Group,  Inc.  note (and related  accrued
               interest) ($5.4 million);

         o     a  reduction  in the fair value of real  property  related to the
               Company's  Port Clinton,  Ohio  facility  which is expected to be
               disposed of this year ($1.1 million);

         o     incentive  payments  and benefit  costs to and for  officers  and
               directors   related  to  the  achievement  of  certain  strategic
               initiatives ($5.3 million);

         o     the write-down of a technology license of $4.0 million related to
               the future  transfer  of  technology  for high  brightness  light
               emitting diodes  (HB-LEDs) from Emcore  Corporation  (the Company
               has added highly qualified  scientists to internally  develop and
               advance the technology for HB-LEDs); and

         o     a special contribution of Company stock to eligible  participants
               of the corporate office of approximately  $554,000 for the 401(k)
               plan.

         Also during Fiscal 2000, there were no corporate allocations to the
         discontinued operations of the High Performance Plastics segment. Prior
         year corporate allocations for Fiscal 1999 were $4.6 million.

                  Interest Income (Expense). Interest income for Fiscal 2000 was
         $3.2 million compared to $206,000 in Fiscal 1999. The increase is
         attributable to interest income earned on the investment of the
         proceeds received from the sale of the Company's High Performance
         Plastics segment on February 28, 2000. Interest expense was $2.1
         million in Fiscal 2000 compared to $1.0 million in Fiscal 1999. The
         increase in interest expense is due to a lower amount of capitalized
         interest in Fiscal 2000 compared to Fiscal 1999. During Fiscal 2000,
         approximately $287,000 of interest was capitalized related to the build
         out of the Optoelectronics facility in Tampa, Florida, versus
         approximately $791,000 in Fiscal 1999.

                  Income Tax Benefit. Income tax benefit in Fiscal 2000 was
         $26.9 million as compared to $3.2 million in Fiscal 1999. The
         provisions for income tax benefit were calculated through the use of
         the estimated income tax rates based upon annualized income. Fiscal
         2000 benefited from the reversal of $13.7 million of deferred tax
         valuation allowance related to capital loss carryforwards. The reversal
         was due to the use of the capital losses to offset capital gains
         resulting from the sale of the preferred stock of Emcore Corporation
         and the sale of the High Performance Plastics segment.

                  Discontinued Operations. Net income from discontinued
         operations and disposition of discontinued operations of the High
         Performance Plastics segment increased to $57.3 million in Fiscal 2000
         compared to $4.3 million in Fiscal 1999. The increase is attributable
         to the net effect of the gain recognized on the February 28, 2000 sale
         of the High Performance Plastics segment of approximately $55.8 million
         (net of taxes of approximately $38.1 million) and operating income for
         the period September 27, 1999 to February 28, 2000. The decline in
         operations is primarily a result of production inefficiencies at the
         Stamford, Connecticut facility due to a major plant modernization and
         only five months of operations in Fiscal 2000 versus twelve months of
         operations in Fiscal 1999. The decline in operations was partially
         offset by the suspension of a corporate allocation to this segment in
         Fiscal 2000.

                  Net income from the discontinued operations of the Specialty
         Adhesives segment in Fiscal 2000 and fiscal 1999 was $2.0 million. In
         Fiscal 2000, a special contribution to the 401(k) plan for eligible
         participants of the Specialty Adhesives segment of $459,000 was
         substantially offset by the increase in sales volume of branded
         industrial products.

         Liquidity and Capital Resources

                  For Fiscal 2001, continuing operations used $23.6 million of
         cash compared to $11.4 million of cash provided by continuing
         operations for Fiscal 2000. Cash used in continuing operations during
         Fiscal 2001 was primarily a result of the increase in start-up costs
         related to the Compound Semiconductor and Optoelectronics segment.

                  Net cash used in investing activities during Fiscal 2001 was
         $7.4 million compared to $167.8 million of net cash provided by
         investing activities during Fiscal 2000. During Fiscal 2001, the
         purchases of property, plant and equipment of $26.1 million and a $2.8
         million acquisition related to the discontinued operations of the
         Specialty Adhesives segment exceeded the cash proceeds from the
         sale/maturity of investments. Fiscal 2000 net cash provided from
         investing activities included the net cash proceeds from the sale of
         the High Performance Plastics segment of $209.0 million and net cash
         proceeds of $8.1 million relating to the sale of the remaining Emcore
         preferred stock and were offset by the net effect of debt securities
         purchased/sold and the purchase of $25.8 million of machinery and
         equipment. For both fiscal years, the purchase of machinery and
         equipment related primarily to the start-up of the Compound
         Semiconductor and Optoelectronics segment.

                  Net cash used in financing activities was $2.2 million in
         Fiscal 2001 versus $104.6 million in Fiscal 2000. The primary use of
         cash in financing activities during Fiscal 2001 was the $9.6 million
         purchase of treasury stock and the repayment of approximately $6.3
         million in debt. These amounts were partially offset by increases in
         term loans and the revolving credit advance of $11.0 million and $2.4
         million of capital contributions from the former minority interest
         holder of Uniroyal Optoelectronics LLC. Primary uses of cash during
         Fiscal 2000 included the repayment of $99.4 million of outstanding term
         and revolving credit borrowings to a syndicate headed by Fleet National
         Bank as a result of the sale of the High Performance Plastics segment
         and the purchase of $13.9 million of the Company's common stock for
         treasury. In Fiscal 2000, we also received $11.6 million in capital
         contributions from the minority interest holder of Uniroyal
         Optoelectronics LLC.

                  On September 30, 2001, we had approximately $2.0 million in
         cash and cash equivalents as compared to approximately $36.6 million at
         October 1, 2000. Working capital deficiency at September 30, 2001 was
         $2.8 million compared to a working capital of $49.0 million at October
         1, 2000. On September 30, 2001, we had outstanding borrowings of $7.2
         million under our $10.0 million revolving credit facility with Tyco
         Capital (subject to a borrowing base limitation of approximately $8.3
         million at September 30, 2001). The principal uses of cash during
         Fiscal 2001 were to fund capital expenditures, working capital,
         operating losses at the Compound Semiconductor and Optoelectronics
         segment and to repurchase shares in the open market. We plan to spend
         an additional $20.0 - $25.0 million on capital expenditures for the
         Compound Semiconductor and Optoelectronics segment over the next three
         years for expansion.

                  We have experienced losses from continuing operations in each
         of the three years ended September 30, 2001 and have an accumulated
         deficit of $11.3 million as of September 30, 2001. Cash used in
         operations for the years ended September 30, 2001 and October 1, 2000
         was $25.0 million and $30.7 million, respectively, and it is likely
         that cash flow from operations will be negative throughout Fiscal 2002.
         We had a working capital deficiency at September 30, 2001 of $2.8
         million compared to working capital of $49.0 million as of October 1,
         2000. At September 30, 2001, our principal source of liquidity is $2.0
         million of cash and cash equivalents and $1.1 million of availability
         under a revolving credit facility. Such conditions raise substantial
         doubt that we will be able to continue as a going concern for a
         reasonable period of time without receiving additional funding.

                  The operating results for Fiscal 2001 and Fiscal 2000 have
         occurred while we have been repositioning our operations away from the
         mature, industrial-based activities and into the high-growth compound
         semiconductor technology industry. The transition to this business
         segment has required significant investment spending related to
         start-up costs and capital expenditures. Many of the markets in this
         business segment are characterized by long lead times for new products
         requiring significant working capital investments and extensive
         testing, qualification and approval by our customers and end users.
         This business segment is marked by intense competition requiring us to
         introduce new products in a timely and cost-effective manner. This
         business segment started operations in the second quarter of Fiscal
         2000 and has a limited operating history. The segment faces risks and
         difficulties as an early stage business in a high-growth and rapidly
         evolving industry. These factors have placed a significant strain on
         our financial resources. We have sought to generate additional
         financial resources by reducing operating costs and selling certain
         assets and by seeking additional sources of financing, including bank
         and other lender financing as well as private placements. Our ultimate
         success depends on our ability to obtain additional financing, to
         continue reducing operating costs and, ultimately to generate higher
         sales levels to attain profitability.

                  On November 9, 2001, we sold certain net assets of UAS, which
         comprised our Specialty Adhesives segment (See "Item 1. Business -
         Recent Developments"). Net cash proceeds at closing approximated
         $8.0 million after the repayment of certain debt.

         Effects of Inflation

                  The markets in which the Company sells products are
         competitive. 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.

         Forward Looking Information

                  Certain statements contained in or incorporated by reference
         into this report are "forward looking statements" within the meaning of
         the United States Private Securities Litigation Reform Act of 1995.
         Forward looking statements include statements which are predictive in
         nature, which depend upon or refer to future events or conditions,
         which include words such as "expects," "anticipates," "intends,"
         "plans," "believes," "estimates," or similar expressions. In addition,
         any statements concerning future financial performance (including
         future revenues, earnings or growth rates), ongoing business strategies
         or prospects, and possible future actions, which may be provided by
         management, are also forward looking statements as defined by the
         United States Private Securities Litigation Reform Act of 1995. Forward
         looking statements are based on current expectations and projections
         about future events and are subject to risks, uncertainties and
         assumptions about the Company, economic and market factors and the
         industries in which we do business, among other things. These
         statements are not guaranties of future performance and we have no
         specific intention to update these statements.

                  These forward looking statements, like any forward looking
         statements, involve risks and uncertainties that could cause actual
         results to differ materially from those projected or anticipated. Among
         the important factors which could cause actual results to differ
         materially from those in the forward looking statements are:

         o     cancellations, rescheduling or delays in product shipments;
         o     manufacturing capacity constraints;
         o     lengthy sales and qualification cycles;
         o     difficulties in the production process;
         o     the effectiveness of our capital expenditure programs;
         o     our future financial performance;
         o     delays in developing and commercializing new products;
         o     competition;
         o     changes in the industries in which we compete or plan to compete,
               especially the HB- LED and  semiconductor  industries,  including
               overall growth of the industries;
         o     the continued acceptance of our products;
         o     availability and performance of key personnel;
         o     relations  with  employees,   customers,  suppliers  and  venture
               partners;
         o     our ability to obtain and protect key intellectual property;
         o     acquisitions   and  our  success  in  integrating   the  acquired
               businesses; and
         o     economic conditions generally and in our industries.

                  For a discussion of important factors that could cause actual
         results to differ materially from the forward looking statements
         contained in or incorporated by reference into this Form 10-K, please
         read "Item 1. Business - Certain Business Risks and Uncertainties."

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

                  We are exposed to changes in short-term interest rates
         primarily as a result of our cash, investing and borrowing activities
         used to maintain liquidity and fund working capital requirements. Our
         earnings and cash flows are subject to fluctuations due to changes in
         interest rates on our floating rate revolving credit advances and
         investment portfolio. Our risk management policy included the use of
         derivative financial instruments (interest rate swaps) to manage our
         interest rate exposure on long-term variable rate debt. The counter
         parties were major financial institutions. We do not enter into
         derivatives or other financial instruments for trading or speculative
         purposes. During Fiscal 2000, we liquidated all of our interest rate
         swap instruments for cash proceeds and a gain of $950,000, which is
         included in the income of discontinued operations on the Consolidated
         Financial Statements.

                  At September 30, 2001, we had approximately $2.0 million of
         cash and cash equivalents subject to variable short-term interest
         rates. On the same date we had a $7.2 million floating rate revolving
         credit advance. Because of the short-term nature or floating rates,
         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 the net balance, a change of one percent in the
         interest rate would cause a change in net interest income of
         approximately $52,000 on an annual basis.

                  At October 1, 2000, we had approximately $47.9 million of
         cash, cash equivalents and investments subject to variable short-term
         interest rates. On the same date we had a $1.3 million floating rate
         revolving credit advance. Based upon net balance, a change of one
         percent in the interest rate would have caused a change in interest
         expense of approximately $466,000 on an annual basis.

                  The changes in the composition and balances of items subject
         to interest rate risk from Fiscal 2000 to Fiscal 2001 is attributable
         to investment spending at our Compound Semiconductor and
         Optoelectronics segment in Fiscal 2001.

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 30, 2001 and
               October  1,  2000 and for the Years  Ended  September  30,  2001,
               October 1, 2000 and September 26, 1999:

               Independent Auditors' Report                                 F-2

               Consolidated  Balance Sheets as of September
               30, 2001 and October 1, 2000                                 F-3

               Consolidated Statements of Operations for the
               Years Ended  September  30, 2001,  October 1,
               2000 and September 26, 1999                                  F-5

               Consolidated   Statements  of   Comprehensive
               (Loss)  Income for the Years Ended  September
               30, 2001,  October 1, 2000 and  September 26,
               1999                                                         F-6

               Consolidated   Statements   of   Changes   in
               Stockholders'  Equity  for  the  Years  Ended
               September  30,  2001,  October  1,  2000  and
               September 26, 1999                                           F-7

               Consolidated Statements of Cash Flows for the
               Years Ended  September  30, 2001,  October 1,
               2000 and September 26, 1999                                  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 Uniroyal. (1)

3.1      Amended and Restated Certificate of Incorporation of Uniroyal. (13)

3.2      By-Laws of Uniroyal, as amended to March 16, 2001.  (13)

4.2      Amended and Restated  Warrant  Agreement  dated January 1, 2001 between
         Uniroyal and Mellon Investor Services, LLC. (12)

10.7     Amended and Restated Employment Agreement,  dated as of April 25, 1995,
         between Howard R. Curd and Uniroyal. (2)

10.8     Amended and Restated Employment Agreement,  dated as of April 25, 1995,
         between Oliver J. Janney and Uniroyal. (2)

10.9     Amended and Restated Employment Agreement,  dated as of April 25, 1995,
         between Robert L. Soran and Uniroyal. (2)

10.10    Amended and Restated Employment Agreement,  dated as of April 25, 1995,
         between George J. Zulanas, Jr. and Uniroyal. (2)

10.16    Amended and Restated Uniroyal Technology  Corporation 1992 Stock Option
         Plan as amended and restated to March 20, 2001. (13)

10.28    Amended and Restated Uniroyal Technology Corporation 1992 Non-Qualified
         Stock Option Plan as amended November 30, 2000. (11)

10.39    Financing  Agreement  dated  as of June 5,  1996  by and  between  Tyco
         Capital  (formerly The CIT  Group/Business  Credit,  Inc.) and Uniroyal
         Technology Corporation. (3)

10.40    Amended and Restated Uniroyal Technology  Corporation 1994 Stock Option
         Plan as amended and restated to March 16, 2001. (13)

10.41    Amended and Restated Uniroyal Technology Corporation 1995 Non-Qualified
         Stock Option Plan. (11)

10.44    Amended and Restated  Shareholder Rights Agreement,  dated as of August
         2, 2001,  between Uniroyal  Technology  Corporation and Mellon Investor
         Services, LLC, as rights agent. (14)

10.45    First  Amendment to Financing  Agreement dated September 5, 1997 by and
         between Tyco Capital (formerly The CIT Group/Business Credit, Inc.) and
         Uniroyal Technology Corporation. (4)

10.47    Amendment  and  Consent  Agreement  dated April 14, 1998 by and between
         Tyco  Capital  (formerly  The  CIT  Group/Business  Credit,  Inc.)  and
         Uniroyal Technology Corporation. (5)

10.48    Consent  Agreement  dated  April 1, 1999 by and  between  Tyco  Capital
         (formerly The CIT Group/Business  Credit, Inc.) and Uniroyal Technology
         Corporation. (6)

10.49    Assumption  Agreement  dated April 1, 1999 by and between  Tyco Capital
         (formerly The CIT Group/Business  Credit,  Inc.),  Uniroyal  Technology
         Corporation and Uniroyal Engineered Products, Inc. (6)

10.50    Guaranty  dated April 1, 1999 between Tyco  Capital  (formerly  The CIT
         Group/Business Credit, Inc.) and Uniroyal Technology Corporation. (6)

10.51    Asset Purchase  Agreement dated as of December 24, 1999, among Spartech
         Corporation,  High Performance  Plastics,  Inc.  Uniroyal HPP Holdings,
         Inc. and Uniroyal Technology Corporation. (7)

10.52    Memorandum  of  Understanding  and   Confidentiality   Agreement  dated
         February 23, 1995  between  Uniroyal and  Firestone  Building  Products
         Division  of   Bridgestone/Firestone,   Inc.  and  amendments  thereto.
         Confidential treatment was obtained for portions of the agreement. (8)

10.53    Amended  and  Restated   Uniroyal   Technology   Corporation   Deferred
         Compensation  Plan Effective  August 1, 1995, as amended April 3, 2000.
         (8)

10.54    Merger Agreement dated as of April 10, 2000, among Uniroyal  Technology
         Corporation, BayPlas4, Inc., and Sterling Semiconductor, Inc. (9)

10.55    Uniroyal  Technology  Long Term  Growth  Plan,  as amended to August 3,
         2000. (10)

10.56    Split  Dollar  Insurance  Agreement  dated as of August  15,  1995,  as
         amended  to  March  10,  2000,  by  and  between  Uniroyal   Technology
         Corporation and Howard R. Curd. (11)

10.57    Split  Dollar  Insurance  Agreement  dated as of August  15,  1995,  as
         amended  to  March  10,  2000,  by  and  between  Uniroyal   Technology
         Corporation and Robert L. Soran. (11)

10.58    Split  Dollar  Insurance  Agreement  dated as of August  15,  1995,  as
         amended  to  March  10,  2000,  by  and  between  Uniroyal   Technology
         Corporation and George J. Zulanas, Jr. (11)

10.59    Split  Dollar  Insurance  Agreement  dated as of August  15,  1995,  as
         amended  to  March  10,  2000,  by  and  between  Uniroyal   Technology
         Corporation and Oliver J. Janney. (11)

10.60    Split  Dollar  Insurance  Agreement  dated as of August  15,  1995,  as
         amended  to  March  10,  2000,  by  and  between  Uniroyal   Technology
         Corporation and Martin J. Gutfreund. (11)

10.61    Uniroyal  Technology  Corporation  2000 Stock Plan, as amended November
         30, 2000. (11)

10.62    Uniroyal Technology Corporation 2001 Stock Option Plan. (13)

10.63    Membership  Purchase  Agreement,  dated August 2, 2001 among  Uniroyal,
         Uniroyal Optoelectronics,  LLC, Uniroyal Compound Semiconductors,  Inc.
         and Emcore Corporation. (14)

10.64    Credit Agreement dated as of August 2, 2001 between Uniroyal and Emcore
         Corporation. (14)

10.65    Registration  Rights Agreement between Uniroyal and Emcore  Corporation
         pursuant to the Membership Interest Purchase Agreement. (16)

10.66    Asset Purchase  Agreement dated as of August 24, 2001 between  Uniroyal
         Engineered Products, LLC and SAS Acquisition Corp. (15)

11.1     Statement Regarding Computation of Per Share Earnings. (17)

21.1     Subsidiaries of Uniroyal Technology Corporation. (17)

23.1     Independent Auditors' Consent. (17)

Footnotes to Exhibits:

         (1)   Contained in Uniroyal's Form 8-K, dated June 9, 1993.

         (2)   Contained  in  Uniroyal's  Quarterly  Report on Form 10-Q for the
               quarterly period ended April 2, 1995 filed on May 12, 1995.

         (3)   Contained  in  Uniroyal's  Quarterly  Report on Form 10-Q for the
               quarterly period ended June 30, 1996 filed August 13, 1996.

         (4)   Contained in  Uniroyal's  Annual Report on Form 10-K for the year
               ended September 28, 1997 filed on December 22, 1997.

         (5)   Contained in Uniroyal's Form 8-K/A dated April 22, 1998.

         (6)   Contained in  Uniroyal's  Annual Report on Form 10-K for the year
               ended September 26, 1999 filed on December 23, 1999.

         (7)   Contained in Uniroyal's 8-K dated March 14, 2000.

         (8)   Contained  in  Uniroyal's  Quarterly  Report on Form 10-Q for the
               quarterly period ended April 2, 2000, filed on May 17, 2000.

         (9)   Contained in Uniroyal's 8-K dated June 14, 2000.

         (10)  Contained  in  Uniroyal's  Quarterly  Report on Form 10-Q for the
               quarterly period ended July 2, 2000, filed on August 16, 2000.

         (11)  Filed  with  Uniroyal's  Annual  Report on Form 10-K for the year
               ended October 1, 2000 filed on December 13, 2000.

         (12)  Contained  in  Uniroyal's  Quarterly  Report on Form 10-Q for the
               quarterly  period  ended  December  31, 2000 filed on February 5,
               2001.

         (13)  Contained  in  Uniroyal's  Quarterly  Report on Form 10-Q for the
               quarterly period ended April 1, 2001 filed on May 9, 2001.

         (14)  Contained in Uniroyal's 8-K dated August 6, 2001.

         (15)  Contained in Uniroyal's 8-K dated November 20, 2001.

         (16)  Contained  in  Uniroyal's  Quarterly  Report on Form 10-Q for the
               quarterly period ended July 1, 2001 filed on August 15, 2001.

         (17)  Filed with this report.


         (d) Reports on Form 8-K:

                  Report  on Form 8-K  dated  August  6,  2001,  related  to the
         completion of the acquisition of Emcore Corporation's minority interest
         in Uniroyal Optoelectronics, LLC.

<PAGE>
Appendix A.    Consolidated Financial Statements and Supplementary Data.

         Index to Consolidated Financial Statements

         Consolidated Financial Statements as of September 30, 2001 and October
         1, 2000 and for the Years Ended September 30, 2001, October 1, 2000 and
         September 26, 1999:

               Independent Auditors' Report                                 F-2

               Consolidated  Balance  Sheets as of September
               30, 2001 and October 1, 2000                                 F-3

               Consolidated Statements of Operations for the
               Years Ended  September  30, 2001,  October 1,
               2000 and September 26, 1999                                  F-5

               Consolidated   Statements  of   Comprehensive
               (Loss)  Income for the Years Ended  September
               30, 2001,  October 1, 2000 and  September 26,
               1999                                                         F-6

               Consolidated   Statements   of   Changes   in
               Stockholders'  Equity  for  the  Years  Ended
               September  30,  2001,  October  1,  2000  and
               September 26, 1999                                           F-7

               Consolidated Statements of Cash Flows for the
               Years Ended  September  30, 2001,  October 1,
               2000 and September 26, 1999                                  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.




<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 30, 2001
and October 1, 2000, and the related consolidated statements of operations,
comprehensive (loss) income, changes in stockholders' equity and cash flows for
each of the three years in the period ended September 30, 2001. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of September 30,
2001 and October 1, 2000 and the results of its operations and its cash flows
for each of the three years in the period ended September 30, 2001, in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Notes 2 and 3
to the consolidated financial statements, the Company's recurring losses from
operations, working capital deficiency and negative cash flow from operating
activities raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans concerning these matters are also described in
Note 3. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.


DELOITTE & TOUCHE LLP
Certified Public Accountants


Tampa, Florida
December 21, 2001


<PAGE>
<TABLE>
<CAPTION>
                UNIROYAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)


                           ASSETS

                                                                              September 30,       October 1,
                                                                                  2001               2000
                                                                              -------------      -----------
<S>                                                                           <C>                <C>

    Current assets:

       Cash and cash equivalents (Notes 2 and 3)                              $     2,037        $    36,625

       Short-term investments (Notes 2 and 4)                                           -             12,425

       Trade accounts receivable (less estimated reserve for
         doubtful accounts of $161 and $75, respectively) (Notes 2 and 11)          4,177              4,392

       Inventories (Notes 2, 5 and 11)                                             13,110              8,935

       Accrued income taxes receivable                                              5,334                  -

       Deferred income taxes - net (Notes 2 and 14)                                     -              5,460

       Net assets of discontinued operations of UAS (Note 6)                       14,103             10,832

       Prepaid expenses and other current assets                                    1,912              1,326
                                                                              -----------        -----------
         Total current assets                                                      40,673             79,995

    Property, plant and equipment - net (Notes 2 and 7)                            66,888             46,822

    Property, plant and equipment held for sale - net (Note 2)                      1,597              2,301

    Investments (Note 2 and 4)                                                          -              8,902

    Goodwill - net (Notes 2, 8 and 9)                                              23,430             26,519

    Deferred income taxes - net (Notes 2 and 14)                                        -              7,828

    Other assets - net (Notes 2 and 10)                                            11,674             12,151
                                                                              -----------        -----------
    TOTAL ASSETS                                                              $   144,262        $   184,518
                                                                              ===========        ===========
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


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

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                              September 30,         October 1,
                                                                                  2001                 2000
                                                                              -------------        -----------
<S>                                                                           <C>                  <C>
      Current liabilities:
         Current portion of long-term debt (Note 11)                          $    18,140          $     6,701
         Trade accounts payable                                                    15,258                8,261
         Net liabilities of discontinued operations of HPPI (Note 12)               1,910                4,632
         Accrued expenses:
           Compensation and benefits                                                5,135                8,589
           Interest                                                                   151                  156
           Taxes, other than income                                                   292                  155
           Accrued income taxes                                                         -                  623
           Other                                                                    2,552                1,890
                                                                              -----------          -----------
           Total current liabilities                                               43,438               31,007
      Long-term debt, net of current portion  (Note 11)                            12,465               15,462
      Other liabilities (Note 13)                                                  24,688               23,665
                                                                              -----------          -----------
           Total liabilities                                                       80,591               70,134
                                                                              -----------          -----------
      Commitments and contingencies (Note 15)
      Minority interest (Notes 1, 2 and 8)                                            225                7,535
      Stockholders' equity (Note 16):
         Preferred stock:
           Series C - 0 shares issued and outstanding; par value
           $0.01; 450 shares authorized                                                 -                    -
         Common stock:
           32,662,611  and 30,707,976 shares issued or to be issued,
           respectively; par value $0.01; 100,000,000 shares
           authorized                                                                 327                  307
         Additional paid-in capital                                               113,904               94,296
         Retained (deficit) earnings                                              (11,260)              40,575
         Accumulated other comprehensive loss - net                                     -                  (44)
                                                                              -----------          -----------
                                                                                  102,971              135,134
        Less treasury stock at cost - 4,794,869 and 4,841,059 shares,
           respectively                                                           (39,525)             (28,285)
                                                                              -----------          -----------
           Total stockholders' equity                                              63,446              106,849
                                                                              -----------          -----------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                              $   144,262          $   184,518
                                                                              ===========          ===========
</TABLE>

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

                UNIROYAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)
                                                                                              Fiscal Years Ended
                                                                           ------------------------------------------------------
                                                                           September 30,          October 1,       September 26,
                                                                               2001                  2000              1999
                                                                           -------------          ----------       --------------

<S>                                                                        <C>                  <C>                 <C>
Net sales                                                                  $    32,862          $    36,674         $    42,826
Costs, expenses and (other income):
   Costs of goods sold                                                          29,209               28,983              31,693
   Selling and administrative (Note 8)                                          30,742               34,141              15,434
   Depreciation and other amortization                                          15,737                7,201               2,632
   Write-down of goodwill (Note 9)                                               9,816                    -                   -
   Loss on assets to be disposed of (Note 2)                                     1,389                1,773                   -
   Purchased in-process research and development (Notes 8 and 9)                   250                6,590                   -
   Provision for uncollectible note receivable (Note 17)                             -                5,387                   -
   Write-down of technology license (Note 10)                                        -                4,000                   -
   Gain on sale of preferred stock investment (Note 18)                              -               (2,905)               (898)
   Gain on sale of division (Note 20)                                                -                    -                (667)
                                                                           -----------          -----------         -----------
Loss before interest, income taxes, minority interest and
   discontinued operations                                                     (54,281)             (48,496)             (5,368)

Interest income                                                                  1,590                3,164                 206
Interest expense                                                                (1,746)              (2,112)             (1,002)
                                                                           -----------          -----------         -----------
Loss before income taxes, minority interest and  discontinued
   operations                                                                  (54,437)             (47,444)             (6,164)

Income tax (expense) benefit (Notes 2 and 14)                                   (6,692)              26,876               3,214
                                                                           -----------          -----------         -----------
Loss before minority interest and discontinued operations                      (61,129)             (20,568)             (2,950)

Minority interest in net losses of consolidated joint venture                    8,246                7,918               2,191
                                                                           -----------          -----------         -----------
Loss from continuing operations before discontinued operations                 (52,883)             (12,650)               (759)

Income from discontinued operations, net of income tax expense of
   $593, $1,732 and $3,369, respectively (Notes 6 and 12)                        1,270                3,516               6,279
(Loss) gain on disposition of discontinued operations, net of income
   tax expense of $529 and $38,146, respectively (Notes 6 and 12)                 (222)              55,821                   -
                                                                           -----------          -----------         -----------
Net (loss) income                                                          $   (51,835)         $    46,687         $     5,520
                                                                           ===========          ===========         ===========

Net (loss) income per common share - basic (Notes 2 and 21)
-----------------------------------------------------------
   Loss from continuing operations                                         $     (2.01)         $     (0.51)        $     (0.03)
   Income from discontinued operations                                            0.04                 2.38                0.26
                                                                           -----------          -----------          ----------
   Net (loss) income                                                       $     (1.97)         $      1.87         $      0.23
                                                                           ===========          ===========         ===========
Net (loss) income per common share - assuming dilution (Notes 2
---------------------------------------------------------------
  and 21)
---------
   Loss from continuing operations                                         $     (2.01)         $     (0.51)        $     (0.03)
   Income from discontinued operations                                            0.04                 2.38                0.26
                                                                           -----------          -----------         -----------
   Net (loss) income                                                       $     (1.97)         $      1.87         $      0.23
                                                                           ===========          ===========         ===========
</TABLE>

                                 See notes to consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>
                UNIROYAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
                                 (In thousands)

                                                                                              Fiscal Years Ended
                                                                           ------------------------------------------------------
                                                                           September 30,          October 1,        September 26,
                                                                               2001                  2000               1999
                                                                           -------------          ----------        -------------


<S>                                                                        <C>                  <C>                 <C>
      Net (loss) income                                                    $   (51,835)         $    46,687         $     5,520
                                                                           -----------          -----------         -----------

      Net unrealized gain (loss) on securities available for sale,
        net of taxes:

        Unrealized gain (loss) on securities
          available for sale                                                        53                  (44)                648

        Less: reclassification adjustment for gains
          realized in net income                                                    (9)                (100)               (548)
                                                                           -----------          -----------         -----------
      Net unrealized gain (loss)                                                    44                 (144)                100
                                                                           -----------          -----------         -----------
      Comprehensive (loss) income (Note 2)                                 $   (51,791)         $    46,543         $     5,620
                                                                           ===========          ===========         ===========
</TABLE>

                                 See notes to consolidated financial statements.

<PAGE>
<TABLE>
<CAPTION>

                UNIROYAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
 FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2001, OCTOBER 1, 2000 AND SEPTEMBER 26, 1999
                                 (In thousands)

                                                                                               Accumulated
                                                                      Additional   Retained      Other
                                                            Common     Paid-In     Earnings   Comprehensive  Treasury  Stockholders'
                                                             Stock     Capital     (Deficit)  Income (Loss)    Stock       Equity
                                                            ------    ----------  ---------- -------------  ---------- -------------
<S>                  <C> <C>                                <C>       <C>          <C>          <C>          <C>          <C>
Balance at September 27, 1998                               $  284    $  54,471    $(11,632)    $       -    $(10,812)    $  32,311
Common stock issued for acquisitions                             -          775           -             -         598         1,373
Common stock issued under stock option plans                    10        1,688           -             -      (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                                  294       57,524      (6,112)          100     (20,673)       31,133
Common stock issued for acquisition                             15       40,599           -             -           -        40,614
Common stock issued under stock option plans                    13        2,127           -             -      (1,368)          772
Common stock issued to employee benefit plan                     -          182           -             -          37           219
Amounts received pursuant to Directors' stock option plan        -          112           -             -           -           112
Purchases of treasury stock                                      -            -           -             -     (13,850)      (13,850)
Cancellation of treasury shares                                (16)      (7,553)          -             -       7,569             -
Tax benefit from exercise of stock options                       -          564           -             -           -           564
Exercise of warrants                                             1          741           -             -           -           742
Net income                                                       -            -      46,687             -           -        46,687
Comprehensive loss                                               -            -           -          (144)          -          (144)
                                                            ------    ---------    --------     ---------    --------     ---------
Balance at October 1, 2000                                     307       94,296      40,575           (44)    (28,285)      106,849
Common stock issued for acquisition of joint venture             -        8,583           -             -       6,484        15,067
Common stock issued under stock option plans                    20        9,042           -             -      (8,779)          283
Common stock issued to employee benefit plan                     -        1,663           -             -         696         2,359
Common stock issued under stock purchase plan                    -           54           -             -           -            54
Amounts received pursuant to Directors' stock option plan        -           90           -             -           -            90
Purchases of treasury stock                                      -            -           -             -      (9,641)       (9,641)
Tax benefit from exercise of stock options                       -          170           -             -           -           170
Exercises of warrants                                            -            6           -             -           -             6
Net loss                                                         -            -     (51,835)            -           -       (51,835)
Comprehensive income                                             -            -           -            44           -            44
                                                            ------    ---------    --------     ---------    --------     ---------
Balance at September 30, 2001                               $  327    $ 113,904    $(11,260)    $       -    $(39,525)    $  63,446
                                                            ======    =========    ========     =========    ========     =========
</TABLE>

                                 See notes to consolidated financial statements.
<PAGE>

<TABLE>
<CAPTION>
                UNIROYAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                                                                                Fiscal Years Ended
                                                                           ------------------------------------------------------
                                                                           September 30,         October 1,         September 26,
                                                                               2001                 2000                1999
                                                                           -------------        -----------        --------------
<S>                                                                        <C>                  <C>                 <C>
OPERATING ACTIVITIES:
   Net (loss) income                                                       $   (51,835)         $    46,687         $     5,520
   Deduct income from and (loss) gain on disposition of
     discontinued operations                                                    (1,048)             (59,337)             (6,279)
                                                                           -----------          -----------         -----------
   Loss from continuing operations                                             (52,883)             (12,650)               (759)
   Adjustments to reconcile net (loss) income to net cash (used in )
     provided by operating activities:
       Depreciation and other amortization                                      15,737                7,201               2,632
       Deferred tax expense                                                     13,120                7,110                 842
       Amortization of debt issuance costs                                          53                    2                   -
       Write-down of goodwill                                                    9,816                    -                   -
       Loss on assets to be disposed of                                          1,389                1,773                   -
       Purchased in-process research and development                               250                6,590                   -
       Provision for uncollectible note receivable                                   -                5,387                   -
       Write-down of technology license                                              -                4,000                   -
       Gain on sale of preferred stock investment                                    -               (2,905)               (898)
       Gain on sale of division                                                      -                    -                (667)
       Minority interest in net losses of consolidated joint venture            (8,246)              (7,918)             (2,191)
       Other                                                                       365                  757                 221
       Changes in assets and liabilities:
         Decrease (increase) in trade accounts receivable                           39                 (513)              4,200
         (Increase) decrease in inventories                                     (4,175)              (2,480)              2,382
         Increase in prepaid expenses and other assets                          (6,350)              (1,595)             (1,511)
         Increase (decrease) in trade accounts payable                           7,050                1,215                (323)
         (Decrease) increase in accrued expenses                                  (762)               4,304              (2,340)
         Increase in other liabilities                                           1,023                1,107               1,559
                                                                           -----------          -----------         -----------
   Net cash (used in) provided by continuing operations                        (23,574)              11,385               3,147
   Net cash (used in) provided by discontinued operations                       (1,392)             (42,118)             18,664
                                                                           -----------          -----------         -----------
   Net cash (used in) provided by operating activities                         (24,966)             (30,733)             21,811
                                                                           -----------          -----------         -----------
INVESTING ACTIVITIES:
   Purchases of property, plant and equipment                                  (26,086)             (25,836)            (10,445)
   Investment purchases of available-for-sale securities                       (13,015)             (50,115)                  -
   Investment purchases of held-to-maturity securities                          (6,002)             (17,434)                  -
   Proceeds from sales of available-for-sale securities                         16,994               46,150                   -
   Proceeds from held-to-maturity securities                                    23,477                    -                   -
   Business acquisitions, net of cash acquired                                  (2,750)                 613                (732)
   Purchase of investment                                                            -               (2,640)                  -
   Proceeds from sale of preferred stock                                             -                8,125               4,822
   Purchase of preferred stock                                                       -                    -              (9,144)
   Proceeds from sale of discontinued operations                                     -              208,976                   -
   Proceeds from sale of division                                                    -                    -               1,567
                                                                           -----------          -----------         -----------
   Net cash (used in) provided by investing activities                          (7,382)             167,839             (13,932)
                                                                           -----------          -----------         -----------
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                UNIROYAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                 (In thousands)
                                                                                                Fiscal Years Ended
                                                                           -----------------------------------------------------
                                                                           September 30,         October 1,        September 26,
                                                                               2001                 2000               1999
                                                                           -------------         -----------       -------------
<S>                                                                        <C>                  <C>                 <C>
 FINANCING ACTIVITIES:
   Repayment of term loans                                                      (6,313)             (91,704)            (10,173)
   Proceeds from term loans                                                      5,095                    -               2,582
   Net increase (decrease) in revolving loan balances                            5,948              (13,162)              3,086
   Proceeds from termination of interest rate swaps                                  -                  950                   -
   Minority interest capital contributions                                       2,382               11,628               5,725
   Stock options exercised                                                         283                  772                 353
   Purchases of warrants                                                             -                    -                (292)
   Exercise of warrants                                                              6                  742                   -
   Purchases of treasury stock                                                  (9,641)             (13,850)             (9,114)
                                                                           -----------          -----------         -----------
   Net cash used in financing activities                                        (2,240)            (104,624)             (7,833)
                                                                           -----------          -----------         -----------
Net (decrease) increase in cash and cash equivalents                           (34,588)              32,482                  46
Cash and cash equivalents at beginning of year                                  36,625                4,143               4,097
                                                                           -----------          -----------         -----------
Cash and cash equivalents at end of year                                   $     2,037          $    36,625         $     4,143
                                                                           ===========          ===========         ===========
</TABLE>

Supplemental Disclosures:

Payments for income taxes and interest were as follows (in thousands):
<TABLE>
<CAPTION>
                                                                                                 Fiscal Years Ended
                                                                           -----------------------------------------------------
                                                                           September 30,          October 1,       September 26,
                                                                               2001                  2000              1999
                                                                           -------------        ------------       -------------
<S>                                                                        <C>                  <C>                 <C>
Income tax payments - continuing operations                                $       375          $     6,344         $       677
Income tax payments - discontinued operations                                    2,201                  341                 432
Interest payments (net of capitalized interest) -
  continuing operations                                                          1,507                2,140                 714
Interest payments (net of capitalized interest) -
  discontinued operations                                                            9                4,688               6,855
</TABLE>

Non-cash investing activities were as follows (in thousands):
<TABLE>
<CAPTION>
                                                                                               Fiscal Years Ended
                                                                           ----------------------------------------------------
                                                                           September 30,        October 1,        September 26,
                                                                               2001                2000               1999
                                                                           -------------        -----------       -------------
<S>                                                                        <C>                  <C>                <C>
Business acquisitions purchased with Company common
   stock                                                                   $    15,067          $    40,614        $     1,373
Business acquisitions purchased with notes payable                                   -                   -               3,033
</TABLE>

The purchases of property, plant and equipment and the proceeds from term loans
for the fiscal years ended September 30, 2001, October 1, 2000 and September 26,
1999 do not include $3,500,000, $3,211,000 and $20,372,000, respectively,
related to property held under capitalized leases (Note 15).

During the fiscal years ended September 30, 2001, October 1, 2000 and September
26, 1999, the Company made matching contributions to its 401(k) Savings Plan of
$124,000, $219,000 and $199,000, respectively, through the re-issuance of
19,933, 17,206 and 39,344 shares of its common stock from treasury,
respectively.

During the fiscal year ended September 30, 2001, the Company made special
discretionary contributions to its 401(k) Savings Plan for the plan years ended
December 31, 2000 and December 31, 1999. These special contributions were valued
at approximately $2,235,000 and were funded through the re-issuance of 298,612
shares of common stock from treasury. The estimated liability and related
compensation expense for the special discretionary contributions accrued at
October 1, 2000 approximated $1,698,000 for continuing operations and $459,000
for discontinued operations.

                                 See notes to consolidated financial statements.


<PAGE>


                UNIROYAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For the Fiscal Years Ended September 30, 2001,
                     October 1, 2000 and September 26, 1999


1.       THE COMPANY

         The accompanying consolidated financial statements relate to Uniroyal
         Technology Corporation, its wholly-owned subsidiaries, Uniroyal HPP
         Holdings, Inc., Uniroyal Compound Semiconductors, Inc. (formerly
         Uniroyal Optoelectronics, Inc.), BayPlas3, Inc., BayPlas7, Inc.,
         UnitechOH, 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"). BayPlas7, Inc. includes its 98%
         owned subsidiary, Uniroyal Engineered Products, LLC, which includes its
         operating divisions, Uniroyal Engineered Products ("UEP") and Uniroyal
         Adhesives and Sealants ("UAS"). The remaining ownership in Uniroyal
         Engineered Products, LLC is split between Uniroyal Technology
         Corporation and Uniroyal Compound Semiconductors, Inc. Uniroyal
         Compound Semiconductors, Inc. includes its wholly-owned subsidiaries,
         NorLux Corp., Uniroyal Optoelectronics, LLC and Uniroyal
         Optoelectronics Service Corporation. Uniroyal Liability Management
         Company includes its wholly-owned subsidiary BayPlas2, Inc. See Note 6
         for information regarding the sale of UAS. See Note 8 regarding the
         purchase of the minority interest in the Uniroyal Optoelectronics, LLC
         joint venture. See Note 12 for information concerning the sale of
         HPPI's business.

         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 ULMC;
         therefore, the accompanying consolidated financial statements include
         the results of operations of ULMC and its subsidiary, BayPlas2, Inc.,
         which is a special purpose subsidiary created in the fiscal year ended
         October 1, 2000 to hold certain assets of ULMC.

         NorLux Corp. is a development stage company which will engage in the
         design, development and manufacture of optoelectronic devices and
         optoelectronic solutions. Uniroyal Optoelectronics Service Corporation
         was established during the fiscal year ended September 30, 2001 and
         leases employees to Uniroyal Optoelectronics, LLC and ULMC. UnitechNJ,
         Inc. is a special purpose subsidiary created during the fiscal year
         ended September 26, 1999 to hold the Company's plant in Stirling, New
         Jersey. UnitechOH, Inc. and BayPlas3, Inc. are special purpose
         subsidiaries created during the fiscal year ended October 1, 2000 to
         hold certain assets of the Company. BayPlas7, Inc. is a special purpose
         subsidiary created during the fiscal year ended September 30, 2001 to
         hold certain assets of the Company.

         The Company is principally engaged in the development, manufacture and
         sale of a broad range of materials employing compound semiconductor
         technologies and specialty chemicals.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Going Concern

         The accompanying consolidated financial statements have been prepared
         on a going concern basis, which contemplates the realization of assets
         and the satisfaction of liabilities in the normal course of business;
         and, as a consequence the consolidated financial statements do not
         include any adjustments relating to the recoverability and
         classification of recorded asset amounts or the amounts and
         classifications of liabilities that might be necessary should the
         Company be unable to continue as a going concern. See further
         discussion at Note 3.

         Consolidation

         The consolidated financial statements include the accounts of Uniroyal
         Technology Corporation, its wholly-owned subsidiaries and its
         majority-owned subsidiary. 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 subsidiary.

         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 30, 2001 ("Fiscal 2001"), October 1,
         2000 ("Fiscal 2000") and September 26, 1999 ("Fiscal 1999"). Fiscal
         2000 encompassed a 53-week period as compared to Fiscal 2001 and Fiscal
         1999 which encompassed 52-week periods. The additional week in Fiscal
         2000 occurred in the first quarter ended January 2, 2000.

         Use of Estimates

         The preparation of consolidated financial statements in conformity with
         accounting principles generally accepted in the United States of
         America 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 include all highly liquid investments
         purchased with an original maturity of three months or less.

         Investments and Investment in Preferred Stock

         All investments with an original maturity greater than three months are
         accounted for under Statement of Financial Accounting Standards
         ("SFAS") No. 115, Accounting for Certain Investments in Debt and Equity
         Securities. This statement requires certain securities to be classified
         into three categories:

         (1)   Securities Held-to-Maturity: Debt securities the entity has the
               ability and intent to hold to maturity are reported at amortized
               cost.

         (2)   Trading Securities: Debt and equity securities bought and held
               principally for the purpose of sale in the near term are reported
               at fair value, with unrealized gains and losses included in
               earnings.

         (3)   Securities Available-For-Sale: Debt and equity securities not
               classified as either held-to-maturity or trading are reported at
               fair value with unrealized gains and losses reported as a
               separate component of stockholders' equity.

         Management determines the appropriate classification of securities at
         the time of purchase and re-evaluates such designation as of each
         balance sheet date. The fair value of each equity security is
         determined by the most recently traded price of the underlying common
         stock at the balance sheet date. The fair value of debt securities is
         determined by broker quotes at the balance sheet date.

         Financial Instruments

         Interest rate swap agreements have been used to manage interest rate
         exposures. The interest rate differentials to be paid or received under
         such swaps were 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 unless
         otherwise indicated.

         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 2001, Fiscal 2000 and Fiscal
         1999 approximated $810,000, $287,000 and $791,000, respectively.

         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 reviewed
         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.

         During Fiscal 2001, the Company made a decision to terminate its lease
         for a new facility in Sterling, Virginia for the operations of Sterling
         Semiconductor, Inc. The decision was made as a result of construction
         delays and breaches of contract. As a result of the lease termination,
         the Company recorded a write-off of approximately $686,000 for the
         impairment of assets at that facility. This amount is included in the
         statement of operations within loss on assets to be disposed of. The
         Company is currently involved in litigation regarding the lease
         termination (Note 15).

         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 20). The Company expects to dispose of
         the remaining Port Clinton assets, including real property, during the
         second quarter of the fiscal year ending September 29, 2002 ("Fiscal
         2002") and is carrying the property at fair value less cost to sell
         based upon an executed asset purchase agreement for the property. The
         fair value less cost to sell of the property approximates $756,000 at
         September 30, 2001. 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 Company recorded additional impairment losses of
         $544,000 in Fiscal 2001 and $1,773,000 in Fiscal 2000, related to
         machinery and equipment and real property at Port Clinton.

         During Fiscal 1998, the Company decided to sell its Stirling facility.
         In accordance with SFAS No. 121, the Company had previously recorded a
         write-down of the facility in Fiscal 1998. In Fiscal 2001, the Company
         recorded an additional write-down of the facility of approximately
         $159,000. The Company expects the disposition of the Stirling facility
         to be completed in Fiscal 2002. The Company is carrying the facility at
         fair value less cost to sell based upon recent purchase offers. The
         fair value less cost to sell approximates $841,000 at September 30,
         2001. The Stirling operations (excluding the facility) were sold to
         Spartech Corporation in Fiscal 2000. See Note 12.

         Amortization

         Debt issuance costs are included in other assets and are amortized
         using the interest method over the life of the related debt. Trademarks
         are included in other assets and are amortized using the straight-line
         method over periods ranging from 14 to 20 years. Goodwill is amortized
         on a straight-line basis over five years for the high technology
         business and 15 years for all others. Goodwill is reported net of
         accumulated amortization of $7,579,000 and $1,896,000 at September 30,
         2001 and October 1, 2000, respectively.

         Research and Development Expenses

         Research and development expenditures are expensed as incurred.
         Research and development expenditures were $4,352,000, $1,113,000 and
         $608,000 in Fiscal 2001, Fiscal 2000 and Fiscal 1999, respectively. The
         increase in research and development expenditures is due to start-up
         operations of the Compound Semiconductor and Optoelectronics segment.

         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.

         At September 30, 2001, the Company established a deferred tax asset
         valuation allowance of approximately $17,870,000 because management
         could not conclude that it is more likely than not that the deferred
         tax asset could be realized.

         Stock-Based Compensation

         The Company accounts for employee stock option grants using the
         intrinsic-value method in accordance with Accounting Principles Board
         ("APB") Opinion No. 25, Accounting for Stock Issued to Employees. Under
         APB Opinion No. 25, compensation costs for each stock option granted is
         computed as the amount by which the quoted market price of the
         Company's common stock on the date of grant exceeds the amount the
         employee must pay to acquire the common stock. The amount of
         compensation cost, if any, is charged to income over the vesting
         period.

         In Fiscal 1997, the Company adopted only the disclosure provisions of
         SFAS No. 123, Accounting for Stock-Based Compensation. Pro forma
         information regarding net income and earnings per share, as calculated
         under the provisions of SFAS No. 123, are disclosed in Note 16.

         Comprehensive (Loss) 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 (loss) income. The net unrealized
         gain on securities available for sale is shown net of tax (expense)
         benefit of ($34,000), $28,000 and ($63,000) for the years ended
         September 30, 2001, October 1, 2000, September 26, 1999, respectively.

         Income Per Common Share

         Earnings per share are computed in accordance with SFAS No. 128,
         Earnings Per Share. Basic earnings per share is based on the weighted
         average number of common shares outstanding for the period. Diluted
         earnings per share is based on the sum of weighted average number of
         shares outstanding for the period and the weighted average number of
         potential common shares outstanding. Potential common shares consist of
         outstanding options under the Company's stock option plans and
         outstanding warrants to purchase the Company's common stock.

         Stock Split

         On March 10, 2000, the Company declared a two-for-one stock split in
         the form of a 100% stock dividend to its common stockholders of record
         on March 20, 2000. The consolidated financial statements and
         accompanying notes have been retroactively adjusted to reflect the
         effect of the split.

         New Accounting Pronouncements

         In June 1998, the Financial Accounting Standards Board ("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. In July 1999, FASB issued SFAS
         No. 137, Accounting for Derivative Instruments and Hedging Activities -
         Deferral of the Effective Date of SFAS No. 133, which postponed the
         effective date of SFAS No. 133 for one year. In June 2000, FASB issued
         SFAS No. 138, Accounting for Certain Derivative Instruments and Certain
         Hedging Activities, an Amendment to SFAS No. 133. The Company adopted
         SFAS No. 133 (as amended by SFAS No. 138) as of October 2, 2000. The
         adoption of this statement had no impact on the Company's financial
         position or results of operations.

         In June 2001, the FASB issued SFAS No. 141, Business Combinations,
         which requires that the purchase method of accounting be used for all
         business combinations initiated after June 30, 2001 and that more of
         the pooling-of-interest method is no longer allowed. The Company has
         adopted this standard for business combinations after June 30, 2001.

         In June 2001, the FASB issued SFAS No. 142, Goodwill and Other
         Intangible Assets. SFAS No. 142 requires that upon adoption,
         amortization of goodwill will cease and instead, the carrying value of
         goodwill will be evaluated for impairment on an annual basis.
         Identifiable intangible assets will continue to be amortized over their
         useful lives and reviewed for impairment in accordance with SFAS No.
         121. SFAS No. 142 is effective for fiscal years beginning after
         December 15, 2001. The Company is evaluating the impact of the adoption
         of SFAS No. 142 and has not yet determined the effect of adoption on
         its financial position and results of operations.

         In October 2001, the FASB issued SFAS No. 144, Accounting for the
         Impairment or Disposal of Long-Lived Assets, which replaces SFAS No.
         121. The accounting model for long-lived assets to be disposed of by
         sale applies to all long-lived assets, including discontinued
         operations, and replaces the provisions of APB Opinion No. 30,
         Reporting Results of Operations - Reporting the Effects of Disposal of
         a Segment of a Business, and Extraordinary, Unusual and Infrequently
         Occurring Events and Transactions, for the disposal of segments of a
         business. SFAS No. 144 requires that those long-lived assets be
         measured at the lower of the carrying amount or fair value less cost to
         sell, whether reported in continuing operations or in discontinued
         operations. Therefore, discontinued operations will no longer be
         measured at net realizable value or include amounts for operating
         losses that have not yet occurred. SFAS No. 144 also broadens the
         reporting of discontinued operations to include all components of an
         entity with operations that can be distinguished from the rest of the
         entity and that will be eliminated from the ongoing operations of the
         entity in a disposal transaction. The provisions of SFAS No. 144 are
         effective for financial statements issued for fiscal years beginning
         after December 15, 2001 and, generally are to be applied prospectively.
         The Company has not yet evaluated the impact the adoption of SFAS No.
         144 will have on its financial statements.

         Reclassifications

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

3.       LIQUIDITY

         The Company has experienced losses from continuing operations in each
         of the three years ended September 30, 2001 and has an accumulated
         deficit of $11,260,000 as of September 30, 2001. Cash used in
         operations for the years ended September 30, 2001 and October 1, 2000
         was $24,966,000 and $30,733,000, respectively, and it is likely that
         cash flow from operations will be negative throughout Fiscal 2002. The
         Company had a working capital deficiency at September 30, 2001 of
         $2,765,000 compared to working capital of $48,988,000 as of October 1,
         2000. At September 30, 2001, the Company's principal source of
         liquidity is $2,037,000 of cash and cash equivalents and $1,087,000 of
         availability under a revolving credit facility. Such conditions raise
         substantial doubt that the Company will be able to continue as a going
         concern for a reasonable period of time without receiving additional
         funding.

         The operating results for Fiscal 2001 and Fiscal 2000 have occurred
         while the Company has been repositioning its operations away from the
         mature, industrial-based activities and into the high-growth compound
         semiconductor technology industry. The transition to this business
         segment has required significant investment spending related to
         start-up costs and capital expenditures. Many of the markets in this
         business segment are characterized by long lead times for new products
         requiring significant working capital investments and extensive
         testing, qualification and approval by the Company's customers and end
         users of products. This business segment is marked by intense
         competition requiring the Company to introduce new products in a timely
         and cost-effective manner. This business segment started operations in
         the second quarter of Fiscal 2000 and has a limited operating history.
         The segment faces risks and difficulties as an early stage business in
         a high-growth and rapidly evolving industry. These factors have placed
         a significant strain on the financial resources of the Company.
         Management has sought to generate additional financial resources by
         reducing operating costs and selling certain assets and by seeking
         additional sources of financing, including bank and other lender
         financing as well as private placements. The ultimate success of the
         Company depends on its ability to obtain additional financing, to
         continue reducing operating costs and, ultimately to generate higher
         sales levels to attain profitability.

         On November 9, 2001, the Company sold certain net assets of UAS, which
         comprised its Specialty Adhesives segment (Note 6). Net cash proceeds
         at closing approximated $8,000,000 after the repayment of the Emcore
         Corporation note and the pay-down of a portion of the revolving line of
         credit related to UAS assets (Note 11).

4.       INVESTMENTS

         At September 30, 2001, the Company had no investments. During Fiscal
         2001, the Company's remaining investments matured or were liquidated.

         At October 1, 2000, the Company's investment portfolio consisted of
         marketable debt securities classified as held-to-maturity and
         available-for-sale as well as marketable equity securities classified
         as available-for-sale. The carrying amount of the investment portfolio
         by investment type and classification as of October 1, 2000, was as
         follows (in thousands):
<PAGE>
<TABLE>
<CAPTION>
                                           Held-to-Maturity       Available-for-Sale           Total
                                           ----------------       ------------------         -----------
<S>                                          <C>                     <C>                     <C>
         Short-term:
           Corporate debt securities         $    12,425             $        -              $    12,425
                                             -----------             ----------              -----------
         Long-term:
           Corporate debt securities               5,009                  1,000                    6,009
           State debt security                         -                  2,750                    2,750
           Common stock                                -                    143                      143
                                             -----------             ----------              -----------
         Total long-term securities                5,009                  3,893                    8,902
                                             -----------             ----------              -----------
         Total investments                   $    17,434             $    3,893              $    21,327
                                             ===========             ==========              ===========
</TABLE>

         Held-to-maturity debt securities were carried at amortized cost. During
         Fiscal 2001, the Company liquidated its remaining held-to-maturity
         securities portfolio, some prior to their scheduled maturity date, and
         recognized a loss of approximately $22,000 upon disposal. The fair
         value of the held-to-maturity debt securities approximated $17,372,000
         at October 1, 2000, based upon broker quotes. The gross unrecognized
         holding loss approximated $62,000 at October 1, 2000.

         Available-for-sale debt securities were carried at fair market value
         with the unrealized gains and losses, net of tax, reported in
         stockholders' equity until realized. Gains and losses on securities
         sold were based upon the specific identification method. At October 1,
         2000, the cost of available-for-sale debt securities was equal to fair
         value (based upon broker quotes); accordingly, there were no unrealized
         gains or losses. There have been no realized gains or losses for Fiscal
         2001 or Fiscal 2000.

         Available-for-sale equity securities were carried at fair market value
         with the unrealized gains and losses, net of tax, reported in
         stockholders' equity until realized. Gains and losses on equity
         securities sold were based upon the specific identification method.
         During Fiscal 2001, the realized gain on the sale of available-for-sale
         equity securities approximated $15,000. At October 1, 2000, the fair
         value of the equity securities (based upon broker quotes) was less than
         the cost. The net unrealized loss included in stockholders' equity was
         $44,000 (net of tax of $28,000). During Fiscal 2000, there were no
         realized gains or losses on the sale of available-for-sale equity
         securities other than those discussed in Note 18.

         There were no investments at September 26, 1999, other than the
         investment in Emcore Corporation preferred stock discussed in Note 18.

5.       INVENTORIES

         Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
                                                                   September 30,          October 1,
                                                                       2001                  2000
                                                                   -------------          ----------

<S>                                                                 <C>                   <C>
                Raw materials, work in process and supplies         $    7,468            $    4,482
                Finished goods                                           5,642                 4,453
                                                                    ----------            ----------
                Total                                               $   13,110            $    8,935
                                                                    ==========            ==========
</TABLE>

6.       DISCONTINUED OPERATIONS OF UAS

         On June 26, 2001 (the measurement date), the Company entered into a
         letter of intent to sell certain net assets of UAS, which comprises its
         Specialty Adhesives segment. Then, on August 24, 2001, the Company
         entered into an asset purchase agreement for the sale of UAS. The
         transaction closed on November 9, 2001 for a purchase price of
         $21,620,000. Proceeds consisted of approximately $14,620,000, in cash,
         $3,500,000 in subordinated promissory notes of the purchaser,
         $1,500,000 in preferred stock of the purchaser's parent and $2,000,000
         of payments contingent on the future earnings achievement of the UAS
         business sold. The Company will record a gain of approximately
         $2,500,000 on the sale in the first quarter of Fiscal 2002 after the
         settlement of certain purchase price adjustments and the calculation of
         transaction costs.

         The consolidated financial statements presented herein have been
         restated to reflect the discontinued operations of UAS in accordance
         with APB Opinion No. 30.

         The net assets of the discontinued operations of UAS have been
         segregated on the September 30, 2001 and October 1, 2000 consolidated
         balance sheets, the components of which are as follows (in thousands):

<TABLE>
<CAPTION>
         Net Assets of Discontinued Operations of UAS
                                                                       September 30,           October 1,
                                                                           2001                   2000
                                                                       -------------         ------------
<S>                                                                     <C>                  <C>
        Assets:
        Cash                                                            $         2          $         2
        Trade receivables                                                     1,469                1,277
        Inventories                                                           2,786                2,144
        Prepaids and other assets                                                96                   82
        Property, plant and equipment - net                                  10,305               10,564
        Goodwill - net                                                        3,792                1,253
        Other assets - net                                                      879                1,024
                                                                        -----------          -----------
        Total assets                                                         19,329               16,346
                                                                        -----------          -----------
        Liabilities:
        Current portion of long-term debt                                         -                    1
        Trade payables                                                        3,159                3,302
        Compensation and benefits                                               376                  591
        Taxes, other than income                                                226                  236
        Other accrued expenses                                                1,357                1,249
        Other liabilities                                                       108                  135
                                                                        -----------          -----------
        Total liabilities                                                     5,226                5,514
                                                                        -----------          -----------
        Net assets of discontinued operations of UAS                    $    14,103          $    10,832
                                                                        ===========          ===========
</TABLE>

         The results of operations for all periods presented have been restated
         for discontinued operations. The operating results of the discontinued
         operations of UAS are as follows (in thousands):
<TABLE>
<CAPTION>
                                                                                   Fiscal Years Ended
                                                                ---------------------------------------------------
                                                                September 30,       October 1,        September 26,
                                                                    2001               2000               1999
                                                                -------------      -----------        -------------

<S>                                                             <C>                <C>                <C>
        Net sales                                               $    31,372        $    31,579        $    28,388
        Cost of goods sold                                           24,325             24,363             21,987
        Selling and administrative                                    2,693              3,610              2,842
        Depreciation and other amortization                           1,154                944                873
                                                                -----------        -----------        -----------
        Income before interest expense and income taxes               3,200              2,662              2,686
        Interest income - net                                            19                 23                 18
                                                                -----------        -----------        -----------
        Income before taxes                                           3,219              2,685              2,704
        Income tax expense                                             (898)              (694)              (694)
                                                                -----------        -----------        -----------
        Net income from discontinued operations of UAS          $     2,321        $     1,991        $     2,010
                                                                ===========        ===========        ===========
</TABLE>

         The following note relates to the business of the Specialty Adhesives
         segment.

         Acquisition

         On December 18, 2000, the Company completed the acquisition of the net
         assets of the solvent-based industrial adhesives business of Henkel
         Corporation for $2,750,000 in cash, which became part of the operations
         of UAS.

         The business combination was accounted for by the purchase method in
         accordance with APB Opinion No. 16, Business Combinations. The results
         of operations of the above named business is included in the
         consolidated financial statements from the date of acquisition forward
         as part of the discontinued operations of UAS.

         The fair market value of purchased assets was determined to be zero;
         therefore, the entire purchase price has been allocated to goodwill on
         the date of acquisition. The acquired goodwill was to be amortized over
         its estimated useful life of 15 years.

         The pro forma effect of this acquisition on the Company's net sales,
         income (loss) from continuing operations, net income (loss) and
         earnings (loss) per share, had the acquisition occurred on September
         28, 1998, is not considered material, either quantitatively or
         qualitatively.

7.       PROPERTY, PLANT AND EQUIPMENT

         Property, plant and equipment consisted of the following (in
         thousands):
<TABLE>
<CAPTION>
                                                    Estimated         September 30,           October 1,
                                                  Useful Lives            2001                   2000
                                                  ------------        -------------          -----------
<S>                                                                    <C>                    <C>
                Land and improvements                        -         $     203              $     203
                Buildings and improvements         5-40 years             14,170                  9,635
                Machinery, equipment and office
                  furnishings                      3-20 years             64,616                 47,138
                Construction in progress                     -            12,989                  6,484
                                                                       ---------              ---------
                                                                          91,978                 63,460
                Accumulated depreciation                                 (25,090)               (16,638)
                                                                       ---------              ---------
                Total                                                  $  66,888              $  46,822
                                                                       ==========             =========
</TABLE>

         Depreciation expense was $8,556,000, $4,692,000 and $2,424,000 for
         Fiscal 2001, Fiscal 2000 and Fiscal 1999, respectively.

8.       ACQUISITION OF MINORITY INTEREST

         As of September 29, 1997, the Company entered into a technology
         agreement with Emcore Corporation ("Emcore") to acquire certain
         technology for the manufacture of epitaxial wafers used in high
         brightness LEDs for lamps and display devices for $5,000,000. See Note
         10 regarding the Fiscal 2000 write-down of the technology license. On
         September 29, 1997, 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, Mr. Russell resigned from the
         Board of Directors of the Company and Mr. Curd resigned from the Board
         of Directors of Emcore.

         Uniroyal Optoelectronics, Inc. (now known as Uniroyal Compound
         Semiconductors, Inc.), a wholly-owned subsidiary of Uniroyal Technology
         Corporation, entered into a joint venture (Uniroyal Optoelectronics,
         LLC ("UOE")) with Emcore which Uniroyal Optoelectronics, Inc. managed
         and owned a 51% interest through June 2001 and a 64.3% interest
         thereafter until August 2, 2001. Emcore was the 49% owner through June
         2001 and 35.7% owner until August 2, 2001. 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 2001, Fiscal 2000 and
         Fiscal 1999, Emcore made additional capital contributions to the joint
         venture of $2,382,000, $11,628,000 and $5,500,000, respectively. During
         Fiscal 2001 and Fiscal 2000, the Company made additional capital
         contributions to the joint venture of approximately $17,700,000 and
         $17,827,000, respectively. The Company did not make any capital
         contributions to the joint venture in Fiscal 1999.

         On August 2, 2001, the Company purchased Emcore's remaining 35.7%
         interest in UOE. The primary reason for the purchase was the Company's
         desire to have full control of the venture. The purchase was
         consummated through the issuance of 1,965,924 shares of the Company's
         common stock valued at approximately $15,067,000 (net of approximately
         $67,000 of stock registration costs). The Company common stock issued
         was valued based upon the average market value of such shares over the
         2-day period before and after the terms of the acquisition were agreed
         to and announced. The Company is required to register these shares of
         the Company's common stock issued to Emcore and anticipates that the
         registration statement will be filed shortly after the filing of the
         Company's Annual Report on Form 10-K.

         The acquisition of the Emcore minority interest was accounted for by
         the purchase method in accordance with SFAS No. 141, Business
         Combinations.

         The results of 100% of the UOE operations are included in the
         consolidated financial statements for the period August 2, 2001 through
         September 30, 2001. Emcore's share of the losses prior to August 2,
         2001 are shown as minority interest in the consolidated statements of
         operations. The purchase price was allocated to assets purchased and
         liabilities assumed based upon the percentage of interest purchased
         (35.7%) applied to the difference between fair market value and net
         book value of the assets and liabilities on the date of acquisition.

         The fair market values were based upon an independent appraisal and
         management estimates at the date of acquisition. The purchase price was
         allocated as follows (in thousands):

                   Property, plant and equipment                   $       352
                   Intangible assets                                       928
                   Goodwill                                             12,408
                   Minority interest                                     1,446
                                                                   -----------
                   Total assets acquired                                15,134
                   Current liabilities                                     (67)
                                                                   -----------
                   Net assets acquired                             $    15,067
                                                                   ===========

         Of the $928,000 of acquired intangible assets, $678,000 was assigned to
         core technology with a weighted average useful life of 5 years and
         $250,000 was assigned to in-process research and development assets
         ("IPR&D") that were written off at the date of acquisition in
         accordance with SFAS No. 2, Accounting for Research and Development
         Costs, as clarified by FASB Interpretation No. 4, Applicability of FASB
         Statement No. 2 to Business Combinations Accounted for the Purchase
         Method. The write-off of the IPR&D was charged to expense and was
         determined through established valuation techniques. This amount was
         expensed at acquisition because technological feasibility had not been
         established and no future alternate uses existed. The $12,408,000 of
         goodwill was assigned to the Compound Semiconductor and Optoelectronics
         segment, is expected to be deductible for tax purposes, and, in
         accordance with SFAS No. 141, is not amortizable.

         Included in selling and general administrative expenses of the Company
         for Fiscal 2001, Fiscal 2000 and Fiscal 1999 are $14,672,000,
         $12,667,000 and $4,345,000, respectively, of UOE start-up costs.

         In July 1998, UOE entered into a supply agreement with Emcore whereby
         Emcore agreed to supply epitaxial wafers, dies and package-ready
         devices to UOE until UOE was ready to produce its own products. During
         Fiscal 2000 and Fiscal 1999, UOE sales of approximately $1,643,000 and
         $479,000, respectively, were attributable to product supplied by
         Emcore. No sales were attributable to product supplied by Emcore in
         Fiscal 2001. The supply agreement was terminated in connection with the
         acquisition of Emcore's minority interest on August 2, 2001.

         In July 1998, UOE entered into a lease agreement for a facility in
         Tampa, Florida and completed construction of leasehold improvements in
         Fiscal 1999. Significant start-up costs have been incurred during
         Fiscal 2001 and Fiscal 2000 for training and research and development.
         UOE reached commercial production levels in the first quarter of Fiscal
         2002 and accordingly emerged from the development stage on October 1,
         2001.

9.       ACQUISITION OF STERLING SEMICONDUCTOR, INC.

         On May 31, 2000, the Company completed a merger with Sterling
         Semiconductor, Inc. ("Sterling") whereby Sterling became a wholly-owned
         subsidiary of the Company. Sterling is a developer and manufacturer of
         silicon carbide ("SiC") semiconductor wafer substrates and substrates
         with epitaxial thin film coatings.

         Under the terms of the merger agreement, the Company exchanged 1.1965
         shares of its common stock for each share of Sterling's issued and
         outstanding preferred and common stocks and exchanged Company employee
         stock options for 1.1965 shares of the Company's common stock for each
         share of Sterling common stock covered by an outstanding Sterling
         employee stock option (the majority of which were vested). This
         resulted in an issuance of 1,531,656 shares of the Company's common
         stock valued at approximately $31,655,000, the issuance of 508,219 of
         Company employee stock options valued at approximately $8,959,000, and
         the payment of approximately $2,000 for fractional shares. The total
         purchase price, including acquisition costs, approximated $41,333,000.
         The Company common stock issued was valued based upon the average
         market value of such shares on the dates surrounding the final purchase
         price adjustment, which occurred on April 30, 2000. The Company
         employee stock options issued were recorded at fair value calculated
         using the Black-Scholes option-pricing model.

         The Sterling merger was accounted for by the purchase method in
         accordance with the APB Opinion No. 16, Business Combinations. The
         results of operations of Sterling are included in the consolidated
         financial statements for the period June 1, 2000 through September 30,
         2001. The purchase price was allocated to the estimated fair value of
         assets purchased, liabilities assumed and IPR&D based on an independent
         appraisal and management estimates at the date of acquisition as
         follows (in thousands):

            Working capital (excluding cash)                     $        (521)
            Cash                                                           613
            Property, plant and equipment                                1,840
            Deferred tax asset                                           2,656
            Intangible assets                                            6,102
            Other assets                                                    81
            Goodwill                                                    28,415
            Notes payable                                               (1,051)
            Other liabilities                                           (3,392)
                                                                 -------------
            Net value of purchased assets                               34,743
            Purchased in-process research and development                6,590
            Value of common stock and employee
               stock options issued                                    (40,614)
            Cash paid for fractional shares                                 (2)
            Accrued acquisition costs                                     (717)
                                                                 -------------
            Cash due at closing                                  $           -
                                                                 =============

         Included in other liabilities as of the acquisition date is
         approximately $2,640,000 related to the Company's investment in
         Sterling prior to the merger. Subsequent to the merger, this amount was
         converted to a capital contribution.

         The excess of the purchase price over the fair value of the net
         identifiable assets, totaling $28,415,000 was allocated to goodwill and
         is being amortized on a straight-line basis over 5 years. In the fourth
         quarter of Fiscal 2001, the Company recorded a write-down of Sterling
         goodwill of approximately $9,816,000. The write-down was in accordance
         with SFAS No. 121. Goodwill was determined to be impaired after revised
         undiscounted future cash flows were determined to be less than the
         carrying amount of goodwill. The amount of the write-off was then
         calculated as the excess of goodwill over the fair value of Sterling.
         The estimated fair value of the Company was determined through
         discounted cash flow models. Factors in the fourth quarter that led to
         impairment include the buyout of Emcore's minority interest on August
         2, 2001 (Note 8) and the re-evaluation of the Compound Semiconductor
         and Optoelectronics segment which included revised strategies and
         projections.

         Approximately $6,102,000 of the purchase price was allocated to
         identifiable intangible assets including existing product line, core
         technology and trained workforce. These intangible assets are being
         amortized over a 5-year period.

         Approximately $6,590,000 of the purchase price was allocated to IPR&D
         for research and development projects of Sterling that were in various
         stages of development, had not reached technological feasibility and
         for which there was no alternative future use. In accordance with SFAS
         No. 2, as clarified by FASB Interpretation No. 4, amounts assigned to
         IPR&D that have not reached technological feasibility and for which
         there is no alternative use must be charged to expense as part of the
         allocation of the purchase price. The IPR&D was charged to expense in
         the fourth quarter of Fiscal 2000 and had no tax benefit.

         The identifiable intangible assets and IPR&D were valued on the
         acquisition date using an income approach and, in the case of the
         trained workforce intangible asset, a cost to replicate approach. In
         the income approach, a cash flow was developed associated with the
         respective asset after charges for the use of existing assets (as
         applicable) and consideration of the economic life of the asset
         (reflected by the obsolescence factor). The income stream was
         discounted to its present value based upon the estimated discount rate.
         The discount rate was based upon our required rate of return, useful
         life of the technology and risks associated with the timely completion
         of the product lines. In the case of IPR&D, the "exclusionary rule" was
         applied by which the indicated value was multiplied by the estimate of
         the percentage of the total technology that was complete as of the
         valuation date. Percentage of completion was determined based upon the
         relative number of critical issues solved to the total number of
         critical issues identified. Significant appraisal assumptions include
         revenue projections, margins and expense levels and the risk adjusted
         discount rate applied to the project's expected cash flows.

         As of the acquisition date, Sterling had developed a commercial
         production capability for 2-inch 4H and 6H poly type SiC wafers.
         Sterling was also engaged in concurrent efforts to develop potential
         product lines for large diameter (3-inch and 4-inch 4H and 6H) wafers,
         semi-insulating wafers, epitaxial coatings and device designs that
         would produce an economical device die for discrete semiconductor
         devices.

         The purchased IPR&D is summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                              Expected Date for
                                          Discount     Economic     Percent                    Full Commercial
           IPR&D Technology Description     Rate         Life       Complete    Fair Value      Viability
          -----------------------------  -----------  ---------     --------    ----------    -----------------
<S>                                        <C>        <C>            <C>          <C>                 <C>
          3" and 4" large diameter:
            SiC wafers                     32.7%      11 years        70%         $    858            2004
            Semi-insulating wafers         32.7%      11 years        75%              456            2004
            Epitaxy coatings               32.7%      11 years        40%              723            2005
            Devices                        32.7%      11 years        40%            4,553            2005
                                                                                  --------
            Total IPR&D                                                           $  6,590
                                                                                  ========
</TABLE>

         The cost to complete all projects approximated $13,200,000 in May of
         2000 and $10,900,000 at September 30, 2001. Progress has been made on
         purchased IPR&D projects during Fiscal 2001. The expected dates for
         full commercial viability remain the same. The nature of the efforts
         required to develop the acquired IPR&D into technologically feasible
         and commercially viable products principally relate to the completion
         of all planning, design and testing activities necessary to establish a
         product that can be produced to meet its design requirements including
         functions, features and technical performance requirements. The Company
         currently expects the acquired IPR&D will be successfully developed but
         there can be no assurance the technological feasibility or commercial
         viability of these products will be achieved. If none of these products
         are successfully developed, the Company's sales and profitability may
         be adversely affected in future periods.

         The following pro forma data (in thousands) summarize the results of
         operations for the periods indicated as if the Sterling acquisition had
         been completed as of the beginning of the periods presented. The pro
         forma data give effect to actual operating results prior to the
         acquisition, adjusted to include the pro forma effect of interest
         expense, amortization of intangibles and income taxes. The pro forma
         results do not include an adjustment for IPR&D. These pro forma results
         are not necessarily indicative of the results that would have actually
         been obtained if the acquisition occurred as of the beginning of the
         periods presented or that may be obtained in the future.

                                                     Fiscal Year Ended
                                               -------------------------------
                                               October 1,        September 26,
                                                  2000               1999
                                               -----------       -------------
         Pro forma net sales                    $   38,838         $   44,774
         Pro forma net income (loss)            $   39,447         $   (3,669)
         Pro forma earnings (loss) per share:
           Basic                                $     1.58         $    (0.15)
           Diluted                              $     1.58         $    (0.15)

         The acquisition costs for Sterling primarily include approximately
         $428,000 paid to an investment banking firm of which one of the
         Company's directors is a principal and approximately $137,000 paid to a
         law firm of which one of the Company's directors is a senior partner.

10.      OTHER ASSETS

         Other assets consisted of the following (in thousands):

                                              September 30,         October 1,
                                                  2001                 2000
                                              -------------       ------------

         Intangible assets                       $    6,183         $    5,695
         Trademarks                                   2,256              2,464
         Technology license                               -              1,000
         Deposits                                       116                139
         Other                                        3,119              2,853
                                                 ----------         ----------

         Total                                   $   11,674         $   12,151
                                                 ==========         ==========

         Intangible assets were acquired in connection with the Sterling
         acquisition (Note 9), in connection with the acquisition of Emcore's
         minority interest (Note 8), and as a result of certain miscellaneous
         licensing arrangements. Intangible assets are reported net of
         accumulated amortization of $1,697,000 at September 30, 2001 and
         $407,000 at October 1, 2000. Trademarks are reported net of accumulated
         amortization of $1,800,000 and $1,592,000 at September 30, 2001 and
         October 1, 2000, respectively.

         During Fiscal 1999 and Fiscal 1998, the Company paid a total of
         $5,000,000 to 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 8). During the fourth
         quarter of Fiscal 2000, the Company wrote down the value of its
         technology license in the amount of $4,000,000 based on its decision to
         pursue its own research and development efforts. In conjunction with
         the purchase of Emcore's minority interest (Note 8), the technology
         license agreement was terminated and the remaining value of the
         technology license was reclassified to intangible assets and will be
         amortized over the estimated life of the technology of five years.

11.      LONG-TERM DEBT

         Long-term debt consisted of the following (in thousands):

                                          September 30,              October 1,
                                              2001                      2000
                                          -------------              ----------

         Revolving credit agreement       $    7,214                 $    1,266
         Secured promissory note               5,000                          -
         Unsecured promissory notes            1,739                      3,069
         Capital lease obligations            16,652                     17,828
                                          ----------                 ----------
                                              30,605                     22,163
         Less current portion                (18,140)                    (6,701)
                                          ----------                 ----------
         Long-term debt, net
           of current portion             $   12,465                 $   15,462
                                          ==========                 ==========

         Debt amounts become due during subsequent fiscal years ending in
         September as follows (in thousands):

                                               2002                  $   18,140
                                               2003                       6,585
                                               2004                       4,758
                                               2005                       1,048
                                               2006                          74
                                                                     ----------
                                         Total debt                  $   30,605
                                                                     ==========

         Tyco Capital Revolving Credit Agreement

         On April 14, 1998, the Company entered into an Amendment and Consent
         Agreement with Tyco Capital (formerly The CIT Business/Credit Group,
         Inc.) ("Tyco") 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
         Tyco revolving credit agreement was assumed by Uniroyal Engineered
         Products, Inc. (now known as Uniroyal Engineered Products, LLC). The
         collateral securing the credit line includes only the assets of
         Uniroyal Engineered Products, LLC. Interest on the Tyco 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 matured
         on June 5, 2001 and is subject to automatic one year renewals unless
         the agreement is terminated by either party with a 90 day notice and is
         therefore included as a short-term obligation at September 30, 2001.
         All of Uniroyal Engineered Products, LLC's 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
         30, 2001. At September 30, 2001, the Company had approximately
         $7,214,000 of outstanding borrowings under the revolving credit
         agreement and $1,087,000 of availability. The Company had $1,266,000 of
         outstanding borrowings under this agreement at October 1, 2000. The
         weighted average interest rate on the Tyco revolving credit agreement
         was 9.1% during Fiscal 2001 and Fiscal 2000.

         Secured Promissory Note

         In connection with the August 2, 2001 acquisition of Emcore's minority
         interest in UOE (Note 8), the Company received a $5,000,000 loan, at
         prime rate, from Emcore. The Company incurred additional interest of
         433 shares of the Company's common stock per day from September 28,
         2001 until the note was repaid on November 9, 2001.

         The loan was evidenced by a convertible note, the principal and accrued
         interest of which was convertible into the Company's common stock on
         the earlier of September 20, 2001 and the completion of the sale of
         UAS. The conversion price for the note was based upon the trading price
         of the Company's common stock, but would be no more than $8.39 or less
         than $6.87 per share and was subject to customary antidilution
         adjustments. The weighted average interest rate of this obligation was
         7.0% in Fiscal 2001. The maturity date of the loan was the earlier of
         the completion of the sale of UAS (Note 6) or August 2, 2003.

         Unsecured Promissory Notes

         On May 31, 2000, in connection with the acquisition of Sterling, the
         Company assumed an unsecured promissory note payable with a balance of
         approximately $833,000. The note was payable in two equal installments
         of approximately $416,500 on September 1, 2000 and September 1, 2001,
         plus accrued interest at the stated rate of 10.50%. At September 30,
         2001, the balance of this note payable is zero.

         On June 14, 1999, in connection with the purchase of Happel Marine,
         Inc., 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 was 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. At September 30, 2001,
         the balance of these notes approximates $1,250,000.

         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 2001 and Fiscal 2000 were
         primarily related to the Company's Compound Semiconductor and
         Optoelectronics segment. The Company is a guarantor of the majority of
         the lease obligations. The weighted average interest rate on these
         obligations was 9.5% in Fiscal 2001 and 8.9% in Fiscal 2000.

         The approximate minimum future lease obligations on long-term
         non-cancelable capital lease obligations included in long-term debt
         during subsequent fiscal years ending in September are as follows (in
         thousands):

                                           Fiscal Year
                                           -----------
                                               2002                  $   6,380
                                               2003                      6,616
                                               2004                      4,996
                                               2005                      1,076
                                               2006                         71
                                                                     ---------
                                                                        19,139
                                            Less imputed interest       (2,487)
                                                                     ---------
                                            Total                    $  16,652
                                                                     =========

         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.

12.      DISCONTINUED OPERATIONS OF HPPI

         On December 24, 1999, the Company entered into a definitive agreement
         to sell certain net assets of HPPI, which comprises its High
         Performance Plastics segment, for $217,500,000 in cash to Spartech
         Corporation ("Spartech"). The transaction closed on February 28, 2000,
         and resulted in cash proceeds of $208,976,000 net of certain
         transaction costs and preliminary purchase price adjustments (the
         "Spartech Sale"). In Fiscal 2000, the ultimate purchase price
         adjustments had not been agreed to by both parties. The Company
         estimated, and had provided for, an ultimate reduction in purchase
         price of approximately $5,100,000, which would have resulted in a loss
         of the $5,000,000 holdback as well as an additional payment from the
         Company to Spartech of approximately $100,000. In addition to what the
         Company had provided for, Spartech was seeking an additional purchase
         price reduction up to approximately $4,237,000. After consideration of
         the estimated purchase price adjustments of $5,100,000 during Fiscal
         2000, the Company recorded a gain on the sale of approximately
         $55,821,000 (net of taxes of approximately $38,146,000).

         On August 27, 2001, the Company and Spartech agreed to the final
         purchase price adjustment. The settlement resulted in the loss of the
         $5,000,000 holdback as well as an additional $1,000,000 payment to be
         made by the Company to Spartech. The $1,000,000 payment is evidenced by
         an unsecured promissory note at prime rate. The note is repayable in
         four increments of $250,000. The first increment was due November 1,
         2001 and has been paid. The remaining payments are due February 1,
         2002, May 1, 2002 and August 1, 2002. As a result of the settlement,
         the Company recorded a loss of approximately $522,000 (net of taxes of
         approximately $306,000) in Fiscal 2001.

         The accompanying consolidated financial statements reflect HPPI as
         discontinued operations in accordance with APB Opinion No. 30.

         Net liabilities of the discontinued operations of HPPI have been
         segregated on the September 30, 2001 and October 1, 2000 balance
         sheets, the components of which are as follows (in thousands):

         Net Liabilities of Discontinued Operations of HPPI

                                               September 30,         October 1,
                                                   2001                 2000
                                               -------------        -----------
        Assets:
        Cash                                   $       109          $       100
        Trade receivables                                -                   21
        Deferred income tax                              -                  186
        Prepaids and other                             194                  466
                                               -----------          -----------
        Total assets                                   303                  773
                                               -----------          -----------
        Liabilities:
        Current portion of long-term debt            1,000                  158
        Trade payables                                  45                  432
        Other accrued expenses                       1,168                4,815
                                               -----------          -----------
        Total liabilities                            2,213                5,405
                                               -----------          -----------
        Net liabilities of discontinued
          operations of HPPI                   $     1,910          $     4,632
                                               ===========          ===========

         The results of operations for all periods presented have been restated
         for the HPPI discontinued operations. The operating results of the HPPI
         discontinued operations are as follows (in thousands):
<PAGE>
<TABLE>
<CAPTION>

                                                                                Fiscal Years Ended
                                                                --------------------------------------------------
                                                                September 30,       October 1,       September 26,
                                                                    2001               2000              1999
                                                                ------------       -----------       -------------

<S>                                                             <C>                <C>                <C>
         Net sales                                              $         -        $    55,001        $   130,219
         Cost of goods sold                                               -             44,434             93,367
         Selling and administrative                                     221              3,933             15,538
         Depreciation and other amortization                              -              2,511              5,652
         Loss on assets to be disposed of                                 -                  -                144
         Loss (gain) on sale of segment                                 828            (96,027)                 -
                                                                -----------        -----------        -----------
         Income before interest expense and income taxes              1,049            100,150             15,518
         Interest expense - net                                           -             (3,620)            (8,574)
                                                                -----------        -----------        -----------
         Income before taxes                                         (1,049)            96,530              6,944

         Income tax expense                                            (224)           (39,184)            (2,675)
                                                                -----------        -----------        -----------
         Net (loss) income and gain on disposition of
            discontinued operations of HPPI                     $    (1,273)       $    57,346        $     4,269
                                                                ===========        ===========        ===========
</TABLE>

         The following information relates to the business of HPPI.

         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 was composed of a $30,000,000 Term A Advance, for
         which the weighted average interest rate was 8.0% in Fiscal 2000 and
         7.36% in Fiscal 1999, a $60,000,000 Term B Advance for which the
         weighted average interest rate was 8.3% in Fiscal 2000 and 7.57% in
         Fiscal 1999, and a $20,000,000 Revolving Credit Advance for which the
         weighted average interest rate was 8.8% in Fiscal 2000 and 8.31% in
         Fiscal 1999. The Fleet Financing was repaid on February 28, 2000, in
         connection with the Spartech Sale.

         Under the terms of the Credit Agreement, HPPI was 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. The interest rate swap agreements were terminated
         on February 28, 2000 in connection with the repayment of the Fleet
         Financing. HPPI received $950,000 upon termination and recorded this
         amount as a gain on interest rate swap termination. The gain on
         interest rate swap termination is included in selling and
         administrative expenses of discontinued operations.


13.      OTHER LIABILITIES

         Other liabilities consisted of the following (in thousands):

                                               September 30,         October 1,
                                                   2001                 2000
                                               -------------        -----------

          Accrued retirement benefits          $    23,756          $    22,482
          Taxes, other than income                       -                    2
          Other                                        932                1,181
                                               -----------          -----------
          Total                                $    24,688          $    23,665
                                               ===========          ===========

14.      INCOME TAXES

         The effective tax rate differs from the statutory federal income tax
         rate for the following reasons (in thousands):
<PAGE>
<TABLE>
<CAPTION>
                                                                                   Fiscal Years Ended
                                                                -------------------------------------------------
                                                                September 30,       October 1,      September 26,
                                                                    2001               2000             1999
                                                                -------------      -----------      -------------
<S>                                                             <C>                <C>                <C>
         Income tax benefit calculated at the
           statutory rate applied to loss before
           income taxes and discontinued
           operations                                           $ (16,167)         $ (13,808)         $  (1,354)

         Increase (decrease) resulting from:
           Capital loss from medical benefits
             subsidiary                                                 -                  -            (15,980)
           Valuation allowance                                     17,870            (13,702)            13,702
           Goodwill                                                 6,273              3,358                  -
           State income tax                                        (1,642)            (1,870)                30
           Research and development credit                              -               (894)                 -
           Other                                                      358                 40                388
                                                                ---------          ---------          ---------
         Income tax expense (benefit)                           $   6,692          $ (26,876)         $  (3,214)
                                                                =========          =========          =========
</TABLE>

         Income tax expense (benefit) consisted of the following components (in
         thousands):
<TABLE>
<CAPTION>
                                                                                    Fiscal Years Ended
                                                                --------------------------------------------------
                                                                September 30,        October 1,      September 26,
                                                                    2001                2000             1999
                                                                -------------      ------------      -------------
<S>                                                             <C>                <C>                <C>
         Current:
           Federal                                              $    (6,284)       $   (31,340)       $   (3,691)
           State                                                       (144)            (2,646)             (365)
                                                                -----------        -----------        ----------
           Total                                                $    (6,428)       $   (33,986)       $   (4,056)
                                                                ===========        ===========        ==========
         Net deferred tax expense:
           Federal                                              $    12,045        $     6,334        $      447
           State                                                      1,075                776               395
                                                                -----------        -----------        ----------
           Total                                                $    13,120        $     7,110        $      842
                                                                ===========        ===========        ==========
         Total:
           Federal                                              $     5,761        $   (25,006)       $   (3,244)
           State                                                        931             (1,870)               30
                                                                -----------        -----------        ----------
           Total                                                $     6,692        $   (26,876)       $   (3,214)
                                                                ===========        ===========        ==========

</TABLE>

         The components of the deferred tax assets and liabilities were as
         follows (in thousands):
<TABLE>
<CAPTION>
                                                                                September 30, 2001
                                                                -------------------------------------------------
                                                                    Assets         Liabilities           Total
                                                                -----------        -----------        -----------
         Current
         -------
<S>                                                             <C>                <C>                <C>
         Accrued expenses deductible in future
           Periods                                              $     1,415        $         -        $     1,415
         Valuation allowance                                         (1,415)                 -             (1,415)
                                                                -----------        -----------        -----------
         Total                                                            -                  -                  -
                                                                ===========        ===========         ===========
         Non-Current
         -----------
         Tax loss carryforward benefits                         $     5,269        $         -        $     5,269
         Acquired tax loss carryforward benefits                      4,741                  -              4,741
         Tax credit carryforward benefits                             2,109                  -              2,109
         Book basis in excess of tax basis of assets                      -             (6,257)            (6,257)
         Long-term accrual of expenses deductible
           in future periods                                         10,593                  -             10,593
         Valuation allowance                                        (16,455)                 -            (16,455)
                                                                -----------        -----------        -----------
         Total                                                  $     6,257        $    (6,257)       $         -
                                                                ===========        ===========        ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                                                  October 1, 2000
                                                                -------------------------------------------------
                                                                   Assets         Liabilities            Total
                                                                -----------       ------------        -----------
         Current
         -------
<S>                                                             <C>                <C>                <C>
         Accrued expenses deductible in future
           Periods                                              $     5,460        $         -        $     5,460
                                                                ===========        ===========        ===========
         Non-Current
         -----------
         Acquired tax loss carryforward benefits                $     4,976        $         -        $     4,976
         Book basis in excess of tax basis of assets                      -             (4,214)            (4,214)
         Long-term accrual of expenses deductible
           in future periods                                          7,066                  -              7,066
                                                                -----------        -----------        -----------
         Total                                                  $    12,042        $    (4,214)       $     7,828
                                                                ===========        ===========        ===========
</TABLE>

         The Company has established a valuation allowance as it has not
         determined that it is more likely than not that the deferred tax asset
         is realizable, based upon the Company's projected future taxable
         income.

         As of September 30, 2001, the Company has net operating loss
         carryforwards for tax purposes of approximately $10,000,000 that expire
         in the year 2021 as well as research and development tax credit
         carryforwards of approximately $1,200,000 expiring in years beginning
         in 2007.

         The acquired tax loss carryforward benefits expire in various years
         starting in the year 2007 through 2020. These acquired tax loss
         benefits consist of tax net operating loss carryforwards from
         acquisitions of subsidiaries and are subject to an annual limitation.
         The annual limitation on utilization of the acquired net operating
         losses is approximately $4,000,000 per year.

         In Fiscal 1999, the Company established a subsidiary to administer the
         Company's employee medical benefits program. The Company realized a
         one-time federal 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 $2,278,000 of this
         benefit was recognized in Fiscal 1999 as an offset against current and
         previous capital gains. In Fiscal 2000, the Company realized an
         additional state tax benefit of $936,000 and the $13,702,000 previous
         federal balance of this benefit was recognized as an offset to a
         portion of the capital gain realized upon the sale of HPPI.

15.      COMMITMENTS AND CONTINGENCIES

         Litigation

         On February 23, 2001, the Company and its wholly owned subsidiary,
         Sterling, were served with a complaint by AFG-NVC, LLC in the Loudoun
         County, Virginia Circuit Court. The complaint seeks approximately
         $8,106,000 for alleged default under a lease and benefits that the
         landlord believes it would have received under such lease. The Company
         has filed an answer seeking not less than $7,000,000 for breaches of
         contract, fraud and constructive fraud on the part of the plaintiff.
         The case is currently in discovery. At the present time, the amount of
         liability, if any, cannot be reasonably estimated.

         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.

         In connection with the July 1996 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 30, 2001, the Company
         had incurred approximately $746,000 of related remediation costs. In
         connection with the sale of UAS in November 2001 (Note 6), we placed an
         additional $300,000 in escrow.

         In connection with the Spartech Sale, the Company conducted
         environmental assessments on two of the plants of HPPI in compliance
         with the laws of the states of Connecticut and New Jersey relating to
         transfers of industrial real property. The asset purchase agreement
         provided that Spartech could defer taking title to certain parcels of
         real property until the Company provides evidence that environmental
         contamination had been remediated to the satisfaction of Spartech. The
         environmental assessment of the Connecticut property indicated that a
         separate parcel purchased by the Company in 1995 was contaminated with
         total petroleum hydrocarbons, DDT and other pesticide chemicals. The
         Company had removed approximately 60% of the soil on the property in
         Fiscal 2000 at a cost of approximately $1,600,000. Fiscal 2001
         expenditures approximated $50,000. The Company has retained
         environmental consultants to review its options with regard to the
         remaining soil on the premises and expects to complete remediation
         under a program approved by the Connecticut Department of Environmental
         Protection in December 2001. The environmental assessment of the
         Hackensack, New Jersey facility is still underway. At September 30,
         2001, the Company has estimated the clean-up costs for both facilities
         to approximate $1,000,000. At September 30, 2001, the estimates for
         environmental clean-up costs are included in the Net Liabilities of
         Discontinued Operations of HPPI. Spartech has agreed to lease the
         parcels for a nominal amount until after remediation is complete.

         Based on information available as of September 30, 2001, 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 capital leases, included in property,
         plant and equipment (Note 7) consisted of the following (in thousands):

                                               September 30,        October 1,
                                                   2001                2000
                                               ------------         ----------
         Buildings and improvements            $    5,429           $    5,429
         Machinery, equipment and office
           furnishings                             20,279               18,202
         Construction in progress                   1,845                    -
                                               ----------           ----------
                                                   27,553               23,631
         Less accumulated amortization             (5,458)              (2,117)
                                               ----------           ----------
         Total                                 $   22,095           $   21,514
                                               ==========           ==========

         Amortization of assets recorded under capital leases is included with
         depreciation expense.

         The Company leases equipment, vehicles and warehouse and office space
         and contracts for various services 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 and service agreements during subsequent fiscal years ending in
         September are as follows (in thousands):

                                           Fiscal Year
                                           -----------
                                               2002                 $  1,964
                                               2003                    1,911
                                               2004                    1,730
                                               2005                      943
                                               2006                      769
                                          Subsequent years             2,061
                                                                    --------
                                          Total                     $  9,378
                                                                    ========

         Rent expense was approximately $1,456,000, $988,000 and $556,000 for
         Fiscal 2001, Fiscal 2000 and Fiscal 1999, 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 earned interest at 12% per annum until March 10,
         2000, at which time the plan was amended to reduce the interest rate to
         7.84%. The program is not qualified under Section 401 of the Internal
         Revenue Code. At September 30, 2001 and October 1, 2000, participant
         deferrals, which are included in other liabilities, were $1,145,000 and
         $938,000, respectively. The expense during Fiscal 2001, Fiscal 2000 and
         Fiscal 1999 was $207,000, $212,000 and $208,000, 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 were paid by the
         Company with respect to these policies. During Fiscal 2000, the Company
         deposited approximately $1,190,000 into a Premium Deposit Fund which
         will be used to fund the remaining annual insurance premiums under the
         split dollar life insurance contracts. As of September 30, 2001 and
         October 1, 2000, $2,135,000 has been capitalized to reflect the cash
         surrender value of these contracts due the Company.

         As of September 30, 2001, the Company had employment contracts with
         four officers of the Company, providing for total annual payments of
         approximately $1,631,000 plus bonuses through September 1, 2002.
         Effective October 16, 2001, the compensation of the four officers was
         reduced by amounts ranging from 15% to 25% for an undetermined length
         of time.

16.      STOCKHOLDERS' EQUITY

         The Company's certificate of incorporation provides that the authorized
         capital stock of the Company consists of 100,000,000 shares of common
         stock and 1,000 shares of preferred stock, each having a par value of
         $0.01 per share. At September 30, 2001, 32,662,611 shares of common
         stock were issued or to be 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 2001, Fiscal 2000 and Fiscal 1999.

         Treasury Stock Transactions

         During Fiscal 2001 and Fiscal 2000, the Company received 1,116,185 and
         109,149 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 $9,154,000 in Fiscal
         2001 and $1,368,000 in Fiscal 2000 (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 30, 2001 and
         October 1, 2000.

         During Fiscal 2001 and Fiscal 2000, the Company repurchased 1,304,700
         and 1,008,496 shares, respectively, of its common stock in the open
         market for approximately $9,641,000 and $13,547,000, respectively.

         During Fiscal 2001, the Company issued 2,132,040 shares of its common
         stock (189,026 of which came from treasury) to directors, officers and
         employees of the Company upon the exercise of stock options.

         During Fiscal 2001 the Company received 6,420 shares of its common
         stock from one of its benefit plans in settlement of a prior year
         purchase issue. During Fiscal 2000, the Company repurchased 47,984 of
         its common stock from its benefit plans for approximately $303,000.

         Warrants

         The Company has 366,395 warrants outstanding to purchase an aggregate
         of 732,790 shares of its common stock at a price equal to $4.375 per
         warrant, 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
         1,600,000 shares of its common stock in connection with the issuance of
         its Senior Secured Notes in Fiscal 1993. 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 2001, 1,490 warrants were
         exercised resulting in cash proceeds of approximately $6,500 and the
         issuance of 2,980 shares of the Company's common stock. During Fiscal
         2000, 169,650 warrants were exercised resulting in cash proceeds of
         approximately $742,000 and the issuance of 339,300 shares of the
         Company's common stock.

         Stock Compensation Plans

         At September 30, 2001, the Company has seven 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 SFAS 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 30,         October 1,      September 26,
                                                                   2001                2000              1999
                                                               -------------       ------------      -------------
<S>                                                            <C>                 <C>                 <C>
         Net (loss) income:
           As reported                                         $  (51,835)         $   46,687          $    5,520
           Pro forma                                           $  (61,109)         $   43,090          $    4,778
         (Loss) earnings per share - basic and diluted:
           As reported                                         $    (1.97)         $     1.87          $     0.23
           Pro forma                                           $    (2.32)         $     1.73          $     0.20
</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 30, 2001, October 1, 2000 and September 26, 1999,
         respectively: expected volatility of 72.84%, 58.65% and 44.16%,
         dividend yield of 0% for all years, risk-free interest rates of 4.68%,
         6.23% and 6.014% and expected lives of 2 to 10 years.

         The Company has reserved 2,727,272 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 retainers
         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 approximately $95,000, $118,000 and
         $109,000 during Fiscal 2001, Fiscal 2000 and Fiscal 1999, 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. Up to 5,304,000 shares of common stock may be granted and
         outstanding 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. After Fiscal 2001, no more options are to be granted under this
         plan.

         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 20,000 shares of the
         Company's common stock in the case of the initial grant and 35,000
         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 60,000 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 20,000 to 35,000 shares of the Company's common stock.

         During Fiscal 2000, the Company adopted the 2000 Stock Plan available
         for directors, officers and employees of the Company. The maximum
         number of shares reserved for award is 250,000 shares of the Company's
         common stock. Under the 2000 Stock Plan, restricted shares of common
         stock are awarded to participating employees of the Company who meet or
         exceed an annual spending goal of 10% of the employee's base salary
         plus bonus potential on the purchase of the Company's common stock. If
         the employee meets the goal, the Company will issue restricted common
         stock to the employee with a value representing 25% of the dollar
         amount paid for the purchased common shares. Each non-officer director
         of the Company may participate in the plan by spending at least $25,000
         to purchase stock during a calendar year. If that goal is met, the
         Company will issue restricted common stock representing 25% of the
         dollar amount paid for the purchased common shares for purchases up to
         $37,500. The number of shares of restricted common stock to be awarded
         is calculated based upon the closing market price of the Company's
         common stock on the last trading day of the calendar year. The
         restrictions on the common stock lapse ratably on an annual basis over
         a 3-year period. During Fiscal 2001, the Company issued 8,641
         restricted shares of its common stock and recorded compensation expense
         of approximately $54,000 under the 2000 Stock Plan. No restricted stock
         was issued or compensation expense recorded under the 2000 Stock Plan
         in Fiscal 2000.

         During Fiscal 2001, the Company adopted the 2001 Stock Option Plan for
         certain key employees. Up to 5,000,000 shares of common stock of the
         Company may be granted under this plan. 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. Unless the grant certificate states otherwise, stock options
         under this plan will vest 20% each year over a five-year period.

         During Fiscal 2001, the Company adopted the 2001 Non-Executive Stock
         Option Plan for employees of the Company who are not officers or
         directors of the Company. Up to 3,000,000 shares of common stock of the
         Company may be granted under this plan. The stock options are
         exercisable over a period determined by the Board of Directors or its
         Compensation Committee, but no longer than ten years from the date
         granted. Unless the grant certificate states otherwise, the vesting
         period for stock options under this plan will vest 20% each year over a
         five year period.

         The following table summarizes all stock option transactions for the
         fiscal years ended September 30, 2001, October 1, 2000 and September
         26, 1999:
<TABLE>
<CAPTION>

                                                              Fiscal Years Ended
                               ---------------------------------------------------------------------------------
                                  September 30, 2001            October 1, 2000            September 26, 1999
                               ------------------------     ------------------------   -------------------------
                                             Weighted-                    Weighted-                   Weighted-
                                              Average                      Average                     Average
                                 Shares      Exercise         Shares      Exercise         Shares     Exercise
                                               Price                        Price                       Price
                               ----------- ------------     ----------    ---------      ----------   ----------

<S>                              <C>         <C>            <C>           <C>            <C>          <C>
          Outstanding at
            Beginning of Year    5,936,619   $    7.87       3,695,060    $    2.87       4,352,786   $    2.53
          Grants                 2,307,328   $    8.17       3,382,079    $   11.37         374,200   $    3.88
          Exercised             (2,132,040)  $    4.43      (1,125,520)   $    1.91        (996,926)  $    1.71
          Forfeited                (44,688)  $   10.12         (15,000)   $   13.59         (35,000)  $    3.92
                                ----------                  ----------                   ----------
          Outstanding at End
            of Year              6,067,219   $    9.17       5,936,619    $    7.87       3,695,060   $    2.87
                                ==========                  ==========                   ==========
          Exercisable at End
            of Year              2,397,025                   2,676,093                    2,059,210
                                ==========                  ==========                   ==========

          Weighted-average
            fair value of
            options granted
            during the year     $    4.83                   $     8.30                   $     1.85


</TABLE>
<PAGE>

         The following table summarizes information about stock options at
         September 30, 2001:
<TABLE>
<CAPTION>

                                    Options Outstanding                                     Options Exercisable
         ---------------------------------------------------------------------------  -------------------------------
                                   Number         Weighted-Average       Weighted-          Number        Weighted-
              Range of           Outstanding          Remaining           Average        Exercisable       Average
          Exercise Prices         at 9/30/01      Contractual Life   Exercise Price       At 9/30/01   Exercise Price
          ---------------       -------------    ------------------  --------------     -------------  --------------

<S>                               <C>                  <C>              <C>              <C>             <C>
         $   0.00 - $  2.99        1,216,730            2.92 Years       $    1.62        1,216,730       $    1.62
         $   3.00 - $  5.99          687,002            4.97 Years       $    4.44          534,178       $    4.41
         $   6.00 - $  8.99        1,696,589            9.01 Years       $    7.91           73,869       $    7.19
         $   9.00 - $ 11.99          808,500            4.07 Years       $    9.47          219,700       $   10.56
         $  12.00 - $ 14.99          155,148            7.59 Years       $   13.12           65,548       $   12.74
         $  15.00 - $ 17.99        1,212,500            8.55 Years       $   17.18            5,600       $   16.21
         $  18.00 - $ 20.99            2,750            8.68 Years       $   19.45              150       $   18.00
         $  21.00 - $ 23.99          285,000            1.68 Years       $   23.03          280,650       $   23.06
              $ 29.25                  3,000            8.50 Years       $   29.25              600       $   29.25
                                   ---------                                              ---------
                                   6,067,219            6.20 Years       $    9.17        2,397,025       $    6.09
                                   =========                                              =========
</TABLE>


17.      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 was payable semi-annually at
         11.75% per annum. The Note was to mature 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. 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, the Company had accrued interest receivable
         related to the Note of approximately $387,000. In March of 2000, the
         Company fully reserved its note receivable and related accrued interest
         from RBX in the amount of $5,387,000. This was a result of a
         determination that based on recent events at RBX, which included the
         effects of a prolonged strike at its major facility, the financial
         condition of RBX had deteriorated such that collectibility of the note
         receivable and related accrued interest was in doubt. On June 22, 2000,
         the Company settled all outstanding claims and counterclaims with RBX
         for a cash payment from RBX of $250,000. The settlement is included in
         selling and administrative costs for the year ended October 1, 2000 and
         was substantially offset by legal costs incurred.

18.      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 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 were cumulative and were 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 were 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.

         The Preferred Stock was redeemable, in whole or in part, at the option
         of Emcore at any time Emcore's common stock 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 was required to provide not less than 30 days and not more
         than 60 days notice of the redemption. The shares of Preferred Stock
         were 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.

         On September 26, 1999, the closing sales price of Emcore's common stock
         on the Nasdaq National Market was $14.4375. This resulted in an
         unrealized gain of $100,000 (net of taxes of $63,000) as of September
         26, 1999.

         During the first quarter of Fiscal 2000, the Company converted the
         remaining 372,857 shares of its Emcore preferred stock into 372,857
         shares of Emcore common stock. The common stock was then sold in the
         open market for approximately $8,125,000. This resulted in a gain of
         approximately $2,905,000, net of certain transaction costs.

19.      EMPLOYEE COMPENSATION

         Post-retirement Healthcare and Life Insurance Benefits

         Certain retired employees are currently provided with specified
         healthcare 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 predecessor companies, and
         Uniroyal, Inc. ("Uniroyal") (not affiliated with the Company) who are
         class members under a federal district court order. The Company and
         Uniroyal, through Uniroyal Holdings, Inc., 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, Employer's Accounting for
         Post-retirement Benefits Other than Pensions, 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 were both expected to be approximately 16 years. In connection
         with the Spartech Sale, the Company recognized approximately $6,341,000
         of the transition obligation as a reduction of the gain on sale.

         The components of net periodic benefit costs are as follows (in
         thousands):
<TABLE>
<CAPTION>

                                                              September 30,      October 1,        September 26,
                                                                  2001              2000               1999
                                                              -------------      -----------       -------------
<S>                                                            <C>                 <C>                 <C>
         Service cost                                          $     106           $     132           $      61
         Interest cost                                             2,523               2,184               1,864
         Amortization of prior service credit                        (14)                (14)                (14)
         Amortization of transition obligation                       375                 683               1,114
         Recognized actuarial loss                                   420                 310                 151
                                                               ---------           ---------           ---------
         Net periodic benefit cost                             $   3,410           $   3,295           $   3,176
                                                               =========           =========           =========
</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 30,         October 1,
                                                                     2001                2000
                                                                 ------------         ----------
<S>                                                               <C>                  <C>
         Change in benefit obligations:
         Benefit obligation at beginning of year                   $  31,669           $  28,651
         Service cost before expenses                                    106                 132
         Interest cost                                                 2,523               2,184
         Benefit payments                                             (2,710)             (2,827)
         Actuarial (gain)/loss                                         4,212               3,529
                                                                   ---------           ---------
         Benefit obligation at end of year                         $  35,800           $  31,669
                                                                   =========           =========
         Reconciliation of funded status:
         Benefit obligation at end of year                         $  35,800           $  31,669
         Unrecognized actuarial loss                                  (9,772)             (5,980)
         Unrecognized prior service credit                               218                 232
         Unrecognized transition obligation                           (2,624)             (2,999)
                                                                   ---------           ---------
         Net amount recognized at year-end                         $  23,622           $  22,922
                                                                   =========           =========
</TABLE>
         The weighted average discount rate assumptions were 7.25% at September
         30, 2001, 7.5% at October 1, 2000 and 6.75% at September 26, 1999.

         The assumed healthcare cost trend rate used in measuring the healthcare
         benefits for Fiscal 2001 through Fiscal 2005 was a 7.5% average annual
         rate of increase in the per capita cost healthcare benefits. This rate
         is assumed to change over the years as follows: 7.0% for the fiscal
         years beginning 2006, 6.5% for the fiscal years beginning 2011, 6.0%
         for the fiscal years beginning 2016, and 5.5% for the fiscal years
         beginning 2021 and later.

         Assumed healthcare cost trend rates have a significant effect on the
         amounts reported for the healthcare plan. A one-percentage-point change
         in assumed cost trend would have the following effects for Fiscal
         2001(in thousands):
<TABLE>
<CAPTION>
                                                              1% Point Increase      1% Point Decrease
                                                              -----------------      -----------------
<S>                                                                <C>                 <C>
         Effect on total of service and interest
           cost components for 2001                                $    313            $   (261)

         Effect on year-end 2001 post-retirement
           benefit obligation                                         3,878              (3,258)
</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 components of net periodic benefit costs are as follows (in
         thousands):
<TABLE>
<CAPTION>
                                                              September 30,        October 1,         September 26,
                                                                  2001                2000                 1999
                                                              -------------       -----------         -------------
<S>                                                            <C>                 <C>                 <C>
         Service cost                                          $      488          $      487          $      525
         Interest cost                                                 72                  35                   -
                                                               ----------          ----------          ----------
         Net periodic benefit cost                             $      560          $      522          $      525
                                                               ==========          ==========          ==========
</TABLE>
         The following table provides a reconciliation of the changes in the
         plan's benefit obligations and a reconciliation of the funded status
         for Fiscal 2001 and Fiscal 2000 (in thousands):
<TABLE>
<CAPTION>
                                                                  September 30,        October 1,
                                                                      2001                2000
                                                                  -------------        ----------
<S>                                                                <C>                 <C>
         Accrued benefit obligation at beginning of year           $      962          $      525
         Service cost                                                     488                 487
         Interest cost                                                     72                  35
         Benefits paid or transferred                                       -                 (85)
                                                                   ----------          ----------
         Accrued benefit obligation at end of year                 $    1,522          $      962
                                                                   ==========          ==========

         Projected benefit obligation                              $    1,566          $      903
         Unrecognized (loss) gain                                         (44)                 59
                                                                   ----------          ----------
         Accrued benefit obligation at end of year                 $    1,522          $      962
                                                                   ==========          ==========
</TABLE>
         The discount rate used as of September 30, 2001 and October 1, 2000 was
         7.25% and 8.0%, respectively.

         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 $454,000 and $482,000 were paid by the
         Company in Fiscal 2001 and Fiscal 2000, respectively, for these
         policies. As of September 30, 2001 and October 1, 2000, approximately
         $981,000 and $660,000, respectively, have been capitalized to reflect
         the cash surrender value of the contracts.

         During Fiscal 2000, the post-retirement defined benefit plan was
         amended for the officers of the Company. The amendment provided for
         extended plan benefits. The extended benefits were immediately vested
         and fully funded through life insurance products. The Company funded
         and recognized an expense of approximately $2,300,000 in Fiscal 2000 in
         connection with the plan amendment. This amount is included in selling
         and administrative costs in Fiscal 2000.

         Other Benefit Plans

         The Company provided additional retirement benefits to the union wage
         employees of the UEP division through a defined contribution savings
         plan through December 2000. The plan provided for employee
         contributions and employer matching contributions to employee savings.
         Employer contributions were at rates per hour ranging generally from
         $.05 to $.66 based on years of service. The expenses pertaining to this
         plan amounted to approximately $13,000, $32,000 and $54,000 for Fiscal
         2001, Fiscal 2000 and Fiscal 1999, 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 for continuing operations were approximately $199,000,
         $111,000 and $63,000 for Fiscal 2001, Fiscal 2000 and Fiscal 1999,
         respectively. During Fiscal 2001, Fiscal 2000 and Fiscal 1999, the
         Company contributed 19,993, 17,206 and 39,344 shares of its common
         stock with a market value of approximately $124,000, $219,000 and
         $199,000, respectively, to the savings plan. These contributions
         included contributions to employees of discontinued operations for UAS
         in Fiscal 2001 and UAS and HPPI in Fiscal 2000 and Fiscal 1999.

         On August 4, 2000, the Board of Directors of the Company approved a
         special contribution of Company common stock to the Company's 401(k)
         savings plan for the plan years ended December 31, 2000 and December
         31, 1999. The contribution was made to eligible plan participants
         employed by the Company and certain of the Company's subsidiaries
         during Fiscal 2001. The amount of the contribution was approximately
         $2,235,000 and was made through a re-issuance of 298,612 shares of the
         Company's common stock from treasury. As of September 30, 2000,
         approximately $1,698,000 had been accrued and charged to selling and
         administrative expenses of continuing operations and approximately
         $459,000 had been accrued and charged to discontinued operations. Of
         the remaining expense recognized in Fiscal Year 2001, $55,000 was
         charged to selling and administrative of continuing operations and
         $23,000 was charged to discontinued operations.

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

         In Fiscal 1999, the Company finalized its sale of the automotive
         operations of the Coated Fabrics segment in Port Clinton, Ohio to
         Canadian General-Tower, Limited. The original sale agreement was signed
         on October 17, 1997 and the closings occurred in stages between October
         1997 and July 1999. In connection with the finalization of the sale,
         the Company recognized a gain of $667,000 in Fiscal 1999.

21.      INCOME (LOSS) PER COMMON SHARE

         For the years ended September 30, 2001, October 1, 2000 and September
         26, 1999, the weighted average number of common shares outstanding for
         the calculation of basic and diluted earnings per share was 26,286,148,
         24,937,364 and 24,315,992, respectively. Inclusion of stock options to
         purchase 6,067,219, 5,936,619 and 3,695,060, respectively, shares of
         common stock at various prices and warrants to purchase 732,790,
         735,770 and 1,075,070, respectively, shares of common stock at $2.1875
         per share in the calculation of diluted earnings per share would have
         been antidilutive.

22.      RELATED PARTY TRANSACTIONS

         The Company had an agreement with an investment banking firm, in which
         one of the Company's directors is a principal, that expired on December
         31, 2000. The investment banking firm has provided financial advisory
         services to the Company for fees of approximately $2,452,000 and
         $157,000 during Fiscal 2000 and Fiscal 1999, respectively. Of the
         $2,452,000 incurred in Fiscal 2000, approximately $1,959,000 was paid
         in connection with the Spartech Sale and $428,000 was paid in
         connection with the acquisition of Sterling. No fees were paid to this
         investment banking firm in Fiscal 2001.

         During the fiscal years ended September 30, 2001, October 1, 2000 and
         September 26, 1999, the Company incurred legal fees of approximately
         $117,000, $448,000 and $299,000, respectively, with a law firm of which
         one of the Company's directors is a senior partner. Approximately
         $164,000 of legal fees incurred in Fiscal 2000 were paid in connection
         with the acquisition of Sterling and the related common stock
         registration.

         During Fiscal 2001, the Company incurred legal fees of approximately
         $530,000 to two other law firms of which two of the Company's directors
         are partners. During Fiscal 2000, the Company incurred approximately
         $117,000 of legal fees to one of these firms. No legal fees were paid
         to either of these firms during Fiscal 1999.

         During Fiscal 2000, the Company paid approximately $17,000 to a
         relative of one of the Company's executive officers for consulting
         services. No fees were paid to this relative in Fiscal 2001 or Fiscal
         1999.

23.      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 two reportable segments:
         Coated Fabrics and Compound Semiconductor and Optoelectronics. The
         Coated Fabrics segment manufactures vinyl coated fabric products. The
         Compound Semiconductor and Optoelectronics segment manufactures wafers,
         epitaxial wafers, dies and package-ready dies used in high brightness
         light-emitting diodes (LEDs), power amplification and radio frequency
         applications.

         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 Coated Fabrics segment comprises Uniroyal Engineered Products,
         LLC's operating division, Uniroyal Engineered Products. The Compound
         Semiconductor and Optoelectronics segment includes Uniroyal Compound
         Semiconductors, Inc. and its subsidiaries, Uniroyal Optoelectronics,
         LLC, Sterling Semiconductor, Inc. and NorLux Corp. All other
         subsidiaries are considered part of the corporate office.

         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, were approximately $3,568,000, $3,491,000 and
         $1,972,000 in Fiscal 2001, Fiscal 2000 and Fiscal 1999, respectively.
         There were no sales to one customer in Fiscal 2001 and Fiscal 2000 that
         represented more than 10% of consolidated net sales. Sales to one
         customer of the Coated Fabrics segment represented approximately 14.5%
         of consolidated net sales in Fiscal 1999.

         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.

         Segment data for Fiscal 2001, Fiscal 2000 and Fiscal 1999 was as
         follows (in thousands):

<TABLE>
<CAPTION>
                                                              September 30,      October 1,       September 26,
                                                                   2001             2000              1999
                                                              -------------     -----------       -------------
<S>                                                            <C>              <C>                <C>
        Net Sales:
           Coated Fabrics                                      $   27,799       $   33,651         $   42,341
           Compound Semiconductor and Optoelectronics               5,063            3,023                485
                                                               ----------       ----------         ----------
        Total                                                  $   32,862       $   36,674         $   42,826
                                                               ==========       ==========         ==========
        Operating (loss) income:
           Coated Fabrics                                      $     (216)      $      227         $    4,814
           Compound Semiconductor and Optoelectronics             (45,505)         (25,841)            (5,080)
           Corporate                                               (8,560)         (22,882)            (5,102)
                                                               ----------       ----------         ----------
        Total                                                  $  (54,281)      $  (48,496)        $   (5,368)
                                                               ==========       ==========         ==========
        Identifiable assets:
           Coated Fabrics                                      $   18,950       $   20,915         $   23,547
           Compound Semiconductor and Optoelectronics              98,251           74,823             22,474
           Corporate                                               12,958           77,948             45,110
           Discontinued operations                                 14,103           10,832             10,981
                                                               ----------       ----------         ----------
        Total                                                  $  144,262       $  184,518         $  102,112
                                                               ==========       ==========         ==========
        Depreciation and other amortization:
           Coated Fabrics                                      $    1,762       $    1,719         $    1,702
           Compound Semiconductor and Optoelectronics              13,566            4,906                210
           Corporate                                                  409              576                720
                                                               ----------       ----------         ----------
        Total                                                  $   15,737       $    7,201         $    2,632
                                                               ==========       ==========         ==========
         Capital Expenditures:
           Coated Fabrics                                      $      284       $      587         $      535
           Compound Semiconductor and Optoelectronics              28,660           16,613             21,353
           Corporate                                                    -              147                787
           Discontinued operations                                    642           11,700              8,142
                                                               ----------       ----------         ----------
        Total                                                  $   29,586       $   29,047         $   30,817
                                                               ==========       ==========         ==========
</TABLE>

         Included in each segment's operating income are the following corporate
         overhead allocations for Fiscal 2001, Fiscal 2000 and Fiscal 1999,
         respectively: $973,000, $1,178,000 and $1,499,000 for the Coated
         Fabrics segment and $1,616,00, $1,207,000 and $875,000 for the Compound
         Semiconductor and Optoelectronics segment.

         In Fiscal 2001, the amount of loss on assets to be disposed of included
         in Corporate approximates $703,000. The amount of loss on assets to be
         disposed of included in the Compound Semiconductors and Optoelectronics
         segment approximates $686,000. The acquired IPR&D of $250,000 is
         included in the Compound Semiconductor and Optoelectronics segment. The
         write-down of goodwill of $9,816,000 is included in the Compound
         Semiconductor and Optoelectronics segment.

         In Fiscal 2000, the gain on the sale of the preferred stock investment,
         the provision for uncollectible note receivable, the write-down of the
         technology license and $1,116,000 of the loss on assets to be disposed
         of (related to the real property) are included in Corporate. The
         acquired IPR&D is included in the Compound Semiconductor and
         Optoelectronics segment and $657,000 of the loss on assets to be
         disposed of (relating to machinery and equipment) is included in the
         Coated Fabrics segment.

         In Fiscal 1999, the gain on the sale of preferred stock is included in
         Corporate, and the gain on the sale of the automotive coated fabrics
         division is included in the Coated Fabrics segment.


<PAGE>



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

                                          First Quarter     Second Quarter     Third Quarter     Fourth Quarter
                                          -------------     --------------     -------------     --------------
         Fiscal 2001
         -----------
<S>                                         <C>               <C>               <C>                 <C>
         Net sales                          $     7,824       $     8,822       $     8,153         $     8,063

         Gross profit                             1,400             1,148               556                 549

         Net loss                           $    (4,862)           (5,901)(1)        (6,130)(2)         (34,942)(3)

         Basic loss per share               $     (0.19)      $     (0.23)      $     (0.23)        $     (1.28)

         Diluted loss per share             $     (0.19)      $     (0.23)      $     (0.23)        $     (1.28)
</TABLE>

         (1) Includes the following unusual adjustment:
               o  loss on assets to be disposed of of approximately $492,000
                  (net of tax).

         (2) Includes the following unusual adjustment:
               o  loss on assets to be disposed of of approximately $316,000
                  (net of tax).

         (3) Includes the following unusual adjustments:
               o  write-down of goodwill of approximately $9,816,000 for which
                  there is no tax effect;
               o  establishment of a deferred tax
                  asset valuation allowance of approximately $17,870,000;
               o  write-off of purchased in-process research and development of
                  approximately $157,000 (net of tax);
               o  loss on assets to be disposed of of approximately $59,000 (net
                  of tax); and
               o  loss of approximately $522,000 (net of taxes) resulting from
                  the finalization of the HPPI purchase price.

<TABLE>
<CAPTION>

         Fiscal 2000                      First Quarter    Second Quarter     Third Quarter     Fourth Quarter
         -----------                      -------------    --------------     -------------     --------------

<S>                                         <C>               <C>               <C>                 <C>
         Net sales                          $    9,319        $    9,490        $    8,842          $   9,023

         Gross profit                            2,517             1,711             2,060              1,403

         Net income (loss)                       2,420            60,225 (1)        (1,827)           (14,131) (2)

         Basic earnings (loss) per
           share                            $     0.10        $     2.44        $    (0.07)         $   (0.54)

         Diluted earnings (loss)
           per share                        $     0.09        $     2.08        $    (0.07)         $   (0.54)
</TABLE>

         (1) Includes the following unusual adjustments:
               o  gain of approximately $57,118,000 (net of tax) related to the
                  sale of HPPI;
               o  incentive payments and benefit costs to and for officers and
                  directors related to the achievement of certain strategic
                  initiatives of approximately $3,324,000 (net of tax);
               o  provision for an uncollectible note receivable of
                  approximately $3,286,000 (net of tax);
               o  loss on assets to be disposed of of approximately $1,356,000
                  (net of tax); and
               o  tax benefit of approximately $13,702,000 related to the
                  utilization of a capital loss carryforward.

         (2) Includes the following unusual adjustments:
               o  reduction in the selling price of HPPI of approximately
                  $1,297,000 (net of tax);
               o  write-off of purchased in-process research and development of
                  $6,590,000 for which there is no tax effect;
               o  write-off of approximately $2,440,000 (net of tax) related to
                  the technology license; and
               o  accrual of approximately $1,316,000 (net of tax) related to a
                  special contribution to the Company's 401(k) plan.

<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 30, 2001, and
October 1, 2000, and the related consolidated statements of operations,
comprehensive (loss) income, changes in stockholders' equity and cash flows for
the years ended September 30, 2001, October 1, 2000, and September 26, 1999, and
have issued our report thereon dated December 21, 2001 (included in this Form
10-K and which report is unqualified and contains an explanatory paragraph
regarding the Company's ability to continue as a going concern). 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 21, 2001




<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
                                             ----------    ------------       ---------       ---------         ---------
                                                              CHARGED         ADDITIONS
                                              BALANCE AT    (CREDITED)TO       CHARGED                            BALANCE
                                              BEGINNING      COSTS AND         TO OTHER                          AT END OF
           DESCRIPTION                        OF PERIOD      EXPENSES           ACCTS.         DEDUCTION           PERIOD
   -------------------------------            ---------     -----------       ---------        ---------        ----------
  Allowance for Doubtful Accounts:                                              (a)             (b)
<S>                                           <C>            <C>              <C>              <C>              <C>
    Year ended September 30, 2001             $      75      $     187        $       -        $    (101)       $     161
                                              =========      =========        =========        =========        =========

    Year ended October 1, 2000                $      24      $      109       $       5        $     (63)       $      75
                                              =========      ==========       =========        =========        =========

    Year ended September 26, 1999             $      23      $        -       $       2        $      (1)       $      24
                                              =========      ==========       =========        =========        =========
  Allowance for Customer Claims:

    Year ended September 30, 2001             $     364      $      233       $       -        $    (388)       $     209
                                              =========      ==========       =========        =========        =========

    Year ended October 1, 2000                $     651      $      911       $       -        $  (1,198)       $     364
                                              =========      ==========       =========        =========        =========

    Year ended September 26, 1999             $     888      $    3,280       $       -        $  (3,517)       $     651
                                              =========      ==========       =========        =========        =========
  Inventory Reserves:

    Year ended September 30, 2001             $     779      $    1,255       $       -        $    (665)       $   1,369
                                              =========      ==========       =========        =========        =========

    Year ended October 1, 2000                $     718      $      537       $      50        $    (526)       $     779
                                              =========      ==========       =========        =========        =========

    Year ended September 26, 1999             $   1,977      $      224       $       -        $  (1,483)       $     718
                                              =========      ==========       =========        =========        =========
  Deferred Tax Valuation Allowance:

    Year ended September 30, 2001             $       -      $   17,870       $       -        $       -        $  17,870
                                              =========      ==========       =========        =========        =========

    Year ended October 1, 2000                $  13,702      $  (13,702)      $       -        $       -        $       -
                                              =========      ==========       =========        =========        =========

    Year ended September 26, 1999             $       -      $   13,702       $       -        $       -        $  13,702
                                              =========      ==========       =========        =========        =========
</TABLE>

(a)      Represents recovery of amounts previously written-off and reserves
         established upon business acquisitions.

(b)      Includes write-off of uncollectible accounts, customer returns and the
         write-off of obsolete inventory.



<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.




Date:  December 27, 2001
                                        By: /s/ Howard R. Curd
                                         ---------------------------------------
                                         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/ Howard F. Curd
-------------------------------------------------      ------------------------
Robert L. Soran, Director, President and               Howard F. Curd, Director
Chief Operating Officer                                Date:  December 27, 2001
Date:  December 27, 2001




/s/ George J. Zulanas, Jr.                             /s/ Curtis L. Mack
-------------------------------------------------      ------------------------
George J. Zulanas, Jr., Executive Vice President,      Curtis L. Mack, Director
Treasurer and  Chief Financial Officer                 Date:  December 27, 2001
Date:  December 27, 2001



/s/ Howard R. Curd                                     /s/ Roland H. Meyer
-------------------------------------------------      -------------------------
Howard R. Curd, Director, Chairman of the Board        Roland H. Meyer, Director
and Chief Executive Officer                            Date:  December 27, 2001
Date:  December 27, 2001




/s/ Peter C. B. Bynoe                                   /s/ John A. Porter
------------------------------------------------        ------------------------
Peter C. B. Bynoe, Director                             John A. Porter, Director
Date:  December 27, 2001                                Date:  December 27, 2001




/s/ Thomas E. Constance
------------------------------------------------
Thomas E. Constance, Director
Date:  December 27, 2001


<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 Board     Peter C.B. Bynoe, Director
and Chief Executive Officer                         Date:  December 27, 2001
Date:  December 27, 2001



/s/ Robert L. Soran                                /s/ Thomas E. Constance
-----------------------------------------------    -----------------------------
Robert L. Soran, Director, President and Chief     Thomas E. Constance, Director
Operating Officer                                  Date:  December 27, 2001
Date:  December 27, 2001



                                                   /s/ Howard F. Curd
                                                   ------------------------
                                                   Howard F. Curd, Director
                                                   Date:  December 27, 2001




                                                   /s/ Curtis L. Mack
                                                   ------------------------
                                                   Curtis L. Mack, Director
                                                   Date: December 27, 2001




                                                  /s/ Roland H. Meyer
                                                  -------------------------
                                                  Roland H. Meyer, Director
                                                  Date:  December 27, 2001




                                                 /s/ John A. Porter
                                                 ------------------------
                                                 John A. Porter, Director
                                                 Date:  December 27, 2001