<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                    FORM 10-Q

(Mark One)

 X   Quarterly report pursuant to Section 13 or 15(d) of the Securities 
---  Exchange Act of 1934.


For the quarterly period ended    September 27, 1997     or
                                  ------------------

     Transition report pursuant to Section 13 or 15(d) of the 
---  Securities Exchange Act of 1934


For the transition period from                      to
                               --------------------     ------------------------

Commission file number                   333-4723
                        --------------------------------------------------------

                          CLARK-SCHWEBEL HOLDINGS, INC.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

                Delaware                                     13-3883016
-------------------------------------------         ----------------------------
      (State or Other Jurisdiction of                     (I.R.S. Employer
       Incorporation or Organization)                     Identification No.)

2200 South Murray Avenue, Anderson, SC                          29622
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                      (Zip Code)

                                 (864) 224-3506
--------------------------------------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)



         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
         ---          ---


As of September 27, 1997, there were 9,000 shares outstanding of common stock of
Clark-Schwebel Holdings, Inc.



<PAGE>   2

                          CLARK-SCHWEBEL HOLDINGS, INC.
                         FORM 10-Q QUARTERLY REPORT FOR
                     FISCAL QUARTER ENDED SEPTEMBER 27, 1997


                                TABLE OF CONTENTS


                                                                        PAGE NO.

PART I - FINANCIAL INFORMATION:

         ITEM 1. Financial Statements:                                     3

                 Consolidated Balance Sheets as of December 28, 1996
                 and September 27, 1997.                                   4

                 Consolidated Statements of Income for the
                 Three and Nine Months ended September 27, 1997 and
                 September 28, 1996.                                       5

                 Consolidated Statements of Cash Flows for the
                 Nine Months ended September 27, 1997 
                 and September 28, 1996.                                   6

                 Notes to Condensed and Consolidated 
                 Financial Statements.                                     7

         ITEM 2. Management's Discussion and Analysis of 
                 Financial Condition and Results of Operations.           13

         ITEM 3. Quantitative and Qualitative Disclosures 
                 about Market Risk.                                       23

PART II - OTHER INFORMATION:

         ITEM 6. Exhibits and Reports on Form 8-K.                        24

SIGNATURES                                                                25

EXHIBITS

         Exhibit 4.1 - Indenture dated as of August 14, 1997 between
                       Clark-Schwebel Holdings, Inc. and State Street Bank
                       and Trust Company with respect to 12.5% Senior
                       Debentures due 2007; Incorporated by reference to
                       Exhibit 4.1 to the Company's Registration Statement
                       on Form S-4, Registration No. 333-36491, filed on
                       September 26, 1997.

         Exhibit 27 -  Financial Data Schedule
                       (electronic filing only)


                                       2
<PAGE>   3

                                     PART I
                              FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS


         (See Pages 4 - 12 - This page is intentionally left blank)



                                       3
<PAGE>   4

                          CLARK-SCHWEBEL HOLDINGS, INC.
                           CONSOLIDATED BALANCE SHEETS
                    DECEMBER 28, 1996 AND SEPTEMBER 27, 1997
                  (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                               DECEMBER 28,   SEPTEMBER 27,
                                                                                  1996           1997
                                                                               ------------   -------------
                                                                                (Successor     (Successor
                                                                                  Basis)         Basis)
<S>                                                                            <C>            <C>     
ASSETS
CURRENT ASSETS:
         Cash and cash equivalents ...........................................  $  4,064       $  7,904
         Accounts receivable, net ............................................    25,794         25,428
         Inventories, net ....................................................    32,633         36,809
         Other................................................................       592            308
                                                                                 -------        -------
              Total current assets ...........................................    63,083         70,449
                                                                                 -------        -------
PROPERTY, PLANT AND EQUIPMENT ................................................    67,936         70,136
     Accumulated depreciation ................................................    (5,841)       (10,414)
                                                                                 -------        -------
         Property, plant and equipment, net ..................................    62,095         59,722
                                                                                 -------        -------
EQUITY INVESTMENTS ...........................................................    63,426         61,444
GOODWILL .....................................................................    44,333         43,503
OTHER ASSETS .................................................................     6,808          6,182
                                                                                 -------        -------
TOTAL ASSETS .................................................................  $239,745       $241,300
                                                                                 =======        =======
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
         Accounts payable ....................................................  $ 21,448       $ 26,763
         Accrued liabilities .................................................    14,338         17,914
         Deferred tax liabilities -- current .................................     2,056          2,056
         Current maturities of long-term debt ................................        51              0
                                                                                 -------        -------
              Total current liabilities ......................................    37,893         46,733
                                                                                 -------        -------
LONG-TERM DEBT ...............................................................   123,440        155,994
DEFERRED TAX LIABILITIES .....................................................    21,458         20,838
LONG-TERM BENEFIT PLANS AND OTHER ............................................     7,121          3,984
COMMITMENTS AND CONTINGENCIES ................................................
                                                                                 -------        -------
TOTAL LIABILITIES ............................................................   189,912        227,549
                                                                                 -------        -------
EQUITY:
    Preferred stock (par value per share - $.01) - 12.5%
      participating, 10,000 shares authorized, 1,000 and 0
      shares issued and outstanding, respectively (see Note 6)................    35,000              0
    Common stock (par value per share - $.01) - 100,000 shares
      authorized, 9,000 shares issued and outstanding, less
      management loans of $822 and $0, respectively
      (see Note 6) ...........................................................     9,178          9,000
    Retained earnings ........................................................     7,005          8,874
    Cumulative translation adjustment ........................................    (1,350)        (4,123)
                                                                                 -------        -------
              Total equity ...................................................    49,833         13,751
                                                                                 -------        -------
TOTAL LIABILITIES AND EQUITY .................................................  $239,745       $241,300
                                                                                 =======        =======
</TABLE>


                 See notes to consolidated financial statements.

                                        4

<PAGE>   5


                          CLARK-SCHWEBEL HOLDINGS, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                       (UNAUDITED - Dollars in Thousands)



<TABLE>
<CAPTION>
                                         DECEMBER 31,     JUNE 30,      APRIL 18,      JUNE 29,      DECEMBER 29,
                                            1995 -         1996 -         1996 -        1997 -          1996 -
                                           APRIL 17,    SEPTEMBER 28,  SEPTEMBER 28, SEPTEMBER 27,  SEPTEMBER 27,
                                             1996           1996           1996          1997            1997
                                           -------        -------        -------        -------        --------
                                     (Predecessor Basis)                    (Successor Basis)

<S>                                        <C>            <C>            <C>            <C>            <C>     
Net sales ..........................       $68,911        $47,959        $95,289        $57,107        $180,406
Cost of goods sold .................        54,958         38,038         75,782         43,941         139,792
                                           -------        -------        -------        -------        --------
Gross profit .......................        13,953          9,921         19,507         13,166          40,614
Selling, general and administrative
    expenses .......................         4,812          3,427          6,450          4,124          11,851
                                           -------        -------        -------        -------        --------
    Operating income ...............         9,141          6,494         13,057          9,042          28,763

Other income (expense):
    Interest expense ...............          (148)        (3,548)        (6,682)        (3,697)        (10,124)
    Other, net .....................            (5)            54             53              2              (1)
                                           -------        -------        -------        -------        -------- 
Income before income taxes .........         8,988          3,000          6,428          5,347          18,638
Provision for income tax ...........        (3,595)        (1,308)        (2,779)        (2,220)         (7,695)
Income from equity investees, net ..         1,174            763          1,748          1,203           2,785
                                           -------        -------        -------        -------        --------
Net income .........................       $ 6,567          2,455          5,397          4,330          13,728
                                           =======
Accrued dividends on preferred stock                       (1,115)        (1,988)          (441)         (2,857)
                                                          -------        -------        -------        --------
    Net income applicable to common
    shares .........................                      $ 1,340        $ 3,409        $ 3,889        $ 10,871
                                                          =======        =======        =======        ========
</TABLE>

                 See notes to consolidated financial statements.


                                       5
<PAGE>   6


                          CLARK-SCHWEBEL HOLDINGS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                       (UNAUDITED - Dollars In Thousands)


<TABLE>
<CAPTION>
                                                                              DECEMBER 31,                     DECEMBER 29,
                                                                                 1995 -         APRIL 18 -        1996 -
                                                                                APRIL 17,      SEPTEMBER 28,   SEPTEMBER 27,
                                                                                  1996            1996            1997
                                                                              ------------     -------------   -------------
                                                                           (Predecessor Basis)      (Successor Basis)
<S>                                                                             <C>            <C>             <C>     
OPERATING ACTIVITIES:
     Net income ..........................................................      $  6,567       $   5,397       $ 13,728
     Adjustments to reconcile net income to net cash 
     provided by operating activities:
        Depreciation and amortization of goodwill
        and unearned revenue .............................................         3,526           4,206          6,847
        Amortization of deferred financing cost ..........................             0             388            626
        Deferred tax provision ...........................................         1,404             238           (345)
        Income from equity investments, net ..............................        (1,174)         (1,748)        (2,785)
        Loss on sale of equipment ........................................             0               0             18
        Changes in assets and liabilities, net of
         the effects of the purchase of the company:
             Accounts receivable .........................................         1,832           4,856            366
             Inventories .................................................        (2,883)          5,783         (3,184)
             Prepaid expenses and other ..................................          (187)            785            671
             Accounts payable ............................................          (697)          8,251          5,315
             Accrued liabilities .........................................          (289)          7,888          3,037
        Other ............................................................          (131)            475             17
                                                                                  ------         -------        -------
               Net cash provided by operating
               activities ................................................         7,968          36,519         24,311
                                                                                  ------         -------        -------
INVESTING ACTIVITIES:
     Purchases of equipment ..............................................        (1,603)         (1,162)        (5,929)
     Payment for purchase of Company .....................................             0        (192,895)             0
     Proceeds from sale of equipment .....................................             0               0          1,511
                                                                                  ------         -------        -------
               Net cash used in investing activities......................        (1,603)       (194,057)        (4,418)
                                                                                  ------         -------        -------
FINANCING ACTIVITIES:
     Investment by Springs ...............................................       (10,955)              0              0
     Transfer of assets retained by Springs ..............................         4,461               0              0
     Proceeds from issuance of stock .....................................             0          45,000              0
     Payment of acquisition fees, net ....................................             0         (10,500)             0
     Loans to management investors .......................................             0            (822)             0
     Proceeds from long-term borrowings ..................................             0         160,000         45,994
     Principal payments under long-term debt and
        capital lease obligations ........................................           (29)        (35,596)       (13,491)
     Proceeds from repayment of loans to
        management investors .............................................             0               0            822
     Redemption of preferred stock .......................................             0               0        (35,000)
     Redemption of participation value of preferred
        stock ............................................................             0               0        (10,000)
     Payment of preferred stock dividend .................................             0               0         (5,994)
     Dividends received from ASCO ........................................             0             104          1,616
                                                                                  ------         -------        -------
               Net cash provided by (used in)
               financing activities ......................................        (6,523)        158,186        (16,053)
                                                                                  ------         -------        -------
NET CHANGE IN CASH .......................................................          (158)            648          3,840
CASH, BEGINNING OF PERIOD ................................................           584             426          4,064
                                                                                  ------         -------        -------
CASH, END OF PERIOD ......................................................       $   426        $  1,074       $  7,904
                                                                                  ======         =======        =======
CASH PAID FOR INTEREST ...................................................       $   120        $  1,059       $  6,383
                                                                                  ======         =======        =======
CASH PAID FOR TAXES ......................................................       $     0        $  2,541       $  8,344
                                                                                  ======         =======        =======
</TABLE>



                 See notes to consolidated financial statements.

                                        6

<PAGE>   7

                          CLARK-SCHWEBEL HOLDINGS, INC.
            NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)


1. BASIS OF PRESENTATION

     The accompanying consolidated financial statements include the assets,
liabilities and results of operations as of September 27, 1997 and for the
period from December 29, 1996 to September 27, 1997 of Clark-Schwebel Holdings,
Inc., the successor company ("Company"), following the change in ownership (see
Note 2). The Company's primary asset is all of the capital stock of
Clark-Schwebel, Inc., its operating company. The statements also include the
assets and liabilities of the Company as of December 28, 1996, and the results
of operations for the period of December 31, 1995 to April 17, 1996 of Fort Mill
A Inc., the predecessor company ("Predecessor Company"), prior to the change in
ownership, and the results of operations of Clark-Schwebel Holdings, Inc., the
successor company, for the period from April 18, 1996 to September 28, 1996,
following the change in ownership. The statements of the Predecessor Company
include certain expenses that historically were accounted for only at the
Springs Industries, Inc. ("Springs") parent company level.

      SUMMARIZED FINANCIAL INFORMATION---The following table provides summarized
financial information for Clark-Schwebel, Inc., the operating company, on a
stand alone basis. Clark-Schwebel, Inc. is a wholly owned subsidiary of
Clark-Schwebel Holdings, Inc. and its separate financial statements are not
included or filed separately because management has determined that they would
not be material to investors since they are not significantly different from the
financial statements of Clark-Schwebel Holdings, Inc. The balance sheet
information is as of September 27, 1997 and the income statement information is
for the nine months ended September 27, 1997.

<TABLE>
<CAPTION>
                                               1997
                                             --------
                                            (Successor)
<S>                                          <C>     
Current assets ..................            $ 70,449
Noncurrent assets ...............             170,851
                                             --------
Total assets ....................            $241,300
                                             ========
Current liabilities .............            $ 46,733
Noncurrent liabilities ..........             180,816
Equity ..........................              13,751
                                             --------
Total liabilities and equity ....            $241,300
                                             ========
Net sales .......................            $180,406
Gross profit ....................              40,614
Income from continuing operations              14,112
Net income.......................              14,112
                                             ========
</TABLE>

       All assets of Clark-Schwebel, Inc. represent restricted net assets with
the exception of the foreign equity investments and distributions received from
the foreign equity investments. Except in limited circumstances, Clark-Schwebel,
Inc. is prohibited from transferring restricted net assets to Clark-Schwebel
Holdings, Inc. in the form of cash dividends, loans, or advances without the
consent of a third party lender. The amount of unrestricted net assets at
September 27, 1997 is $60,970, which represents the book value of the foreign
equity investments ($57,499) and distributions received in the form of cash from
the foreign equity investments ($3,471).

                                       7
<PAGE>   8

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X of the Securities and Exchange Commission (SEC).
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
All significant intercompany balances and transactions have been eliminated. The
balance sheet at December 28, 1996 has been derived from the audited financial
statements at that date. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Results of operations for interim periods are
not necessarily indicative of results for the entire year. For further
information, refer to the Company's consolidated financial statements and
footnotes for the year ended December 28, 1996 included in the Company's Form
10-K for the year then ended.


2. CHANGE IN OWNERSHIP TRANSACTION

      On February 24, 1996, the Company, Springs and affiliates of Vestar Equity
Partners, L.P. (Vestar), entered into an Agreement and Plan of Merger
(Agreement) whereby an affiliate of Vestar would acquire the Company (the
"Acquisition"). Pursuant to the Agreement, on April 17, 1996 (Closing Date),
Vestar/CS Holding Company, LLC (Vestar/CS) purchased all of the issued and
outstanding capital stock of Fort Mill A Inc. from Springs for approximately
$192,895. The sources of cash for this purchase included $110,000 of senior
notes, an equity contribution of $45,000 and bank debt. On the day following the
Closing Date, Vestar/CS had an 82% common equity interest and management
investors had an 18% common equity interest in the Company.

     Under the Agreement, Springs agreed to (i) assume responsibility for
repayment of the Industrial Revenue Bonds payable in 2010 and related accrued
interest, (ii) pay $959 in certain accrued employee benefits, (iii) provide
indemnification for certain environmental, tax and other matters, (iv) retain
the accounts receivable from one customer (which totaled $2,782 as of December
30, 1995) and related $1,400 reserve, and (v) retain the $99 accrued obligation
related to the Company's Long-term Disability Plan. At the Closing Date, all
payable and receivable accounts between the Company and Springs were canceled.

         The acquisition was accounted for as a purchase business combination.
The adjustment to net assets represents the step-up to fair value of the net
assets acquired as follows:


<TABLE>
<CAPTION>

         <S>                                                                     <C>      
         Purchase price ................................................         $ 192,895
         Nonfinancing portion of fees and expenses .....................             2,780
         Total purchase price ..........................................           195,675
         Less fair value of net assets acquired ........................          (150,547)
                                                                                 ---------
         Excess of purchase price over fair value of net assets acquired         $  45,128
                                                                                 =========
</TABLE>


     The fair values of Clark-Schwebel, Inc.'s assets and liabilities at the
date of acquisition are presented below:

<TABLE>
<CAPTION>
         <S>                                   <C>      
         Current  assets .............         $  68,410
         Property, plant and equipment            66,391
         Equity investments ..........            62,314
         Current liabilities .........           (20,282)
         Other liabilities ...........           (26,286)
                                               ---------
         Net assets acquired .........         $ 150,547
                                               =========
</TABLE>


                                       8
<PAGE>   9

     Following the acquisition, the purchase cost (including the fees and
expenses related thereto) was allocated to the tangible and intangible assets
and liabilities of the Company based upon their respective fair values. This
resulted in a step-up in the basis of inventory of $5,274 and property, plant
and equipment of $15,000. The excess of the purchase price over the fair value
of net assets acquired of $45,128 was recorded as goodwill, and is being
amortized on a straight-line basis over a period of 40 years.

         Additional agreements include Transition Agreements for specified
periods in which Springs would be compensated for certain services provided to
the Company, and a Management Agreement that specifies services to be provided
to the Company by an affiliate of Vestar.

     In accordance with agreements related to the change of ownership
transaction, certain assets totaling $4,461 were transferred to Springs in the
first quarter of 1996. This balance has been separately disclosed on the face of
the accompanying 1996 statements of cash flows.


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Following is a summary of the significant accounting policies used in
the preparation of the financial statements of the Company.

         BASIS OF CONSOLIDATION - The consolidated financial statements include
the accounts of the Company and its operating company and wholly-owned
subsidiary, Clark-Schwebel, Inc. All material intercompany amounts and
transactions have been eliminated.

         FISCAL YEAR - The Company's operations are based on a fifty-two or
fifty-three week fiscal year ending on the Saturday closest to December 31.
Accordingly, the interim periods will also be reported on the Saturday closest
to the calendar quarter end. The fiscal year ended January 3, 1998 is referrred
to herein as 1997. The fiscal year ended December 28, 1996 is referred to herein
as 1996. The 1996 fiscal year consisted of 52 weeks, while the 1997 fiscal year
will consist of 53 weeks.

         USE OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. These estimates include the allowance for doubtful
accounts receivable and the liabilities for certain long-term benefit plans.
Actual results could differ from such estimates.

         REVENUE RECOGNITION - Revenue from product sales is recognized at the
time ownership of the goods transfers to the customer and the earnings process
is complete. This generally occurs when the goods are shipped.

         CASH AND CASH EQUIVALENTS - Cash and cash equivalents include cash on
hand and in the bank as well as short term investments held for the purpose of
general liquidity. Such investments normally mature within three months from the
date of acquisition.

         ACCOUNTS RECEIVABLE - The Company establishes an allowance for doubtful
accounts based upon factors including the credit risk of specific customers,
historical trends and other information. The Company performs ongoing credit
evaluations of its customers' financial condition and generally requires no
collateral.

         INVENTORIES - Inventories are valued at the lower of cost or market.
Cost is determined using the last-in, first-out (LIFO) method for substantially
all inventories.

                                       9
<PAGE>   10


         PROPERTY, PLANT, AND EQUIPMENT - Property, plant, and equipment is
recorded at cost and depreciation is computed on a straight-line basis over the
estimated useful lives of the related assets. Estimated useful lives are as
follows:

         Land improvements ...................................... 10 to 20 years
         Buildings and improvements.............................. 20 to 40 years
         Machinery and equipment ................................  3 to 11 years

         EQUITY INVESTMENTS - The company owns equity interests in CS-Interglas
AG (headquartered in Germany), Asahi-Schwebel Co., Ltd. (headquartered in Japan)
and Clark Schwebel Tech-Fab Company (located in Anderson, SC), which are
accounted for using the equity method of accounting.

         FOREIGN CURRENCY - The foreign equity investments are translated at
year-end exchange rates. Equity income and losses are translated at the average
rate during the year. Cumulative translation adjustments are reflected as a
separate component of stockholders' equity.

         POSTRETIREMENT BENEFITS - Postretirement benefits are accounted for
pursuant to Statement of Financial Accounting Standards ("SFAS") No. 106,
Employers Accounting for Postretirement Benefits Other Than Pensions. SFAS No.
106 requires that the projected future cost of providing postretirement
benefits, such as health care and life insurance, be recognized as an expense as
employees render service rather than when claims are incurred.

         INCOME TAXES - Income taxes are accounted for pursuant to SFAS 109,
Accounting for Income Taxes. Under SFAS No. 109, deferred income tax assets and
liabilities represent the future income tax effect of temporary differences
between the book and tax bases of assets and liabilities assuming they will be
realized and settled at the amounts reported in the financial statements. The
provision for income taxes included in the accompanying financial statements is
computed in a manner consistent with SFAS No. 109.


4. LONG-TERM DEBT

        Long-term debt consisted of the following:
<TABLE>
<CAPTION>
                                                                             December 28,     September 27,
                                                                                 1996             1997
                                                                             ------------     -------------
<S>                                                                          <C>              <C>     
         Senior Notes, payable in 2006, interest at 10.5% ..........          $110,000          $110,000
         Senior Debentures, payable in 2007, interest at 12.5% .....                 0            45,994
         Term Loan payable in quarterly installments; paid
              in July 1997 .........................................            13,440                 0
         Revolving Credit Agreement, due 2002, interest at variable
             rates .................................................                 0                 0
         Capitalized lease obligation payable in equal monthly
             installments of $7, through June 1997 .................                51                 0
                                                                              --------          --------
         Total .....................................................           123,491           155,994
         Less current maturities ...................................               (51)                0
                                                                              --------          --------

         Long-term debt ............................................          $123,440          $155,994
                                                                              ========          ========
</TABLE>


       The Senior Notes accrue interest at a fixed rate of 10.5% per annum, with
interest payable semiannually in arrears on April 15 and October 15. The Senior
Notes are not redeemable at the option of the Company prior to April 15, 2001,
except in the event of a public equity offering of the Company, at which time a
portion of the Senior Notes would be redeemable.

       The Senior Debentures accrue interest at a fixed rate of 12.5% per annum
with interest payable semiannually in arrears on January 15 and July 15 to the
extent permitted by the Credit Agreement and the indenture governing the Senior
Notes. If the Company is unable to pay interest in cash due to the 

                                       10
<PAGE>   11

prohibitions contained in the Credit Agreement or such indenture, interest on
the Senior Debentures would be payable in additional Senior Debentures. The
Senior Debentures will not be redeemable at the Company's option prior to July
15, 2002, except in the event of a public equity offering of the Company, or a
change of control or subsidiary change of control after January 15, 1998.

       On July 14, 1997, the Company prepaid all of its outstanding indebtedness
under the Term Loan and amended the Credit Agreement to provide, among other
things, that the Company may, subject to certain conditions, pay cash dividends
on the Preferred Stock, pay up to $5 million in cash and issue Senior Debentures
in a redemption of the Preferred Stock, and make semi-annual interest payments
in cash on the Senior Debentures (see Note 6). The Revolving Credit Facility
under the Credit Agreement was also amended to increase the aggregate amount of
commitments thereunder to $65 million.

       The Company pays a quarterly commitment fee equal to 0.25% on the unused
portion of the Revolving Credit Facility which was $65 million at September 27,
1997.

       The Revolving Credit Facility, the Senior Notes, and the Senior
Debentures contain certain restrictive covenants which provide limitations on
the company with respect to restricted payments, indebtedness, liens,
investments, dividends, distributions, transactions with affiliates, debt
repayments, capital expenditures, mergers, and consolidations. The bank facility
and Senior Note covenants also require maintenance of certain financial ratios.
At September 27, 1997, the Company was in compliance with such covenants. With
the exception of the Senior Debentures, which are obligations of Clark-Schwebel
Holdings, Inc., all other debt is held at the Clark-Schwebel, Inc., operating
company level.

       No principal payments are required on any long-term debt in the next five
years due to the payment of the term loan in July 1997.


5. INVENTORIES

        Inventories consisted of the following:
<TABLE>
<CAPTION>
                                                                         December 28,     September 27,
                                                                             1996             1997
                                                                          --------          --------
<S>                                                                       <C>               <C>     
         Finished goods .........................................         $  9,264          $  9,519
         Raw material and supplies ..............................            9,254            14,493
         In process .............................................           15,215            13,937
                                                                          --------          --------
         Total at standard cost (which approximates average cost)           33,733            37,949
         Less LIFO reserve ......................................           (1,100)           (1,140)
                                                                          --------          --------
         Inventories, net .......................................         $ 32,633          $ 36,809
                                                                          ========          ========
</TABLE>


6. PREFERRED STOCK REDEMPTION AND ISSUANCE OF SENIOR DEBENTURES

        On July 14, 1997, the Company amended the terms of its outstanding
participating preferred stock (the "Preferred Stock") by amending and restating
its certificate of incorporation (the "Certificate") to allow the Company to
redeem such Preferred Stock. On August 14, 1997 the Company issued $46.0 million
in 12.5% Senior Debentures due 2007 (the "Senior Debentures") and paid $5
million in cash in exchange for and redemption of the Preferred Stock. The $51.0
million redemption price was established as follows:

         Book value of Preferred Stock.....................     $35.0
         Accrued Preferred Stock dividends.................       6.0
         Common equity component of Preferred Stock........      10.0
                                                                -----
             Total                                              $51.0
                                                                =====

                                       11


<PAGE>   12

       Vestar/CS-Holding paid $1.0 million for the common equity component of
the Preferred Stock at the time of the Acquisition. The common equity component
was purchased for $10.0 million on the redemption date.

       Vestar/CS-Holding sold the Preferred Stock on July 14, 1997 and
simultaneously purchased 10% of the outstanding Common Stock of the Company from
the management investors on a pro rata basis. Upon the consummation of that
transaction, all of the Company's outstanding loans to management were repaid in
full.

       The overall net impact of the Preferred Stock redemption and issuance of
Senior Debentures was a reduction of equity by $44.2 million, an increase in
debt by $46.0 million, a reduction of liabilities by $6.0 million, and a
decrease in cash by $4.2 million.


7. SUBSEQUENT EVENT

       On October 1, 1997, the Company purchased an additional 4.3% common
equity interest in Asahi-Schwebel Co., Ltd. ("ASCO"). A total of 56,160
additional shares were purchased for $2.7 million, with funds from existing cash
and short-term investments. After the completion of this transaction, the
Company's ownership percentage in this equity investment increased to 43.3%.
ASCO manufactures fiber glass fabric in Japan and has a majority interest in a
fiber glass manufacturer located in Taiwan. This equity investment will continue
to be accounted for on the equity method of accounting, in accordance with
generally accepted accounting principles.

                                       12
<PAGE>   13



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

         The following information should be read in conjunction with the
consolidated financial statements and the notes thereto. The accompanying
analysis compares the results of operations of Clark-Schwebel Holdings, Inc.,
the successor company ("Company"), for the three months ended September 27, 1997
to the three months ended September 28, 1996. The accompanying analysis also
compares the results of operations of the Company for the nine months ended
September 27, 1997 to the nine months ended September 28, 1996. The results of
operations for the nine months ended September 28, 1996 represent the combined
results of Fort Mill A Inc., the predecessor company ("Predecessor Company"),
for the period of December 31, 1995 through April 17, 1996, and the successor
Company for the period of April 18, 1996 through September 28, 1996, in order to
establish comparative periods. No pro forma adjustments were made to the
financial statements for purposes of this analysis due to the insignificance of
the adjustments on operating income. Interest expense for the nine-month periods
is generally not comparable, and the impact of interest expense on the successor
Company is discussed below.

GENERAL

         Third quarter 1997 results reflected improvement in both sales and
operating income when compared to the same period in 1996. Sales of both fiber
glass and high performance fabrics were up from the same period a year ago.
Operating income 

                                       13

<PAGE>   14

increased as a result of the overall higher volume, favorable sales mix and
lower variable costs achieved through improved operating efficiencies.

RESULTS OF OPERATIONS

THIRD QUARTER 1997 COMPARED TO THIRD QUARTER 1996


NET SALES

         Net sales for the third quarter of 1997 increased $9.1 million, or
19.1%, to $57.1 million from $48.0 million in 1996. Overall fiber glass sales
were up by $7.4 million, or 17.8%, while high performance sales were up by $1.7
million, or 27.8%. Sales of electronic fiber glass increased by 31.1%, while
sales of composite material fiber glass decreased by 12.5%, when compared to
1996. Electronic fiber glass sales, while at expected levels for the third
quarter of 1997, were much higher than a year ago when demand declined due to a
temporary inventory correction in the industry supply chain. Composite material
fiber glass sales declined primarily due to a reduction in sales volume related
to coating and laminating and filtration products. High performance sales in the
third quarter of 1997 improved significantly from third quarter 1996 as a result
of higher sales to the military ballistics market.

GROSS PROFIT

         Gross profit for the third quarter of 1997 increased $3.2 million, or
32.7%, to $13.2 million from $9.9 million in 1996. Gross profit as a percentage
of net sales improved to 23.1% in 1997 from 20.7% in 1996. The improvement in
gross profit 

                                       14

<PAGE>   15

resulted primarily from higher sales in 1997 compared to 1996, a shift in sales
mix weighted more towards higher margin fiber glass fabrics, and the favorable
impact of improved manufacturing efficiencies.

SG&A

         Selling, general, and administrative expenses for the third quarter of
1997 increased $0.7 million, or 20.3%, to $4.1 million from $3.4 million in
1996. However, as a percentage of net sales, SG&A expenses remained flat at 7.2%
for both the third quarters of 1997 and 1996. The increase in SG&A expenses in
the third quarter of 1997 compared to 1996 is primarily attributable to fees and
expenses related to the transaction in which the Company's preferred stock was
redeemed and exchanged for senior debentures, as well as increases in variable
SG&A expenses related to increased sales volume.

OPERATING INCOME

         Operating income increased $2.5 million to $9.0 million in the third
quarter of 1997 from $6.5 million in the same period a year ago. As a percentage
of net sales, operating income was 15.8%, up from 13.5% in 1996. The increases
in sales and gross profit led to the increase in operating income.

INTEREST EXPENSE

         Interest expense incurred by the Company increased to $3.7 million for
the third quarter of 1997 compared to $3.5 million in 1996. This increase is
primarily attributable 

                                       15
<PAGE>   16


to the additional $46.0 of indebtedness incurred on August 14, 1997 related to
the issuance of the senior debentures.

INCOME FROM EQUITY INVESTEES, NET

         Income from equity investees, net, increased by $0.4 million to $1.2
million from $0.8 million in the third quarter of 1996. Increases in the
operating results reported by Asahi-Schwebel and CS-Interglas caused the
increase in equity income. CS-Interglas reported stronger demand relative to the
third quarter a year ago, while sales volume reported by Asahi-Schwebel
continued strong and was also higher than a year ago. Results for CS-Tech Fab
were flat compared to last year.

The equity investment balance as of September 27, 1997 decreased by $2.0 million
from the December 28, 1996 balance sheet. The decline resulted from a
strengthening U.S. dollar relative to the German mark (the functional currency
for CS-Interglas) and the Japanese yen (the functional currency for
Asahi-Schwebel), net of additional equity income recorded in 1997. In addition,
in July 1997, the Company received a dividend distribution from Asahi-Schwebel
in the amount of $1.6 million. Neither the change in the equity investment
balance related to the strengthening dollar nor the receipt of the dividend had
any impact on results of operations in the third quarter or the first nine
months of 1997.

                                       16


<PAGE>   17

NET INCOME

         The $2.5 million increase in operating income reported in the third
quarter of 1997 led to a $0.9 million increase in the provision for taxes. After
considering the $0.4 million increase in income from equity investees and the
small increase in interest expense, the overall net effect was a $1.9 million
increase in third quarter net income when compared to the same period last year.

FIRST NINE MONTHS OF 1997 COMPARED TO THE FIRST NINE MONTHS OF 1996

RESULTS OF OPERATIONS

         The following table sets forth for the Company selected income
statement data for the periods indicated.
<TABLE>
<CAPTION>
                                                    Period from         Period from        Combined nine          Nine month
                                                    December 31,          April 18-         month period         period ended
                                                       1995-            September 28,     from December 31,   December 29, 1996-
                                                   April 17, 1996           1996           1995-September     September 27, 1997
                                                (Predecessor Basis)   (Successor Basis)       28, 1996         (Successor Basis)
                                                -------------------   -----------------   -----------------   ------------------
                                                                             (Dollars in thousands)
<S>                                             <C>                   <C>                 <C>                 <C>
Net sales                                             $68,911              $95,289            $164,200             $180,406
Cost of goods sold                                     54,958               75,782             130,740              139,792
                                                      -------              -------            --------             --------
Gross profit                                           13,953               19,507              33,460               40,614
Selling, general and administrative expenses            4,812                6,450              11,262               11,851
                                                      -------              -------            --------             --------
Operating income                                        9,141               13,057              22,198               28,763
Interest expense                                         (148)              (6,682)             (6,830)             (10,124)
Other income (expense), net                                (5)                  53                  48                   (1)
Provision for income tax                               (3,595)              (2,779)             (6,374)              (7,695)
Income from equity investees, net                       1,174                1,748               2,922                2,785
                                                      -------              -------            --------             --------
Income from continuing operations                     $ 6,567              $ 5,397            $ 11,964             $ 13,728 
                                                      =======              =======            ========             ========


PERCENTAGE OF NET SALES

Net sales                                               100.0%               100.0%              100.0%               100.0%
Cost of goods sold                                       79.7                 79.5                79.6                 77.5
                                                      -------              -------            --------             --------
Gross profit                                             20.3                 20.5                20.4                 22.5
Selling, general and administrative expenses             7.0                  6.8                 6.9                  6.6
                                                      -------              -------            --------             --------
Operating income                                         13.3                 13.7                13.5                 15.9
Interest expense                                         (0.2)                (7.0)               (4.1)                (5.6)
Other income (expense), net                               --                   0.1                 --                   --
Provision for income tax                                 (5.2)                (2.9)               (3.9)                (4.2)
Income (loss) from equity investees, net                  1.7                  1.8                 1.8                  1.5
                                                      -------              -------            --------             --------
Income from continuing operations                         9.6%                 5.7%                7.3%                 7.6%
                                                      =======              =======            ========             ========
</TABLE>


                                       17

<PAGE>   18

NET SALES

         Net sales for the nine months ended September 27, 1997 increased $16.2
million, or 9.9%, to $180.4 million from $164.2 million in 1996. Overall fiber
glass sales were up by $13.5 million, or 9.8%, while high performance sales were
up by $2.7 million, or 10.3%. Sales of electronic fiber glass increased 12.3%,
while sales of composite material fiber glass increased by 2.3% when compared to
the first nine months in 1996. Electronic fiber glass sales increased compared
to 1996 due to the decline in demand experienced in the third quarter of 1996
resulting from a temporary inventory correction in the industry supply chain.
Higher demand for light weight fiber glass fabric accounted for most of the
increased sales of electronic fiber glass.

GROSS PROFIT

         Gross profit for the first nine months of 1997 increased $7.1 million,
or 21.4%, to $40.6 million from $33.5 million in 1996. Gross profit as a
percentage of net sales improved to 22.5% in 1997 from 20.4% in 1996. The
improvement in gross profit resulted primarily from higher sales in 1997
compared to 1996, a shift in sales mix weighted more towards higher margin fiber
glass fabrics, and the favorable impact of improved manufacturing efficiencies.

SG&A

         Selling, general, and administrative expenses for the first nine months
of 1997 increased $0.6 million, or 5.2%, to $11.9 million from $11.3 million in
1996. This increase is attributable to the increase in SG&A expenses incurred in
the third quarter of 

                                       18


<PAGE>   19

1997, as previously noted. However, as a percentage of net sales, SG&A expenses
decreased to 6.6% in 1997 from 6.9% in 1996.

OPERATING INCOME

         As a result of the above factors, operating income for the first nine
months of 1997 increased by $6.5 million, or 29.6%, to $28.7 million from $22.2
million in 1996. As a percentage of net sales, operating income increased to
15.9% in the first nine months of 1997 from 13.5% in 1996.

INTEREST EXPENSE

         Interest expense is not fully comparable to the prior period because of
the financing related to the Acquisition of the Company from Springs. Interest
expense incurred by the Company in the first nine months of 1997 was $10.1
million, attributable primarily to interest expense related to the Senior Notes.

INCOME FROM EQUITY INVESTEES, NET

         Income from equity investees, net, decreased by $0.1 million to $2.8
million in the first nine months of 1997 from $2.9 million in 1996. A decrease
in the operating results reported by CS-Interglas primarily caused the decrease
in equity income. Despite improved operating results in the third quarter of
1997, weaker demand relative to a year ago (particularly in the first quarter of
1997) in Europe for electronic fiber glass fabric led to the decrease in
operating results reported by CS-Interglas. Results reported by Asahi-

                                       19

<PAGE>   20

Schwebel were higher and results for CS-Tech Fab were slightly lower than last
year's comparable results.

NET INCOME

         The significant improvement in operating income ($6.5 million) was
partially offset by the increase in interest expense ($3.3 million), higher
income tax expense ($1.3 million), and lower income from equity investees, net
($0.1 million), as net income for the first nine months of 1997 increased by
$1.7 million to $13.7 million from $12.0 million in the first nine months of
1996.

LIQUIDITY AND CAPITAL RESOURCES

THE ACQUISITION

         On April 17, 1996, the Company was purchased from Springs for
approximately $192.9 million, funded by a combination of equity and debt. Equity
of $45.0 million was provided by Vestar/CS-Holding and management investors in
exchange for all of the capital stock of the Company. Debt of $160.0 million was
used to finance the acquisition. This debt consisted of the following: $110.0
million of Senior Notes, $15.0 million of loans under a Term Loan under the
Credit Agreement, and $35.0 million of loans under a Revolving Credit Facility
under the Credit Agreement.

TRANSACTIONS RELATED TO THE PREFERRED STOCK REDEMPTION

         On July 14, 1997, the Company amended the terms of its outstanding
participating preferred stock (the "Preferred Stock") by amending and restating
its 

                                       20

<PAGE>   21

certificate of incorporation to allow the Company to redeem such Preferred
Stock. In addition, on July 14, 1997, the Company prepaid all of its outstanding
indebtedness under the Term Loan and amended the Credit Agreement to provide,
among other things, that the Company may, subject to certain conditions, pay
cash dividends on the Preferred Stock, pay up to $5.0 million in cash and issue
Senior Debentures in a redemption of the Preferred Stock, and make semi-annual
interest payments in cash on the Senior Debentures. The Revolving Credit
Facility under the Credit Agreement was also amended to increase the aggregate
amount of commitments thereunder to $65.0 million. Vestar/CS-Holding sold the
Preferred Stock on July 14, 1997 and simultaneously purchased 10% of the
outstanding Common Stock of the Company from the management investors on a pro
rata basis. Upon the consummation of that transaction, all of the Company's
outstanding loans to management were repaid in full. On August 14, 1997 the
Company issued $46.0 million in 12.5% Senior Debentures due 2007 (the "Senior
Debentures") and paid $5.0 million in cash in exchange for and redemption of the
Preferred Stock and all accrued but unpaid dividends on the Preferred Stock.

The Senior Debentures are subject to an indenture containing terms similar to
those contained in the indenture governing the Senior Notes and the holders
thereof are entitled to certain registration rights. Interest on the Senior
Debentures is payable in cash semi-annually in arrears on January 15 and July 15
to the extent permitted by the Credit Agreement and the indenture governing the
Senior Notes. If the Company is unable to pay interest in cash due to the
prohibitions contained in the Credit Agreement or such indenture, interest on
the Senior Debentures would be payable in additional Senior 

                                       21

<PAGE>   22

Debentures. The Senior Debentures will not be redeemable at the Company's option
prior to July 15, 2002, except in the event of a public equity offering the
Company, or a change of control or subsidiary change of control after January
15, 1998.

The Revolving Credit Facility matures in April 2002. Substantially all of the
assets of Clark-Schwebel Inc., (the "Operating Company"), are subject to liens
in favor of the Credit Agreement lenders. Other than upon a change of control or
as a result of certain asset sales, the Operating Company will not be required
to make any principal payments in respect of the Senior Notes until maturity in
April 2006. The Operating Company is required to make semi-annual interest
payments on April 15 and October 15 with respect to the Senior Notes. Depending
on market conditions and the Company's financial position, the Operating Company
may from time to time make open market purchases of Senior Notes. Any such
purchases would be subject to the Operating Company satisfying restrictive
covenants and financial ratio tests under the Credit Agreement.

NINE MONTHS 1997 COMPARED TO NINE MONTHS 1996

         Cash provided by operating activities in the first nine months of 1997
was $24.3 million, compared with $44.5 million provided in the same period a
year ago. Despite improved profitability in 1997 compared to 1996, cash provided
by operating activities declined because cash generated from working capital was
less than the comparable period in 1996. The Company spent $5.9 million on
capital additions during the first nine months of 1997. The Company anticipates
capital expenditures will approximate $10.0 million for fiscal 1997. As of
September 27, 1997 the Company had cash and cash 

                                       22

<PAGE>   23

equivalents of approximately $7.9 million. In addition, the Company had $65.0
million of undrawn availability under the Revolving Credit Facility. The Company
ended the quarter with debt, net of cash, of $148.1 million, consisting of
$110.0 million in Senior Notes, $46.0 in Senior Debentures, and $7.9 million in
cash and cash equivalents.

To meet its liquidity needs, the Company has relied and expects to continue to
rely on internally generated funds and, to the extent necessary, on undrawn
commitments available under the Revolving Credit Facility. The Company believes
that cash generated from operations and borrowing resources will be sufficient
to fund the Company's cash needs for the foreseeable future.

RECENT DEVELOPMENTS

         On October 1, 1997, the Company purchased an additional 4.3% common
equity interest in Asahi-Schwebel Co., Ltd. ("ASCO"). A total of 56,160 shares
were purchased for $2.7 million, with funds from existing cash and short-term
investments. After the completion of this transaction, the Company's ownership
percentage in this equity investment increased to 43.3%. ASCO manufactures fiber
glass fabric in Japan and has a majority interest in a fiber glass manufacturer
located in Taiwan. This equity investment will continue to be accounted for on
the equity method of accounting.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Not applicable.

                                       23
<PAGE>   24

                                     PART II
                                OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

       (a)        Exhibits.

                  Exhibit 4.1 - Indenture dated as of August 14, 1997
                                between Clark-Schwebel Holdings, Inc. and
                                State Street Bank and Trust Company with
                                respect to 12.5% Senior Debentures due 2007;
                                Incorporated by reference to Exhibit 4.1 to
                                the Company's Registration Statement on Form
                                S-4, Registration No. 333-36491, filed on
                                September 26, 1997.

                  Exhibit 27 -  Financial Data Schedule
                                (electronic filing only)

       (b)        Reports on Form 8-K.

                  No report was filed during the quarter ended September 27,
                  1997 on Form 8-K.


                                       24
<PAGE>   25

                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                         CLARK-SCHWEBEL HOLDINGS, INC.
                                         ---------------------------------------
                                                 (Registrant)


Date  November 7, 1997                   /s/  William D. Bennison
     --------------------                ---------------------------------------
                                         Name:  William D. Bennison
                                         Title:   President

Date  November 7, 1997                   /s/  Donald R. Burnette
     --------------------                ---------------------------------------
                                         Name: Donald R. Burnette
                                         Title:  Vice President and Chief 
                                                  Financial Officer



                                       25
<PAGE>   26

                                  EXHIBIT INDEX


EXHIBIT 4.1 -     Indenture dated as of August 14, 1997 between Clark-Schwebel
                  Holdings, Inc. and State Street Bank and Trust Company with
                  respect to 12.5% Senior Debentures due 2007; Incorporated by
                  reference to Exhibit 4.1 to the Company's Registration
                  Statement on Form S-4, Registration No. 333-36491, filed on
                  September 26, 1997.


EXHIBIT 27        FINANCIAL DATA SCHEDULE
                  (electronic filing only)