Shuford Mills To Form Separate Yarn Company

Shuford Mills LLC, Hickory, N.C., has
announced it plans to spin off its yarn operations by establishing Shuford Yarns LLC to take over
its yarn business, which produces and distributes coarse-count cotton and polyester yarns for
home-furnishing and industrial applications. Shuford Mills will own a 25-percent share, and members
of a new management team that includes Shuford Mills President Allen Barwick will own a 75-percent
share in the new company, which expects to purchase Shuford Mills’ two yarn plants in Dudley
Shoals, N.C., and Longview, N.C., on June 30, 2006.

Shuford’s weaving operations will retain the Shuford Mills name and will continue to operate
a plant in Hudson, N.C., which manufactures Outdura® outdoor fabrics as well as other fabrics for
industrial applications.

“All Shuford Mills stakeholders — most significantly, our vendors and customers — will
benefit greatly from this transaction,” said Pope Shuford, chairman, STM Industries Inc., parent
company of Shuford Mills. “Our experience has taught us that focus and discipline drive the
efficiencies that are required to remain competitive in the textile business. Establishing separate
yarn and weaving operations ensures that each company will maintain a keen focus on its unique
manufacturing processes and market opportunities.”

Barwick will serve as president of Shuford Yarns, which also will be headquartered in
Hickory. Shuford will serve as a member of the new company’s Board of Directors.

June 6, 2007