R.L. Stowe Mills Inc., a Belmont, N.C.-based manufacturer of cotton and cotton/man-made-blend yarn
used primarily in apparel, home furnishings and automotive textiles has received a $21 million
revolving credit facility from Glastonbury, Conn.-based Bank of America Business Capital. R.L.
Stowe will use the asset-based loan to refinance existing debt and fund its working capital needs.
The company also will receive cash management products and services from Bank of America Business
Capital.

“This new financing provides us with the liquidity to complete our debt restructuring,” said
D. Harding Stowe, CEO and president, R.L. Stowe Mills. “We now have the financial flexibility to
remain competitive during challenging times for the textile industry.”

R.L. Stowe maintains production facilities in North Carolina and Tennessee. Its operations
include spinning, twisting, dyeing and mercerizing.

June 2005

Spartan Fiber Inc., Spartanburg, has acquired Fort Mill, S.C.-based Springs Industries Inc.’s
Eureka Plant in Chester, S.C. Spartan, a supplier of cotton and man-made fiber, and waste fiber and
cloth, plans initially to use the facility for yarn storage and distribution, and is considering
setting up a yarn-manufacturing operation there in the future, said Gary Mahaffey, president and
owner. Spartan will lease part of the facility to the Good Samaritan Clinic, which provides care to
the medically underserved in the community using volunteer health professionals, and support from
the Springs Close Foundation to purchase supplies.

June 2005

While US textile lobbying organizations are unified over the issue of textile quotas and the threat
Chinese textile imports pose to the US industry, their positions differ when it comes to regional
free trade pacts such as the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA).

The agreement has the endorsement of a coalition of trade associations comprising the NCTO;
National Cotton Council (NCC), Memphis, Tenn.; American Fiber Manufacturers Association, Arlington,
Va.; American Textile Machinery Association, Falls Church, Va.; Carpet and Rug Institute, Dalton,
Ga.; and the Cary, N.C.-based Association of Nonwoven Fabrics Industry. The coalition of textile
manufacturers, fiber producers and suppliers to the US textile industry claims to represent more
than $100 billion in annual production and sales within the US textile sector.

On the other side of the trade divide stands another coalition that includes AMTAC; the
National Textile Association (NTA), Boston; UNITE HERE, New York City; and The Domestic
Manufacturers Committee of The Hosiery Association, Charlotte. This coalition claims to include the
nation’s two largest textile trade groups (AMTAC and NTA), as well as the largest textile and
apparel labor union, among other organizations.

NCTO, NCC, AMTAC and NTA also are members of GAFTT.

US textile exports to the DR-CAFTA region in 2004 totaled more than $5 billion in yarn,
fabric and component parts. The pro-DR-CAFTA coalition believes the pact will offer “new export
opportunities to every US producer interested in these markets.” It also hailed the Bush
administration’s commitment to amend provisions in the agreement regarding cumulation, trade
preference levels and the rule of origin for nonvisible pocketings and linings.

The anti-DR-CAFTA contingent calls the agreement “a job killer just like NAFTA [North
American Free Trade Agreement],” charging that it will lead to further outsourcing of US
manufacturing jobs. It notes US textile and apparel manufacturing employment has shrunk by 890,000
jobs or 57.2 percent since NAFTA went into effect in 1994, and that the value of US textile and
apparel shipments fell from $158 billion in 1995 to $114. billion in 2003.

June 2005

The US Committee for the Implementation of Textile Agreements (CITA), Washington, has imposed
safeguards on seven categories of US textile and apparel imports from China and reinstated the
public comment period for five others under consideration. The action follows a Federal Court of
Appeals stay of the Court of International Trade’s injunction last December that halted
consideration of safeguard petitions based on the threat of market disruption.

The safeguards were imposed on cotton and man-made fiber knit shirts and blouses, trousers,
underwear, and men’s and boys’ woven shirts; and combed cotton yarn. CITA’s action limits further
growth this year of Chinese exports of these products to 7.5 percent. CITA and China now must
consult to negotiate growth limits. If no agreement is reached, the safeguards will remain in
effect until the end of this year, and must be reconsidered each year until 2008
(See ”
China
Textile Safeguard: Process Effect,” December 2004).

US imports from China in all 12 categories have grown exponentially since quotas were removed
January 1, thereby significantly increasing the bases for applying the quotas.

June 2005