AF & Y Signs Distribution Agreement Sells Yarns

American Fibers and Yarns Co. (AF and Y), Chapel Hill, N.C., has increased the size of its European
distribution network by signing a reciprocal agreement with Spain-based Polisilk S.A. Under terms
of the agreement, Polisilk has hired a representative to market and sell AF and Y yarns in Europe,
and AF and Y will sell Polisilk yarns in the United States.

“Our product lines complement each other nicely,” said Jim Morelli, executive vice president,
AF and Y. “[W]ere very confident the Polisilk yarns will give us significant advantages as we
expand our offerings in the industrial marketplace.”

In other AF and Y news, its Innova® brand apparel yarns have been selected by Textiles
Internacionales Riza S.A. de C.V., Mexico, for use in a new line of junior sweaters.

March 2004