<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>d10k.txt
<DESCRIPTION>SPEIZMAN INDUSTRIES
<TEXT>
<PAGE>

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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                            _________________________
                                    FORM 10-K

[X]      Annual Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 [Fee Required]


For the fiscal year ended June 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 No. 0-8544

                            SPEIZMAN INDUSTRIES, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)
<TABLE>
<S>                                                       <C>
                 Delaware                                                56-0901212
-----------------------------------------------------     -----------------------------------------
  (State or other jurisdiction of incorporation or           (I.R.S. Employer Identification No.)
                organization)

      701 Griffith Road, Charlotte, North Carolina                          28217
-----------------------------------------------------     ---------------------------------------------
        (Address of principal executives offices)                        (Zip Code)
</TABLE>

Registrant's telephone number, including area code:  (704) 559-5777

Securities registered pursuant to Section 12(b) of the Act:

                                      None
                                      ----

Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.10 Par Value
                          ----------------------------
                                (Title of Class)

        Indicate by check mark whether the registrant (1) has filed all reports
required 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 filing such
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 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 of this Form 10-K. [X]

        The aggregate market value of the voting stock held by non-affiliates
of the registrant as of September 21, 2001, was $3,255,428 based on the last
sale price of $1.00 per share reported by the NASDAQ National Market System on
that date.

        As of September 21, 2001, there were 3,255,428 shares of the
registrant's Common Stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

        Portions of the registrant's Proxy Statement for its Annual Meeting of
Stockholders to be held on November 13, 2001 are incorporated herein by
reference into Part III.

<PAGE>

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

     This Annual Report on Form 10-K and the documents incorporated herein by
reference contain forward-looking statements that have been made pursuant to the
provisions of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are based on current expectations, estimates, and
projections about Speizman's industry, management beliefs, and certain
assumptions made by Speizman's management. Words such as "anticipates,"
"expects," "intends," "plans," "believes, "seeks," "estimates," variations of
such words, and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties, and assumptions
that are difficult to predict; therefore, actual results may differ materially
from those expressed or forecasted in any such forward-looking statements. Such
risks and uncertainties include those set forth herein under "Risk Factors" on
pages 7 through 9. Unless required by law, the Company undertakes no obligation
to update publicly any forward-looking statements, whether as a result of new
information, future events, or otherwise. However, readers should carefully
review the risk factors set forth in other reports and documents that the
Company files from time to time with the Securities and Exchange Commission,
particularly the Quarterly Reports on Form 10-Q and any Current Reports on Form
8-K.

                                     PART I

Item 1. Business.

General

    Speizman Industries, Inc. is a major distributor of specialized industrial
machinery, parts and equipment. The Company operates primarily in two segments,
textile equipment and laundry equipment and services. In the textile segment the
Company distributes sock knitting machines, other knitting equipment, automated
boarding, finishing and packaging equipment used in the sock industry, and
related parts. In the laundry equipment and services segment, the Company sells
commercial and industrial laundry equipment, including the distribution of
machines and parts as well as providing installation and after sales service.
The Company refers to its operations in the textile segment as Speizman
Industries, and the laundry equipment and services segment as Wink Davis
Equipment Co., Inc. ("Wink Davis").

    All references herein are to the Company's 52-or-53 week fiscal year ending
on the Saturday closest to June 30. The fiscal years 1998, 2000 and 2001
contained 52 weeks and ended on June 27, 1998, July 1, 2000 and June 30, 2001,
respectively. Fiscal 1999 contained 53 weeks and ended on July 3, 1999.

Speizman Industries

    Speizman Industries is a leading distributor in North America of automated
solutions for the sock industry. These solutions primarily include
technologically advanced new equipment used in the knitting, seaming, finishing,
boarding, and packaging operations for a sock manufacturer.

    The technologically advanced sock knitting machines distributed by Speizman
Industries are manufactured by Lonati, S.p.A., Brescia, Italy ("Lonati"), which
the Company believes is the world's largest manufacturer of hosiery knitting
equipment. Speizman Industries and Lonati amended their agreement for the sale
of Lonati machines in the United States in March 2001 (the "Lonati Agreement").
Speizman and Lonati also entered into a similar agreement relating to Speizman
Industries' distribution of Lonati sock and sheer hosiery knitting machines in
Canada in January 1992 and in Mexico in 1997. Speizman Industries has
distributed Lonati double cylinder machines in the United States continuously
since 1982. Speizman began distributing Lonati single cylinder open toe knitting
machines in 1989. Its current product line includes newer technology represented
by its single cylinder closed toe knitting machine, which eliminates the steps
associated for a sock manufacturer in sewing the toe on a sock.

     Pursuant to the Lonati Agreement, Lonati has appointed Speizman Industries
as Lonati's distributor and exclusive agent in the United States for the sale of
its range of single (both open and closed toe versions) and double cylinder sock
knitting machines and related spare parts. Although the Lonati Agreement does
not establish Speizman Industries as the exclusive distributor of Lonati sock
machines in the United States, Speizman in fact has exclusively distributed
Lonati double cylinder sock machines continuously since 1982 and Lonati single
cylinder sock knitting machines since 1989.

                                       1

<PAGE>

The Lonati Agreement continues through December 31, 2003 and continues from year
to year thereafter, and can be terminated on 90 days written notice in the event
of a breach.

    The Lonati Agreement contains certain covenants and conditions relating to
Speizman Industries' sale of Lonati machines, including, among others,
requirements that Speizman Industries, at its own expense, promote the sale of
Lonati machines and assist Lonati in maintaining its competitive position,
maintain an efficient sales staff, provide for the proper installation and
servicing of the machines, maintain an adequate inventory of parts and pay for
all costs of advertising the machines. Speizman is prohibited during the term of
the Lonati Agreement from distributing any machines that compete with Lonati
machines. Speizman believes that it is and will remain in compliance in all
material respects with such covenants. The cost to Speizman of Lonati machines,
as well as the delivery schedule of these machines, are totally at the
discretion of Lonati. The Lonati Agreement allows Lonati to sell machines
directly to the sock manufacturer with any resulting commission paid to Speizman
determined on a case by case basis.

    The Lonati single cylinder machines (both closed toe and open toe versions)
distributed by Speizman Industries are for the knitting of athletic socks. The
Lonati double cylinder machines are for the knitting of dress and casual socks.
The Lonati machines are electronic, high-speed, and have computerized controls.
Lonati single cylinder machines are capable of knitting pouch heel and toe,
reciprocated heel and toe and tube socks. These and other features allow the
rapid change of sock design, style and size, result in increased production
volume and efficiency and simplify the servicing of the machines. Lonati single
cylinder machines are also available in a closed toe version, which enables
hosiery manufacturers to automate their production processes by knitting in the
toe as opposed to manually seaming. This procedure not only results in a higher
quality product but manufacturers also benefit from lower costs. In addition to
the previously described machines distributed in the United States, Speizman
Industries distributes these sock knitting machines as well as Lonati sheer
hosiery knitting machines in Canada and Mexico.

    Speizman also distributes knitting machines, manufactured by Santoni,
S.p.A., Brescia, Italy ("Santoni"), one of Lonati's subsidiaries, in the United
States, Canada and Mexico. Santoni products include large diameter circular
knitting machines utilizing new technology in the production of seamless
undergarments, action wear and swimsuits. Sales by Speizman Industries in the
United States, Canada and Mexico of new machines manufactured by Lonati, S.p.A.,
generated the following percentages of the Company's net revenues: 26.2% in
fiscal year 2001, 21.2% in fiscal 2000, and 22.5% in fiscal 1999. In addition,
sales of Santoni machines in the United States, Canada and Mexico generated
4.2%, 32.3%, and 20.3% of the Company's net revenues in fiscal 2001, 2000 and
1999, respectively.

     In addition to the Lonati knitting machines, Speizman Industries
distributes new machines and equipment for the seaming, finishing, boarding, and
packaging operations under written agreements and arrangements with other
manufacturers. The following table sets forth certain information concerning
most of these additional distribution arrangements:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
          Manufacturer                                Machine                                    Territory
--------------------------------------------------------------------------------------------------------------------
  <S>                           <C>                                                     <C>
  Conti Complett, S.p.A.,       Sock toe closing or seaming machines and sock           United States, Canada and
     Milan, Italy               turning devices                                         Mexico

  Dinema,                       Data collection                                         United States and Canada
     Brescia, Italy

  Braun (Joint Marketing        Pocketed dye and extracting machines                    Worldwide
     Agreement with
     Martint Equipment)
     Syracuse, NY

  S.R.A. srl (SRA)              Automated loading, positioning, and finishing           United States and Canada
     Florence, Italy            devices

  Tecnopea                      Automated folding and packaging equipment               United States
     Brescia, Italy
--------------------------------------------------------------------------------------------------------------------
</TABLE>

                                        2

<PAGE>

    Commencing in January 2001 and in conjunction with licensing certain assets
of Todd Motion Controls, Inc. (TMC), a subsidiary of the Company, to SRA,
Speizman Industries retained exclusive rights to distribute TMC equipment in the
United States, Canada and Mexico that is manufactured by SRA. SRA has
distribution rights for TMC equipment outside the United States, Canada and
Mexico.

    Speizman sells textile machine parts and used textile equipment in the
United States and in a number of foreign countries. Speizman Industries carries
significant amounts of machinery and parts inventories to meet customers'
requirements and to assure itself of an adequate supply of used machinery.
Speizman Industries acts as a liquidator of textile mill equipment and as a
broker in the purchase and sale of such equipment.

Sales and Marketing

    Speizman Industries markets and sells knitting machines and related
equipment primarily by maintaining frequent contact with customers and
understanding of its customers' individual business needs. Speizman Industries
exhibits its equipment at trade shows and uses its private showroom to
demonstrate new machines to its customers. In some cases, salespersons will set
up competitive trials in a customer's plant and allow the customer to use
Speizman's machine in its own work environment alongside competing machines for
two weeks to three months. Speizman Industries also offers customers the
opportunity to send their employees to Speizman's facilities for training
courses on the operation and service of the machines and, depending on the
number of machines purchased and the number of employees to train, may offer
such training courses at the customer's facility. These marketing strategies are
complemented by Speizman's commitment to service and continuing education. At
September 10, 2001, Speizman Industries employed 9 salespersons and 23 technical
representatives. In addition to its sales staff, Speizman Industries uses
several commission sales agents in a number of foreign countries in connection
with its sales of used machines.

    The terms of new machine sales generally are individually negotiated
including the purchase price, payment terms and delivery schedule. Speizman
Industries is usually required to purchase imported machines with a letter of
credit in favor of the manufacturer delivered not less than about 15 days prior
to the machine's shipment to the customer's plant. Generally, the letter of
credit must be payable 60 days or longer from the date of the on-board bill of
lading and upon presentation of the bill of lading. The period from shipment by
the manufacturer to installation in the customer's plant is generally 30-60
days.

    The majority all of the new machines sold by Speizman Industries are
drop-shipped from the foreign manufacturer by container or air freight directly
to the customer's plant using Speizman's freight forwarder to coordinate
shipment. Title is taken at the European port, and Speizman insures the machines
for 110% of cost.

    Because a substantial portion of Speizman Industries' revenues are derived
from sales of machines and equipment imported from abroad, these sales may be
subject to import controls, duty and currency fluctuations. Since November 2000,
the majority of Speizman Industries' purchases of Italian machines for sale in
the United States have been denominated in U.S. dollars. Prior to that time,
most of these purchases were denominated in Italian Lira or EURO dollars.
Speizman generally is able to adjust sales prices or purchase lira hedging
contracts to compensate for anticipated dollar fluctuations. During fiscal year
2001, the Company experienced adverse effects utilizing lira hedging contracts
for orders that were postponed or delayed. Additionally, international currency
fluctuations that result in substantial price level changes could impede import
sales and substantially impact profits. Speizman is not able to assess the
quantitative effect such international price level changes could have upon
Speizman Industries' operations. There can be no assurance that fluctuations in
foreign exchange rates will not have an adverse effect on Speizman Industries
future operations. All of Speizman Industries' export sales originating from the
United States are made in U.S. dollars.

    Speizman Industries also markets used machines through its employees and
outside commission salespersons. Speizman Industries markets its used machines
in the United States and in a number of foreign countries. Speizman uses trade
advertising extensively and frequently distributes lists throughout the industry
of used machines that Speizman Industries has for sale. Additionally, Speizman
utilizes its Internet web site for listing used machines available for sale.

                                       3

<PAGE>

    Speizman Industries exports certain new and used machines and parts for sale
in Canada, Mexico and a number of other foreign countries. See Note 1 of Notes
to Consolidated Financial Statements for certain financial information
concerning Speizman Industries' foreign sales in fiscal 2001, 2000 and 1999.

Customers

    Speizman Industries' customers consist primarily of the major sock
manufacturers in the United States and Canada. In fiscal year 2001, one customer
(Sara Lee Sock Company) represented 13.4% of the Company's revenues. In fiscal
years 2000 and 1999, no single customer represented over 10% of the Company's
revenues. Generally, the customers contributing the most to Speizman Industries'
net revenues vary from year to year. Speizman Industries believes that the loss
of any principal customer could have a material adverse effect on Speizman
Industries.

Competition

    The sock knitting machine industry is competitive. The principal competitive
factors in the distribution of sock knitting machines are technology, price,
service, allowance of trade-ins and delivery. Management believes that its
competitive advantages are the technological advantages of machines manufactured
by Lonati and its affiliates, Speizman Industries' commitment to customer
service and Speizman Industries' allowance of trade-ins of used machines on new
machines.

    Lonati single cylinder machines compete primarily with machines manufactured
by an Italian company (Sangiacomo, S.p.A) and a Czech company (Ange) and Lonati
double cylinder machines compete primarily with machines manufactured by an
Italian company (Matec) acquired in 1993 by Lonati but not represented by
Speizman Industries. Lonati machines compete, to a lesser extent, with machines
manufactured by a number of other foreign companies of varying sizes and with
companies selling used machines. Management believes that it is at a short term
competitive disadvantage if a potential customer's decision will be based
primarily on price since, generally, the purchase price of Lonati machines is
higher than that of competing machines.

    In its sale of new equipment other than Lonati machines, Speizman
Industries competes with a number of foreign and domestic manufacturers and
distributors of new and used machines. Certain of Speizman Industries'
competitors may have substantially greater resources than Speizman Industries.

    Domestic and foreign sales of used sock and sheer hosiery knitting machines
are fragmented and highly competitive. Speizman Industries competes with a
number of domestic and foreign companies that sell used machines as well as
domestic and foreign manufacturers that have used machines for sale as a result
of trade-ins. In the United States, Speizman Industries has one primary
competitor in its sale of used sock knitting machines. The principal competitive
factors in Speizman Industries' domestic and foreign sales of used machines are
price and availability of machines that are in demand. Although Speizman
Industries is the exclusive distributor of original equipment manufacturer
("OEM's") parts for a number of the machines it distributes, it competes with
firms that manufacture and distribute duplicates of such parts. In addition,
Speizman Industries competes with a number of distributors and manufacturers in
its other parts sales.

Wink Davis

    Wink Davis, with offices in Smyrna, Georgia, Wooddale, Illinois, and
Charlotte, North Carolina, distributes commercial laundry equipment and parts
and provides related service. Wink Davis was acquired by Speizman on August 1,
1997. Wink Davis sells to a wide variety of customers. A large share of these
customers maintain on premise laundries ("OPL's"). OPL's are commonly found in
hotels, nursing homes and other institutions that perform their laundry services
in-house. Some larger installations of equipment are found in hospitals, prisons
and linen processing plants. The largest portion of Wink Davis' sales are
generated from its distributorships with both Pellerin Milnor (washer extractor
equipment manufacturers based in Kenner, LA) and Chicago Dryer (commercial
ironer/folder manufacturers based in Chicago, IL). Wink Davis represents both of
these companies in Georgia, South Carolina, North Carolina, Virginia, middle and
eastern Tennessee, Maryland, Washington, D.C., northern and central Florida, and
the Chicago, Illinois areas.

                                       4

<PAGE>


    The Pellerin Milnor agreement appoints Wink Davis as the exclusive agent
within its territories. In some instances, a customer's purchase order may be
taken in one agent's territory, but the equipment is actually delivered to a
territory served by a different Pellerin Milnor agent. In these instances,
Pellerin Milnor grants the sale to the territory in which the purchase order was
taken. The dealer servicing the territory in which the equipment is installed
receives a commission for which that dealer must assume responsibility for
installing the equipment. Historically, these sales involving two separate
Pellerin Milnor dealers have been infrequent and management feels this issue
does not significantly improve or hurt its operations. The Chicago Dryer
agreement does not appoint Wink Davis as the exclusive agent within its
territories. Both the Pellerin Milnor and Chicago Dryer agreements are renewed
on an annual basis and may be terminated in the event of a breach. Wink Davis
has continuously represented both manufacturers for most of its current
territories since 1972. Since 1980, Pellerin Milnor has presented its annual top
distributor award to Wink Davis for all but three years. There can be no
assurance that the loss of one or both of these distributorships would not have
a materially adverse impact to Wink Davis' operations.

    The Pellerin Milnor and Chicago Dryer agreements contain certain covenants
and conditions relating to Wink Davis' sales of these products, including, among
other things, that Wink Davis, at its own expense, promote the sale of the
manufacturers' machines and assist the manufacturers in maintaining their
competitive positions, maintain an efficient sales staff, provide for the proper
installation, maintenance and servicing of the machines, maintain adequate
inventory of parts and pay for all costs of advertising the machines. Wink Davis
believes that it is and will remain in compliance in all material respects with
such covenants.

     Additionally, Wink Davis, under written agreements and other arrangements
with OEMs, distributes other laundry related equipment. The following table sets
forth, in alphabetical order, certain information concerning the additional
distribution agreements:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
          Manufacturer                               Machine                                    Territory
------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                                    <C>
American Dryer,                        Commercial Dryers                      Southeastern U.S. & Chicago, IL areas
    Fall River, MA

Cissell Manufacturing,                 Commercial Dryers, laundry and dry     Southeastern U.S. & Chicago, IL areas
    Louisville, KY                       Cleaning pressing equipment

Consolidated Laundry Machinery,        Commercial Dryers                      Southeastern U.S. & Chicago, IL areas
    Los Angeles, CA

Energenics Corp.,                      Lint collectors and automatic cart     Southeastern U.S. & Chicago, IL areas
    Naples, FL                           wash systems

Forenta, Inc.,                         Laundry and Dry Cleaning Presses       Southeastern U.S. & Chicago, IL areas
    Morrisville, TN

Huebsch Originators,                   Commercial Dryers                      Southeastern U.S. & Chicago, IL areas
    Ripon, WI

Unipress, Inc.,                        Laundry and Dry Cleaning Presses       Southeastern U.S. & Chicago, IL areas
     Tampa, FL
------------------------------------------------------------------------------------------------------------------------
</TABLE>

Sales and Marketing

    Wink Davis' primary products include washers, dryers, ironers and other
finishing equipment. Some of the larger installations include continuous batch
washers ("CBW's"), large dryers, pressing and folding equipment and conveyor
systems resulting in the laundering process being substantially automated. The
majority of the sales consist of washers, with less than 165 pound capacity per
load ("white machines"), and corresponding dryers. CBW systems or tunnels are
highly customized with a variety of features depending on the unique needs and
constraints of each customer. Sales orders are generated through a variety of
methods including repeat business, referrals, cold calls and unsolicited
telephone orders. Typical sales terms on larger contracts require 15% down with
the balance due 10 days after delivery. At September 10, 2001, Wink Davis
employed approximately 10 sales persons and 35 technical representatives.

                                       5

<PAGE>

    Most used equipment in smaller facilities has little value and there is
little demand for that type of used laundry equipment. Accordingly, Wink Davis
rarely accepts trade-ins of low capacity used equipment, nor do they purchase
used equipment of that nature. Some used CBW units can be rebuilt at a
substantial reduction in price to new units. Wink Davis does occasionally find
sales opportunities of this type. Many large orders, especially those at new
construction sites, require newly designed or modified electrical, plumbing,
construction or other work at the customer site. Wink Davis often subcontracts
these tasks for the customer in conjunction with the sale. Wink Davis has a
staff of CAD operators, and service personnel who assist and support outside
contractors to ensure that the facilities are properly prepared prior to the
delivery of equipment. Wink Davis personnel install the equipment and provide
training for the customers' operators. Smaller white sales generally require
less support and frequently consist of matching the specifications of the newly
ordered machine to the existing site.

    Additionally, Wink Davis provides repair and maintenance services to OPL
facilities. Customers' OPL facilities are typically operated and managed by
their property, maintenance or housekeeping staffs. These staffs are often small
with broad areas of responsibilities and limited technical expertise, especially
for specific maintenance and repair issues of the laundry equipment.
Accordingly, Wink Davis provides a full range of repair and maintenance
services. Generally, each sales office is staffed by four or more technicians.
Each technician travels to the customer's site in a maintenance van, fully
stocked with the most commonly needed parts. Upon notification, Wink Davis will
dispatch and commonly have a technician addressing the problem within 24 hours.
If additional parts are required, they may be ordered from any of the Wink
Davis' locations or shipped directly from the manufacturer.

Customers

    Wink Davis has over 4,000 customers ranging in size from single washing
machine facilities to large laundry systems in hospitals or linen supply houses.
Customers purchasing laundry machines typically continue their association with
Wink Davis through purchase of repair parts or through service calls for
equipment repairs. During the past three fiscal periods, no customer represented
more than 10% of the Company's revenues. Accordingly, the loss of any single
customer would not materially affect the operations of Wink Davis.

Competition

    The laundry equipment business is very competitive. Wink Davis competes
directly with several other distributors representing other OEMs. Wink Davis
believes the products they represent are of equal or better than their
competitors' quality. In some instances, Wink Davis may be at a price
disadvantage when a customer considers price only. Many sales of white machines
are price sensitive, however this varies by region. The purchase decision on
larger installations is less price sensitive as these customers are more
concerned about production output and quality, and the seller's ability to
efficiently service the machines being purchased. Wink Davis maintains a
well-trained staff of technicians covering all geographic areas of distribution.
Management believes this staff is more comprehensive than any maintained by the
competition.

Regulatory Matters

    The Company is subject to various federal, state and local statutes and
regulations relating to the protection of the environment and safety in the work
place. The failure by the Company to comply with any of such statutes or
regulations could result in significant monetary penalties, the cessation of
certain of its operations, or both. Management believes that the Company's
current operations are in compliance with applicable environmental and work
place safety statutes and regulations in all material respects. The Company's
compliance with these statutes and regulations has not materially affected its
business; however, the Company cannot predict the future effects of compliance
with such statutes or regulations.

Employees

    As of September 10, 2001, the Company had 158 full-time employees. The
Company's employees are not represented by a labor union, and the Company has
never suffered an interruption of business as a result of a labor dispute. The
Company considers its relations with its employees to be good.

Backlog

                                       6

<PAGE>

     The Company's firm backlog of unfilled orders for new and used machines was
$15.8 million at September 10, 2001. The Company's firm backlog was $13.8
million and $28.2 million at June 30, 2001 and July 1, 2000, respectively. The
reduction in unfilled orders at June 2001 compared to July 2000 is primarily due
to a trend in lower equipment sales which the Company believes is due to lower
capital spending as a result of declining economic conditions, primarily in the
United States, as well as from shipments in the fourth quarter for orders
committed prior to July 1, 2000. The period of time required to fill orders
varies depending on the machine ordered.

    The Company typically fills its backlog within 12 months; however, orders
constituting the current backlog are subject to customer cancellation, changes
in delivery and machine performance. As a result, the Company's backlog may not
necessarily be indicative of future revenue. In addition, the Company's current
backlog will not necessarily lead to revenues in any future period. Any
cancellation, delay or change in orders which constitute our current or future
backlog may result in lower than expected revenues.

Risk Factors

Relationship with Foreign Suppliers

     The majority of Speizman Industries' suppliers for parts and equipment are
based in foreign countries primarily concentrated in Italy. There can be no
assurance that Speizman will not encounter significant difficulties in any
attempt to enforce any provisions of the agreements with foreign manufacturers,
or any agreement that may arise in connection with the placement and
confirmation of orders for the machines manufactured by foreign manufacturers or
obtain an adequate remedy for a breach of any such provision, due principally
that they are foreign companies.

Dependence on Lonati

    The Company's operations are substantially dependent on the net revenues
generated from the sale of sock knitting and other machines manufactured by both
Lonati and Santoni, S.r.l., Brescia, Italy, one of Lonati's subsidiaries, and
the Company expects this dependence to continue. Sales of sock knitting and
other machines manufactured by Lonati and Santoni generated an aggregate of
approximately 30.4% and 53.5% of the Company's net revenues in fiscal 2001 and
fiscal 2000, respectively. The Company amended its agreement with Lonati for the
sale of its machines in March 2001 to be the exclusive agent through
December 31, 2003. The Company and Lonati entered into their present agreement
for the sale of Lonati machines in Canada in January 1992 and for Mexico in
1997, which is renewable annually. The Company has acted as the United States
sales agent and distributor for certain machines manufactured by Lonati
continuously since 1982. The cost to the Company of Lonati machines, as well as
the delivery schedule of these machines, are in the discretion of Lonati.
Management believes that the Company's relationship with Lonati will continue to
be strong as long as the Company generates substantial sales of Lonati machines;
however, there can be no assurance that the Company will be able to do so or
that the Company's relationship with Lonati will continue or will continue on
its present terms. Any decision by Lonati to sell machines through another
distributor or directly to purchasers would have a material adverse effect on
the Company.

Machine Performance and Delayed Deliveries

    During fiscal 2000 and the early part of fiscal year 2001, the Company
experienced issues with machine performance and delays from Lonati in shipments
of closed toe knitting machines and Santoni undergarment knitting machines. The
Company experienced material cancellations or postponements of orders due to
these delays and performance issues. There can be no assurance that delayed
deliveries in the future or issues with machine performance on newer technology
will not result in the loss or cancellation of significant orders. The Company
also cannot predict situations in Italy such as potential employee strikes or
political developments which could further delay deliveries or have other
adverse effects on the business of Lonati and the other Italian manufacturers
represented by the Company.

Foreign Currency Risk

         Historically, Speizman Industries' purchases of foreign manufactured
machinery and spare parts for resale are denominated in Italian lira. For
purchases of machines that were denominated in Italian lira or Euro dollars,
Speizman generally purchased lira hedging contracts to compensate for
anticipated dollar fluctuations; however, during fiscal year 2001, the Company
experienced adverse effects utilizing lira hedging contracts for orders that
were postponed or

                                       7

<PAGE>

delayed. Prior to fiscal year 2001 and for approximately 30 years, the Company
did not experience any adverse effect from utilizing lira hedging contracts.
During fiscal year 2001, and in light of newer technology that was being
delivered by Lonati represented by its newer version closed toe single cylinder
sock knitting machine, and with previous experiences of delays associated with
the development of its previous generation closed toe machine, the Company
arranged with Lonati and its affiliates to purchase its products for resale in
U.S. dollars. Speizman's arrangement to buy in U.S. dollars with Lonati
contractually ends on April 30, 2002. For purchases of machines that are
supplied by other manufacturers that are denominated in Italian lira or Euro
dollars, Speizman Industries feels its current practices enable the Company to
adjust sales prices, or to commit to lira hedging contracts that effectively
compensate for anticipated dollar fluctuations. At June 30, 2001, the Company
had contracts maturing through September 2001 to purchase approximately 432.0
million lira for approximately $198,000 for which the market value at June 30,
2001 if terminated was $189,000.

         Additionally, international currency fluctuations that result in
substantial price level changes could impede or promote import/export sales and
substantially impact profits. Speizman is not able to assess the quantitative
effect of such international price level changes could have upon Speizman
Industries' operations. There can be no assurance of fluctuations and foreign
exchange rates will not have an adverse effect on Speizman Industries' future
operations. All of Speizman Industries' export sales originating from the United
States are made in U.S. dollars.

Industry Conditions

    The Company's business is subject to all the risks inherent in acting as a
distributor including competition from other distributors and other
manufacturers of both textile and laundry equipment, as well as the termination
of profitable distributor-manufacturer relationships.

    The Company's laundry equipment segment is subject to the risks associated
with new construction in the hospitality industry. Currently, there is a
slowdown in construction of new hotels due to excess room availability as a
whole. This as well as a general slowdown in the U.S. economy recently reduced
demand for new equipment product offered by the Company.

    The textile segment is subject to the risks associated with certain
categories in the textile industry, specifically, for socks, underwear, and
actionwear garments. The textile industry risks relating to socks, underwear,
and actionwear garments include the impact of style and consumer preference
changes. These factors may contribute to fluctuations in the demand for the
Company's sock knitting and packaging equipment and knitted fabric equipment
products. There is a slowdown in underwear and actionwear garments that
commenced during the second half of the last fiscal year. Currently, there also
appears to be a downturn in the sock industry.

Need for Additional Capital

    The Company may need to raise additional funds in the future to support its
operations or respond to unanticipated requirements. If the Company seeks to
raise additional funds, it may not be able to obtain funds on terms which are
favorable or acceptable to the Company.

Nasdaq Listing

    The Company's Common stock has been listed on the Nasdaq SmallCap Market
since March 20, 2001 and was listed on the Nasdaq National Market System from
October 1993 to March 19, 2001. The Company may have difficulty meeting one or
more of the criteria for continued listing on the Nasdaq SmallCap Market. If the
Company's securities cease to be listed on the Nasdaq SmallCap Market, they may
continue to be listed in the OTC-Bulletin Board, which is viewed by most
investors as a less desirable marketplace. In such event, the market price of
the Common Stock may be adversely impacted and a stockholder may find it
difficult to dispose, or obtain accurate quotations as to the market value, of
the Company's Common Stock.

Item 2.  Properties.

    The Company leases all of its real property. Significant leases are
summarized in the table below:


                                       8

<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
                                                                          Lease         Monthly        Approximate
                                                      Lease Origination   Term           Rental       Rental Square
             Use                 Location                   Date        (months)          Rate          Footage
--------------------------------------------------------------------------------------------------------------------------
<S>                           <C>                   <C>                  <C>         <C>            <C>              <C>
Properties used primarily by Speizman Industries:
Executive, administrative,     Charlotte, NC         December 1, 1999       180         $ 87,931         221,000      (a)
   machinery rebuilding and
   warehousing
Properties used primarily by Wink Davis:
Administrative, general        Smyrna, GA            May 1, 2001             61         $  5,147          12,000
  office and warehouse
Sales and service office and   Wooddale, IL          August 1, 1999          24         $  5,157           6,800      (b)
  warehouse
Sales and service office and   Chester, VA           August 1, 1999          24         $  1,982           6,000      (b)
  warehouse
Sales and service office and   Charlotte, NC         March 1, 2000           60         $  6,469          10,800      (c)
  warehouse
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

(a)  The Company's headquarters are leased from a limited liability company
     owned by Robert S. Speizman, his wife and their children. The Company
     relocated its executive, administrative, machinery rebuilding and a
     substantial portion of its warehousing to this location in the spring of
     1999.

(b)  These properties are leased from a partnership owned by C. Alexander Davis,
     a former shareholder and President of Wink Davis, and his brother.

(c)  This property is leased from a limited liability company owned by Robert S.
     Speizman, his wife and their children.

The Company believes its office and warehouse space is sufficient to meet its
needs for the foreseeable future.

Item 3.  Legal Proceedings.

     The Company is a defendant in a lawsuit filed by Bluegrass Hosiery, Inc. on
January 28, 1999, now pending in a U.S. District Court for the Eastern District
of Kentucky, Civil Action No. 99-80, in which Bluegrass alleges that the Company
breached a contract in which it had sold machines to Bluegrass, and seeking
damages, including punitive damages in an unspecified amount. The Company
vigorously denies the allegations. Trial is scheduled for November 2001.

     On June 29, 2000, Hazel Hernandez filed a lawsuit against Wink Davis
Equipment Company, Inc. (a wholly-owned subsidiary of Speizman Industries) in
the U.S. District Court for the Northern District of Illinois, Case No.
00-CV-5183. The plaintiff alleges that her decedent, who was her husband and a
laundry company employee, was killed by a Milnor 2-stage laundry press machine
which was sold by Wink Davis Equipment Company, Inc. to the employer of
Hernandez's decedent. The manufacturer of the machine, as well as manufacturers
of certain components therein, have also been joined as defendants in the
lawsuit. The legal grounds for including the Company as a defendant are not
clear. The plaintiff's claims include allegations that the Company and Wink
Davis Equipment Company, Inc. placed an unreasonably dangerous machine in the
stream of commerce, were negligent in the design, manufacture, sale, and
distribution of the machine, and other grounds. The court has dismissed the
claim against Speizman Industries. Wink Davis Equipment Company, Inc. denies the
allegations and believes that it will ultimately prevail in the matter.

     On July 30, 2001, the Nalpac Company filed a counterclaim against the
Company in the Superior Court, District of Montreal, Province of Quebec, Canada
(Civil Action No. 500-17-010102-013). Prior to this filing, the Company filed
suit against Nalpac for payment for machines purchased by Nalpac. Nalpac's
counterclaim, as filed on July 30, 2001 referred above, claims that it set up a
joint venture with Gentry Mills, known as Seamless Knit, Inc., to knit and sell
seamless garments, investing as much as $6,000,000 (Canadian) in the project. It
also alleges that delays in delivery of the machines, and defects in their
operation, caused Nalpac to suffer financial loss in the amount of $4,000,000
(Canadian), plus interest and penalties in an unspecified amount, under Quebec
law. The Company denies the allegations of the counterclaim, and is defending
its position vigorously, and believes that it will ultimately prevail.

     Due to the inherent uncertainty as to the outcome of litigation, the
Company cannot estimate the amount of loss, if any, that will result from the
resolution of the lawsuits described above.

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

     No matters were submitted to a vote of the Company's security holders
during the fourth quarter of fiscal 2001.

                                       9

<PAGE>

Executive Officers of Registrant

    The following table sets forth certain information regarding the executive
officers of the Company:

<TABLE>
<CAPTION>
        Name                     Age   Positions with the Company
        ----                     ---   --------------------------
<S>                              <C>   <C>
        Robert S. Speizman ....  61    Chairman of the Board, President and Director
        Mark A. Speizman ......  30    Senior Vice President, Hosiery
        John C. Angelella .....  39    Vice President-Finance,  Chief Financial Officer, Secretary
                                       and Treasurer
        P. Donald Mullen II ...  37    President, Wink Davis Equipment Company, Inc.
</TABLE>

     Robert S. Speizman has served as President of the Company since November
1976. From 1969 to October 1976, Mr. Speizman served as Executive Vice President
of the Company. Mr. Speizman has been a director of the Company since 1967 and
Chairman of the Board of Directors since July 1987.

     Mark A. Speizman, son of Robert S. Speizman, began serving as Senior Vice
President, Hosiery in July 1997 and served as a sales representative of the
Company from 1995 to June 1997.

     John C. Angelella began serving as Vice President-Finance, Chief Financial
Officer, Secretary and Treasurer in May 2000. He served as Vice President,
Finance and Corporate Controller of a privately held e-business solutions and
network integration provider from November 1998 to May 2000. Prior to that, he
served as Chief Financial Officer for a privately held confectionery business
from September 1995 to November 1998.

     P. Donald Mullen II, son-in-law of Robert S. Speizman, began serving as
President of Wink Davis Equipment Company, Inc. in August 2000. He served as
Vice President of Wink Davis from June 1998 to August 2000 and as Sales Engineer
of Wink Davis from August 1997 to June 1998. He also served as a Sales Manager
of Speizman from August 1996 to August 1997. Prior to that, he served four years
as an accountant for a division of TimeWarner.

                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters.

    The Company's Common Stock has been included for quotation on the NASDAQ
National Market System under the NASDAQ symbol "SPZN" from October 1993 to March
19, 2001. Commencing on March 20, 2001, the Company began trading on the NASDAQ
SmallCap System under SPZN. The following table sets forth, for the periods
indicated, the high and low sale prices as reported by the NASDAQ Market System.

Fiscal 2000                                         High        Low
                                                    ----        ---
    First Quarter (ended October 2, 1999) .......  $5.88       $3.50
    Second Quarter (ended January 1, 2000) ......   5.50        3.69
    Third Quarter (ended April 1, 2000) .........   5.00        3.50
    Fourth Quarter (ended July 1, 2000) .........   4.25        3.13
Fiscal 2001
    First Quarter (ended September 30, 2000) ....   3.43        2.25
    Second Quarter (ended December 30, 2000) ....   2.36         .50
    Third Quarter (ended March 31, 2001) ........   1.68         .50
    Fourth Quarter (ended June 30, 2001) ........   1.50         .53

    As of June 30, 2001, there were approximately 200 stockholders of record of
the Common Stock. Management believes that when the number of beneficial
stockholders are included with the number of record stockholders, the Company is
in compliance with the maintenance standards set by the Nasdaq Stock Market.

    The Company has never declared or paid any dividends on its Common Stock.

    Future cash dividends, if any, will be at the discretion of the Company's
Board of Directors and will depend upon, among other things, future earnings,
operations, capital requirements, surplus, restrictive covenants in agreements
to which the Company may be subject, general business conditions and such other
factors as the Board of Directors may

                                       10

<PAGE>

deem relevant. The Company's present credit facility contains certain financial
and other covenants that limit the Company's ability to pay cash dividends on
its capital stock.

Item 6.  Selected Consolidated Financial Data.

     The following selected consolidated financial data sets forth selected
financial information for Speizman Industries, Inc. as of and for each of the
years in the five-year period ended June 30, 2001, and has been derived from the
Company's audited consolidated financial statements. The selected consolidated
financial data should be read together with the Company's consolidated financial
statements and related notes thereto and with "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
                                                                                  Fiscal Year Ended
                                                          ------------------------------------------------------------------
                                                           June 30,        July 1,      July 3,        June 27,     June 28,
                                                             2001           2000          1999         1998 (a)       1997
                                                          ----------     ----------    ----------     ---------    ---------
                                                                         (In thousands, except per share data)
<S>                                                       <C>           <C>           <C>            <C>          <C>
Statement of Operations Data:
    Net revenues ......................................   $   82,233     $  115,182    $  101,412     $  90,886    $  79,103
    Cost of sales .....................................       70,511         96,443        85,564        74,034       65,935
                                                          ----------     ----------    ----------     ---------    ---------
    Gross profit ......................................       11,722         18,739        15,848        16,852       13,168
    Selling, general and administrative expenses ......       14,848         15,421        15,124        12,658        8,855
                                                          ----------     ----------    ----------     ---------    ---------
    Operating income (loss) ...........................       (3,126)         3,318           724         4,194        4,313
    Interest (income) expense, net ....................        2,423          1,972         1,103           988          (18)
    Loss on settlement of uncommitted foreign
      currency derivative contracts ...................        3,926              -             -             -            -
                                                          -----------    ----------    ----------     ---------    ---------
    Income (loss) before taxes on income ..............       (9,475)         1,346          (379)        3,206        4,331
    Taxes (benefit) on income .........................       (3,612)           544          (126)        1,273        1,645
                                                          ----------     ----------    ----------     ---------    ---------
    Net income (loss) .................................   $   (5,863)    $      802    $     (253)    $   1,933    $   2,686
                                                          ==========     ==========    ==========     =========    =========

Per Share Data:
    Basic earnings (loss) per share ...................   $    (1.80)    $     0.25    $    (0.08)    $    0.59    $    0.83
    Diluted earnings (loss) per share .................        (1.80)          0.24         (0.08)         0.56         0.80

    Weighted average shares outstanding - basic .......        3,253          3,243         3,274         3,284        3,229
    Weighted average shares outstanding - diluted .....        3,253          3,296         3,274         3,426        3,353

Balance Sheet Data:
    Working capital ...................................   $   17,300     $   28,182    $   16,058     $  20,210    $  18,741
    Total assets ......................................       54,873         68,255        56,456        51,925       43,174
    Short-term debt ...................................            -              -         4,900         4,000            -
    Long-term debt, including current maturity ........       16,404         19,725         7,196         9,561          112
    Stockholders' equity ..............................       17,366         23,490        22,577        23,207       20,938
</TABLE>
__________________
(a)  On August 1, 1997, the Company acquired Wink Davis.  On February 6, 1998,
the Company acquired TMC.

     The Company has never declared or paid any dividends in Common Stock.

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
of Operations.

     The following discussion of the Financial Condition and Results of
Operations of Speizman contains forward-looking statements within the meaning of
Section 21e of the Securities Exchange Act of 1934. Speizman's actual results
and timing of certain events could differ materially from those anticipated in
these forward-looking statements as a result of certain factors, including, but
not limited to, those set forth under "Risk Factors" and "Cautionary Note
Regarding Forward-Looking Information" and elsewhere in this Annual Report on
Form 10-K.

Overview

     The Company is a leader in the sales and distribution of specialized
industrial machinery, parts and equipment. The Company's revenues are generated
primarily from its distribution of textile equipment (principally knitting
equipment and, to a lesser extent, from the sale of parts used in such equipment
and the sale of used equipment) and commercial laundry equipment and services
(principally commercial washers and dryers and, to a lesser extent, the sale of
parts used in such equipment and related services). The Company began operating
in the laundry equipment and services segment with the purchase of Wink Davis on
August 1, 1997.

                                       11

<PAGE>

     The Company during fiscal year 2001 experienced a decline in its equipment
bookings, primarily in the textile segment. The Company expects this trend to
continue during the first six months in fiscal year 2002 based upon current
market conditions and the Company's existing pipeline. In furtherance with the
Company's cost saving initiatives that began in fiscal year 2001, the Company
expects to further reduce its expenses to help mitigate the adverse effects from
the decline in equipment bookings.

Results of Operations

Year Ended June 30, 2001 Compared to Year Ended July 1, 2000

     Net Revenues. Net revenues decreased to approximately $82.2 million for the
year ended June 30, 2001, a decrease of $33.0 million (or 28.6%) from the prior
year. Revenues in the laundry equipment and services segment increased to $34.9
million, an increase of $5.1 million (or 17%) compared to the prior year. The
increase in laundry equipment and service revenue was primarily due to two large
installation projects completed during fiscal year 2001. The increase in
revenues for laundry equipment and services was offset by a decrease in textile
equipment revenues. Revenues decreased in the textile equipment segment to $47.3
million for the year ended June 30, 2001, a decrease of $38.1 million (or 44.6%)
from the prior year. Approximately $34.0 million of the decrease in textile
equipment revenues (or 89%) was due to decreased sales in the United States and
Canada for knitted fabric equipment, resulting from the dramatic softening in
demand in the seamless underwear category.

     Cost of Sales. Cost of sales as a percentage of revenues increased
unfavorably to 85.7% for the fiscal year 2001 as compared to 83.7% in fiscal
year 2000. The net increase is due to increased costs on lira denominated
equipment and parts sold primarily during the first half of fiscal year 2001.
The increase in lira costs was a result of an overall devaluation in the Euro
and lira coupled with the company utilizing foreign exchange derivatives
contracted at stronger exchange rates for commitments that were subsequently
delay or cancelled. Refer to Disclosure about Foreign Currency Losses in Fiscal
Year 2001 for more discussion. The increase in lira costs associated with
utilizing these foreign exchange contracts for equipment and parts sold during
fiscal year 2001was $3.2 million and represented a 3.9% component of
consolidated cost of sales as a percentage of consolidated revenues for fiscal
year 2001. This increase was offset primarily by reduced costs of approximately
$1.5 million reflected in the second half of fiscal year 2001 from the planned
elimination of non-performing business operations including the manufacturing
activities of TMC.

     Selling Expenses. Selling expenses decreased by $120,000 (or 1.5%) to $7.7
million in fiscal 2001. As a percentage of revenue, selling expenses increase
unfavorably to 9.4%, compared to 6.9% in the prior fiscal year. As a percentage
of revenue, the increase is due to selling expense, primarily personnel and
related costs, in the textile equipment segment being primarily fixed in nature
coupled with a decrease in annual textile equipment sales, and higher total
commissions due to a higher mix of laundry equipment sales compared to the mix
in the prior fiscal year. Commissions on laundry equipment sales are generally
higher compared to commissions on sales of textile equipment.

     General and Administrative. General and administrative expenses decreased
favorably by $450,000 (or 6%) to $7.1 million, compared to the prior fiscal
year. The reduction primarily resulted from savings reflected in second half of
fiscal year 2001 from reduced personnel and overhead associated with the
Company's planned elimination of certain non-performing operations as well as
the consolidation of certain administrative activities for its laundry segment.

     Interest Expense. Interest expense increased unfavorably by $450,000 to
$2.4 million in fiscal year 2001 compared to $1,972,000 in the prior year. The
increase is due to higher average balances throughout the fiscal year 2001 on
the Company's line of credit to fund operations.

     Loss on Settlement of Uncommitted Foreign Currency Derivatives. Loss on
settlement of uncommitted foreign currency derivatives of $3.9 million reflects
a one-time loss associated with the discontinuation of the company's uncommitted
foreign currency derivatives classified as cash flow hedges. Refer to Disclosure
about Foreign Currency Losses in Fiscal Year 2001 for more discussion.

     Taxes (Benefit) on Income (Loss). The benefit for income taxes was $3.6
million for the current year, a rate of 38.1% of the net loss. The effective
rate in the prior fiscal year was 40.4%. The reduced rate in the current year is
primarily due to a reduced effective state tax rate in the current fiscal year.
The Company recognized as of June 30, 2001 a deferred tax benefit of $3.0
million for which the Company believes will be recoverable through the normal
course of its business in the future.

                                       12

<PAGE>

     Net Loss. Net loss for the year was $5.9 million or $1.80 per share, both
basic and diluted. In the prior year, net income was $802,000 or $0.25 per basic
share and $0.24 per diluted share.

Year Ended July 1, 2000 Compared to Year Ended July 3, 1999

     Net Revenues. Net revenues increased to approximately $115.2 million for
the year ended July 1, 2000, an increase of $13.8 million (or 13.6%) from the
prior year. Knitted fabric equipment sales due to high demand primarily during
the first half of the year, showed a substantial increase of $18.4 million from
year to year. Other components of the increase include $1.1 million increase in
parts sales and $1.3 million increase in laundry equipment and services. These
increases were offset by a $2.6 million decrease in the hosiery-related
equipment due to delays in introducing the closed toe machine as well as a $3
million decrease in yarn processing equipment and a $1.5 million decrease in
products no longer represented.

     Cost of Sales. Cost of sales as a percentage of revenue decreased favorably
to 83.7% of revenues for the current year as compared to 84.4% in the prior
year. The increase is primarily due to higher margins in the laundry and
services segment from a greater proportion in the current year of parts sales
which have higher gross margins. The textile segment showed slight increases in
gross margin primarily from higher margins in yarn processing equipment due to a
greater mix of used machinery sales.

     Selling Expenses. Selling expenses increased by $166,000 (or 2.2%) to $7.9
million in fiscal year 2000 compared to $7.7 million in the prior fiscal year.
The increase is primarily due to increases in salaries and wages from the hiring
of additional personnel associated with the growth in the knitted fabric
equipment line during the year as well as general salary increases. Selling
expenses, as a percentage of sales, improved to 6.9% compared to 7.6% in the
prior year.

     General and Administrative. General and administrative expenses totaled
approximately $7.5 million, an increase of $130,000 (or 1.8%) from the prior
year. The increase included one-time charges associated with severance of two
executives, increases in depreciation for capitalized leases, offset by
reduction in rents associated with operating leases.

     Interest Expense. In fiscal year 2000, interest expense was approximately
$1,972,000 as compared to approximately $1,103,000 in the prior year. The
increase was primarily due to increases in interest from additions in the
obligation under capital lease and increased borrowings under the Company's line
of credit from year to year.

     Taxes (Benefit) on Income (Loss). The expense for income taxes was $544,000
for the current year, a rate of 40.4% of the net income as compared to the 1999
effective rate of 33.3%. The difference is primarily due to a change in tax
legislation that was favorable in 1999.

     Net Income. Net income for the year was $802,000, or $0.25 per basic and
$0.24 per diluted share. In the prior year, net loss was $253,000 or $0.08 per
basic and diluted share.

Liquidity and Capital Resources

     Over the past three fiscal periods, the Company satisfied its cash flow
requirements from operations and/or borrowings under current and long-term
facility arrangements. The Company has a revolving credit facility with
SouthTrust Bank, N.A. The agreement with SouthTrust as recently amended, expires
on July 31, 2002 and provides a line of credit up to $15.0 million and an
additional line of credit for issuance of Documentary Letters of Credit up to
$9.0 million. The availability under the combined lines of credit is limited by
the percentage of accounts receivable and inventory determined from time to time
by SouthTrust. The unused amount available to the Company as determined by the
Bank as of June 30, 2001 was $2,964,000. Amounts outstanding under the line of
credit for direct borrowings bear interest based upon two components: London
Interbank Offered Rate (LIBOR) rate plus 1.5% to 2.5% for a short term fixed
period and prime plus 0% to 1% for the non-fixed period. The rates vary based
upon the Company's funded debt as defined in the loan agreement. The Company has
two interest rate swaps that fixes the LIBOR interest rate (exclusive of margin)
at 7.77% and 7.79% for borrowings of $3.0 million and $5.0 million,
respectively, that expire on June 2, 2002 and June 2, 2003, respectively. In
connection with the SouthTrust's facility, the Company granted a security
interest in all assets of the Company.

                                       13

<PAGE>

    Working capital at June 30, 2001 was $17.3 million, a decrease of $10.9
million from $28.2 at July 1, 2000. Working capital ratio at June 30, 2001 was
1.79 compared to 2.09 at July 1, 2000. Net cash provided by operating activities
was $2.8 million for 2001 compared to $4.2 million used in operating activities
during 2000. Net cash provided by operating activities in 2001 was primarily due
to a net reduction in accounts receivable of $10.9 million, a reduction in
prepaid expenses of $3.6 million and non-cash expenses of $2.5 million partially
offset by a net loss of $5.9 million, a non-cash income tax benefit of $3.0
million, a $4.9 million decrease in accounts payable and bank overdraft, and a
$900,000 increase in inventory.

    The reduction of $10.9 million in accounts receivable during fiscal year
2001 was due to a decline in sales or billings for fiscal year 2001 when
compared to the prior fiscal year coupled with an improvement in the number of
days of sales in accounts receivable from year to year, partially offset by
deductions for losses on accounts of $267,000 that were reserved in previous
years. The percentage drop in sales from year to year of 28.6% accounted for a
decrease in net accounts receivable of approximately $8.8 million. The number of
days of sales in accounts receivable improved at June 30, 2001 to 85 days
compared to 96 days as of July 1, 2001. The improvement of 11 days accounted for
a further reduction in net accounts receivable of approximately $2.5 million and
was primarily due to an increased effort on cash collections. The number of days
of sales in accounts receivable is calculated by dividing the net accounts
receivable balance by the revenues for the prior fiscal period multiplied by 360
days for the fiscal period.

    The reduction in prepaid expenses was primarily due to recognition of
deferred costs of $2.3 million associated with foreign currency derivatives
designated as hedges that were utilized and recognized in the company's
statement of operations during fiscal year 2001. The balance of the decrease in
prepaid expenses and other assets was primarily due to reduced deposits on
equipment purchase orders resulting from a decline in related customer bookings
and equipment sales during fiscal year 2001 as compared to fiscal year 2000.

    The increase in deferred taxes of $3.0 million represented a non-cash
benefit recognized during fiscal year 2001. The Company believes this deferred
tax benefit will be recoverable through its normal course of business in the
future.

    The net decrease in accounts payable and overdraft of $4.9 million during
fiscal year 2001 was primarily due to a decrease in costs associated with the
decrease in the Company's sales. The percentage drop in cost of sales of
$70,511,000 in fiscal year 2001 as compared to cost of sales of $96,442,000 in
fiscal year 2000 was approximately 27%. The percentage drop in cost of sales of
27% accounted for a $5,450,000 decrease in accounts payable and bank overdraft.
This decrease was offset by an increase in accounts payable from extended
payment terms provided by certain suppliers to the Company.

    The increase in inventory of $900,000 was offset by provisions for inventory
obsolescence and write downs of approximately $700,000. New machine inventory
increased to $6.5 million at June 30, 2001 compared to $6.0 million at July 2,
2000. The increase in new machine inventory was partially offset by a $600,000
decrease in used machine inventory at June 30, 2001 compared to July 2, 2000.
The net increase in the new machine inventory consisted of an increase of $1.6
million associated with Santoni knitting machines held for resale. In light of
the recent downturn in the seamless underwear category, the Company provided
specific reserves to adjust the historical cost on these machines to an
estimated current net realizable value that the Company anticipates will be
recovered through future sales in the next 12 months. Additionally, the
Company's parts inventory increased by approximately $400,000 at June 30, 2001
compared to July 2, 2000 to $5.8 million. Approximately 60% of the increase in
parts related to additional items and higher volumes purchased in yarn parts due
to the Company's growth in this relatively new business line, with the balance
of the increase primarily due to higher costs on imported parts remaining in
inventory that were purchased in lira during fiscal year 2001. The Company
believes its inventories are valued at the lower of cost or market.

    During 2000, net cash used in operating activities related primarily to a
$9.8 million increase in accounts receivable, a $1.9 million decrease in accrued
expenses and customers' deposits and a $900,000 increase in inventories. These
uses were partially offset by net income for the year excluding the effect of
non-cash expenses, and a $5.0 million increase in accounts payable.

    Net cash used in investing activities, primarily for capital expenditures,
was $131,000 in 2001 compared to $394,000 in 2000. Net cash used in financing
activities was $3.4 million in 2001, primarily from a reduction (payments net of
borrowings) in SouthTrust's line of credit facility.


                                       14

<PAGE>

This compared to net cash provided by financing activities in the prior year of
$4.7 million, primarily related to net borrowings on its line of credit.

    The Company believes the available funds through its facility agreement with
SouthTrust and cash flows generated by operations, if any, will be sufficient to
fund its working capital and capital expenditures requirements through July 31,
2002. Thereafter, the Company may need to raise additional funds or extend its
facility agreement with SouthTrust. The Company believes that it will extend its
facility with SouthTrust or refinance with another bank as it has in the past
few years. However, there is no assurance that additional financing will be
available when needed or desired on terms favorable to the Company or at all.

Seasonality and Other Factors

    There are certain seasonal factors that may affect the Company's business.
Traditionally, manufacturing businesses in Italy close for the month of August,
and the Company's domestic hosiery customers close for one week in July.
Consequently, no shipments or deliveries, as the case may be, of machines
distributed by the Company that are manufactured in Italy are made during these
periods which fall in the Company's first quarter. In addition, manufacturing
businesses in Italy generally close for two weeks in December, during the
Company's second quarter. Fluctuations of customer orders or other factors may
result in quarterly variations in net revenues from year to year.

Effects of Inflation and Changing Prices

    Management believes that inflation has not had a material effect on the
Company's operations.

Disclosure about Foreign Currency Losses in Fiscal Year 2001

    Historically, Speizman Industries' purchases of foreign manufactured
machinery and spare parts for resale are denominated in Italian lira. As part of
its risk management programs, the Company historically has used forward exchange
contracts to protect against the currency exchange risk associated with the
Company's anticipated and firm commitments of lira-denominated purchases for
resale. In cases where anticipated or firm commitments are cancelled or
postponed that were previously hedged with foreign currency contracts, the
utilization of these forward exchange contracts on future purchases may
positively or negatively affect the earnings of the Company, depending upon the
position of the U.S. dollar against the lira at the time of the actual
purchases.

    The Company cancelled or postponed orders during calendar year 2000 due to
unanticipated delays associated with the closed toe machines as well as
cancellations by customers who had signed sales orders with the Company for
closed toe hosiery and knitted fabric equipment. Associated with these cancelled
purchase orders, the Company had committed to purchase contracts of
approximately 76 billion lira during the latter part of calendar year 1999. The
utilization of this lira during fiscal year 2001 for other purchases coupled
with the continual strengthening position of the dollar since 1999 has had a
significant adverse effect on gross profit during fiscal year 2001. The adverse
effect on gross profit through increased cost of sales during the year ended
June 2001 was approximately $3.2 million.

    Additionally, of the 76 billion lira contracts associated with the cancelled
purchase orders, approximately 37 billion lira were uncommitted and were treated
as cash flow hedges for accounting purposes. For cash flow hedges, changes in
the fair value of the hedging instrument are deferred and recorded in other
comprehensive income (equity), then recognized in the statement of operations in
the same period as the sale is recognized on the hedged item. These commitments
were initially designated to be utilized on anticipated purchase commitments
primarily related to two product lines. Due to delays by the manufacturers, the
Company renegotiated its future purchases with these foreign suppliers in U.S.
dollars. In light of this, on November 13, 2000, the Company deemed these
foreign currency derivatives as ineffective for hedge accounting as originally
designated going forward. Accordingly, and in light of the potential future
devaluation of the lira in relation to the U.S. dollar, the Company entered into
offsetting foreign currency derivatives in order to fix its exposure on the
ineffective cash flow derivatives and reported a loss on settlement of cash flow
derivatives of approximately $3.9 million, before income tax benefit. The
Company had no foreign exchange contracts designated as cash flow hedges as of
June 30, 2001.

    In summary, the total losses associated with the utilization of the
Company's fair value hedge contracts and the settlement of its cash flow hedges
were approximately $7.1 million for fiscal year 2001, before tax benefit. In the

                                       15

<PAGE>

future, currency fluctuations of the lira could result in substantial price
level changes and therefore impede or promote import/export sales and
substantially impact profits. Generally, the Company is not able to assess the
quantitative effect that such currency fluctuations could have upon the
Company's operations. There can be no assurance that fluctuations in foreign
currency exchange rates will not have a significant adverse effect on Speizman
Industries' future operations. In addition, the Company is continually
evaluating other alternatives to limit its risk on foreign currency fluctuations
and is currently purchasing a majority of its textile equipment denominated in
U.S. dollars.

New Accounting Pronouncements

    In June 2001, the Financial Accounting Standards Board finalized Statement
of Financial Accounting Standards (SFAS) Statements No. 141, Business
Combinations (SFAS 141), and No. 142, Goodwill and Other Intangible Assets (SFAS
142). SFAS 141 requires the use of the purchase method of accounting and
prohibits the use of the pooling-of-interests methods of accounting for business
combinations initiated after June 30, 2001. SFAS 141 also requires that the
Company recognize acquired intangible assets apart from goodwill if the acquired
intangible assets meet certain criteria. SFAS 141 applies to all business
combinations initiated after June 30, 2001 and for purchase business
combinations completed on or after July 1, 2001. It also requires, upon adoption
of SFAS 142, that the Company reclassify the carrying amounts of intangible
assets and goodwill based on the criteria in SFAS 141.

    SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually. In
addition, SFAS 142 requires that the Company identify reporting units for the
purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS 142. SFAS 142 is required to be applied in
fiscal years beginning after December 15, 2001 to all goodwill and other
intangible assets recognized at that date, regardless of when those assets were
initially recognized. SFAS 142 requires the Company to complete a transitional
goodwill impairment test six months from the date of adoption. The Company is
also required to reassess the useful lives of other intangible assets within the
first interim quarter after adoption of SFAS 142.

    The Company's previous business combinations were accounted for using the
purchase method. As of June 30, 2001, the net carrying amount of goodwill is
$4,790,407. Amortization expense during the year ended June 30, 2001 was
approximately $440,000. Currently, the Company is assessing but has not yet
determined how the adoption of SFAS 141 and SFAS 142 will impact its financial
position and results of operations.

    In September 2000, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) Statement No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities
(SFAS 140). The Statement provides revised accounting and reporting standards
for transfers and servicing of financial assets and extinguishments of
liabilities. Adoption of this standard is not expected to have a significant
impact on the Company's financial statements.

    In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) Statement No. 143, Accounting for Asset
Retirement Obligations (SFAS 143). The statement requires that the fair value of
a liability for an asset retirement obligation be recognized in the period in
which it is incurred if a reasonable estimate of fair value can be made. The
associated asset retirement costs are capitalized as part of the carrying amount
of the long-lived asset. Adoption of this standard is not expected to have a
significant impact on the Company's financial statements.

Item 7A.  Quantitative and Qualitative Disclosure about Market Risk.

    The Company is exposed to market risks, which include changes in U.S. and
international interest rates as well as changes in foreign currency exchange
rates as measured against the U.S. dollar and each other. The Company attempts
to reduce these risks by utilizing financial instruments, pursuant to Company
policies.

    The value of the U.S. dollar affects the Company's financial results.
Changes in exchange rates (primarily the Euro and Lira) may positively or
negatively affect the Company's revenues (as expressed in U.S. dollars), cost of
sales, gross margins, operating expenses, and retained earnings. Where the
Company deems it prudent, it engages in hedging those

                                       16

<PAGE>

transactions aimed at limiting in part the impact of currency fluctuations. As
discussed in the Foreign Currency Risk section set forth herein under "Risk
Factors," the Company purchases forward exchange contracts to protect against
currency exchange risks associated with the Company's anticipated and firm
commitments of lira-dominated purchases for resale.

    These hedging activities provide only limited protection against currency
exchange risks. Factors that could impact the effectiveness of the Company's
programs include volatility of the currency markets, and availability of hedging
instruments. All currency contracts that are entered into by the Company are
components of hedging programs and are entered into for the sole purpose of
hedging an existing or anticipated currency exposure, not for speculation.
Although the Company maintains these programs to reduce the impact of changes in
currency exchange rates, when the U.S. dollar sustains a strengthening position
against the lira in which the Company has anticipated purchase commitments, the
Company's gross margins could be adversely affected if future sale prices cannot
be increased because of market pressures.

    The Company is also subject to interest rate exposure on a portion of its
debt outstanding at June 30, 2001 that was priced at interest rates that float
with the market. The total outstanding debt currently subject to interest rate
exposure is $10,978,000 of which $8,000,000 is fixed pursuant to swap
agreements. A 100 basis point movement of the interest rate on the net floating
rate debt of $2,978,000 would result in an approximate $29,800 increase or
decrease in interest expense and cash flows. Reference is made to Note 8 of the
Consolidated Financial Statements for additional information.

Item 8.   Financial Statements and Supplementary Data.

    The financial statements and supplementary data required by this Item 8
appear on Pages F-1 through F-18 and S-1 through S-2 of this Annual Report on
Form 10-K.

Item 9.   Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

    Not applicable.

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant.

    The response to this Item 10 is set forth in part under the caption
"Executive Officers of the Registrant" in Part I of this Annual Report on Form
10-K and the remainder is set forth in the Company's 2001 Proxy Statement for
the 2001 Annual Meeting of Stockholders

Item 11.  Executive Compensation.

    The response to this Item 11 is set forth in the Company's 2001 Proxy
Statement under the section captioned "Executive Compensation and Related
Information," which section, other than the subsections captioned "Report of the
Compensation Committee and the Stock Option Committee on Executive Compensation"
and "Comparative Performance Graph," is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.

    The response to this Item 12 is set forth in the Company's 2001 Proxy
Statement under the section captioned "Stock Ownership of Certain Beneficial
Owners and Management," which section is incorporated by reference.

Item 13.  Certain Relationships and Related Transactions.

    The response to this Item 13 is set forth in the Company's 2001 Proxy
Statement under the section captioned "Certain Transactions," which section is
incorporated herein by reference.

                                     PART IV

                                       17

<PAGE>

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.

     (a)  The following documents are included as part of the Annual Report on
Form 10-K:

1.   Financial Statements:

<TABLE>
<CAPTION>
                                                                                             Page
                                                                                             ----
<S>                                                                                          <C>
Report of Independent Certified Public Accountants ......................................    F-1
Consolidated Balance Sheets - June 30, 2001 and July 1, 2000 ............................    F-2
Consolidated Financial Statements for each of the three years in the period ended
     June 30, 2001, July 1, 2000 and July 3, 1999: ......................................
      Consolidated Statements of Operations .............................................    F-3
      Consolidated Statements of Stockholders' Equity ...................................    F-4
      Consolidated Statements of Cash Flows .............................................    F-5
Summary of Accounting Policies ..........................................................    F-6
Notes to Consolidated Financial Statements ..............................................    F-9
</TABLE>

2.   Financial Statement Schedules:

<TABLE>
<CAPTION>
                                                                                             Page
                                                                                             ----
<S>                                                                                          <C>
Report of Independent Certified Public Accountants on Financial Statement Schedule ......    S-1
Schedule II - Valuation and Qualifying Accounts .........................................    S-2
</TABLE>

3.   Exhibits:

     (a) The Exhibits filed as part of this Annual Report on Form 10-K are
listed on the Exhibit Index immediately preceding such Exhibits, and are
incorporated herein by reference.

     (b) Reports on Form 8-K

         None.

                                       18

<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 131 or 15(d) 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.

                                            SPEIZMAN INDUSTRIES, INC.

Date:  September 25, 2001

                                            By: /s/ Robert S. Speizman
                                                --------------------------------
                                                Robert S. Speizman, President


         Pursuant to the requirements of the Securities Act of 1933, this has
been signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
             Signatures                      Title                            Date
             ----------                      -----                            ----
<S>                             <C>                                    <C>
/s/ Robert S. Speizman          Chairman of the Board, President       September 25, 2001
---------------------------     and Director (Principal Executive
Robert S. Speizman              Officer)


/s/ John C. Angelella           Vice President-Finance, CFO,           September 25, 2001
---------------------------     Secretary and Treasurer
John C. Angelella


/s/ Jon P. Brady                Director                               September 25, 2001
---------------------------
Jon P. Brady


/s/ William Gorelick            Director                               September 25, 2001
---------------------------
William Gorelick


/s/ Scott C. Lea                Director                               September 25, 2001
---------------------------
Scott C. Lea


/s/ Josef Sklut                 Director                               September 25, 2001
---------------------------
Josef Sklut
</TABLE>

                                       19

<PAGE>

                            [BDO SEIDMAN LETTERHEAD]



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


To the Board of Directors and Stockholders
Speizman Industries, Inc.

We have audited the accompanying consolidated balance sheets of Speizman
Industries, Inc. and Subsidiaries as of June 30, 2001 and July 1, 2000, and the
related consolidated statements of operations, stockholders' equity and cash
flows for each of the three years in the period ended June 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 audits 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, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Speizman Industries,
Inc. and subsidiaries at June 30, 2001 and July 1, 2000, and the results of
their operations and their cash flows for each of the three years in the period
ended June 30, 2001, in conformity with accounting principles generally accepted
in the United States of America.

Charlotte, North Carolina                                       BDO Seidman, LLP
August 15, 2001

                                       F-1

<PAGE>

                   SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                    June 30,               July 1,
                                                                                      2001                  2000
                                                                                ----------------       --------------
<S>                                                                             <C>                    <C>
ASSETS
Current:
    Cash and cash equivalents ...............................................    $            -        $     713,754
    Accounts receivable .....................................................        19,440,188           30,722,678
    Inventories .............................................................        16,721,714           16,489,494
    Prepaid expenses and other current assets ...............................         3,142,445            6,181,283
                                                                                 --------------        -------------
       TOTAL CURRENT ASSETS .................................................        39,304,347           54,107,209
                                                                                 --------------        -------------
Property and Equipment:
    Building and leasehold improvements .....................................         7,336,153            7,310,261
    Machinery and equipment .................................................         1,083,517            1,008,656
    Furniture, fixtures and transportation equipment ........................         1,657,855            1,779,829
                                                                                 --------------        -------------
                                                                                     10,077,525           10,098,746
    Less accumulated depreciation and amortization ..........................        (2,865,649)          (2,092,204)
                                                                                 --------------        -------------
       NET PROPERTY AND EQUIPMENT ...........................................         7,211,876            8,006,542
                                                                                 --------------        -------------
Deferred tax asset, long-term ...............................................         3,297,707              446,000
Other long-term assets ......................................................           268,750              464,897
Goodwill, net of accumulated amortization ...................................         4,790,407            5,230,410
                                                                                 --------------        -------------
                                                                                 $   54,873,087        $  68,255,058
                                                                                 ==============        =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current:
    Bank Overdraft ..........................................................    $    1,438,466        $           -
    Accounts payable ........................................................        14,005,690           20,196,790
    Customers' deposits .....................................................         4,183,369            3,351,778
    Accrued expenses ........................................................         1,475,347            1,491,593
    Current maturities of long-term liabilities .............................           901,216              884,996
                                                                                 --------------        -------------
       TOTAL CURRENT LIABILITIES ............................................        22,004,088           25,925,157
Long-term debt ..............................................................        10,978,000           14,258,001
Obligation under capital lease ..............................................         4,524,682            4,581,593
                                                                                 --------------        -------------
       TOTAL LIABILITIES ....................................................        37,506,770           44,764,751
                                                                                 --------------        -------------

Commitments and Contingencies

Stockholders' Equity:
    Common Stock - par value $.10; authorized 20,000,000 shares, issued
       3,396,228, outstanding 3,255,428; and issued 3,393,228, outstanding
       3,252,428, respectively ..............................................           339,623              339,323
    Additional paid-in capital ..............................................        13,047,150           13,045,200
    Accumulated other comprehensive loss ....................................          (263,585)                   -
    Retained earnings .......................................................         4,829,952           10,692,607
                                                                                 --------------        -------------
       Total ................................................................        17,953,140           24,077,130
    Treasury stock, at cost, 140,800 shares .................................          (586,823)            (586,823)
                                                                                 --------------        -------------
       TOTAL STOCKHOLDERS' EQUITY ...........................................        17,366,317           23,490,307
                                                                                 --------------        -------------
                                                                                 $   54,873,087        $  68,255,058
                                                                                 ==============        =============
</TABLE>



          See accompanying summary of accounting policies and notes to
                       consolidated financial statements.

                                       F-2

<PAGE>

                   SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                             Year Ended
                                                        ----------------------------------------------------
                                                            June 30,            July 1,          July 3,
                                                              2001               2000             1999
                                                        ----------------     -------------   ---------------
<S>                                                     <C>                 <C>              <C>
NET REVENUES                                             $  82,233,048      $ 115,181,669    $ 101,412,128
                                                         -------------      -------------    -------------
COSTS AND EXPENSES:
    Cost of sales ....................................      70,511,299         96,442,751       85,563,543
    Selling expenses .................................       7,769,578          7,890,174        7,724,174
    General and administrative expenses ..............       7,078,360          7,530,340        7,399,792
                                                         -------------      -------------    -------------
        Total costs and expenses .....................      85,359,237        111,863,265      100,687,509
                                                         -------------      -------------    -------------

Operating (loss) income ..............................      (3,126,189)         3,318,404          724,619

INTEREST EXPENSE, net of interest income of
    $68,734, $63,028 and $91,586 .....................       2,422,325          1,972,538        1,103,141
LOSS on settlement of uncommitted foreign currency
    derivative contracts .............................       3,925,947                  -                -
                                                         -------------      -------------    -------------

NET (LOSS) INCOME BEFORE TAXES .......................      (9,474,461)         1,345,866         (378,522)

TAXES (BENEFIT) ON INCOME ............................      (3,611,806)           543,963         (126,000)
                                                         -------------      -------------    -------------

NET (LOSS) INCOME ....................................   $  (5,862,655)     $     801,903    $    (252,522)
                                                         =============      ==============   =============

Earnings (loss) per share:
    Basic ............................................   $       (1.80)     $        0.25    $       (0.08)
    Diluted ..........................................           (1.80)              0.24            (0.08)

Weighted average shares outstanding:
    Basic ............................................       3,252,577          3,243,311        3,274,435
    Diluted ..........................................       3,252,577          3,295,579        3,274,435
</TABLE>



          See accompanying summary of accounting policies and notes to
                       consolidated financial statements.

                                       F-3

<PAGE>

                   SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                       Accumulated
                                                               Additional                 Other
                                     Common        Common       Paid-In      Retained Comprehensive    Treasury     Comprehensive
                                     Shares        Stock         Capital     Earnings      Loss          Stock          Loss
                                   -----------  ----------     -----------   --------   ----------     ---------     -------------
<S>                               <C>          <C>            <C>           <C>           <C>             <C>           <C>
   BALANCE, JUNE 28, 1998 ......  3,357,406    $  335,741     $12,889,546   $10,143,226   $        -      $ (161,647)
   Net loss ....................          -             -               -      (252,522)           -               -
   Exercise of stock options ...     12,100         1,210          46,340             -            -               -
   Purchase of treasury stock ..          -             -               -             -            -        (425,176)
                                  ---------    ----------     -----------   -----------   ----------      ----------
   BALANCE, JULY 3, 1999 .......  3,369,506       336,951      12,935,886     9,890,704            -        (586,823)
   Net  income .................          -             -               -       801,903            -               -
   Exercise of stock options ...     23,722         2,372         109,314             -            -               -
                                  ---------    ----------     -----------   ------------  ----------      ----------
   BALANCE, JULY 1, 2000 .......  3,393,228       339,323      13,045,200    10,692,607            -        (586,823)
   Net loss                               -             -               -    (5,862,655)           -               -     (5,862,655)
   Accumulated Comprehensive loss
     - Interest rate swap, net
     of tax ....................          -             -               -             -     (263,585)              -       (263,585)
                                                                                                                        -----------
      Comprehensive Loss ........         -             -               -             -            -               -     (6,126,240)
                                                                                                                        ===========
   Exercise of stock options ....     3,000           300           1,950             -            -               -
                                  ---------    ----------     -----------   -----------   ----------      ----------
   BALANCE, JUNE 30, 2001 ....... 3,396,228    $  339,623     $13,047,150   $ 4,829,952   $ (263,585)     $ (586,823)
                                  =========    ==========     ===========   ===========   ==========      ==========
</TABLE>

See accompanying summary of accounting policies and notes to consolidated
                            financial statements.

                                       F-4

<PAGE>

                   SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                          Year Ended
                                                                   ----------------------------------------------------
                                                                      June 30,             July 1,              July 3,
                                                                        2001                2000                1999
                                                                   -------------       -------------       ------------
<S>                                                                 <C>                <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss) ............................................      (5,862,655)      $     801,903       $    (252,522)
  Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
  (Gain) loss on disposal of fixed assets ......................           5,427              (6,453)              3,560
  Depreciation .................................................         920,834             997,772             838,138
  Amortization .................................................         531,742             572,983             528,800
  Provision for losses on accounts receivable ..................         413,207             259,034             394,127
  Provision for inventory obsolescence .........................         689,323             807,001             400,000
  Deferred income taxes ........................................      (3,027,983)           (246,000)           (366,000)
  (Increase) decrease in:
      Accounts receivable ......................................      10,869,283          (9,843,149)         (1,714,856)
      Inventories ..............................................        (921,543)           (936,129)           (825,621)
      Prepaid expenses and other assets ........................       3,599,246             105,844          (2,653,614)
  Increase (decrease) in:
      Accounts payable and bank overdraft ......................      (4,752,634)          5,127,589           4,259,225
      Accrued expenses and customers' deposits .................         322,036          (1,871,129)          2,367,431
                                                                   -------------       -------------       -------------
  Net cash provided by (used in) operating activities ..........       2,786,283          (4,230,734)          2,978,668
                                                                   -------------       -------------       -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures .........................................        (218,720)           (473,288)         (2,976,464)
  Proceeds from property and equipment disposals ...............          87,125              79,133             290,075
                                                                   -------------       -------------       -------------
      Net cash used in investing activities ....................        (131,595)           (394,155)         (2,686,389)
                                                                   -------------       -------------       -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net borrowings on line of credit agreements                                  -                   -             900,000
  Borrowings on line of credit .................................      40,386,000          13,510,000                   -
  Payments on line of credit ...................................     (43,208,000)         (4,610,000)                  -
  Principal payments on long-term debt .........................        (498,692)         (5,641,315)         (2,365,815)
  Debt issue costs .............................................         (50,000)           (244,186)                  -
  Other borrowings                                                             -           1,570,291                   -
  Issuance of common stock upon exercise of stock options ......           2,250             111,686              47,550
  Purchase of treasury stock                                                   -                   -            (425,176)
                                                                   -------------       -------------       --------------
      Net cash provided by (used in) financing activities ......      (3,368,442)          4,696,476          (1,843,441)
                                                                   -------------       -------------       -------------
NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS .............................................        (713,754)             71,587          (1,551,162)
CASH AND CASH EQUIVALENTS, at beginning of year ................         713,754             642,167           2,193,329
                                                                   -------------       -------------       -------------
CASH AND CASH EQUIVALENTS, at end of year ......................   $           -       $     713,754       $     642,167
                                                                   =============       =============       =============
</TABLE>


See accompanying summary of accounting policies and notes to consolidated
                        financial statements.

                                       F-5

<PAGE>


                   SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
                         SUMMARY OF ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

       The consolidated financial statements of Speizman Industries, Inc. and
subsidiaries (collectively the "Company") include all of its subsidiaries, all
of which are wholly owned. All material intercompany transactions (domestic and
foreign) have been eliminated. Wink Davis Equipment Company, Inc. ("Wink Davis")
was acquired on August 1, 1997. Todd Motion Controls, Inc. ("TMC") was acquired
on February 6, 1998. Speizman Yarn Equipment Co., Inc. ("Speizman Yarn") began
operations on August 1, 1998. Speizman Canada, Inc. was incorporated on February
16, 1989. Speizman de Mexico S.A. de C.V. was incorporated on April 2, 1997.

REVENUE RECOGNITION

       The major portion of the Company's revenues consists of sales and
commissions on sales of machinery and equipment. The revenue derived therefrom
for the textile segment is recognized in full at the time of shipment, and for
the laundry segment, at time of installation. In some instances the laundry
equipment and services business is engaged in installation projects for
customers on a contract basis. Some contracts call for progress billings. In
such cases, the Company uses the percentage of completion method to recognize
revenue whereby sales are recorded based upon the ratio of costs incurred to
total estimated costs at completion. Billings in excess of the revenue
recognized or deferred revenue at June 30, 2001 and July 2, 2000 was immaterial.
Shipping and handling charges to customers are included in revenues. Costs
associated with shipping are included in cost of sales.

CASH AND CASH EQUIVALENTS

       For purposes of the statements of cash flows, the Company considers all
highly liquid debt instruments with an original maturity of three months or less
to be cash equivalents. The carrying amount of cash equivalents approximates
fair value due to the short-term maturity of these instruments.

INVENTORIES

       Inventories are carried at the lower of cost or market. Cost is computed,
in the case of machines, on an identified cost basis and, in the case of other
inventories, on an average cost basis.

PROPERTY AND EQUIPMENT

       Property and equipment are stated at cost. Depreciation is computed over
the estimated useful lives of the assets by the straight-line and accelerated
methods for financial reporting purposes and by accelerated methods for income
tax purposes. Useful lives are generally five years for computer equipment,
seven years for machinery, and ten years for office furniture. Assets recorded
under capital leases and leasehold improvements are amortized using the
straight-line method over the lesser of their useful lives or the related lease
term (between 5-15 years).

LONG-LIVED ASSETS

       Long-lived assets, such as goodwill and property and equipment, are
evaluated for impairment when events or changes in circumstances indicate that
the carrying amount of the assets may not be recoverable through the estimated
undiscounted future cash flows from the use of these assets. When any such
impairment exists, the related assets will be written down to fair value.

FINANCIAL INSTRUMENTS

       The Company does not hold or issue financial instruments for trading
purposes. Amounts to be paid or received under interest rate swap agreements are
recognized as increases or reductions in interest expense in the periods in
which they accrue.

TAXES ON INCOME

       The Company provides for income taxes using the liability method.
Deferred tax assets or liabilities at the end of each period are determined
using the tax rate expected to be in effect when taxes are actually paid or
recovered. Income tax expense will increase or decrease in the same period in
which a change in tax rates is enacted.

                                       F-6

<PAGE>

                   SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
                  SUMMARY OF ACCOUNTING POLICIES - (continued)

INCOME (LOSS) PER SHARE

       Basic net income per share includes no dilution and is calculated by
dividing net income (loss) by the weighted average number of common shares
outstanding for the period. Diluted net income per share reflects the potential
dilution of securities that could share in the net income of the Company which
consists of stock options (using the treasury stock method).

       A reconciliation of shares used in calculating basic and diluted earnings
per share for years ending June 30, 2001, July 1, 2000 and July 3, 1999 is as
follows:

       The basic shares outstanding for the fiscal year 2001, 2000 and 1999 is
3,252,577, 3,243,311 and 3,274,435, respectively. The effect of the assumed
conversion of employee stock options was 0, 52,268 and 0 for fiscal years 2001,
2000 and 1999, respectively. Options to purchase approximately 389,000, 284,500
and 273,722 shares of common stock at prices from $1.88 to $6.31, $4.87 to
$6.13, and $4.95 to $6.31 per share were outstanding during portions of fiscal
years 2001, 2000 and 1999, respectively, but were not included in the
computation of diluted earnings per share for each of the respective years
because they were anti-dilutive.

FISCAL YEAR

       The Company maintains its accounting records on a 52-53 week fiscal year.
The fiscal year ends on the Saturday closest to June 30. The years ending June
30, 2001 and July 1, 2000 included 52 weeks, respectively. The year ending July
3, 1999 included 53 weeks.

ADVERTISING

       The Company expenses advertising costs as incurred. Total advertising
expense approximated $103,000, $169,000 and $145,000 for fiscal years 2001, 2000
and 1999, respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS

       Financial instruments of the Company include long-term debt and line of
credit agreements. Based upon the current borrowing rates available to the
Company, estimated fair values of these financial instruments approximate their
recorded carrying amounts.

USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS

       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
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

RECLASSIFICATIONS

       Certain reclassifications were made to the prior years' financial
statements to conform to the current year presentation.

NEW ACCOUNTING PRONOUNCEMENTS

       In June 2001, the Financial Accounting Standards Board finalized
Statement of Financial Accounting Standards (SFAS) Statements No. 141, Business
Combinations (SFAS 141), and No. 142, Goodwill and Other Intangible Assets (SFAS
142). SFAS 141 requires the use of the purchase method of accounting and
prohibits the use of the pooling-of-interests methods of accounting for business
combinations initiated after June 30, 2001. SFAS 141 also requires that the
Company recognize acquired intangible assets apart from goodwill if the acquired
intangible assets meet certain criteria. SFAS 141 applies to all business
combinations initiated after June 30, 2001 and for purchase business
combinations completed on or after July 1, 2001. It also requires, upon adoption
of SFAS 142, that the Company reclassify the carrying amounts of intangible
assets and goodwill based on the criteria in SFAS 141.

                                       F-7

<PAGE>

                   SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
                  SUMMARY OF ACCOUNTING POLICIES - (continued)

       SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually. In
addition, SFAS 142 requires that the Company identify reporting units for the
purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS 142. SFAS 142 is required to be applied in
fiscal years beginning after December 15, 2001 to all goodwill and other
intangible assets recognized at that date, regardless of when those assets were
initially recognized. SFAS 142 requires the Company to complete a transitional
goodwill impairment test six months from the date of adoption. The Company is
also required to reassess the useful lives of other intangible assets within the
first interim quarter after adoption of SFAS 142.

       The Company's previous business combinations were accounted for using the
purchase method. As of June 30, 2001,the net carrying amount of goodwill is
$4,790,407. Amortization expense during the year ended June 30, 2001 was
approximately $440,000. Currently, the Company is assessing but has not yet
determined how the adoption of SFAS 141 and SFAS 142 will impact its financial
position and results of operations.

       In September 2000, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) Statement No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities (SFAS 140). The Statement provides revised accounting and reporting
standards for transfers and servicing of financial assets and extinguishments of
liabilities. Adoption of this standard is not expected to have a significant
impact on the Company's financial statements.

       In June 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) Statement No. 143, Accounting for Asset
Retirement Obligations (SFAS 143). The statement requires that the fair value of
a liability for an asset retirement obligation be recognized in the period in
which it is incurred if a reasonable estimate of fair value can be made. The
associated asset retirement costs are capitalized as part of the carrying amount
of the long-lived asset. Adoption of this standard is not expected to have a
significant impact on the Company's financial statements.

                                       F-8

<PAGE>

                   SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -- BUSINESS AND CREDIT RISK CONCENTRATION

     The Company is engaged in the distribution of machinery for the textile and
commercial laundry industries. With operations in the United States, Canada and
Mexico, the Company primarily sells to customers located within the United
States. Export sales from the United States were $4,310,000, $16,633,000 and
$13,941,000 during fiscal 2001, 2000 and 1999, respectively. There were no
export sales by the Canadian operations or the commercial laundry operations.

     Financial instruments which potentially subject the Company to credit risk
consist principally of temporary cash investments and trade receivables. The
Company places its temporary cash investments with high credit quality financial
institutions and, by policy, limits the amount of credit exposure to any one
financial institution. The Company also reviews a customer's credit history
before extending credit. An allowance for doubtful accounts is established based
upon factors surrounding the credit risk of specific customers, historical
trends and other information. To reduce credit risk the Company generally
requires a down payment on large equipment orders.

     A substantial amount of the Company's revenues are generated from the sale
of sock knitting and other machines manufactured by Lonati, S.p.A. and one of
its wholly owned subsidiaries (Santoni). Sales by the Company in the United
States, Canada and Mexico of machines manufactured by Lonati, S.p.A., generated
the following percentages of the Company's net revenues: 26.2% in 2001, 21.2% in
2000 and 22.5% in 1999. In addition, sales of Santoni machines in the United
States, Canada and Mexico generated 4.2%, 32.3% and 20.3% of the Company's net
revenues in fiscal 2001, 2000 and 1999, respectively. In 2001, sales to one
customer approximated 13.4% of revenues. In 2000 and 1999, there were no sales
to customers in excess of 10% of revenues. Generally, the customers contributing
the most to the Company's net revenues vary from year to year.

NOTE 2 -- RISK MANAGEMENT AND DERIVATIVE FINANCIAL INSTRUMENTS

     Effective July 2, 2000, the Company adopted Statement of Financial
Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities (SFAS 133), as amended by SFAS No. 137 and SFAS No. 138, which
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities.

     SFAS 133, as amended, requires the Company to recognize all derivative
instruments on the balance sheet at fair value. If the derivative is a hedge,
changes in the fair value of derivatives are either offset against the change in
fair value of assets, liabilities, or firm commitments through earnings or
recognized in comprehensive income (equity) until the hedged item is recognized
in earnings. The ineffective portion of a derivative's change in fair value is
recognized in earnings. In transition, the statement required all hedging
relationships to be evaluated and designated anew, resulting in
cumulative-effect-type transition adjustments to other comprehensive income. The
effect on earnings in transition was immaterial.

     The Company has historically entered into forward exchange contracts to
reduce the foreign currency exchange risks associated with its committed and
anticipated lira denominated purchases, and not for speculation. As of June 30,
2001, the Company had contracts to purchase approximately 432 million lira for
approximately $198,000, for which the market value at June 30, 2001 was
approximately $189,000. Of these contracts, the Company had designated all of
them as fair value hedges for committed purchase contracts. For fair value
hedges, changes in the fair value of the hedging instrument are recognized in
the statement of operations in the period that the underlying hedged transaction
is recognized. Any ineffective portion of fair value hedge is recognized
immediately in the Statement of Operations. The ineffective portion of the
Company's fair value hedges as of June 30, 2001 was immaterial.

                                       F-9

<PAGE>

                   SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

     For derivatives classified as cash flow hedges, changes in the fair value
of the hedging instrument are deferred and recorded in other comprehensive
income (equity), then recognized in the statement of operations in the same
period that the hedged transaction is recognized. In transition, and effective
July 2, 2000, the Company's designated commitments to purchase 37.0 billion lira
as cash flow hedges. These commitments were initially designated to be utilized
on anticipated purchase commitments primarily related to two product lines. Due
to delays by the manufacturers, the Company renegotiated its future purchases
with these foreign suppliers in U.S. dollars. In light of this, on November 13,
2000, the Company deemed these foreign currency derivatives as ineffective for
hedge accounting as originally designated going forward. Accordingly, and in
light of the potential future devaluation of the lira in relation to the U.S.
dollar, the Company entered into offsetting foreign currency derivatives in
order to fix its exposure on the ineffective cash flow derivatives. On November
13, 2000, and in accordance with SFAS 133, as amended, the Company reported a
loss on settlement of cash flow derivatives of approximately $3.9 million,
before income tax benefit. The Company had no foreign exchange contracts
designated as cash flow hedges as of June 30, 2001.

     The Company had two interest rate swap derivatives designated as cash flow
hedges at June 30, 2001. The change in the fair market value was a loss of
$263,585 net of tax benefit, and was recognized in Other Comprehensive Income
(equity) at June 30, 2001. For interest rate swap agreements, increases or
reductions in interest expense are recognized in the periods in which they
accrue.

NOTE 3 -- ACCOUNTS RECEIVABLE

     Accounts receivable are summarized as follows:

<TABLE>
<CAPTION>
                                                                             June 30, 2001    July 1, 2000
                                                                             -------------    ------------

      <S>                                                                    <C>              <C>

      Trade receivables ..................................................   $  20,187,280    $ 31,324,483
      Less allowance for doubtful accounts ...............................        (747,092)       (601,805)
                                                                                -----------     -----------
      Net accounts receivable ............................................   $  19,440,188    $ 30,722,678
                                                                                ===========     ===========
</TABLE>

NOTE 4 -- INVENTORIES

     Inventories net of reserves are summarized as follows:

<TABLE>
<CAPTION>
                                                                             June 30, 2001     July 1, 2000
                                                                             -------------     ------------
      <S>                                                                    <C>               <C>

      Machines
         New .............................................................   $   6,452,782    $  6,022,435
         Used ............................................................       4,457,416       5,067,409
      Parts and supplies..................................................       5,811,516       5,399,650
                                                                                -----------     -----------
      Total...............................................................   $  16,721,714    $ 16,489,494
                                                                                ===========     ===========
</TABLE>

NOTE 5 - GOODWILL

     Goodwill is calculated as the excess of the cost of purchased businesses
over the value of their underlying net assets and is amortized on a
straight-line basis over fifteen years. Goodwill is net of accumulated
amortization of $1,647,502 and $1,207,500 at June 30, 2001 and July 1, 2000,
respectively.

NOTE 6 -- LEASES

     The Company conducts its operations from leased real properties, which
include offices and warehouses.

     The former primary operating facility of the textile operations and
corporate offices was leased from a partnership in which Mr. Robert S. Speizman,
the Company's President, has a 50% interest. In April 1999, the Company
relocated these functions to a newly renovated facility. Warehouse space at the
former location was leased on a monthly basis until additional warehouse space
at the new facility was completed in 2000. Lease payments to the partnership
approximated $76,366 and $336,000 in fiscal years 2000 and 1999, respectively.

                   SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

                                      F-10

<PAGE>

       In April 1999, several textile machinery warehouses and the corporate
offices were located into a new facility. This new facility is leased from The
Speizman LLC, a limited liability company owned by Mr. Robert S. Speizman, his
wife and their children. In accordance with SFAS No. 13, Accounting for Leases,
the Company recognized a portion of the lease applicable to the land as an
operating lease.

       In December 1999, The Speizman LLC completed construction of an
additional 100,000 square feet of warehouse space to the facility. In order to
consolidate the remaining textile equipment warehouses to this single location,
the Company entered into a new lease agreement. This agreement, including the
portion attributable to the land, has been accounted for as a capital lease. In
June 2000, the Company amended the lease with The Speizman LLC. The amendment
extended the term to 180 months, ending May 2015, and made maintenance and taxes
the responsibility of the Company.

       Lease payments to The Speizman LLC approximated $1,055,000, $860,000 and
$659,000 in fiscal years 2001, 2000 and 1999, respectively.

       The primary operating facility and certain sales offices of the laundry
equipment and services operations were leased from a partnership in which Mr. C.
Alexander Davis, former President of Wink Davis, has a 50% interest. The primary
lease expired in fiscal 2001. Lease payments to the partnership were
approximately $203,000, $205,000 and $216,000 in fiscal years 2001, 2000 and
1999, respectively.

       In April 2000, Wink Davis entered into a five-year lease for office
facilities with The Speizman LLC II, a limited liability company owned by Mr.
Robert S. Speizman, his wife and their children. Lease payments to The Speizman
LLC II totaled approximately $80,000 and $19,000 in 2001 and 2000, respectively.
The lease has been accounted for as an operating lease.

       As of June 30, 2001, future net minimum lease payments under capital and
operating leases that have initial or remaining noncancelable terms in excess of
one year are as follows:

<TABLE>
<CAPTION>
                                                                                   Capital             Operating
                                                                                   Lease                Leases
                                                                               -------------          ------------
       <S>                                                                     <C>                    <C>
       2002 ...............................................................    $  1,055,174           $    663,197
       2003 ...............................................................       1,055,174                488,015
       2004 ...............................................................       1,055,174                273,083
       2005 ...............................................................       1,055,174                140,059
       2006 ...............................................................       1,055,174                 62,949
       Beyond .............................................................       9,408,638                      -
                                                                                -----------              ---------
          Total minimum lease payments ....................................    $ 14,684,508            $ 1,627,303
                                                                                                         =========
          Less amount representing interest at 22% ........................     (10,102,916)
                                                                                -----------
          Present value of net minimum lease payments .....................       4,581,592
          Current portion .................................................         (56,910)
                                                                                -----------
                                                                               $  4,524,682
                                                                                ===========


       The following summarizes property held under capital leases:

<CAPTION>
                                                                                    2001                   2000
                                                                                ------------          -----------
       <S>                                                                      <C>                   <C>
       Land and Building ..................................................    $  5,126,719           $  5,126,719
       Less accumulated depreciation ......................................        (640,342)              (318,684)
                                                                                -----------              ---------
                                                                               $  4,486,377           $  4,808,035
                                                                                ===========              =========
</TABLE>


       Total rent expense for all operating leases approximated $1,124,858,
$1,057,000 and $1,634,000 in fiscal years 2001, 2000 and 1999, respectively.

                                      F-11

<PAGE>

                   SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 7-- TAXES (BENEFIT) ON INCOME

     Povisions (benefit) for federal and state income taxes in the consolidated
statements of operations are made up of the following components:

<TABLE>
<CAPTION>
                                                                  2001            2000             1999
                                                                  ----            ----             ----
<S>                                                         <C>              <C>              <C>
      Current:
        Federal ............................................ $   (629,310)   $    549,963     $    158,000
        State ..............................................       45,487         240,000           82,000
        Foreign ............................................            -               -                -
                                                             ------------    ------------     ------------
                                                                 (583,823)        789,963          240,000
                                                             ------------    ------------     ------------
      Deferred:
        Federal ............................................   (2,194,000)       (167,000)        (325,000)
        State ..............................................     (833,983)        (79,000)         (41,000)
                                                             ------------    ------------     ------------
                                                               (3,027,983)       (246,000)        (366,000)
                                                             ------------    ------------     ------------

      Total taxes (benefit) on income ...................... $ (3,611,806)   $    543,963     $   (126,000)
                                                             ============    ============     ============
</TABLE>

     Deferred tax benefits and liabilities are provided for the temporary
differences between the book and tax bases of assets and liabilities. Deferred
tax assets are reflected in the consolidated balance sheets as follows:

<TABLE>
<CAPTION>

                                                                            June 30, 2001     July 1, 2000
                                                                            -------------     ------------
<S>                                                                         <C>               <C>
      Net current assets .................................................   $  1,366,000     $    960,000
      Net noncurrent assets ..............................................      3,297,707          446,000
                                                                             ------------     ------------
                                                                             $  4,663,707     $  1,406,000
                                                                             ============     ============
</TABLE>

Principal items making up the deferred income tax assets (liabilities) are as
follows:

<TABLE>
<CAPTION>
                                                                                       Year Ended
                                                                            --------------------------------
                                                                               June 30,          July 1,
                                                                                  2001            2000
                                                                             ------------     -----------
<S>                                                                          <C>              <C>
      Inventory valuation reserves ......................................... $   617,000      $   496,000
      Depreciation .........................................................      27,000          (76,000)
      Deferred compensation ................................................     286,000          400,000
      Deferred charges and other ...........................................     116,000         (214,000)
      Inventory capitalization .............................................     299,000          450,000
      Accounts receivable reserves .........................................     294,000          228,000
      Net operating loss carryforwards .....................................   2,795,000          122,000
      Interest rate swap ...................................................     229,707                -
                                                                             -----------      -----------
         Net deferred tax asset ............................................ $ 4,663,707      $ 1,406,000
                                                                             ===========      ===========
</TABLE>

     Deferred taxes include Federal and state net operating loss carryforwards
of approximately $6,811,000 and $9,165,000, respectively, which may be utilized
to offset future taxable income. These carryforwards expire at various dates
through 2021.

                                      F-12

<PAGE>

                   SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

     The Company's effective income tax rates are different than the U.S.
Federal statutory tax rate for the following reasons:

<TABLE>
<CAPTION>
                                                                             2001       2000       1999
                                                                             ----       ----       ----
<S>                                                                         <C>       <C>        <C>
     U.S. Federal statutory tax rate .....................................   34.0%       34.0%      34.0%
     State income taxes, net of federal income tax benefit ...............    5.5         7.9       (6.0)
     Non-deductible expenses .............................................    1.6         3.3      (31.1)
     Effect of change in tax regulation ..................................    -           -         33.0
     Other ...............................................................   (3.0)       (4.8)       3.4
                                                                             ----      ------      -----
     Effective tax rate ..................................................   38.1%       40.4%      33.3%
                                                                             ====      ======      =====
</TABLE>

NOTE 8 - LONG-TERM DEBT

     The Company has a revolving credit facility and a line of credit for
issuance of Documentary Letters of Credit with SouthTrust Bank, N.A. Effective
July 1, 2001 the Company entered into a Second Amendment and Forebearance
Agreement ("Second Amendment") relating to its original Credit Facility
Agreement with SouthTrust. The amendment modified the original agreement which
provided a $17.5 million credit facility and a $15.0 million line for
documentary letters of credit. The Second Amendment supercedes all terms of the
First Amendment dated November 13, 2001. The Amended Agreement dated July 1,
2001 provides a revolving credit facility up to $15.0 million and an additional
line of credit for issuance of Documentary Letters of Credit up to $9.0 million.
The availability under the combined facility is limited to a borrowing base as
defined in the Second Amendment and the original Credit Facility Agreement. The
Second Amendment also changes the maturity date on the credit facility to July
31, 2002 from May 31, 2003 per the original Credit Facility Agreement.

     Advances under the revolving credit facility and line of credit are broken
down into two components for the calculation of interest expense: the London
Interbank Offered Rate (LIBOR) component that accrues interest at the LIBOR rate
plus 1 1/2% to 2 1/2 %, and a base rate component that accrues interest at prime
plus 1 %. The rates are scaled based upon the Company's funded debt as defined
in the original Credit Facility Agreement. Prior to the Second Amendment and
pursuant to the terms of the First Amendment dated November 13, 2000, the LIBOR
component accrued interest at the LIBOR rate plus 3%, and the base rate
component accrued interest at prime plus 1 1/4 %. The Company also has in effect
interest rate swap derivatives that fix the interest rate for advances under the
LIBOR component at 7.77% and 7.79% plus the applicable margin for borrowing
levels of $3 million and $5 million, respectively, which expires on June 2, 2002
and June 2, 2003, respectively. As of June 30,2001, amounts outstanding of $10.0
million were advanced under the LIBOR component at a rate of 4.06% plus 3% and,
$978,000 were advanced under the base rate component at the prime rate of 6.75%
plus 1 1/4%.

     The Credit Facility as amended by the Second Agreement contains specific
covenants that require, among other things, the Company to maintain a specified
level of earnings, tangible net worth, and debt to equity ratios in the fourth
quarter of fiscal year 2001 and each quarter for fiscal year 2002. As of June
30, 2001, the Company was in compliance with all of the bank covenants pursuant
to the terms of the Second Amendment. The facility is secured by all the assets
of the Company.

     Long-term debt consists of several notes entered into during 2000 and
2001 with three vendors for the purchase of various machines. Two of the
non-interest bearing notes payable are to be paid in equal monthly installments
of $34,922 and $30,506 through January 2002. The third vendor's notes payable
are due in varying amounts from November through December 2001. At June 30,
2001, the outstanding balances are $283,313, $305,063 and $255,930,
respectively.

     During 2000, the Company paid off the term loan with Bank of America.

                                       F-13

<PAGE>


                   SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

       Long-term debt consists of:

<TABLE>
<CAPTION>
                                                               June 30, 2001                  July 1, 2000
                                                     ------------------------------ ------------------------------
                                                                  Total                          Total
                                                                  -----                          -----
<S>                                                          <C>                            <C>
Revolving Credit Facility ....................               $  10,978,000                  $ 13,800,000
Notes payable ................................                     844,306                     1,297,192
                                                             -------------                  ------------
Total ........................................                  11,822,306                    15,097,192
Current maturities ...........................                    (844,306)                     (884,996)
                                                             -------------                  ------------
                                                             $  10,978,000                  $ 14,212,196
                                                             =============                  ============

       Annual maturities of long-term debt excluding capital lease obligations
are:

        2002 .................................               $    844,306
        2003 .................................                 10,978,000
                                                             ------------
                                                             $ 11,822,306
                                                             ============
</TABLE>

NOTE 9 -- STOCK OPTIONS

       The Company has reserved 250,000, 450,000 and 155,000 shares of Common
Stock under employee stock plans adopted in 1991, 1995 and 2000, respectively.
As of June 30, 2001, options to purchase 2,000, 436,600 and 155,000 were
outstanding under the 1991, 1995 and 2000 Plans, respectively. No options were
outstanding for the 2000 Plan. Generally, outstanding options become exercisable
in two to four years from the grant date. All options, subject to certain
exceptions with regard to termination of employment and the percentage of
outstanding shares of common stock owned, must be exercised within ten (10)
years of the grant date. The option price under the 1981 and 1991 Plans, subject
to certain exceptions, may not be less than 100% of the fair market value per
share of Common Stock on the date of the grant of the option or 110% of such
value for persons who control 10% or more of the voting power of the Company's
stock on the date of the grant. The option price under the 1995 and 2000 Plans
are not limited and may be less than 100% of the fair market value on the date
of the grant. A summary of employee stock option transactions and other
information for 2001, 2000 and 1999 follows:

<TABLE>
<CAPTION>
                                                                                   Year Ended
                                             ---------------------------------------------------------------------------------------
                                                             Weighted                       Weighted                     Weighted
                                                June 30,     Average        July 1,         Average        July 3,       Average
                                                 2001        Price/Sh        2000           Price/Sh        1999         Price/Sh.
                                             -----------     --------    -----------        --------     -----------     ---------
<S>                                          <C>            <C>          <C>               <C>          <C>              <C>
Shares under option, beginning of year ....    463,163      $ 4.80         440,385          $ 4.83         460,385         $ 4.81
Options granted ...........................     45,000        1.00          46,500            4.51               -              -
Options exercised .........................     (3,000)       0.75         (23,722)           4.81         (12,100)          3.93
Options expired ...........................    (78,163)       4.08               -               -          (7,900)          4.90
                                             ---------      ------       ---------          ------       ---------         ------
Shares under option, end of year ..........    427,000      $ 4.56         463,163          $ 4.80         440,385         $ 4.83
                                             =========      ======       =========          ======       =========         ======
Options exercisable .......................    371,000                     416,663                         379,803
                                             =========                   =========                       =========
Prices of options exercised ...............  $    0.75                   $    0.75 to                    $    3.00 to
                                                                         $    4.95                       $    4.50
Prices of options outstanding, end of        $    1.00 to                $    0.75 to                    $    0.75 to
year ......................................  $    6.31                   $    6.31                       $    6.31
</TABLE>

       The Company has reserved 15,000 shares of Common Stock under a
non-employee directors stock option plan adopted in 1995. Each option granted
under the Plan becomes exercisable in cumulative increments of 50% and 100% on
the first and second anniversaries of the date of the grant, respectively, and
subject to certain exceptions must be exercised within ten (10) years from the
date of the grant. The option price equals the fair market value per share of
Common Stock on the date of the grant.

                                       F-14

<PAGE>


                   SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

       A summary of non-employee directors stock option and other information
for 2001, 2000 and 1999 follows:

<TABLE>
<CAPTION>
                                                                                   Year Ended
                                                 -------------------------------------------------------------------------------
                                                                Weighted                   Weighted                   Weighted
                                                  June 30,      Average       July 1,      Average       July 3,      Average
                                                   2001         Price/Sh.      2000        Price/Sh.      1999        Price/Sh.
                                                 --------       ---------    --------      ---------    --------      ---------
<S>                                              <C>            <C>          <C>           <C>          <C>           <C>
Shares under option, beginning of year ........    15,000       $  5.06        12,000      $  5.11         9,000       $  4.81
Options granted ...............................         -             -         3,000         4.88         3,000          6.00
Options exercised .............................         -             -             -            -             -             -
Options expired ...............................         -             -             -            -             -             -
                                                 --------       -------      --------      -------      --------       -------
Shares under option, end of year ..............    15,000       $  5.06        15,000      $  5.06        12,000       $  5.11
                                                 ========       =======      ========      =======      ========       =======
Options exercisable ...........................    13,500                      10,500                      7,500
                                                 ========                    ========                   ========
Prices of options exercised ...................         -                           -                          -
Prices of options outstanding, end of year ....  $   2.88 to                 $   2.88 to                $   2.88 to
                                                 $   6.13                    $   6.13                   $   6.13
</TABLE>

       The Company has adopted the disclosure only provisions of Statement of
Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation
(SFAS No. 123). Accordingly, no compensation cost has been recognized for the
stock option plans. The fair value of these options was estimated on the date of
grant using the Black-Scholes option-pricing model with the following
weighted-average assumptions for fiscal years 2001, 2000 and 1999: expected
lives of 10.0 years, expected volatility of 70.4% for fiscal year 2001, 53% for
fiscal year 2000 and 57.4% for fiscal year 1999, risk-free interest rate of 5.4%
and dividend yield of 0.0%.

       The Black-Scholes option valuation model was developed for estimating the
fair value of traded options that have no vesting restrictions and are fully
transferable. Because option valuation models require the use of subjective
assumptions and changes in these assumptions can materially impact the fair
value of the options and the Company's options do not have the characteristics
of traded options, the option valuation models do not necessarily provide a
reliable measure of the fair value of its options. The estimated fair value of
stock options granted during fiscal years 2001, 2000 and 1999 was $1.00, $3.36
and $4.46 per share, respectively.

       For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the vesting period. Had compensation cost
for the Company's stock option plans been determined based on the fair value at
the grant date for awards consistent with the provisions of SFAS No. 123, the
Company's net earnings and earnings per share would have been changed to the pro
forma amounts indicated below:

<TABLE>
<CAPTION>
                                                                 Year Ended        Year Ended          Year Ended
                                                                June 30, 2001     July 1, 2000        July 3, 1999
                                                                -------------     ------------        ------------
<S>                                                           <C>                  <C>                <C>
         Pro forma net (loss) income .......................  $  (5,913,841)       $   670,036        $ (646,994)
         Pro forma basic (loss) earnings per share .........  $       (1.82)       $      0.20        $    (0.20)
         Pro forma diluted (loss) earnings  per share ......          (1.82)              0.21             (0.20)
</TABLE>

       The following table summarizes information about stock options
outstanding at June 30, 2001:

<TABLE>
<CAPTION>
                                     Options Outstanding                               Options Exercisable
                     --------------------------------------------------------------------------------------------------
                        Number of     Weighted-Average                              Number              Weighted-
        Range of       Outstanding       Remaining        Weighted-Average        Exercisable        Average Exercise
     Exercise price     at 6/30/01    Contractual Life     Exercise Price         at 6/30/01             Price
    -------------------------------------------------------------------------------------------------------------------
<S>                   <C>          <C>                   <C>                   <C>                  <C>
    $  1 to 2             47,000            8.9                 1.04                  2,000               1.88
       2 to 4            130,500            6.6                 3.07                119,500               3.02
       4 to 6            194,500            6.7                 5.83                193,000               5.83
       6 to 8             70,000            6.4                 6.31                 70,000               6.31
                         -------                                                    -------
                         442,000                                                    384,500
                         =======                                                    =======
</TABLE>

                                      F-15

<PAGE>


                   SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 10 -- DEFERRED COMPENSATION PLANS

       The Company has deferred compensation agreements with one active and one
retired employee providing for remaining payments amounting to $1,788,592. One
agreement, as modified, has been in effect since 1972 and the second agreement
was effective October 1989. The earliest of the agreements matured in December
1998. The agreements provide for monthly payments on retirement or death
benefits over fifteen year periods. The agreements are funded under trust
agreements whereby the Company pays to the trust amounts necessary to meet the
obligations under the deferred compensation agreements.

       Charges to operations applicable to those agreements were approximately
$20,000, $30,200 and $113,000 for the fiscal years 2001, 2000 and 1999,
respectively.

NOTE 11 -- EMPLOYEES' RETIREMENT PLAN

       During 1989, the Company adopted a 401(k) retirement plan for all
qualified employees of the Company to participate in the plan. Employees may
contribute a percentage of their pretax eligible compensation to the plan, and
the Company matches 50% of each employee's contribution up to 4% of pretax
eligible compensation. The Company's matching contributions totaled
approximately $173,000, $163,000 and $160,000 in fiscal years 2001, 2000 and
1999, respectively.

NOTE 12 -- COMMITMENTS AND CONTINGENCIES

       The Company had outstanding commitments backed by letters of credit of
approximately $5,321,000 and $11,302,000 at June 30, 2001 and July 1, 2000,
respectively, relating to the purchase of machine inventory for delivery to
customers.

       The Company filed a lawsuit with one of its customers for nonperformance
associated with certain sales contracts. On July 30, 2001, the defendant filed a
counterclaim alleging damages due to delay in delivery of machines and defects
in operation in the amount of $4,000,000 (Canadian) or approximately U.S. $2.6
million, plus interest and penalties in an unspecific amount. Based upon
discussions with its legal counsel, the Company believes the counterclaim is
without merit and intends to defend its position vigorously.

       In the normal course of business, the Company is named in various other
lawsuits. The Company vigorously defends such lawsuits, none of which are
expected to have a material impact on operations, either individually or in the
aggregate.

NOTE 13 -  SEGMENT INFORMATION

       During fiscal 1999, the Company adopted Statement of Financial Accounting
Standards No. 131, Disclosures about Segments of an Enterprise and Related
Information (SFAS No. 131). SFAS No. 131 establishes standards for the way that
public companies report information about operating segments in annual financial
statements and requires reporting of selected information about operating
segments in interim financial statements issued to the public. SFAS No. 131
defines operating segments as components of a company about which separate
financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing
performance.

                                      F-16

<PAGE>


                   SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

       The Company operates primarily in two segments of business, textile
equipment ("textile") and laundry equipment and services ("laundry"). Prior to
the acquisition of Wink Davis on August 1, 1997, the Company operated only in
the textile segment. TMC and Speizman Yarn are included in the textile equipment
classification. Corporate operations include general corporate expenses,
amortization of debt issuance costs, interest expense related to the Company's
credit facility and elimination of intersegment balances. The table below
summarizes financial data by segment.


<TABLE>
<CAPTION>
                                                   Total Textile       Total Laundry
                                                      Segment             Segment          Corporate         Total
                                                    ------------       -------------       ---------         -----
<S>                                        <C>    <C>                <C>                  <C>           <C>
Net Revenues .............................. 2001   $ 47,337,209        $  34,895,839     $         -     $  82,233,048
                                            2000     85,369,319           29,812,350               -       115,181,669
                                            1999     73,140,182           28,271,946               -       101,412,128

Earnings (Loss) before Interest & Taxes ... 2001     (6,397,597)             713,925      (1,368,464)       (7,052,136)
                                            2000      4,481,204              144,021      (1,306,821)        3,318,404
                                            1999      2,061,853             (240,540)     (1,096,694)          724,619

Total Assets .............................. 2001     43,338,426           14,570,252      (3,035,591)       54,873,087
                                            2000     55,328,543           13,498,780        (572,265)       68,255,058
                                            1999     43,669,908           13,901,259      (1,115,134)       56,456,033

Capital Expenditures ...................... 2001        182,277               36,443               -           218,720
                                            2000      3,214,245               59,043               -         3,273,288
                                            1999      4,828,402               48,062               -         4,876,464

Depreciation and Amortization ............. 2001        914,278              446,559          91,739         1,452,576
                                            2000        967,070              470,706         132,983         1,570,755
                                            1999        752,926              525,215          88,797         1,366,938

Interest Expense (Income) ................. 2001        963,415               27,690       1,431,220         2,422,325
                                            2000        727,303                7,090       1,238,145         1,972,538
                                            1999        (34,910)               4,984       1,133,067         1,103,141
</TABLE>



       In 2001, the loss before interest and taxes for the textile segment
includes foreign currency losses of $7.1 million which included a one-time loss
on settlement of uncommitted cash flow foreign currency derivative contracts of
$3.9 million. The balance of the loss was recognized in cost of sales.

NOTE 14 -- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                                                                       Year Ended
                                                              ------------------------------------------------------
                                                                   June 30,            July 1,             July 3,
                                                                    2001                2000                1999
                                                               -------------        -------------      ------------
<S>                                                           <C>                  <C>               <C>
Cash paid (received) during year for:
  Interest expense including capitalized interest of
   $392,000 for 1999 ......................................   $   2,388,716        $   2,053,566      $   1,686,815
  Income taxes ............................................        (304,330)             872,934            758,212
</TABLE>


                                       F-17

<PAGE>


                   SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Non-Cash Transactions:

       The Company acquired $255,000 of inventory through financing arrangements
with one of its vendors in 2001.

       A capital lease obligation of $1,900,000 was incurred in fiscal 1999 when
the Company entered into a lease for its corporate offices and warehouses. An
additional $2,800,000 was incurred in fiscal 2000 from the addition of 100,000
square feet of warehouse space leased and related land during the year.

NOTE 15 -- QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

       The following table presents unaudited supplemental quarterly financial
information for the years ended June 30, 2001 and July 1, 2000:

<TABLE>
<CAPTION>
                                                                             QUARTER ENDED
                                          September 30, 2000      December 30, 2000      March 31, 2001       June 30, 2001
                                          ------------------      -----------------      --------------       -------------
<S>                                      <C>                    <C>                    <C>                  <C>
2001
Revenues ..............................  $      20,895,881      $      17,810,685      $     21,164,396     $    22,362,086
Gross Profit ..........................          1,547,752              2,405,093             3,503,192           4,265,712
Operating Income (loss) ...............         (2,344,208)            (1,516,350)               25,509             708,860
Income (loss) before taxes ............         (2,855,612)            (6,089,017)             (600,567)             70,735
Net Income (loss) .....................  $      (1,783,658)     $      (3,750,871)     $       (370,567)    $        42,441

Basic earnings (loss) per share .......  $           (0.55)     $           (1.15)     $          (0.11)    $          0.01
Diluted earnings (loss) per share .....              (0.55)                 (1.15)                (0.11)               0.01

<CAPTION>
                                                                             QUARTER ENDED
                                            October 3, 1999        January 1, 2000        April 1, 2000        July 1, 2000
                                            ---------------        ---------------        -------------        ------------
<S>                                      <C>                    <C>                    <C>                  <C>
2000
Revenues ..............................  $      27,551,666      $      32,888,309      $     23,372,530     $    31,369,164
Gross Profit ..........................          4,984,259              6,457,345             3,287,428           4,009,886
Operating Income (loss) ...............          1,040,565              2,051,449              (256,883)            483,273
Income (loss) before taxes ............            653,775              1,648,666              (673,558)           (283,017)
Net Income (loss) .....................  $         390,775      $       1,002,666      $       (424,558)    $      (166,980)

Basic earnings (loss) per share .......  $            0.12      $            0.31      $          (0.13)    $         (0.05)
Diluted earnings (loss) per share .....               0.12                   0.30                 (0.13)              (0.05)
</TABLE>

Earnings (loss) per share calculation for each quarter are based on the weighted
average shares outstanding for each period. The sum of the quarters may not
necessarily be equal to the full year earnings (loss) per share amount.

                                       F-18

<PAGE>


                            [BDO SEIDMAN LETTERHEAD]



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
                         ON FINANCIAL STATEMENT SCHEDULE


Speizman Industries, Inc.


The audits referred to in our report dated August 15, 2001, relating to the
consolidated financial statements of Speizman Industries, Inc. and subsidiaries,
which is contained in Item 8 of this Form 10-K included the audit of the
financial statement schedule listed in the accompanying index. This financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement schedule
based upon our audits.

In our opinion, such financial statement schedule presents fairly, in all
material respects, the information set forth therein.

Charlotte, North Carolina                                       BDO Seidman, LLP
August 15, 2001



                                       S-1

<PAGE>

                   SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES

                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS


<TABLE>
<CAPTION>
Column A                                              Column B       Column C       Column D          Column E        Column F
--------                                              --------       --------       --------          --------        --------
                                                     Balance at     Charged to     Charged to        Deductions        Balance
                                                     beginning       costs and        other             from           at end
Description                                          of period       expenses       accounts          reserves        of period
-----------                                          ---------       --------       --------          --------        ---------
<S>                                                 <C>             <C>            <C>               <C>            <C>
Fiscal year ended July 3, 1999: .................
   Reserve for doubtful accounts ................   $   853,211     $   394,127    $       -         $  601,022     $   646,316
                                                    -----------     -----------    ----------        ----------     -----------
   Reserve for inventory obsolescence ...........   $   507,186     $   400,000    $       -         $  171,670     $   735,516
                                                    -----------     -----------    ----------        ----------     -----------
Fiscal year ended July 1, 2000:
   Reserve for doubtful accounts ................   $   646,316     $   259,034    $       -         $  303,545     $   601,805
                                                    -----------     -----------    ----------        ----------     -----------
   Reserve for inventory obsolescence ...........   $   735,516     $   807,001    $       -         $  230,179     $ 1,312,338
                                                    -----------     -----------    ----------        ----------     -----------
Fiscal year ended June 30, 2001:
   Reserve for doubtful accounts ................   $   601,805     $   413,207    $       -         $  267,920     $   747,092
                                                    -----------     -----------    ----------        ----------     -----------
   Reserve for inventory obsolescence ...........   $ 1,312,338     $   689,323    $       -         $  429,939     $ 1,571,722
                                                    -----------     -----------    ----------        ----------     -----------
</TABLE>

                                      S-2

<PAGE>

                            SPEIZMAN INDUSTRIES, INC.
                                INDEX TO EXHIBITS

 Exhibit
 Number                        Description of Exhibit
 ------                        ----------------------
  3.1      Certificate of Incorporation of Speizman Industries, Inc. (the
           "Company"). (Incorporated by reference to Exhibit 3.1 contained in
           the Company's Registration Statement on Form S-1 (the "1993 Form
           S-1"), registration number 33-69748, filed with the Securities and
           Exchange Commission (the "Commission") on September 30, 1993, and
           amendments thereto.)
  3.2      Certificate of Amendment to Certificate of Incorporation of the
           Company, dated December 4, 1978. (Incorporated by reference to
           Exhibit 3.2 contained in the 1993 Form S-1.)
  3.3      Certificate of Amendment to Certificate of Incorporation of the
           Company, dated February 8, 1993. (Incorporated by reference to
           Exhibit 3.3 contained in the 1993 Form S-1.)
  3.4      Certificate of Amendment of Certificate of Incorporation of the
           Company, dated January 31, 1997.
  3.5      Bylaws of the Company, as amended November 7, 1978. (Incorporated by
           reference to Exhibit 3.6 contained in the 1993 Form S-1.)
  4.1      Certificate of Incorporation of the Company as currently in effect
           (included as Exhibits 3.1 through 3.5). (Incorporated by reference to
           Exhibit 4.1 contained in the 1993 Form S-1.)
  4.2      Bylaws of the Company, as amended November 7, 1978. (Incorporated by
           reference to Exhibit 4.2 contained in the 1993 Form S-1.)
  4.3      Specimen Common Stock Certificate. (Incorporated by reference to
           Exhibit 4.3 contained in the 1993 Form S-1.)
  10.1     Agency Agreement between the Company and Lonati, S.r.l., Brescia,
           Italy ("Lonati"), dated January 2, 1992, relating to the Company's
           distribution of machines in the United States. (Incorporated by
           reference to Exhibit 10.1 contained in the 1993 Form S-1.)
  10.2     Agency Agreement between the Company and Lonati, dated January 2,
           1992, relating to the Company's distribution of machines in Canada.
           (Incorporated by reference to Exhibit 10.2 contained in the 1993 Form
           S-1.)
  10.3     Distribution Agreement by and between Company and Lonati, dated
           January 2, 1997, relating to the Company's distribution of circular
           knitting machines, ladies and men in Mexico. (Incorporated by
           reference to Exhibit 10.3 contained in the Company's Annual Report on
           Form 10-K for the fiscal year ended June 28, 1998, File No. 0-8544,
           filed with the Commission on September 25, 1998 (the "1998 Form
           10-K").)
  10.4     First Amendment to Agency Agreement the Company and Lonati effective
           May 3, 2001. Confidential Treatment requested pursuant to a request
           for confidential treatment filed with the SEC on September 28, 2001.
           The portions of the exhibit for which confidential treatment has been
           requested have been omitted from the exhibit. The omitted information
           has been filed separately with the Commission as part of the
           confidential treatment request.
  10.5     Agency Agreement between the Company and Santoni, S.r.l., Brescia,
           Italy ("Santoni"), dated January 2, 1992 ("Santoni Agreement").
           (Incorporated by reference to Exhibit 10.3 contained in the 1993 Form
           S-1.)
  10.6     Letter from Santoni relating to the Santoni Agreement, dated June 8,
           1992. (Incorporated by reference to Exhibit 10.4 contained in the
           1993 Form S-1.)
  10.7     Letter Agreement between the Company and Santoni relating to the
           Santoni Agreement, dated July 21, 1993. (Incorporated by reference to
           Exhibit 10.5 contained in the 1993 Form S-1.)
  10.8     Distributorship Agreement between the Company and Conti Complett,
           S.p.A., Milan, Italy, dated October 2, 1989. (Incorporated by
           reference to Exhibit 10.8 contained in the Company's Annual Report on
           Form 10-K for the fiscal year ended July 2, 1994, File No. 0-8544,
           filed with the Commission on September 30, 1994 (the "1994 Form
           10-K").)
  10.9     Letter Agreement between Speizman Yarn Equipment, Inc. and Margasa,
           dated June 15, 1999. (Incorporated by reference to Exhibit 10.10
           contained in the Company's Annual Report on Form 10-K for the fiscal
           year ended July 3, 1999, File No. 0-8544, filed with the Commission
           on October 1, 1999 (the "1999 Form 10-K".)
  10.10    Letter Agreement between Speizman Yarn Equipment, Inc. and Margasa,
           dated January 23, 2001.
  10.11    Letter Agreement between Speizman Yarn Equipment, Inc. and Meccanica
           Carresi, dated June 15, 1999. (Incorporated by reference to Exhibit
           10.11 contained in the 1999 Form 10-K.)
  10.12    Agency Agreement by and between U.T.I.T. S.p.A. and the Company,
           dated as of March 22, 2000. (Incorporated by reference to Exhibit
           10.13 contained in the Company's Annual Report on Form 10-K for the
           fiscal year ended July 1, 2000, File No. 0-8544, filed with the
           Commission on September 30, 2000 (the "2000 Form 10-K".)


  10.13    Split Dollar Insurance Agreement, dated January 15, 1992, between the
           Company and Richard A. Bigger, Jr.,

<PAGE>

           Successor Trustee of the Robert S. Speizman Irrevocable Insurance
           Trust. (Incorporated by reference to Exhibit 10.13 contained in the
           1993 Form S-1.)
  10.14    First Amendment to Split Dollar Insurance Agreement, dated September
           4, 1996, between the Company and Richard A. Bigger, Jr., Successor
           Trustee of the Robert S. Speizman Irrevocable Insurance Trust.
           (Incorporated by reference to Exhibit 10.16.1 contained in the
           Company's Annual Report on Form 10-K for the fiscal year ended June
           29, 1996, File No. 0-8544, filed with the Commission on September 25,
           1996 (the "1996 Form 10-K").)
  10.15    Lease Agreement by and between The Speizman LLC and the Company
           regarding corporate headquarters and warehouse, dated as of December
           1, 1999. (Incorporated by reference to Exhibit 10.17 contained in the
           2000 Form 10-K.)
  10.16    First Amendment to Lease Agreement, dated December 1, 1999 by and
           between The Speizman LLC and the Company, dated as of June 2000.
           (Incorporated by reference to Exhibit 10.18 contained in the 2000
           Form 10-K.)
  10.17*   1981 Incentive Stock Option Plan of the Company. (Incorporated by
           reference to Exhibit 10.19 contained in the 1993 Form S-1.)
  10.18*   1991 Incentive Stock Option Plan and Amendment to 1981 Incentive
           Stock Option Plan of the Company. (Incorporated by reference to
           Exhibit 10.20 contained in the 1993 Form S-1.)
  10.19*   1991 Incentive Stock Option Plan, as Amended and Restated Effective
           September 20, 1993, of the Company. (Incorporated by reference to
           Exhibit 10.21 contained in the 1993 Form S-1.)
  10.20*   Speizman Industries, Inc. 1995 Stock Option Plan. (Incorporated by
           reference to Exhibit 4 to the Company's Registration Statement on
           Form S-8, registration number 333-06287, filed with the Commission on
           June 19, 1996.)
  10.21*   Speizman Industries, Inc. Nonqualified Stock Option Plan as amended
           on October 4, 1996. (Incorporated by reference to Exhibit 99.1 to the
           Company's Registration Statement on Form S-8, registration no.
           333-23503, filed with the Commission on March 18, 1997.)
  10.22*   Speizman Industries, Inc. Nonqualified Stock Option Plan as amended
           on September 29, 1997. (Incorporated by reference to Exhibit 99.1 to
           the Company's Registration Statement on Form S-8, registration no.
           333-46769, filed with the Commission on February 24, 1998.)
  10.23*   Speizman Industries, Inc. 2000 Equity Compensation Plan of the
           Company.
  10.24*   Restated Deferred Compensation Agreement, dated May 22, 1989, between
           the Company and Josef Sklut, as amended by Amendment to Deferred
           Compensation Agreement, dated December 30, 1992 (the "Deferred
           Compensation Agreement"). (Incorporated by reference to Exhibit 10.27
           contained in the 1993 Form S-1.)
  10.25*   Restated Trust Agreement, dated May 22, 1989, between the Company and
           First Citizens Bank and Trust Company, as amended by First Amendment
           to Trust Agreement dated December 30, 1992, relating to the Deferred
           Compensation Agreement. (Incorporated by reference to Exhibit 10.28
           contained in the 1993 Form S-1.)
  10.26*   Letter Agreement between the Company and John C. Angelella, regarding
           his employment with the Company.
  10.27*   Executive Bonus Plan of the Company, adopted February 2, 1990, as
           amended March 5, 1990. (Incorporated by reference to Exhibit 10.29
           contained in the 1993 Form S-1.)
  10.28*   Executive Bonus Plan of the Company, adopted July 20, 1993.
           (Incorporated by reference to Exhibit 10.30 contained in the 1993
           Form S-1.)
  10.29*   Resolutions of the Company's Board of Directors dated November 15,
           1995, extending Executive Bonus Plan adopted July 20, 1993.
           (Incorporated by reference to Exhibit 10.34 contained in the
           Company's Annual Report on Form 10-K for the fiscal year ended July
           1, 1995, File No. 0-8544, filed with the Commission on September 29,
           1995 (the "1995 Form 10-K").)
  10.30    Redemption Agreement between the Company and Robert S. Speizman,
           dated May 31, 1974, as amended by Modified Redemption Agreement,
           dated April 14, 1987, Second Modified Redemption Agreement, dated
           September 30, 1991, and Third Modified Redemption Agreement, dated as
           of July 14, 1993. (Incorporated by reference to Exhibit 10.34
           contained in the 1993 Form S-1.)
  10.31    Fourth Modified Redemption Agreement between the Company and Robert
           S. Speizman, dated September 14, 1994. (Incorporated by reference to
           Exhibit 10.36 contained in the Company's 1995 Form 10-K).
  10.32    Credit Facility Agreement by and between the Company and its
           subsidiaries and SouthTrust Bank, N.A., dated as of May 31, 2000.
           (Incorporated by reference to Exhibit 10.53 contained in the 2000
           Form 10-K.)
  10.33    Amendment and Forbearance Agreement by and between the Company and
           its subsidiaries and SouthTrust, dated as of November 13, 2000.
           (Incorporated by reference to Exhibit 10(a) contained in the
           Company's Quarterly Report on Form 10-Q for quarter ended December
           30, 2000, File No. 0-8544, filed with the Commission on February 13,
           2001 (the "December 30, 2000 Form 10-Q".)

  10.34    Second Amendment and Forbearance Agreement by and between the Company
           and its subsidiaries and SouthTrust dated as of July 1, 2001.
  10.35    Stock Purchase Agreement, dated as of July 31, 1997, by and among
           Speizman Industries, Inc. and Wink Davis,

<PAGE>

           Jr., C. Alexander Davis, Wingfield Austin Davis IIII, Taylor Ferrell
           Davis, Allison Davis Jabaley, Matthew Worley Davis, Amy Butler Davis
           and Kyle Alexander Davis. (Incorporated by reference to Exhibit 3
           contained in the Company's Current Report on Form 8-K, File No.
           0-8544, filed on August 14, 1997.)
  10.36    Dealer Agreement by and between Pellerin Milnor Corporation and Wink
           Davis Equipment Company, Inc. ("Wink Davis"), dated July 1, 1989,
           relating to the Company's distribution of machines primarily in the
           southeastern United States and the Chicago, Illinois area.
           (Incorporated by reference to Exhibit 10.50 contained in the
           Company's Annual Report on Form 10-K for fiscal year ended June 27,
           1997, File No. 0-8544, filed with the Commission on September 26,
           1997 (the "1997 Form 10-K").)
  10.37    Distributor Agreement by and between Chicago Dryer Corporation
           ("CDC") and Wink Davis, dated January 1, 1994, relating to the
           distribution of certain items of CDC's commercial laundry equipment.
           (Incorporated by reference to Exhibit 10.51 contained in the
           Company's 1997 Form 10-K.)
  10.38    Atlanta Commercial Board of Realtors Standard Commercial Lease
           Agreement by and among Davis Brothers Venture and Wink Davis, dated
           July 31, 1997 relating to the Atlanta, Georgia area. (Incorporated by
           reference to Exhibit 10.52 contained in the Company's 1997 Form
           10-K.)
  10.39    Atlanta Commercial Board of Realtors Standard Commercial Lease
           Agreement by and among Davis Brothers Venture and Wink Davis, dated
           July 31, 1997 relating to the Charlotte, North Carolina area.
           (Incorporated by reference to Exhibit 10.53 contained in the
           Company's 1997 Form 10-K.)
  10.40    Atlanta Commercial Board of Realtors Standard Commercial Lease
           Agreement by and among Davis Brothers Venture and Wink Davis, dated
           July 31, 1997 relating to the Wooddale, Illinois area. (Incorporated
           by reference to Exhibit 10.54 contained in the Company's 1997 Form
           10-K.)
  10.41    Atlanta Commercial Board of Realtors Standard Commercial Lease
           Agreement by and among Davis Brothers Venture and Wink Davis, dated
           July 31, 1997 relating to the Chester, Virginia area. (Incorporated
           by reference to Exhibit 10.55 contained in the Company's 1997 Form
           10-K.)
  10.42    Lease Agreement by and between The Speizman LLC, II and Wink Davis
           Equipment Company, Inc., dated as of March 1, 2000 relating to the
           Wink Davis Charlotte, North Carolina office. (Incorporated by
           reference to Exhibit 10.61 contained in the 2000 Form 10-K.)
  10.43    Letter Agreement by the Company and Wink Davis relating to the
           Charlotte, North Carolina, Richmond, Virginia and Chicago, Illinois
           locations, dated August 10, 1999. (Incorporated by reference to
           Exhibit 10.71 contained in the Company's 1999 Form 10-K.)
  10.44    Letter Agreement by the Company and Davis Brothers Venture relating
           to the Chicago, Illinois location, dated August 24, 2001.
  10.45    Earnout Agreement by and among Speizman Industries, Inc. and C.
           Alexander Davis, Amy Butler Davis, Taylor Ferrell Davis and Kyle
           Alexander Davis, dated July 31, 1997. (Incorporated by reference to
           Exhibit 10.56 contained in the Company's 1997 Form 10-K.)
  10.46    Stock Purchase Agreement, dated as of February 6, 1998, by and among
           Speizman Industries, Inc. and William H. Todd, Leon Locklear, Marion
           C. Todd and Joseph L. Collins. (Incorporated by reference to Exhibit
           10.64 contained in the Company's 1998 Form 10-K.)
  10.47    Letter of Intent regarding licensing agreement between TMC and SRA
           srl dated July 31, 2000. (Incorporated by reference to Exhibit 10.67
           contained in the Company's 2000 Form 10-K.)
  10.48    License Agreement by and between Todd Motion Controls, Inc and SRA
           srl, dated October 4, 2000. (Incorporated by reference to Exhibit
           10(b) contained in the Company's December 30, 2000 Form 10-Q.)

  21       List of Subsidiaries
  23       Consent of BDO Seidman, LLP

__________________
* Represents a management contract or compensatory plan or arrangement of the
Registrant.

</TEXT>
</DOCUMENT>
