1078394--3/28/2007--BGF_INDUSTRIES

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{debt, indebtedness, cash}

{cost, contract, operation}

{product, market, service}

{cost, regulation, environmental}

{customer, product, revenue}

{tax, income, asset}

{condition, economic, financial}

{investment, property, distribution}

As a result of our significant debt, we may not be able to meet our obligations or obtain additional financing for capital expenditures or other beneficial activities. We may not be able to generate sufficient cash flow to meet our debt obligations, including making required payments on the Senior Subordinated Notes. Because the WFF Loan is senior to and will mature prior to the Senior Subordinated Notes, we may not have enough assets left to pay the holders of our Senior Subordinated Notes. The indenture governing the Senior Subordinated Notes limits our ability to incur additional debt, transfer or sell assets, and merge or consolidate. The WFF Loan may prevent us from satisfying our obligations under the Senior Subordinated Notes. Market downturns could reduce the demand for our products. We compete in highly competitive markets and recent competition from Asia has reduced demand for our electronic glass fiber fabrics and increased supply, which could result in lower sales. Our operating performance is dependent upon a limited number of customers. A decrease in business from major customers could reduce cash available to make required payments under the Senior Subordinated Notes. If we are not able to keep up with technological advances in the markets we serve or if our competitors introduce cost-effective alternatives to our products, we could experience declining sales or a loss of customers. Our products may be viewed as commodities by our customers, which could lead to increased competition from foreign manufacturers. In-sourcing of fabric manufacturing by our customers would reduce the demand for our products. We may experience a decline in the supply of raw materials, which means we could have to pay higher prices for raw materials or we could be delayed in making our products. We will incur substantial costs with respect to our ongoing environmental cleanup projects and monitoring projects at our Altavista and Cheraw facilities, which will reduce our cash available to make required payments under our Senior Subordinated Notes. We may be responsible for safety and health costs that could adversely affect our business, financial condition and results of operations and result in less cash available to make required payments under the Senior Subordinated Notes. Our operations are subject to various hazards that may cause personal injury or property damage and increase our operating costs Anticipated increased health care expenses will reduce our future net income. Anticipated increases in the funding requirements of our pension plan will reduce our future net income and liquidity. Ongoing compliance with increasingly complex regulations governing companies that make voluntary filings with the SEC will likely increase our future selling, general and administrative expenses. We may have conflicts of interest with our controlling equity holder that could result in changes in our business that could adversely affect our financial condition and results of operations.

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1078394--3/28/2007--BGF_INDUSTRIES_INC