content: SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C. 20549
  
  
  
                                      FORM 10-Q
  
  
                  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
  
                  For the quarterly period ended September 28, 1997
  
                           Commission file number 0-22624
  
  
  
                              FOAMEX INTERNATIONAL INC.
               (Exact name of registrant as specified in its charter)
  
  
  
  
               Delaware                                  05-0473908
  (State or other jurisdiction of                     (I.R.S. Employer
  incorporation or organization)                      Identification Number)
  
  
  1000 Columbia Avenue
  Linwood, PA                                                19061
  (Address of principal                                    (Zip Code)
  executive offices)
  
  
  Registrant's telephone number, including area code:  (610) 859-3000
  
  Indicate by check mark whether the registrant (1) has filed all reports required
  to be filed 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 such  filing
  requirements for the past 90 days. YES X NO
  
  The number of shares of the registrant's common stock outstanding as of November
  3, 1997 was 24,919,680.
  
  
                                    Page 1 of 27
                            Exhibit List on Page 21 of 27
  
  <PAGE>
                              FOAMEX INTERNATIONAL INC.
  
                                        INDEX
                                                                              Page
  
  Part I.   Financial Information:
  
            Item 1.  Financial Statements
  
               Condensed Consolidated Statements of Operations -
                 Thirteen Week and Thirty-Nine Week Periods Ended
                 September 28, 1997 and September 29, 1996                       3
  
               Condensed Consolidated Balance Sheets as of September 28,
                 1997 and December 29, 1996                                      4
  
               Condensed Consolidated Statements of Cash Flows -
                 Thirty-Nine Week Periods Ended September 28, 1997 and
                 September 29, 1996                                              5
  
               Notes to Condensed Consolidated Financial Statements              6
  
            Item 2.  Management's Discussion and Analysis of Financial 
                     Condition and Results of Operations                        15
  
  Part II.  Other Information                                                   21
  
            Exhibit List                                                        21
  
            Signatures                                                          27
  
  <PAGE>
  PART I.  FINANCIAL INFORMATION
  ITEM 1.  FINANCIAL STATEMENTS
  
                FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
  
  <TABLE>
  <CAPTION>
                                             13 Week Periods Ended        39 Week Periods Ended
                                          September 28, September 29,  September 28,   September 29,
                                              1997          1996            1997          1996
                                                   (thousands except per share data)
  
  <S>                                      <C>           <C>            <C>            <C>      
  NET SALES                                $ 233,434     $ 236,766      $ 702,441      $ 696,344
  
  COST OF GOODS SOLD                         195,395       196,806        576,825        582,186
                                           ---------     ---------      ---------      ---------
  
  GROSS PROFIT                                38,039        39,960        125,616        114,158
  
  SELLING, GENERAL AND
     ADMINISTRATIVE EXPENSES                  15,766        15,485         47,853         43,207
                                           ---------     ---------      ---------      ---------
  
  INCOME FROM OPERATIONS                      22,273        24,475         77,763         70,951
  
  INTEREST AND DEBT ISSUANCE EXPENSE          12,080        13,794         39,522         39,742
  
  OTHER INCOME, NET                              324           501          1,410          1,003
                                           ---------     ---------      ---------      ---------
  
  INCOME FROM CONTINUING OPERATIONS
     BEFORE PROVISION FOR INCOME TAXES        10,517        11,182         39,651         32,212
  
  PROVISION FOR INCOME TAXES                   4,002         3,826         15,530         12,408
                                           ---------     ---------      ---------      ---------
  
  INCOME FROM CONTINUING OPERATIONS            6,515         7,356         24,121         19,804
  
  LOSS FROM DISCONTINUED OPERATIONS,
     NET OF INCOME TAX BENEFITS                   --       (73,576)            --       (111,594)
  
  EXTRAORDINARY LOSS ON EARLY
     EXTINGUISHMENT OF DEBT,
     NET OF INCOME TAXES                          --          (403)       (42,599)          (403)
                                           ---------     ---------      ---------      ---------
  
  NET INCOME (LOSS)                        $   6,515     $ (66,623)     $ (18,478)     $ (92,193)
                                           =========     =========      =========      =========
  
  EARNINGS (LOSS) PER SHARE:
  
  CONTINUING OPERATIONS                    $    0.26     $    0.29      $    0.94      $    0.77
  DISCONTINUED OPERATIONS                         --         (2.88)            --          (4.33)
  EXTRAORDINARY LOSS                              --         (0.02)         (1.66)         (0.02)
                                           ---------     ---------      ---------      ---------
  EARNINGS (LOSS) PER SHARE                $    0.26     $   (2.61)     $   (0.72)     $   (3.58)
                                           =========     =========      =========      =========
  
  WEIGHTED AVERAGE NUMBER
     OF SHARES OUTSTANDING                    25,435        25,541         25,645         25,749
                                           =========     =========      =========      =========
  </TABLE>
  
       The accompanying notes are an integral part of the condensed
                    consolidated financial statements.
  
                                    3
  <PAGE>
                     FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
  
  <TABLE>
  <CAPTION>
                                                             September 28,    December 29,
  ASSETS                                                         1997             1996
  CURRENT ASSETS:                                                     (thousands)
  <S>                                                          <C>            <C>      
     Cash and cash equivalents                                 $   1,916      $  22,203
     Accounts receivable, net                                    142,410        126,573
     Inventories                                                  94,301        102,610
     Other current assets                                         53,476         55,718
                                                               ---------      ---------
       Total current assets                                      292,103        307,104
  
  PROPERTY, PLANT AND EQUIPMENT, NET                             207,676        195,373
  
  COST IN EXCESS OF ASSETS ACQUIRED, NET                          80,624         82,471
  
  DEBT ISSUANCE COSTS, NET                                        17,771         18,628
  
  DEFERRED INCOME TAXES                                           24,111             --
  
  OTHER ASSETS                                                    20,343         16,270
                                                               ---------      ---------
  
  TOTAL ASSETS                                                 $ 642,628      $ 619,846
                                                               =========      =========
  
  LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
  CURRENT LIABILITIES:
     Short-term borrowings                                     $   4,871      $   3,692
     Current portion of long-term debt                             9,434         14,505
     Accounts payable                                             87,339         84,930
     Accrued interest                                              7,273          9,012
     Other accrued liabilities                                    66,170         58,384
                                                               ---------      ---------
       Total current liabilities                                 175,087        170,523
                                                               ---------      ---------
  
  LONG-TERM DEBT                                                 528,872        483,344
                                                               ---------      ---------
  
  OTHER LIABILITIES                                               27,074         24,082
                                                               ---------      ---------
  
  COMMITMENTS AND CONTINGENCIES                                       --             --
                                                               ---------      ---------
  
  STOCKHOLDERS' EQUITY (DEFICIT):
     Preferred Stock, par value $1.00 per share:
     Authorized 5,000,000 shares - none issued                        --             --
     Common Stock, par value $.01 per share:
       Authorized 50,000,000 shares, Issued 26,908,680 and
       26,753,262 shares, respectively; Outstanding
       24,919,680 and 25,198,862 shares, respectively                269            267
     Additional paid-in capital                                   85,743         84,579
     Retained earnings (accumulated deficit)                    (140,251)      (120,174)
     Other                                                       (14,964)        (9,312)
                                                               ---------      ---------
                                                                 (69,203)       (44,640)
  
     Common Stock held in treasury, at cost; 1,989,000
       shares at September 28, 1997 and 1,554,400 Shares
       at December 29, 1996, respectively                        (19,202)       (13,463)
                                                               ---------      ---------
  
       Total stockholders' equity (deficit)                      (88,405)       (58,103)
                                                               ---------      ---------
  
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)         $ 642,628      $ 619,846
                                                               =========      =========
  </TABLE>
  
       The accompanying notes are an integral part of the condensed
                    consolidated financial statements.
  
                                    4
  <PAGE>
                FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
  
  <TABLE>
  <CAPTION>
                                                                                39 Week Periods Ended
                                                                             September 28,  September 29,
                                                                                 1997           1996
  OPERATING ACTIVITIES:                                                             (thousands)
  <S>                                                                        <C>            <C>       
     Net income (loss)                                                       $ (18,479)     $ (92,193)
     Adjustments to reconcile  net income (loss) to net cash
       provided by operating activities:
        Depreciation and amortization                                           16,409         16,861
        Amortization of debt issuance costs and debt discount                    7,380         10,283
        Extraordinary loss on extinguishment of debt                            42,599            403
        Loss from discontinued operations                                           --        111,594
        Other operating activities, net                                          9,274         (4,095)
        Changes in operating assets and liabilities, net of acquisitions       (26,807)        (7,558)
                                                                             ---------      ---------
  
        Net cash provided by continuing operations                              30,376         35,295
        Net cash provided by discontinued operations                                --         14,415
                                                                             ---------      ---------
        Net cash provided by operating activities                               30,376         49,710
                                                                             ---------      ---------
  
  INVESTING ACTIVITIES:
     Capital expenditures                                                      (25,865)       (14,536)
     Decrease (increase) in restricted cash                                     12,143        (33,149)
     Proceeds from sale of discontinued operations                                  --         45,425
     Loan to shareholder                                                        (5,000)            --
     Other investing activities                                                 (2,930)         1,745
     Discontinued operations investing activities                                   --         (4,828)
                                                                             ---------      ---------
  
        Net cash used for investing activities                                 (21,652)        (5,343)
                                                                             ---------      ---------
  
  FINANCING ACTIVITIES:
     Net proceeds from short-term borrowings                                     1,179          2,970
     Net proceeds from revolving loans                                          31,000             --
     Proceeds from long-term debt                                              453,500             --
     Repayments of long-term debt                                             (450,270)       (19,034)
     Premiums and payments associated with debt extinguishment                 (42,565)            --
     Debt issuance costs                                                       (15,617)            --
     Purchase of treasury stock                                                 (5,739)        (5,789)
     Other financing activities                                                   (499)            70
     Discontinued operations financing activities                                   --        (12,184)
                                                                             ---------      ---------
  
        Net cash used for financing activities                                 (29,011)       (33,967)
                                                                             ---------      ---------
  
  NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                         (20,287)        10,400
  
  CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                              22,203          6,162
                                                                             ---------      ---------
  
  CASH AND CASH EQUIVALENTS AT END OF PERIOD                                 $   1,916      $  16,562
                                                                             =========      =========
  </TABLE>
  
       The accompanying notes are an integral part of the condensed
                    consolidated financial statements.
  
                                    5
  <PAGE>
                     FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  1.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  
       Foamex International Inc.'s (the "Company") condensed  consolidated balance
  sheet as of December 29, 1996 has been condensed  from the audited  consolidated
  balance  sheet at that date.  The  condensed  consolidated  balance  sheet as of
  September 28, 1997, the condensed consolidated  statements of operations for the
  thirteen  week  and  thirty-nine  week  periods  ended  September  28,  1997 and
  September 29, 1996 and the condensed  consolidated  statements of cash flows for
  the  thirty-nine  week periods  ended  September 28, 1997 and September 29, 1996
  have been  prepared by the Company  and have not been  audited by the  Company's
  independent  accountants.   In  the  opinion  of  management,  all  adjustments,
  consisting only of normal recurring adjustments, considered necessary for a fair
  presentation  of the financial  position,  results of operations  and cash flows
  have been included.
  
       Certain information and note disclosures normally included in the financial
  statements prepared in accordance with generally accepted accounting  principles
  have been condensed or omitted in accordance  with the rules and  regulations of
  the Securities and Exchange Commission.  These condensed  consolidated financial
  statements  should be read in conjunction  with the Company's 1996  consolidated
  financial  statements  and notes  thereto as set forth in the  Company's  Annual
  Report on Form 10-K for the fiscal year ended December 29, 1996.
  
  2.   DISCONTINUED OPERATIONS
  
       In  December  1996,  the  Company  completed  the  sale of its  partnership
  interests  in  JPS  Automotive  L.P.  ("JPS  Automotive")  for a sale  price  of
  approximately  $220.1  million  including  $200.1  million  of JPS  Automotive's
  indebtedness.  The sale price is subject to a post-closing adjustment.  The sale
  included the net assets of the  automotive  textiles  business  segment.  During
  1996, the Company sold the  outstanding  common stock of Perfect Fit Industries,
  Inc. ("Perfect Fit"), a wholly-owned  subsidiary,  for an adjusted sale price of
  approximately  $44.2  million.  The sale  included  the net  assets  of the home
  comfort products business segment.
  
       The  Company's  condensed  consolidated  financial  statements  reflect the
  discontinuation  of the home comfort  products and automotive  textile  business
  segments.  In  addition  to  the  interest  and  debt  issuance  expense  of JPS
  Automotive,  interest and debt issuance  expense was  allocated to  discontinued
  operations  based on the estimated debt to be retired from the net proceeds from
  the sale of Perfect  Fit and JPS  Automotive.  A summary of the  results for the
  discontinued operations is as follows:
  
  <TABLE>
  <CAPTION>
                                                                    13 Week Period Ended    39 Week Period Ended
                                                                     September 29, 1996      September 29, 1996
                                                                                     (thousands)
  <S>                                                                       <C>                 <C>      
            Net sales                                                       $  36,540           $ 244,305
            Gross profit                                                        3,842              38,296
            Income from operations                                                596              17,072
            Interest and debt issuance expense                                  3,101              16,905
            Loss on disposal of discontinued operations,
                net of income taxes                                           (71,713)           (111,010)
            Other income (expense)                                                 93                (975)
            Loss from discontinued operations before
                benefit from income taxes                                     (74,125)           (111,818)
            Benefit for income taxes                                             (549)               (224)
            Loss from discontinued operations, net of income taxes            (73,576)           (111,594)
  </TABLE>
  
                                         6
  <PAGE>
                     FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  3.   INVENTORIES
  
       The components of inventories consist of:
  
  <TABLE>
  <CAPTION>
                                         September 28,     December 29,
                                             1997              1996
                                                   (thousands)
  <S>                                      <C>               <C>     
       Raw materials and supplies          $ 49,067          $ 61,559
       Work-in-process                       17,568            13,453
       Finished goods                        27,666            27,598
                                           --------          --------
  
       Total                               $ 94,301          $102,610
                                           ========          ========
  </TABLE>
  
  4.   EARNINGS (LOSS) PER SHARE
  
       Earnings  (loss)  per share is  calculated  by  dividing  net income by the
  weighted average shares of common stock  outstanding.  Common stock  equivalents
  have been included in the weighted  average  shares of common stock  outstanding
  for 1997 and 1996.
  
       In February 1997, the Financial Accounting Standards Board issued Statement
  of Financial  Accounting  Standards ("SFAS") No. 128, "Earnings Per Share". SFAS
  No. 128  specifies  new  standards  designed to improve the  earnings  per share
  ("EPS") information provided in financial statements by simplifying the existing
  computational guidelines,  revising the disclosure requirements,  and increasing
  the  comparability  of EPS data on an international  basis.  Some of the changes
  made to simplify the EPS computations  include: (i) eliminating the presentation
  of primary EPS and replacing it with basic EPS,  with the  principal  difference
  being that common stock  equivalents  are not considered in computing basic EPS,
  (ii)  eliminating  the  modified  treasury  stock  method and the three  percent
  materiality provision and (iii) revising the contingent share provisions and the
  supplemental EPS data  requirements.  Fully diluted earnings per share under the
  provisions of SFAS No.128 would not differ significantly from earnings per share
  presented on the consolidated  statement of operations.  In addition,  under the
  provisions of SFAS No. 128, the Company would have reported the following  basic
  per share information:
  
  <TABLE>
  <CAPTION>
                                                          13 Week Periods Ended               39 Week Periods Ended
                                                     September 28,      September 29,     September 28,   September 29,
                                                           1997              1996              1997            1996
                                                                    (thousands except per share data)
  <S>                                                    <C>             <C>                <C>             <C> 
       Basic loss per share                               $0.26            $(2.64)            $(0.73)        $(3.62)
       Weighted  average shares  outstanding             24,959            25,251             25,198         25,450
  </TABLE>
  
                                         7
  <PAGE>
  
                     FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  5.   LONG-TERM DEBT
  
       Long-term debt consists of:
  
  <TABLE>
  <CAPTION>
                                                                            September 28,       December 29,
                                                                                 1997               1996
                                                                                      (thousands)
  
  <S>                                                                          <C>               <C>     
       9 7/8% senior subordinated notes due 2007 (1)                            $150,000          $     --
       Foamex L.P. term loans (7.83% interest rate
           at September 28, 1997) (2)                                            298,000                --
       Foamex L.P. revolving loan (7.62% interest rate
           at September 28, 1997) (3)                                             31,000                --
       9 1/2% senior secured notes due 2000 (4)                                    4,523           106,793
       11 1/4% senior notes due 2002 (4)                                           5,825           141,400
       11 7/8% senior subordinated debentures due 2004 (net of
           unamortized debt discount of $116 and $769) (4)                        20,227           125,056
       Senior secured discount debentures due 2004, Series B
           (net of unamortized debt discount of $35,864) (5)                          --            80,881
       11 7/8% senior subordinated debentures due 2004, Series B (6)                  45             7,000
       Industrial revenue bonds (7)                                                7,000             7,000
       Foamex L.P. term loan (8.54% interest rate as of
           December 29, 1996) (7)                                                     --            11,000
       Subordinated note (net of debt discount of $969 and $1,198) (7)             6,046             5,817
       Other                                                                      15,640            12,902
                                                                                --------          --------
  
                                                                                 538,306           497,849
  
       Less current portion                                                        9,434            14,505
                                                                                --------          --------
  
       Long-term debt                                                           $528,872          $483,344
                                                                                ========          ========
  <FN>
  
  (1)  Subsidiary  debt of Foamex  L.P.  and Foamex  Capital  Corporation  ("FCC")
       (together  the  "Issuers"),  guaranteed  by General Felt  Industries,  Inc.
       ("General Felt"),  Foamex Fibers, Inc. ("Foamex Fibers") and certain future
       domestic subsidiaries of the Issuers.
  
  (2)  Subsidiary debt of Foamex L.P., guaranteed by the Company, General Felt and
       Foamex Fibers.
  
  (3)  Subsidiary debt of Foamex L.P. and General Felt,  guaranteed by the Company
       and Foamex Fibers.
  
  (4)  Subsidiary debt of the Issuers, guaranteed by the Company and General Felt.
  
  (5)  Subsidiary debt of FJPS and Foamex-JPS Capital  Corporation,  guaranteed by
       the Company.
  
  (6)  Subsidiary debt of the Issuers, guaranteed by General Felt.
  
  (7)  Subsidiary debt of Foamex L.P.
  </FN>
  </TABLE>
  
                                         8
  <PAGE>
  
                     FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  5.   LONG-TERM DEBT (continued)
  
       Refinancing Plan
  
       On June 12, 1997, the Company  substantially  completed a refinancing  plan
  (the  "Refinancing  Plan") that included the  refinancing  of certain  long-term
  indebtedness  to reduce the  Company's  interest  expense and improve  financing
  flexibility.  In connection with the  Refinancing  Plan,  Foamex L.P.  purchased
  approximately  $342.3 million of aggregate  principal  amount of its public debt
  and  approximately  $116.7 million of aggregate  principal  amount of Foamex-JPS
  Automotive   L.P.'s  ("FJPS")  senior  secured  discount   debentures  due  2004
  ("Discount  Debentures")  and repaid $5.2 million of term loan borrowings  under
  its old credit facility. The Company incurred an extraordinary loss on the early
  extinguishment  of debt associated with the  Refinancing  Plan of  approximately
  $42.0 million (net of income taxes).  The Refinancing  Plan was funded by $347.0
  million of  borrowings  under a new $480.0  million  credit  facility  (the "New
  Credit  Facility") and the net proceeds from the issuance of $150.0 million of 9
  7/8% senior subordinated notes due 2007.
  
       In  addition,  on  October  1,  1997,  the  Company  redeemed  all  of  the
  outstanding: (i) 11 1/4% senior notes due 2002, (ii) 11 7/8% senior subordinated
  debentures  due 2004 and (iii) the 11 7/8% senior  subordinated  debentures  due
  2004,  Series B, constituting  approximately  $26.0 million of the approximately
  $30.0  million of  outstanding  public debt that was not tendered as part of the
  Refinancing Plan. The redemption was funded with borrowings under the New Credit
  Facility.  In connection with this  redemption,  the Company expects to incur an
  extraordinary  loss on the early  extinguishment  of debt of approximately  $1.6
  million (net of income taxes) in the fourth quarter of 1997.
  
       Term Loans and Revolving Loan
  
       On June 12, 1997,  Foamex L.P.  entered into the New Credit Facility with a
  group of banks that provides for term loans of up to $330.0 million which expire
  from June  2003 to June 2006 and  borrowings  of up to  $150.0  million  under a
  revolving  line of credit which  expires in June 2003.  In  connection  with the
  Refinancing  Plan,  Foamex L.P.  entered  into term loans of $298.0  million and
  borrowed $49.0 million under the revolving line of credit.
  
       The term loans are comprised of a (i) term A loan ("Term A") which provides
  up to $120.0  million of borrowings of which Foamex L.P.  borrowed $88.0 million
  in connection with the  Refinancing  Plan, (ii) term B loan ("Term B") of $110.0
  million and (iii) term C loan ("Term C") of $100.0 million.  The remaining $32.0
  million  available under the Term A is restricted and can only be used by Foamex
  L.P. to retire its public debt not tendered in connection  with the  Refinancing
  Plan with such  unused  availability  terminating  June 15,  1998.  Foamex  L.P.
  borrowed  $29.0 million under the Term A in connection  with the October 1, 1997
  redemption.
  
       Borrowings   under  the  New  Credit   Facility   are   collateralized   by
  substantially  all of the assets of Foamex L.P.,  General Felt and Foamex Fibers
  on a pari passu  basis  with the 9 1/2%  senior  secured  notes due 2000 and the
  industrial revenue bonds (collectively, the "Notes"); however, the rights of the
  holders  of the  applicable  issue of the  Notes  to  receive  payment  upon the
  disposition of the collateral securing such issue of Notes has been preserved.
  
       Pursuant to the terms of the New Credit Facility,  borrowed funds will bear
  interest at a floating rate equal to an applicable margin, as defined,  plus the
  higher of (i) the base rate of The Bank of Nova  Scotia,  in effect from time to
  time, or (ii) a rate that is equal to 0.5% per annum plus the federal funds rate
  in effect from time to time.  The applicable  margin is determined  based on the
  total net debt to EBDAIT ratio,  as defined,  and can range from no margin up to
  1.125% per annum for Term A and revolving loans, from 0.875% per annum to 1.375%
  per annum for Term B and from  1.125%  per annum to 1.625% per annum for Term C.
  At the option of Foamex L.P.,  portions of the  outstanding  loans under the New
  Credit Facility are convertible into LIBOR based loans
  
                                         9
  <PAGE>
  
                     FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  5.   LONG-TERM DEBT (continued)
  
  which bear interest at a floating  rate equal to an applicable  margin for LIBOR
  based loans,  as defined,  plus the average  LIBOR,  as defined.  The applicable
  margin for LIBOR based loans is a rate that will generally  equal the applicable
  margin (discussed above) plus 1.0% per annum.
  
       9 7/8% Senior Subordinated Notes due 2007 ("Senior Subordinated Notes")
  
       The Senior  Subordinated  Notes  were  issued by Foamex  L.P.  and FCC in a
  private placement under Rule 144A of the Securities Act of 1933, as amended,  on
  June 12, 1997 in connection with the Refinancing  Plan. The Senior  Subordinated
  Notes bear interest at the rate of 9 7/8% per annum payable semiannually on each
  June 15 and December 15, commencing  December 15, 1997. The Senior  Subordinated
  Notes mature on June 15, 2007. The Senior  Subordinated Notes may be redeemed at
  the option of Foamex L.P., in whole or in part, at any time on or after June 15,
  2002, initially at 104.938% of their principal amount, plus accrued interest and
  liquidated  damages,  as defined,  if any, thereon to the date of redemption and
  declining to 100.0% on or after June 15, 2005. In addition, at any time prior to
  June 15, 2000,  Foamex L.P. may on one or more  occasions  redeem up to 35.0% of
  the initially outstanding principal amount of the Senior Subordinated Notes at a
  redemption  price  equal to  109.875%  of the  principal  amount,  plus  accrued
  interest and liquidated  damages, if any, thereon to the date of redemption with
  the cash proceeds of one or more Public Equity Offerings,  as defined.  Upon the
  occurrence  of  a  change  of  control,  as  defined,   each  holder  of  Senior
  Subordinated  Notes will have the right to require Foamex L.P. to repurchase the
  Senior  Subordinated  Notes at a price equal to 101.0% of the principal  amount,
  plus accrued interest and liquidated damages, if any, to the date of repurchase.
  The Senior Subordinated Notes are subordinated in right of payment to all senior
  indebtedness  and are pari passu in right of payment to the  subordinated  note.
  The Senior  Subordinated  Notes contain certain covenants that will limit, among
  other  things,  the ability of Foamex L.P.  (i) to pay  distributions  or redeem
  partnership interests, (ii) to make certain restrictive payments or investments,
  (iii) to incur additional  indebtedness or issue Preferred  Equity Interest,  as
  defined,  (iv) to merge,  consolidate  or sell all or  substantially  all of its
  assets or (v) to enter into  certain  transactions  with  affiliates  or related
  persons. The Senior Subordinated Notes are guaranteed by General Felt and Foamex
  Fibers and certain future domestic subsidiaries of the Issuers.
  
       The Issuers  have filed a  registration  statement  relating to an exchange
  offer in which the Issuers will offer to exchange the Senior  Subordinated Notes
  issued in the private  placement for new notes.  The terms of the new notes will
  be substantially identical in all respects (including principal amount, interest
  rate,  maturity  and  ranking)  to the terms of the Senior  Subordinated  Notes,
  except  that the new notes  will be  transferable  by  holders  thereof  without
  further registration under the Securities Act of 1933, as amended (except in the
  case of Senior  Subordinated  Notes held by  affiliates  of the  Issuers and for
  certain  other  holders),   and  are  not  subject  to  any  covenant  regarding
  registration under the Securities Act of 1933, as amended. The exchange offer is
  expected to be consummated during November 1997.
  
       Principal  payments on the  Company's  long-term  debt for the remainder of
  1997 and for the next five years are as  follows:  1997 - $4.3  million;  1998 -
  $12.7 million; 1999 - $21.6 million; 2000 - $32.1 million; 2001 - $32.1 million;
  2002 - $33.5 million; and thereafter - $403.1 million.
  
       Early Extinguishment of Debt - Refinancing Plan
  
       In  connection  with  the  Refinancing   Plan,  the  Company   incurred  an
  extraordinary  loss on the early  extinguishment of debt of approximately  $42.0
  million (net of income tax benefits of $25.7 million). The extraordinary loss is
  comprised of  approximately  $39.0 million for premium and consent fee payments,
  approximately  $16.2 million for the  write-off of debt issuance  costs and debt
  discount,  approximately $8.2 million for the loss associated with the effective
  termination and amendment of the interest rate swap agreements and approximately
  $4.3  million of  professional  fees and other  costs.  In  connection  with the
  Refinancing Plan, Foamex
  
                                         10
  <PAGE>
  
                     FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  5.   LONG-TERM DEBT (continued)
  
  L.P. repaid $5.2 million in term loan  borrowings  under its old credit facility
  and purchased  approximately  $459.0  million of aggregate  principal  amount of
  public debt comprised of:
  
  o    $99.8 million of aggregate  principal  amount of its 9 1/2% senior  secured
       notes due 2000 for an aggregate consideration of 104.193% of principal plus
       accrued interest, comprised of a tender price of 102.193% and a consent fee
       of 2.0%;
  
  o    $130.1  million of aggregate  principal  amount of its 11 1/4% senior notes
       due 2002 for an  aggregate  consideration  of  105.709% of  principal  plus
       accrued interest, comprised of a tender price of 103.709% and a consent fee
       of 2.0%;
  
  o    $105.5  million  of  aggregate  principal  amount  of  its 11  7/8%  senior
       subordinated debentures due 2004 for an aggregate consideration of 107.586%
       of principal plus accrued interest, comprised of a tender price of 105.586%
       and a consent fee of 2.0%;
  
  o    $6.9  million  of  aggregate   principal  amount  of  its  11  7/8%  senior
       subordinated debentures,  series B, due 2004 for an aggregate consideration
       of 107.586% of principal plus accrued interest, comprised of a tender price
       of 105.586% and a consent fee of 2.0%; and
  
  o    $116.7 million of aggregate principal amount of the Discount Debentures for
       an aggregate  consideration of 9.0% of principal  amount,  which represents
       approximately  116.2%  of the  accreted  book  value as of June  12,  1997,
       comprised of a tender price of 88.0% and a consent fee of 2.0%.
  
       Early Extinguishment of Debt - Other
  
       In  addition,  during 1997 the  Company  incurred  extraordinary  losses of
  approximately  $0.6  million  (net of  income  tax  benefits  of  $0.4  million)
  associated  with the early  extinguishment  of  approximately  $11.8  million of
  long-term  debt funded with  approximately  $12.1  million of the  remaining net
  proceeds  from the sale of Perfect Fit. The  extraordinary  loss is comprised of
  approximately  $0.4 million of premium payments and  approximately  $0.6 million
  for the write-off of debt issuance costs. The long-term debt was comprised of:
  
  o    $2.5 million of  aggregate  principal  amount of its 9 1/2% senior  secured
       notes due 2000.
  
  o    $5.5 million of aggregate  principal amount of its 11 1/4% senior notes due
       2002.
  
  o    Bank term loan  borrowings  of $3.8 million  under Foamex L.P.'s old credit
       facility.
  
       Interest Rate Swaps
  
       The  Company  uses  derivative  financial  instruments  to manage  interest
  expense.  All  derivative  financial  instruments  are  classified  as "held for
  purposes  other  than  trading".  The  Company  does  not  use  derivatives  for
  speculative purposes.
  
       Interest  rate swap  agreements  are used to  manage  interest  expense  by
  changing the  interest  rate  characteristics  of certain  debt  instruments  to
  approximate current market conditions.  The amended interest rate swap agreement
  matures  in June  2007  which  is  consistent  with  the  underlying  debt.  The
  differential  paid or received on interest rate swap agreements is recognized on
  an accrual basis as an adjustment to interest and debt
  
                                         11
  <PAGE>
  
                     FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  5.   LONG-TERM DEBT (continued)
  
  issuance expense.  
  
       In connection with the Refinancing  Plan,  Foamex L.P.'s existing  interest
  rate swap agreements with a notional amount of $300.0 million were considered to
  be effectively  terminated  since the underlying  debt was  extinguished.  These
  interest  rate swap  agreements  had an estimated  fair value  liability of $8.2
  million  at  the  date  of  the  Refinancing  Plan  which  is  included  in  the
  extraordinary  loss  on the  early  extinguishment  of  debt.  In lieu of a cash
  payment  for the  estimated  fair  value  of the  existing  interest  rate  swap
  agreements,  Foamex L.P. entered into an amendment of the existing interest rate
  swap  agreements  resulting in one interest rate swap  agreement with a notional
  amount of $150.0 million through June 2007.  Accordingly,  the $8.2 million fair
  value  liability has been recorded as a deferred  credit which will be amortized
  as a reduction of interest and debt issuance  expense on a  straight-line  basis
  over the life of the amended  interest  rate swap  agreement.  Under the amended
  interest rate swap agreement, Foamex L.P. is obligated to make fixed payments of
  5.75% per annum through December 1997 and variable  payments based on the higher
  of LIBOR at the  beginning  or the end of the  period for the  remainder  of the
  agreement, in exchange for fixed payments by the swap partner at 6.44% per annum
  for the life of the  agreement,  payable  semiannually  in arrears.  The amended
  interest rate swap agreement can be terminated by either party in June 2002, and
  annually thereafter, for a cash settlement based on the fair market value of the
  amended  interest rate swap  agreement.  Interest and debt  issuance  expense is
  subject to  fluctuations  in LIBOR during the term of the swap agreement  except
  during   1997.   Foamex  L.P.  is  exposed  to  credit  loss  in  the  event  of
  nonperformance by the swap partner; however, the occurrence of this event is not
  anticipated.  The  effect  of the  interest  rate  swaps  described  above was a
  favorable  adjustment to interest and debt issuance  expense of $0.5 million and
  $0.9  million  for the  thirteen  week  periods  ended  September  28,  1997 and
  September  29,  1996,  respectively,  and $2.2  million and $2.8 million for the
  thirty-nine  week  periods  ended  September  28, 1997 and  September  29, 1996,
  respectively.
  
  6.   ENVIRONMENTAL MATTERS
  
       As of September 28, 1997,  the Company has accruals of  approximately  $3.8
  million for environmental  matters.  In addition,  as of September 28, 1997, the
  Company  has  net  receivables  of   approximately   $1.0  million  relating  to
  indemnification   for  environmental   liabilities,   net  of  an  allowance  of
  approximately  $1.0 million  relating to potential  disagreements  regarding the
  scope of the  indemnification.  The Company believes that realization of the net
  receivables established for indemnification is probable.
  
       On May 5,  1997,  there  was an  accidental  chemical  spill  at one of the
  Company's manufacturing facilities that was contained on site. The Company is in
  the process of  disposing  of the  contaminated  soil which is estimated to cost
  approximately  $0.6  million.  As of September  28, 1997,  the Company has spent
  approximately $0.5 million for remediation costs related to this chemical spill.
  The  actual  cost and the  timetable  for the  clean-up  of the site  cannot  be
  predicted with any degree of certainty at this time; therefore,  there can be no
  assurance  that the  clean-up of the site will not result in a more  significant
  environmental liability in the future.
  
       The Company has reported to appropriate state authorities that it has found
  soil  and  groundwater  contamination  in  excess  of  state  standards  at four
  additional  facilities and soil  contamination  in excess of state  standards at
  three other  facilities.  The Company has begun  remediation  and is  conducting
  further  investigations into the extent of the contamination at these facilities
  and, accordingly, the extent of the remediation that may ultimately be required.
  The actual cost and the  timetable of any such  remediation  cannot be predicted
  with any degree of certainty at this time. As of September 28, 1997, the Company
  has  environmental  accruals of  approximately  $2.9  million for the  remaining
  potential remediation costs for these facilities based on engineering estimates.
  
                                         12
  <PAGE>
  
                     FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  6.   ENVIRONMENTAL MATTERS (continued)
  
       Federal  regulations  require that by 1998 all  underground  storage  tanks
  ("USTs") be removed or upgraded in most states to meet applicable standards. The
  Company has six USTs that will require removal or permanent  in-place closure by
  the end of  1998.  Due to the age of these  tanks,  leakage  may  have  occurred
  resulting  in soil and  possibly  groundwater  contamination.  The  Company  has
  accrued approximately $0.3 million for the estimated removal and remediation, if
  any,  associated with the USTs.  However,  the full extent of contamination and,
  accordingly,  the actual cost of such  remediation  cannot be predicted with any
  degree of certainty at this time. The Company believes that its USTs do not pose
  a  significant  risk  of  environmental   liability  because  of  the  Company's
  monitoring  practices for USTs and conditional  approval for permanent  in-place
  closure for certain USTs. However, there can be no assurance that such USTs will
  not result in significant environmental liability in the future.
  
       The Company has been designated as a Potentially  Responsible Party ("PRP")
  by the United States Environmental Protection Agency (the "EPA") with respect to
  thirteen  sites,  with an  estimated  total  liability  to the  Company  for the
  thirteen  sites of less than  approximately  $0.5  million.  Estimates  of total
  clean-up costs and fractional allocations of liability are generally provided by
  the EPA or the  committee of PRP's with respect to the  specified  site. In each
  case, the participation of the Company is considered to be immaterial.
  
       Although it is possible that new information or future  developments  could
  require the Company to reassess its potential  exposure  relating to all pending
  environmental  matters,  management  believes  that,  based  upon all  currently
  available  information,  the resolution of such  environmental  matters will not
  have a material adverse effect on the Company's operations,  financial position,
  capital expenditures or competitive position.  The possibility exists,  however,
  that new  environmental  legislation  and/or  environmental  regulations  may be
  adopted,  or other  environmental  conditions  may be found to  exist,  that may
  require expenditures not currently anticipated and that may be material.
  
  7.   LITIGATION
  
       As of November 3, 1997, Foamex L.P. and Trace  International  Holdings Inc.
  ("Trace Holdings") were two of multiple defendants in actions filed on behalf of
  approximately  5,500 persons in various  United States  federal and state courts
  and one Canadian  provincial  court by  recipients of breast  implants,  some of
  which allege substantial  damages,  but most of which allege unspecified damages
  for  personal  injuries  of various  types.  Three of these cases seek to allege
  claims on behalf of all breast implant  recipients or other  allegedly  affected
  parties,  but only one class has been  approved or certified  by the court,  and
  that is a class  limited to Louisiana  residents  or persons who received  their
  implants in Louisiana. In addition,  three cases have been filed alleging claims
  on behalf of  approximately  725 residents of Australia and New Zealand.  During
  1995,  Foamex  L.P.  and Trace  Holdings  were  granted  summary  judgments  and
  dismissed  as  defendants  from all cases in the  federal  courts of the  United
  States and the state  courts of  California.  Appeals for these  decisions  were
  withdrawn and the decisions are final.  Although  breast implants do not contain
  foam,  certain  silicone gel implants were produced  using a  polyurethane  foam
  covering  fabricated by independent  distributors or fabricators  from bulk foam
  purchased  from Foamex L.P. or Trace  Holdings.  Neither  Foamex L.P.  nor Trace
  Holdings  recommended,  authorized  or  approved  the use of its foam for  these
  purposes.  Foamex  L.P.  believes  that the  number of suits and  claimants  may
  increase,  but  not  significantly.  While  it is not  feasible  to  predict  or
  determine the outcome of these actions, based on management's present assessment
  of the merits of pending claims,  after consultation with the general counsel of
  Trace  Holdings,  management  believes that the  disposition of matters that are
  pending or that may reasonably be  anticipated to be asserted  should not have a
  material adverse effect on either Foamex L.P.'s or Trace Holdings'  consolidated
  financial  position or results of operations.  In addition,  Foamex L.P. is also
  indemnified  by  Trace  Holdings  for  any  such  liabilities  relating  to foam
  manufactured  prior to the  capitalization  of  Foamex  L.P.  in  October  1990.
  Although Trace Holdings has paid Foamex L.P.'s  litigation  expenses pursuant to
  such  indemnification,  and  management  believes  Trace  Holdings  will be in a
  position to continue to pay such
  
                                         13
  <PAGE>
  
                     FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  7.   LITIGATION (continued)
  
  
  expenses, there can be no assurance that Trace Holdings will be able to continue
  to provide such  indemnification.  Based on  information  available at this time
  with  respect  to  the  potential  liability,  the  Company  believes  that  the
  proceedings  should not  ultimately  result in any  liability  that would have a
  material  adverse  effect on the financial  position or results of operations of
  the Company. If management's  assessment of Foamex L.P.'s liability with respect
  to these actions is incorrect, such actions could have a material adverse effect
  on the Company.
  
       The  Company is party to various  other  lawsuits,  both as  defendant  and
  plaintiff,  arising  in the  normal  course of  business.  It is the  opinion of
  management  that the  disposition of these lawsuits will not  individually or in
  the  aggregate,  have a material  adverse  effect on the  financial  position or
  results  of  operations  of  the  Company.  If  management's  assessment  of the
  Company's  liability  with respect to these actions is  incorrect,  such actions
  could have a material  adverse  effect on the Company's  consolidated  financial
  position.
  
  8.   RELATED PARTY TRANSACTION
  
       On July 1,  1997,  Trace  Holdings  borrowed  $5.0  million  pursuant  to a
  promissory  note with an aggregate  principal  amount of $5.0 million  issued to
  Foamex L.P. on June 12, 1997. The  promissory  note is due and payable on demand
  or, if no demand is made,  on July 7, 2001,  and bears  interest  at 2 3/8% plus
  three-month LIBOR, as defined, per annum payable quarterly in arrears commencing
  October 1, 1997.  The  promissory  note is  included in the other  component  of
  stockholders' equity (deficit).
  
       During June 1997,  Foamex L.P. and Trace Foam Company,  Inc. ("Trace Foam")
  amended  their  management  services  agreement  to increase the annual fee from
  $1.75 million to $3.0 million, plus reimbursement of expenses incurred.
  
       On June 12, 1997, a promissory note issued to Foamex L.P. by Trace Holdings
  was amended. The amended promissory note is an extension of a promissory note of
  Trace Holdings that was due in July 1997. The aggregate  principal amount of the
  amended  promissory  note was  increased to  approximately  $4.8 million and the
  maturity of the promissory  note was extended.  The  promissory  note is due and
  payable on demand or, if no demand is made, on July 7, 2001,  and bears interest
  at 2 3/8% plus  three-month  LIBOR, as defined,  per annum payable  quarterly in
  arrears.   The  promissory   note  is  included  in  the  other   components  of
  stockholders' equity (deficit).
  
       In  connection  with  the  Refinancing   Plan,  Foamex  L.P.  made  a  cash
  distribution of  approximately  $1.5 million to Trace Foam as a result of Foamex
  L.P.'s  distribution to FJPS and FMXI, Inc. of the Discount  Debentures,  a note
  with a principal  amount of  approximately  $56.2 million (net of  approximately
  $20.6 million of original issue discount) due from FJPS and a promissory note in
  the  aggregate  principal  amount  of $2.0  million  due from the  Company.  The
  distribution to Trace Foam reduced retained  earnings  (accumulated  deficit) of
  the Company.
  
  9.   SUBSEQUENT EVENT
  
       On October 6, 1997, the Company sold substantially all of the net assets of
  its  needlepunch  carpeting,  tufted  carpeting and  artificial  grass  products
  business  located at its facilities in Dalton,  Georgia to Bretlin,  Inc. for an
  aggregate sale price of  approximately  $41.2 million,  subject to  post-closing
  adjustments.  The Company expects to realize an immaterial gain on the sale (net
  of income taxes) in the fourth  quarter of 1997.  The Company used $38.8 million
  of the net sale proceeds to repay outstanding term loan borrowings under the New
  Credit Facility. In connection with this repayment, the Company expects to incur
  an extraordinary loss on the early  extinguishment of debt of approximately $0.6
  million (net of income tax benefits) during the fourth quarter of 1997.
  
                                         14
  <PAGE>
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS
  
  
       The Company operates in the flexible polyurethane and advanced polymer foam
  products  industry.  The Company's  operations are conducted through its largest
  subsidiary Foamex L.P., together with Foamex L.P.'s  wholly-owned  subsidiaries,
  General Felt, Foamex Fibers, Foamex Canada Inc., Foamex Latin America, Inc., and
  Foamex Asia, Inc. The following  discussion  should be read in conjunction  with
  the condensed consolidated financial statements and related notes thereto of the
  Company  included in this report.  Certain  information in this report  contains
  forward-looking statements and should be read in conjunction with the discussion
  regarding forward-looking statements set forth on pages 3 and 4 of the Company's
  1996 Annual Report on Form 10-K.
  
       On June 12, 1997, the Company substantially  completed the Refinancing Plan
  which included the repurchase of $342.3 million of aggregate principal amount of
  Foamex L.P.'s public debt and $116.7  million of aggregate  principal  amount of
  the Discount Debentures and the payment of $5.2 million of Foamex L.P. term loan
  borrowings under its old credit facility.  The Company incurred an extraordinary
  loss on the early extinguishment of debt associated with the Refinancing Plan of
  approximately  $42.0 million (net of income tax benefits of approximately  $25.7
  million).  The Refinancing Plan was funded by $347.0 million of borrowings under
  the New  Credit  Facility  and the net  proceeds  from the  issuance  the Senior
  Subordinated  Notes.  See  Note  5  to  the  condensed   consolidated  financial
  statements  for further  discussion.  As a result of the  Refinancing  Plan, the
  Company's  total  long-term  debt  increased  $63.9  million to $556.5  million.
  However,  the Company expects the Refinancing Plan to result in interest expense
  savings of approximately  $3.5 million in the second half of 1997 as compared to
  the first half of 1997, and annualized interest expense savings of approximately
  $8.0 million,  as compared to the debt structure prior to the Refinancing  Plan,
  assuming no material  changes in interest rates.  The Company's  future interest
  expense,  and the ability to realize the expected  savings in interest  expense,
  will vary based on a variety of factors, including fluctuation in interest rates
  in general.  As a result of the Refinancing Plan, variable rate debt comprises a
  larger percentage of the Company's overall indebtedness than in the past, and as
  a result,  future  fluctuations  in interest rates will have a greater impact on
  the Company's interest expense than in the past.
  
       In  addition,  on  October  1,  1997,  the  Company  redeemed  all  of  the
  outstanding: (i) 11 1/4% senior notes due 2002, (ii) 11 7/8% senior subordinated
  debentures  due 2004 and (iii) the 11 7/8% senior  subordinated  debentures  due
  2004,  Series B, constituting  approximately  $26.0 million of the approximately
  $30.0  million of  outstanding  public debt that was not tendered as part of the
  Refinancing Plan. The redemption was funded with borrowings under the New Credit
  Facility.  In connection with this  redemption,  the Company expects to incur an
  extraordinary  loss on the early  extinguishment  of debt of approximately  $1.6
  million (net of income tax benefits) in the fourth quarter of 1997.
  
       Also,  on October 6, 1997,  the Company sold  substantially  all of the net
  assets of its  needlepunch  carpeting,  tufted  carpeting and  artificial  grass
  products  business  located at its facilities in Dalton,  Georgia  ("Dalton") to
  Bretlin,  Inc.  for an  aggregate  sale price of  approximately  $41.2  million,
  subject  to  post-closing  adjustments.   The  Company  expects  to  realize  an
  immaterial gain on the sale (net of income taxes) in the fourth quarter of 1997.
  Dalton's  revenues  were $10.7  million and $9.3 million for the  thirteen  week
  periods ended September 28, 1997 and September 29, 1996, respectively, and $35.1
  million and $32.1 million for the  thirty-nine  week periods ended September 28,
  1997 and September 29,1996,  respectively.  As of September 28, 1997, Dalton had
  $7.5 million, $14.8 million, $12.3 million and $2.0 million of inventories,  net
  plant, property and equipment, net goodwill and other assets, respectively.  The
  Company used $38.8  million of the net sale proceeds to repay  outstanding  term
  loan  borrowings  under  the  New  Credit  Facility.  In  connection  with  this
  repayment,  the  Company  expects  to incur an  extraordinary  loss on the early
  extinguishment  of  debt of  approximately  $0.5  million  (net  of  income  tax
  benefits) during the fourth quarter of 1997.
  
       During  July 1997,  the  Company  announced  the  creation  of a new senior
  management   operating  committee  to  simplify  the  Company's  management  and
  reporting  structure and to position the Company to achieve its strategic  goals
  which include: (i) to focus on its core flexible polyurethane  operations in the
  automotive,   carpet  cushion,  technical,   cushioning  and  furniture  markets
  (furniture  sales were  previously  combined  with  cushioning  sales),  (ii) to
  maximize  revenue  growth  by  increasing  market  share  in  existing  markets,
  introducing  new and 
  
                                         15
  <PAGE>
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS
  
  enhanced  foam  products   with  higher   margins  and  pursuing   international
  opportunities and (iii) to continue to lower its cost structure.
  
       The principal  suppliers to the foam  industry  announced raw material cost
  increases  effective  April 1997.  The impact of the raw material cost increases
  were not  significant  during the second quarter of 1997.  However,  the Company
  estimates  the raw  material  cost  increases,  net of sale price  increases  to
  customers,  had an unfavorable  impact of approximately  $2.0 million during the
  third quarter of 1997.  There can be no assurance  that chemical  suppliers will
  not increase  raw material  costs in the future or that the Company will be able
  to  implement  selling  price  increases  to offset any such raw  material  cost
  increases.
  
       During  1996,  the  Company  sold  Perfect  Fit  and JPS  Automotive  which
  comprised the home comfort products and automotive  textile  business  segments,
  respectively,   of  the  Company.   Accordingly,   the  accompanying   condensed
  consolidated statements of operations for the thirteen week and thirty-nine week
  periods ended  September 29, 1996 and the  condensed  consolidated  statement of
  cash flows for the thirty-nine  week period ended September 29, 1996 reflect the
  home comfort products and automotive  textile business  segments as discontinued
  operations.  See Note 2 to the condensed  consolidated  financial statements for
  further discussion.
  
       Operating  results  for 1997  are  expected  to be  influenced  by  various
  internal and external factors.  These factors include,  among other things,  (i)
  continued  implementation of the continuous  improvement  program to improve the
  Company's profitability, (ii) additional raw material cost increases, if any, by
  the Company's chemical  suppliers,  (iii) the Company's success in passing on to
  its  customers  selling  price  increases  to  recover  such raw  material  cost
  increases, and (iv) fluctuations in interest rates.
  
  13 Week  Period  Ended  September  28, 1997  Compared  to 13 Week  Period  Ended
  September 29, 1996
  
  Results of Operations
  
       Net sales for the third quarter of 1997 were $233.4  million as compared to
  $236.8 million in the third quarter of 1996, a decrease of $3.4 million or 1.4%.
  Carpet  cushion  products net sales for the third quarter of 1997 decreased 6.4%
  to $72.0 million from $77.0  million in the third quarter of 1996  primarily due
  to a change in product mix and competitive  pricing  pressure  resulting from an
  excess  supply of foam trim,  the primary  component of rebond  carpet  cushion.
  Cushioning  products net sales for the third quarter of 1997  increased  5.7% to
  $60.2 million from $57.0  million in the third quarter of 1996  primarily due to
  an increase in net sales from both new and existing customers of bedding related
  products.  Furniture  products net sales for the third  quarter of 1997 of $29.6
  million were  consistent as compared to net sales of $29.0 million for the third
  quarter of 1996.  Automotive  products  net sales for the third  quarter of 1997
  decreased  6.4% to $52.3 million from $55.9 million in the third quarter of 1996
  primarily due to decreased net sales volume resulting from reduced car and light
  truck builds due to temporary production shut-downs at several Chrysler and Ford
  facilities  for new model  conversions  and slower  than  expected  start-up  of
  several new platforms during the third quarter of 1997.  Technical  products net
  sales for the third quarter of 1997  increased  8.0% to $19.3 million from $17.9
  million  in the third  quarter  of 1996  primarily  due to  increased  net sales
  volume.
  
       Gross profit as a percentage of net sales  decreased to 16.3% for the third
  quarter of 1997 from 16.9% in the third  quarter  of 1996  primarily  due to the
  unfavorable   impact  of  the   unrecovered   raw  material  cost  increases  of
  approximately  $2.0 million during the third quarter of 1997, offset by improved
  material and production  efficiencies and  manufacturing  cost containment which
  includes favorable raw material efficiencies and an increased impact of the 1995
  restructuring and operational plan in 1997 as compared to 1996.
  
       Income from operations  decreased to $22.3 million for the third quarter of
  1997 from  $24.5  million  in the third  quarter  of 1996  primarily  due to the
  reasons discussed above and an increase in selling,  general and  administrative
  expenses of $0.3 million for the third quarter of 1997. The increase in selling,
  general and  
  
                                         16
  
  <PAGE>
  
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS
  
  administrative   expenses  is  primarily   due  to  increases  in  research  and
  development  costs and travel and promotion costs  associated with the launching
  of new products  and  international  expansion  offset by a decrease in employee
  compensation and incentives.
  
       Income from  continuing  operations  decreased to $6.5 million or $0.26 per
  share for the third  quarter of 1997 as  compared  to $7.4  million or $0.29 per
  share in the third quarter of 1996. The decrease is primarily due to the reasons
  cited above,  offset by a decrease in interest and debt issuance expense of $1.7
  million.  The decrease in interest and debt issuance expense is primarily due to
  the  effects  of the  Refinancing  Plan,  as  previously  discussed.  Loss  from
  discontinued  operations  in the third  quarter of 1996  represents  the loss on
  disposal  of JPS  Automotive  and the  operating  losses of Perfect  Fit and JPS
  Automotive which were sold during 1996. See Note 2 to the condensed consolidated
  financial  statements for further discussion.  The effective income tax rate for
  continuing  operations  increased  to 38.1% for the third  quarter  of 1997 from
  34.2% in the third  quarter  of 1996  primarily  due to the impact in 1996 of an
  income  tax  benefit  associated  with the  reversal  of  income  tax  valuation
  allowances.
  
       The  extraordinary  loss on early  extinguishment  of debt of approximately
  $0.4 million (net of income tax benefits of  approximately  $0.3 million) during
  the third  quarter  of 1996  relates to the  write-off  of debt  issuance  costs
  associated  with the early  extinguishment  of $12.0  million  of bank term loan
  borrowings.
  
  39 Week  Period  Ended  September  28, 1997  Compared  to 39 Week  Period  Ended
  September 29, 1996
  
  Results of Operations
  
       Net sales for 1997 were $702.4  million as  compared  to $696.3  million in
  1996, an increase of $6.1 million or 0.9%. Carpet cushion products net sales for
  1997  decreased 1.0% to $214.9 million from $217.2 million in 1996 primarily due
  to a change in product mix and competitive  pricing  pressure  resulting from an
  excess  supply of foam trim,  the primary  component of rebond  carpet  cushion.
  Cushioning  products net sales for 1997  increased  4.4% to $167.6  million from
  $160.5  million in 1996  primarily due to an increase in net sales from both new
  and existing customers of bedding related products. Furniture products net sales
  for 1997 of $92.1  million  were  consistent  as  compared to net sales of $91.5
  million  for 1996.  Automotive  products  net sales for 1997  decreased  2.2% to
  $171.4  million for 1997 from $175.2 million for 1996 primarily due to increased
  selling  prices  implemented  during the first quarter of 1996 offset by reduced
  net sales  volume in 1997 as compared  to 1996  resulting  from  reduced car and
  light truck builds due to temporary  production  shut-downs at several  Chrysler
  and Ford facilities,  slower than expected start-up of several new platforms and
  labor  strikes at both  Chrysler  and General  Motors  plants  during the second
  quarter of 1997.  Technical  products net sales for 1997 increased 8.8% to $56.4
  million from $51.9 million in 1996 primarily due to increased net sales volume.
  
       Gross profit as a percentage of net sales  increased to 17.9% for 1997 from
  16.4% in 1996 primarily due to selling price  increases,  improved  material and
  production efficiencies and manufacturing cost containment which include (i) the
  impact during 1997 of the selling  prices  initiated in 1996 to offset  previous
  raw material cost increases,  (ii) favorable raw material efficiencies and (iii)
  an increased  favorable impact of the 1995 restructuring and operational plan in
  1997 as compared to 1996.  These  increases  were offset by  approximately  $2.0
  million of unrecovered  raw material cost increases  during the third quarter of
  1997.
  
       Income  from  operations  increased  to $77.8  million  for 1997 from $71.0
  million in 1996  primarily  due to improved  gross  profit  margins as discussed
  above, offset by a $4.6 million increase in selling,  general and administrative
  expenses for 1997 as compared to the comparable period for 1996. The increase in
  selling,  general and  administrative  expenses is primarily due to increases in
  employee compensation and incentives, research and development costs, and travel
  and  promotion  costs   associated  with  the  launching  of  new  products  and
  international expansion.
  
       Income from continuing  operations  increased to $24.1 million or $0.94 per
  share for 1997 as  compared  to $19.8  million  or $0.77 per share in 1996.  The
  increase is primarily  due to the reasons  cited above.  Loss from  discontinued
  operations for 1996  represents the loss on the disposals of Perfect Fit and JPS
  Automotive and their 
  
                                         17
  <PAGE>
  
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS
  
  operating  losses  which  were sold  during  1996.  See Note 2 to the  condensed
  consolidated  financial statements for further discussion.  The effective income
  tax rate for  continuing  operations  increased  to 39.2% for 1997 from 38.5% in
  1996  primarily  due to the impact in 1996 of an income tax  benefit  associated
  with the reversal of income tax valuation allowances.
  
       The  extraordinary  loss on early  extinguishment  of debt  during  1997 of
  approximately  $42.6 million (net of income tax benefits of approximately  $26.1
  million)  relates to premium and consent fee  payments,  the  write-off  of debt
  issuance costs associated with the early  extinguishment of approximately $476.0
  million of aggregate principal amount of debt in connection with the Refinancing
  Plan and other debt  extinguishment  during  1997.  See Note 5 to the  condensed
  consolidated financial statements for further discussion. The extraordinary loss
  on early extinguishment of debt of approximately $0.4 million (net of income tax
  benefits of  approximately  $0.3 million)  during 1996 primarily  relates to the
  write-off of debt issuance costs  associated  with the early  extinguishment  of
  $12.0 million of bank term loan borrowings.
  
  Liquidity and Capital Resources
  
       Liquidity and Capital Resources
  
       The Company's  operating cash requirements  consist  principally of working
  capital   requirements,   scheduled   payments  of  principal  and  interest  on
  outstanding  indebtedness  and capital  expenditures.  The Company believes that
  cash flow from operating activities,  cash on hand and periodic borrowings under
  revolving  credit  agreements,  if  necessary,  will be  adequate  to  meet  its
  operating cash  requirements.  The ability to meet  operating cash  requirements
  could  be  impaired  if the  Company  were  to fail to  comply  with  any of the
  covenants   contained  in  its  credit   agreements  or   indentures   and  such
  noncompliance was not cured or waived by the lenders or bondholders. The Company
  was in compliance with such covenants as of September 28, 1997 and expects to be
  in compliance with such covenants for the foreseeable future. The ability of the
  Company to receive  distributions  from its  subsidiaries  is  restricted by the
  terms of its existing financing agreements.
  
       Cash and cash  equivalents  decreased  $20.3  million  during  1997 to $1.9
  million at  September  28, 1997 from $22.2  million at December  29,  1996.  The
  decrease in cash and cash equivalents was primarily due to: (i) $25.9 million of
  cash  used for  capital  expenditures,  (ii) $5.7  million  of cash used for the
  purchase of treasury  stock,  (iii) $6.5 million of cash used for  distributions
  and a loan to a  shareholder,  (iv)  $10.6  million  of cash used for  financing
  activities after considering the decrease in restricted cash offset by (v) $30.4
  million of cash provided by operating activities. The $10.6 million of cash used
  for financing activities reflects the: (a) $450.3 million repayment of long-term
  debt, (b) $15.6 million of cash used for debt issuance costs,  (c) $42.5 million
  of cash used for  premium  and  consent  fee  payments  and other  cash  charges
  associated with the Refinancing Plan and other debt extinguishment offset by (d)
  $485.7  million  of cash  proceeds  from  long-term  debt,  revolving  loans and
  short-term  borrowings and (e) the decrease of restricted cash of $12.1 million.
  Cash flow from continuing operations decreased $4.9 million to $30.4 million for
  1997 as compared to $35.3 million for 1996. Cash flow from continuing operations
  decreased  for 1997 as  compared  to 1996  primarily  due to the use of cash for
  operating assets offset by an increase in income from continuing operations.
  
       Working  capital  decreased  $19.6  million  for 1997 to $117.0  million at
  September  28, 1997 from $136.6  million at December 29,  1996.  The decrease in
  working  capital is  primarily  due to the $20.3  million  decrease in cash,  as
  previously  discussed  and  a  $10.0  million  net  increase  in  other  current
  liabilities,  offset by a $5.1  million  increase  in net  operating  assets and
  liabilities,  as  discussed  below,  and a $3.9 million  decrease in  short-term
  borrowings and current portion of long-term  debt. The net operating  assets and
  liabilities (comprised of accounts receivable, inventories and accounts payable)
  increased  $5.1  million to $149.4  million at  September  28,  1997 from $144.3
  million at December 29, 1996 primarily due to an increase in accounts receivable
  offset by an  increase in accounts  payable and a decrease in  inventories.  The
  increase in accounts receivable is primarily due to an increase in net sales for
  September 1997 as compared to December 1996. The increase in accounts payable is
  primarily due to the timing of payments.  The decrease in  inventories is due to
  reduced levels of major chemicals and foam trim inventories  offset by increased
  work-in-process  inventories  which is the  result of  increased  production  in
  September 1997 as compared to December 1996.
  
                                         18
  
  <PAGE>
  
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS
  
       During  1997,  the Company  spent  approximately  $25.9  million on capital
  expenditures and expects to maintain or reduce spending for capital expenditures
  for the  foreseeable  future since  significant  capital  projects (e.g. the new
  Mexico City facility) are expected to be completed during 1997.
  
       As of September 28, 1997, there was approximately $31.0 million outstanding
  of  revolving  credit  borrowings  under the New  Credit  Facility  with  unused
  availability of approximately  $102.6 million.  Borrowings by Foamex Canada Inc.
  as of  September  28, 1997 were  approximately  $2.9  million  under a revolving
  credit  agreement  with  unused  availability  of  approximately  $1.4  million.
  Borrowings  by  Foamex  Latin  America,  Inc.  as of  September  28,  1997  were
  approximately   $2.0  million  under  a  revolving   credit  agreement  with  no
  availability.
  
       Interest Rate Swaps
  
       In connection with the Refinancing  Plan,  Foamex L.P.'s existing  interest
  rate swap agreements with a notional amount of $300.0 million were considered to
  be effectively  terminated  since the underlying  debt was  extinguished.  These
  interest  rate swap  agreements  had an estimated  fair value  liability of $8.2
  million  at  the  date  of  the  Refinancing  Plan  which  is  included  in  the
  extraordinary  loss  on the  early  extinguishment  of  debt.  In lieu of a cash
  payment  for the  estimated  fair  value  of the  existing  interest  rate  swap
  agreement,  Foamex L.P. entered into an amendment of the existing  interest rate
  swap  agreements  resulting in one interest rate swap  agreement with a notional
  amount of $150.0 million through June 2007.  Accordingly,  the $8.2 million fair
  value  liability has been recorded as a deferred  credit which will be amortized
  as a reduction of interest and debt issuance  expense on a  straight-line  basis
  over the life of the amended  interest  rate swap  agreement.  Under the amended
  interest rate swap agreement, Foamex L.P. is obligated to make fixed payments of
  5.75% per annum through December 1997 and variable  payments based on the higher
  of LIBOR at the  beginning  or the end of the  period for the  remainder  of the
  agreement, in exchange for fixed payments by the swap partner at 6.44% per annum
  for the life of the  agreement,  payable  semiannually  in arrears.  The amended
  interest rate swap agreement can be terminated by either party in June 2002, and
  annually thereafter, for a cash settlement based on the fair market value of the
  amended  interest rate swap  agreement.  Interest and debt  issuance  expense is
  subject to  fluctuations  in LIBOR during the term of the swap agreement  except
  during   1997.   Foamex  L.P.  is  exposed  to  credit  loss  in  the  event  of
  nonperformance by the swap partner; however, the occurrence of this event is not
  anticipated.  The  effect  of the  interest  rate  swaps  described  above was a
  favorable  adjustment to interest and debt issuance  expense of $0.5 million and
  $0.9  million  for the  thirteen  week  periods  ended  September  28,  1997 and
  September  29,  1996,  respectively,  and $2.2  million and $2.8 million for the
  thirty-nine  week  periods  ended  September  28, 1997 and  September  29, 1996,
  respectively.
  
       Environmental Matters
  
       The Company is subject to  extensive  and changing  environmental  laws and
  regulations.  Expenditures to date in connection  with the Company's  compliance
  with such laws and  regulations  have not had a material  adverse  effect on its
  operations,  financial position,  capital expenditures or competitive  position.
  The  amount  of  liabilities   recorded  by  the  Company  in  connection   with
  environmental  matters as of September 28, 1997 was approximately  $3.8 million.
  In  addition,  as of  September  28,  1997 the Company  has net  receivables  of
  approximately $1.0 million for indemnification of environmental liabilities from
  former  owners,   net  of  a  $1.0  million  allowance   relating  to  potential
  disagreements  regarding  the  scope  of  the  indemnification.  Although  it is
  possible that new information or future  developments  could require the Company
  to  reassess  its  potential  exposure  to all  pending  environmental  matters,
  including  those   described  in  the  footnotes  to  the  Company's   condensed
  consolidated  financial  statements,  management  believes that,  based upon all
  currently   available   information,   the   resolution   of  all  such  pending
  environmental  matters will not have a material  adverse effect on the Company's
  operations, financial position, capital expenditures or competitive position.
  
       The possibility exists, however, that new environmental  legislation and/or
  environmental  regulations may be adopted, or other environmental conditions may
  be found to exist, that may require  expenditures not currently  anticipated and
  that may be material.
  
                                         19
  <PAGE>
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS
  
  Inflation and Other Matters
  
       There was no significant impact on the Company's  operations as a result of
  inflation for the periods presented. In some circumstances, market conditions or
  customer  expectations  may prevent the Company from increasing the price of its
  products to offset the inflationary pressures that may increase its costs in the
  future.  Effective in January 1997,  the  Company's  operations in Mexico became
  subject to highly  inflationary  accounting  for financial  reporting  purposes.
  Translation adjustments resulting from fluctuations in the exchange rate between
  the Mexican Peso and the U.S. dollar are included in the Company's  consolidated
  statement of  operations  as compared to  stockholders'  equity  (deficit).  The
  effect of  translation  adjustments  on the 1997 results of operations  have not
  been material.
  
       The Company's  automotive  products customers are predominantly  automotive
  original  equipment  manufacturers or other automotive  suppliers.  As such, the
  sales of these  product  lines are  directly  related  to the  overall  level of
  passenger car and light truck  production in North America.  Also, the Company's
  sales are  sensitive  to sales of new and  existing  homes,  changes in personal
  disposable  income  and  seasonality.  The  Company  typically  experiences  two
  seasonally  slow periods  during each year, in early July and in late  December,
  due to scheduled plant shutdowns and holidays.
  
       In February 1997, the Financial Accounting Standards Board issued Statement
  of Financial  Accounting  Standards ("SFAS") No. 128, "Earnings Per Share". SFAS
  No. 128  specifies  new  standards  designed to improve the  earnings  per share
  ("EPS") information provided in financial statements by simplifying the existing
  computational guidelines,  revising the disclosure requirements,  and increasing
  the  comparability  of EPS data on an international  basis.  Some of the changes
  made to simplify the EPS computations  include: (i) eliminating the presentation
  of primary EPS and replacing it with basic EPS,  with the  principal  difference
  being that common stock  equivalents  are not considered in computing basic EPS,
  (ii)  eliminating  the  modified  treasury  stock  method and the three  percent
  materiality provision and (iii) revising the contingent share provisions and the
  supplemental EPS data  requirements.  Fully diluted earnings per share under the
  provisions  of SFAS No. 128 would not differ  significantly  from  earnings  per
  share presented on the consolidated statement of operations.  In addition, under
  the  provisions  of SFAS No. 128, the Company  would have reported the following
  basic per share information:
  
  <TABLE>
  <CAPTION>
                                                           13 Week Periods Ended             39 Week Periods Ended
                                                      September 28,    September 29,     September 28,   September 29,
                                                           1997             1996              1997           1996
                                                                    (thousands except per share data)
  <S>                                                 <C>             <C>                 <C>              <C> 
       Basic loss per share                              $0.26          $(2.64)              $(0.73)         $(3.62)
       Weighted  average shares  outstanding            24,959          25,251               25,198          25,450
  </TABLE>
  
                                         20
  <PAGE>
  Part II - Other Information
  
  Item 1.    Legal Proceedings
  
             Reference  is  made  to  the  description  of the  legal  proceedings
             contained in the Company's  Annual Report on Form 10-K for the fiscal
             year ended December 29, 1996 and in the Company's  Quarterly  Reports
             on Form 10-Q for the fiscal  quarters  ended  March 30, 1997 and June
             29, 1997.
  
             The  information  from  Notes 6 and 7 of the  condensed  consolidated
             financial  statements  of  the  Company  as  of  September  28,  1997
             (unaudited) is incorporated herein by reference.
  
  Item 2.    Changes in Securities
  
             None.
  
  Item 3.    Defaults Upon Senior Securities
  
             None.
  
  Item 4.    Submission of Matters to a Vote of Security Holders.
  
             None.
  
  Item 5.    Other Information
  
             None.
  
  Item 6.    Exhibits and Reports on Form 8-K
  
             (a)  Exhibits
  
  3.1(a)          - Certificate of Limited Partnership of Foamex L.P.
  3.2.1(a)        - Fourth Amended and Restated  Agreement of Limited  Partnership
                  of Foamex  L.P.,  dated as of December  14,  1993,  by and among
                  FMXI, Inc. ("FMXI") and Trace Foam Company, Inc. ("Trace Foam"),
                  as general  partners,  and Foamex  International  Inc.  ("Foamex
                  International"),   as  a  limited   partner  (the   "Partnership
                  Agreement").
  3.2.2(b)        - First Amendment to the Partnership  Agreement,  dated June 28,
                  1994.
  3.2.3(c)        - Second Amendment to the Partnership Agreement,  dated June 12,
                  1997.
  3.3(a)          - Certificate of Incorporation of FMXI.
  3.4(a)          - By-laws of FMXI.
  3.5(k)          - Certificate of  Incorporation  of Foamex  Capital  Corporation
                  ("FCC").
  3.6(k)          - By-laws of FCC.
  3.7(g)          - Certificate of Incorporation of General Felt Industries,  Inc.
                  ("General Felt").
  3.8(g)          - By-laws of General Felt.
  3.9(p)          - Certificate of Incorporation of Foamex Fibers,  Inc.  ("Foamex
                  Fibers")
  3.10(p)         - By-laws of Foamex Fibers.
  3.11(a)         - Certificate of Incorporation of Foamex International.
  3.12(a)         - By-laws of Foamex International.
  4.1.1(d)        -  Indenture,  dated as of June 12,  1997,  by and among  Foamex
                  L.P.,  FCC, the Subsidiary  Guarantors and The Bank of New York,
                  as  Trustee,   relating  to  $150,000,000  principal  amount  of
                  9 7/8% Senior Subordinated Notes due 2007,  including the form
                  of Senior Subordinated Note and Subsidiary Guarantee.
  
                                         21
  <PAGE>
  4.1.2(d)        - Registration  Rights Agreement,  dated as of June 12, 1997, by
                  and among Foamex L.P., FCC, General Felt, Foamex Fibers, and all
                  future direct or indirect  domestic  subsidiaries of Foamex L.P.
                  or FCC, and Donaldson, Lufkin & Jenrette Securities Corporation,
                  Salomon  Brothers Inc. and Scotia  Capital  Markets,  as Initial
                  Purchasers.
  4.2.1(e)        -  Indenture,  dated as of June 3, 1993,  among  Foamex L.P. and
                  FCC, as joint and several obligors,  General Felt, as Guarantor,
                  and Shawmut Bank, National Association ("Shawmut"),  as trustee,
                  relating  to  $160,000,000  principal  amount  of 9 1/2%  Senior
                  Secured  Notes due 2000,  including  the form of Senior  Secured
                  Note.
  4.2.2(a)        - First Supplemental  Indenture,  dated as of November 18, 1993,
                  among Foamex L.P. and FCC, as Issuers,  General Felt and Perfect
                  Fit Industries, Inc. ("Perfect Fit"), as Guarantors and Shawmut,
                  as trustee, relating to the Senior Secured Notes.
  4.2.3(a)        - Second Supplemental Indenture,  dated as of December 14, 1993,
                  among Foamex L.P. and FCC, as Issuers, Foamex L.P., General Felt
                  and Perfect Fit, as Guarantors and Shawmut, as trustee, relating
                  to the Senior Secured Notes.
  4.2.4(f)        - Third Supplemental  Indenture,  dated as of August 1, 1996, by
                  and among  Foamex  L.P.  and FCC, as Issuers,  Foamex  L.P.,  as
                  parent  guarantor,  General Felt, as guarantor,  Perfect Fit, as
                  withdrawing  guarantor,  and Fleet National Bank  ("Fleet"),  as
                  trustee relating to the Senior Secured Notes.
  4.2.5(c)        - Fourth  Supplemental  Indenture,  dated as of May 28, 1997, by
                  and among  Foamex  L.P.  and FCC, as Issuers,  Foamex  L.P.,  as
                  Parent  Guarantor,  General Felt, as  Guarantor,  and Fleet,  as
                  Trustee.
  4.2.6(e)        - Company Pledge Agreement,  dated as of June 3, 1993, by Foamex
                  L.P.  in favor of  Shawmut,  as trustee  for the  holders of the
                  Senior Secured Notes.
  4.2.7(p)        - Amendment  No. 1 to Company  (Foamex  L.P.) Pledge  Agreement,
                  dated June 12, 1997.
  4.2.8(e)        - Company Pledge Agreement,  dated as of June 3, 1993, by FCC in
                  favor of  Shawmut,  as  trustee  for the  holders  of the Senior
                  Secured Notes.
  4.2.9(p)        - Amendment No. 1 to Company (FCC) Pledge Agreement,  dated June
                  12, 1997.
  4.2.10(e)       -  Subsidiary  Pledge  Agreement,  dated as of June 3, 1993,  by
                  General Felt in favor of Shawmut,  as trustee for the holders of
                  the Senior Secured Notes.
  4.2.11(p)       - Amendment No. 1 to Subsidiary (General Felt) Pledge Agreement,
                  dated June 12, 1997.
  4.2.12(e)       -  Company  Security  Agreement,  dated as of June 3,  1993,  by
                  Foamex  L.P.  and FCC in favor of  Shawmut,  as trustee  for the
                  holders of the Senior Secured Notes.
  4.2.13(p)       - Amendment  No. 1 to  Company,  Foamex  L.P.  and FCC  Security
                  Agreement, dated June 12, 1997.
  4.2.14(e)       - Subsidiary  Security  Agreement,  dated as of June 3, 1993, by
                  General Felt in favor of Shawmut,  as trustee for the holders of
                  the Senior Secured Notes.
  4.2.15(p)       - Amendment  No. 1 to  Subsidiary  Security  Agreement  (General
                  Felt), dated June 12, 1997.
  4.2.16(e)       - Collateral  Assignment of Patents and Trademarks,  dated as of
                  June 3, 1993, by Foamex L.P. in favor of Shawmut, as trustee for
                  the holders of the Senior Secured Notes.
  4.2.17(p)       -  Amendment  No. 1 to  Collateral  Assignment  of  Patents  and
                  Trademarks (Foamex L.P.), dated June 12, 1997.
  4.2.18(e)       - Collateral  Assignment of Patents and Trademarks,  dated as of
                  June 3, 1993,  by FCC in favor of  Shawmut,  as trustee  for the
                  holders of the Senior Secured Notes.
  4.2.19(p)       -  Amendment  No. 1 to  Collateral  Assignment  of  Patents  and
                  Trademarks (FCC), dated June 12, 1997.
  4.2.20(e)       - Collateral  Assignment of Patents and Trademarks,  dated as of
                  June 3, 1993,  by General  Felt in favor of Shawmut,  as trustee
                  for the holders of the Senior Secured Notes.
  4.2.21(p)       -  Amendment  No.1  to  Collateral  Assignment  of  Patents  and
                  Trademarks (General Felt), dated June 12, 1997.
  4.2.22(p)       - Amended and Restated  Receivables  Security Agreement,  by and
                  among Fleet  National  Bank,  Citicorp USA, Inc. and The Bank of
                  Nova Scotia, dated as of June 12, 1997.
  4.2.23(p)       -  Intercreditor  Agreement  by and among Fleet,  Citicorp  USA,
                  Inc.,  and The Bank of Nova  Scotia,  dated as of June 12,  1997
                  (re: Senior Secured Notes).
  4.3             - Intentionally omitted.
  
                                         22
  
  <PAGE>
  
  4.4             - Intentionally omitted.
  4.5.1(d)        - Credit  Agreement,  dated as of June 12,  1997,  by and  among
                  Foamex L.P.,  General Felt,  Trace Foam,  FMXI, the institutions
                  from time to time party  thereto as  lenders,  the  institutions
                  from time to time party thereto as issuing  banks,  and Citicorp
                  USA, Inc. and The Bank of Nova Scotia, as Administrative Agents.
  4.5.2(p)        - Foamex International  Guaranty,  dated as of June 12, 1997, in
                  favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.3(p)        - Partnership Guaranty, dated as of June 12, 1997, made by Trace
                  Foam and FMXI in favor of  Citicorp  USA,  Inc.,  as  Collateral
                  Agent.
  4.5.4(p)        - Foamex  Guaranty,  dated as of June 12,  1997,  made by Foamex
                  L.P. in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.5(p)        - GFI Guaranty,  dated as of June 12, 1997, made by General Felt
                  in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.6(p)        - Subsidiary Guaranty, dated as of June 12, 1997, made by Foamex
                  Fibers in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.7(p)        - Subsidiary Guaranty, dated as of June 12, 1997, made by Foamex
                  Latin  America,   Inc.  in  favor  of  Citicorp  USA,  Inc.,  as
                  Collateral Agent.
  4.5.8(p)        - Subsidiary Guaranty, dated as of June 12, 1997, made by Foamex
                  Mexico,  Inc.  in favor of Citicorp  USA,  Inc.,  as  Collateral
                  Agent.
  4.5.9(p)        - Subsidiary Guaranty, dated as of June 12, 1997, made by FCC in
                  favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.10(p)       - Subsidiary Guaranty, dated as of June 12, 1997, made by Foamex
                  Mexico II, Inc. in favor of Citicorp  USA,  Inc.,  as Collateral
                  Agent.
  4.5.11(p)       - Subsidiary Guaranty, dated as of June 12, 1997, made by Foamex
                  Asia, Inc. in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.12(p)       - Partnership Pledge Agreement,  dated as of June 12, 1997, made
                  by Trace Foam Company,  Inc., FMXI, and Foamex  International in
                  favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.13(p)       - Foamex Pledge  Agreement,  dated as of June 12, 1997,  made by
                  Foamex L.P. in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.14(p)       - GFI  Pledge  Agreement,  dated  as of June 12,  1997,  made by
                  General  Felt in favor of  Citicorp  USA,  Inc.,  as  Collateral
                  Agent.
  4.5.15(p)       - Subsidiary Pledge  Agreement,  dated as of June 12, 1997, made
                  by FCC in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.16(p)       - Subsidiary Pledge  Agreement,  dated as of June 12, 1997, made
                  by Foamex Fibers in favor of Citicorp  USA,  Inc., as Collateral
                  Agent.
  4.5.17(p)       - Subsidiary Pledge  Agreement,  dated as of June 12, 1997, made
                  by Foamex Latin America, Inc. in favor of Citicorp USA, Inc., as
                  Collateral Agent.
  4.5.18(p)       - Subsidiary Pledge  Agreement,  dated as of June 12, 1997, made
                  by  Foamex  Asia,  Inc.  in  favor of  Citicorp  USA,  Inc.,  as
                  Collateral Agent.
  4.5.19(p)       - Subsidiary Pledge  Agreement,  dated as of June 12, 1997, made
                  by Foamex  Mexico,  Inc.  in favor of  Citicorp  USA,  Inc.,  as
                  Collateral Agent.
  4.5.20(p)       - Subsidiary Pledge  Agreement,  dated as of June 12, 1997, made
                  by Foamex  Mexico II, Inc. in favor of Citicorp  USA,  Inc.,  as
                  Collateral Agent.
  4.5.21(p)       - Foamex Security Agreement,  dated as of June 12, 1997, made by
                  Foamex L.P. in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.22(p)       - GFI Security  Agreement,  dated as of June 12,  1997,  made by
                  General  Felt in favor of  Citicorp  USA,  Inc.,  as  Collateral
                  Agent.
  4.5.23(p)       - Subsidiary Security Agreement, dated as of June 12, 1997, made
                  by Foamex Fibers in favor of Citicorp  USA,  Inc., as Collateral
                  Agent.
  4.5.24(p)       - Subsidiary Security Agreement, dated as of June 12, 1997, made
                  by Foamex Latin America, Inc. in favor of Citicorp USA, Inc., as
                  Collateral Agent.
  4.5.25(p)       - Subsidiary Security Agreement, dated as of June 12, 1997, made
                  by Foamex  Mexico,  Inc.  in favor of  Citicorp  USA,  Inc.,  as
                  Collateral Agent.
  
                                         23
  
  <PAGE>
  
  4.5.26(p)       - Subsidiary Security Agreement, dated as of June 12, 1997, made
                  by Foamex  Mexico II, Inc. in favor of Citicorp  USA,  Inc.,  as
                  Collateral Agent.
  4.5.27(p)       - Subsidiary Security Agreement, dated as of June 12, 1997, made
                  by  Foamex  Asia,  Inc.  in  favor of  Citicorp  USA,  Inc.,  as
                  Collateral Agent.
  4.5.28(p)       - Subsidiary Security Agreement, dated as of June 12, 1997, made
                  by FCC in favor of Citicorp USA, Inc., as Collateral Agent.
  4.6             - Commitment letter,  dated July 17, 1997, from The Bank of Nova
                  Scotia to Foamex Canada Inc.
  4.7(a)          - Subordinated  Promissory Note, dated as of May 6, 1993, in the
                  original principal amount of $7,014,864  executed by Foamex L.P.
                  to John Rallis ("Rallis").
  4.8(a)          - Marely Loan  Commitment  Agreement,  dated as of December  14,
                  1993, by and between Foamex L.P. and Marely s.a. ("Marely").
  4.9(a)          - DLJ Loan Commitment Agreement,  dated as of December 14, 1993,
                  by  and  between  Foamex  L.P.  and  DLJ  Funding,   Inc.  ("DLJ
                  Funding").
  4.10.1(p)       -  Promissory  Note,  dated  June  12,  1997,  in the  aggregate
                  principal  amount of  $5,000,000,  executed by Trace Holdings to
                  Foamex L.P.
  4.10.2(p)       -  Promissory  Note,  dated  June  12,  1997,  in the  aggregate
                  principal  amount of  $4,794,828,  executed by Trace Holdings to
                  Foamex L.P.
  10.1.1(p)       -  Amendment  to  Master  Agreement,  dated as of June 5,  1997,
                  between Citibank, N.A. and Foamex L.P.
  10.1.2(p)       -  Amended  confirmation,  dated  as of June 13,  1997,  between
                  Citibank, N.A. and Foamex L.P.
  10.2(h)         - Reimbursement  Agreement,  dated as of March 23, 1993, between
                  Trace Holdings and General Felt.
  10.3(h)         -  Shareholder   Agreement,   dated  December  31,  1992,  among
                  Recticel, s.a. ("Recticel"), Recticel Holding Noord B.V., Foamex
                  L.P.,  Beamech Group  Limited,  LME-Beamech,  Inc.,  James Brian
                  Blackwell,  and Prefoam AG relating to foam  technology  sharing
                  arrangement.
  10.4.1(k)       - Asset Transfer Agreement, dated as of October 2, 1990, between
                  Trace  Holdings  and Foamex  L.P.  (the  "Trace  Holdings  Asset
                  Transfer Agreement").
  10.4.2(k)       - First  Amendment,  dated as of December 19, 1991, to the Trace
                  Holdings Asset Transfer Agreement.
  10.4.3(k)       - Amended and Restated Guaranty,  dated as of December 19, 1991,
                  made by Trace Foam in favor of Foamex L.P.
  10.5.1(k)       - Asset Transfer Agreement, dated as of October 2, 1990, between
                  Recticel  Foam  Corporation  ("RFC") and Foamex  L.P.  (the "RFC
                  Asset Transfer Agreement").
  10.5.2(k)       - First  Amendment,  dated as of December 19,  1991,  to the RFC
                  Asset Transfer Agreement.
  10.5.3(k)       - Schedule 5.03 to the RFC Asset  Transfer  Agreement (the "5.03
                  Protocol").
  10.5.4(h)       - The 5.03 Protocol  Assumption  Agreement,  dated as of October
                  13,  1992,  between  RFC and  Foamex  L.P.  10.5.5(h)  n  Letter
                  Agreement  between  Trace  Holdings and Recticel  regarding  the
                  Recticel Guaranty, dated as of July 22, 1992.
  10.6(l)         - Supply Agreement, dated June 28, 1994, between Foamex L.P. and
                  Foamex International.
  10.7.1(l)       - First Amended and Restated Tax Sharing Agreement,  dated as of
                  December 14,  1993,  among  Foamex  L.P.,  Trace Foam,  FMXI and
                  Foamex International.
  10.7.2(d)       - First Amendment to Amended and Restated Tax Sharing  Agreement
                  of Foamex L.P.,  dated as of June 12, 1997,  by and among Foamex
                  L.P., Foamex International, FMXI and Trace Foam.
  10.8.1(m)       - Tax Distribution  Advance Agreement,  dated as of December 11,
                  1996, by and between Foamex L.P. and Foamex-JPS Automotive.
  10.8.2(d)       - Amendment No. 1 to Tax Distribution  Advance Agreement,  dated
                  as of June 12,  1997,  by and  between  Foamex  L.P.  and Foamex
                  International.
  10.9.1(h)       - Trace Foam Management  Agreement between Foamex L.P. and Trace
                  Foam, dated as of October 13, 1992.
  10.9.2(l)       - Affirmation  Agreement re: Management  Agreement,  dated as of
                  December 14, 1993, between Foamex L.P. and Trace Foam.
  10.9.3(d)       - First Amendment to Management Agreement,  dated as of June 12,
                  1997, by and between Foamex L.P. and Trace Foam.
  
                                         24
  
  <PAGE>
  
  10.10.1(k)      - Salaried Incentive Plan of Foamex L.P. and Subsidiaries.
  10.10.2(k)      - Trace Holdings 1987 Nonqualified Stock Option Plan.
  10.10.3(k)      - Equity Growth Participation Program.
  10.10.4(o)      - The Foamex L.P.  Salaried  Pension Plan  (formerly the General
                  Felt Industries,  Inc. Retirement Plan for Salaried  Employees),
                  effective as of January 1, 1995.
  10.10.5(u)      - The Foamex L.P.  Hourly  Pension  Plan  (formerly  "The Foamex
                  Products  Inc.  Hourly  Employee  Retirement  Plan),  as amended
                  December 31, 1995.
  10.10.6(u)      - Foamex L.P. 401(k) Savings Plan effective October 1, 1997.
  10.10.7(a)      - Foamex L.P.'s 1993 Stock Option Plan.
  10.10.8(a)      - Foamex L.P.'s Non-Employee Director Compensation Plan.
  10.11.1(o)      -  Employment  Agreement,  dated as of February 1, 1994,  by and
                  between Foamex L.P. and William H. Bundy.
  10.11.2(q)      -  Employment  Agreement,  dated  as of July  26,  1995,  by and
                  between Foamex L.P. and Salvatore J. Bonanno.
  10.12.1(a)      - Warrant Exchange Agreement,  dated as of December 14, 1993, by
                  and between Foamex L.P. and Marely.
  10.12.2(a)      - Warrant Exchange Agreement,  dated as of December 14, 1993, by
                  and between Foamex L.P. and DLJ Funding.
  10.13(t)        - Warrant Exchange Agreement,  dated as of June 29, 1997, by and
                  between Foamex International and Shawmut Bank.
  10.14(o)        - Stock  Purchase  Agreement,  dated as of December 23, 1993, by
                  and  between  Transformacion  de Espumas u Fieltros,  S.A.,  the
                  stockholders which are parties thereto, and Foamex L.P.
  10.15(r)        - Asset Purchase Agreement,  dated as of August 29, 1997, by and
                  among General  Felt,  Foamex L.P.,  Bretlin,  Inc. and The Dixie
                  Group.
  10.15.1(s)      - Addendum to Asset Purchase  Agreement,  dated as of October 1,
                  1997, by and among General Felt, Foamex L.P., Bretlin,  Inc. and
                  The Dixie Group.
  27              - Financial Data Schedule. 
  
  ----------------------------
  
  (a)  Incorporated   herein  by  reference  to  the  Exhibit  to  Foamex   L.P.'s
       Registration Statement on Form S-1, Registration No. 33-69606.
  
  (b)  Incorporated  herein by reference to the Exhibit to the Form 10-K of Foamex
       for the fiscal year ended January 1, 1995.
  
  (c)  Incorporated  herein by reference  to the Exhibit to the Current  Report on
       Form 8-K of Foamex reporting an event that occurred May 28, 1997.
  
  (d)  Incorporated  herein by reference  to the Exhibit to the Current  Report on
       Form 8-K of Foamex reporting an event that occurred June 12, 1997.
  
  (e)  Incorporated  herein  by  reference  to the  Exhibit  to  the  Registration
       Statement of Foamex and FCC on Form S-4, Registration No. 33-65158.
  
  (f)  Incorporated  herein by reference to the Exhibit to the Form 10-Q of Foamex
       for the quarterly period ended June 30, 1996.
  
  (g)  Incorporated  herein  by  reference  to the  Exhibit  to  the  Registration
       Statement of Foamex,  FCC and General Felt on Form S-1,  Registration  Nos.
       33-60888, 33-60888-01, and 33-60888-02.
  
  (h)  Incorporated  herein by reference to the Exhibit to the Form 10-K Statement
       of Foamex and FCC for fiscal 1992.
  
                                         25
  
  <PAGE>
  
  (i)  Incorporated  herein by reference to the Exhibit to the Form 10-K of Foamex
       L.P. for fiscal 1994.
  
  (j)  Incorporated  herein by reference to the Exhibit to the Form 10-Q of Foamex
       for the quarterly period ended September 30, 1996.
  
  (k)  Incorporated  herein  by  reference  to the  Exhibit  to  the  Registration
       Statement  of Foamex and FCC on Form S-1,  Registration  Nos.  33-49976 and
       33-49976-01.
  
  (l)  Incorporated  herein  by  reference  to the  Exhibit  to  the  Registration
       Statement  of FJPS,  FJCC and Foamex  L.P.  on Form S-4,  Registration  No.
       33-82028.
  
  (m)  Incorporated  herein by  reference  to the Exhibit to the Annual  Report on
       Form 10-K of Foamex for the fiscal year ended December 29, 1996.
  
  (n)  Incorporated  herein by reference to the Exhibit to the Form 10-Q of Foamex
       for the quarterly period ended July 2, 1995.
  
  (o)  Incorporated  herein by reference to the Exhibit to the Form 10-K of Foamex
       L.P. for fiscal 1993.
  
  (p)  Incorporated  herein  by  reference  to the  Exhibit  in  the  Registration
       Statement of Foamex on Form S-4, Registration No. 333-30291.
  
  (q)  Incorporated  herein by reference to the Exhibit to the Form 10-K of Foamex
       L.P. for the fiscal year ended December 31, 1995.
  
  (r)  Incorporated  herein  by  reference  to the  Current  Report on Form 8-K of
       Foamex L.P. reporting an event that occurred on August 29, 1997.
  
  (s)  Incorporated  herein  by  reference  to the  Current  Report on Form 8-K of
       Foamex L.P. reporting an event that occurred on October 6, 1997.
  
  (t)  Incorporated  by  reference  to the  Exhibit  to the  Form  10-Q of  Foamex
       International for the quarterly period ended July 3, 1994.
  
  (u)  Incorporated  by  reference  to the Exhibit to the Form 10-Q of Foamex L.P.
       for the quarterly period ended September 28, 1997.
  
       Certain  instruments  defining  the rights of  security  holders  have been
  excluded herefrom in accordance with Item  601(b)(4)(iii) of Regulation S-K. The
  registrant  hereby  agrees  to  furnish  a copy of any  such  instrument  to the
  Commission upon request.
  
           (b) Foamex L.P. filed the following Current Reports on Form 8-K:
  
                Form 8-K reporting an event that occurred on August 29, 1997.
  
                Form 8-K reporting an event that occurred on October 6, 1997.
  
                                         26
  <PAGE>
  
                                     SIGNATURES
  
  
       Pursuant to the  requirements  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.
  
  
                                            FOAMEX INTERNATIONAL INC.
  
  
  Date:   November 12, 1997                 By: /s/ Kenneth R. Fuette
                                                -------------------------
                                                Kenneth R. Fuette
                                                Chief Financial Officer
  
  
  
  
  
  
                                         27
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 107691}]
metadata_filer: {"company-data": {"conformed-name": "FOAMEX INTERNATIONAL INC", "cik": "0000912908", "assigned-sic": "3086", "irs-number": "050473908", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-22624", "film-number": "97714202"}, "business-address": {"street1": "1000 COLUMBIA AVENUE", "city": "LINWOOD", "state": "PA", "zip": "19061", "phone": "6108593000"}, "mail-address": {"street1": "1000 COLUMBIA AVE", "city": "LINWOOD", "state": "PA", "zip": "19061"}}
text: SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C. 20549
  
                                      FORM 10-Q
  
                  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
  
                  For the quarterly period ended September 28, 1997
  
                           Commission file number 0-22624
  
                              FOAMEX INTERNATIONAL INC.
               (Exact name of registrant as specified in its charter)
  
               Delaware                                  05-0473908
  (State or other jurisdiction of                     (I.R.S. Employer
  incorporation or organization)                      Identification Number)
  
  1000 Columbia Avenue
  Linwood, PA                                                19061
  (Address of principal                                    (Zip Code)
  executive offices)
  
  Registrant's telephone number, including area code:  (610) 859-3000
  
  Indicate by check mark whether the registrant (1) has filed all reports required
  to be filed 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 such  filing
  requirements for the past 90 days. YES X NO
  
  The number of shares of the registrant's common stock outstanding as of November
  3, 1997 was 24,919,680.
  
                                    Page 1 of 27
                            Exhibit List on Page 21 of 27
  FOAMEX INTERNATIONAL INC.
  
                                        INDEX
                                                                              Page
  
  Part I.   Financial Information:
  
            Item 1.  Financial Statements
  
               Condensed Consolidated Statements of Operations -
                 Thirteen Week and Thirty-Nine Week Periods Ended
                 September 28, 1997 and September 29, 1996                       3
  
               Condensed Consolidated Balance Sheets as of September 28,
                 1997 and December 29, 1996                                      4
  
               Condensed Consolidated Statements of Cash Flows -
                 Thirty-Nine Week Periods Ended September 28, 1997 and
                 September 29, 1996                                              5
  
               Notes to Condensed Consolidated Financial Statements              6
  
            Item 2.  Management's Discussion and Analysis of Financial 
                     Condition and Results of Operations                        15
  
  Part II.  Other Information                                                   21
  
            Exhibit List                                                        21
  
            Signatures                                                          27
  PART I.  FINANCIAL INFORMATION
  ITEM 1.  FINANCIAL STATEMENTS
  
                FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
  13 Week Periods Ended        39 Week Periods Ended
                                          September 28, September 29,  September 28,   September 29,
                                              1997          1996            1997          1996
                                                   (thousands except per share data)
  NET SALES                                $ 233,434     $ 236,766      $ 702,441      $ 696,344
  
  COST OF GOODS SOLD                         195,395       196,806        576,825        582,186
                                           ---------     ---------      ---------      ---------
  
  GROSS PROFIT                                38,039        39,960        125,616        114,158
  
  SELLING, GENERAL AND
     ADMINISTRATIVE EXPENSES                  15,766        15,485         47,853         43,207
                                           ---------     ---------      ---------      ---------
  
  INCOME FROM OPERATIONS                      22,273        24,475         77,763         70,951
  
  INTEREST AND DEBT ISSUANCE EXPENSE          12,080        13,794         39,522         39,742
  
  OTHER INCOME, NET                              324           501          1,410          1,003
                                           ---------     ---------      ---------      ---------
  
  INCOME FROM CONTINUING OPERATIONS
     BEFORE PROVISION FOR INCOME TAXES        10,517        11,182         39,651         32,212
  
  PROVISION FOR INCOME TAXES                   4,002         3,826         15,530         12,408
                                           ---------     ---------      ---------      ---------
  
  INCOME FROM CONTINUING OPERATIONS            6,515         7,356         24,121         19,804
  
  LOSS FROM DISCONTINUED OPERATIONS,
     NET OF INCOME TAX BENEFITS                   --       (73,576)            --       (111,594)
  
  EXTRAORDINARY LOSS ON EARLY
     EXTINGUISHMENT OF DEBT,
     NET OF INCOME TAXES                          --          (403)       (42,599)          (403)
                                           ---------     ---------      ---------      ---------
  
  NET INCOME (LOSS)                        $   6,515     $ (66,623)     $ (18,478)     $ (92,193)
                                           =========     =========      =========      =========
  
  EARNINGS (LOSS) PER SHARE:
  
  CONTINUING OPERATIONS                    $    0.26     $    0.29      $    0.94      $    0.77
  DISCONTINUED OPERATIONS                         --         (2.88)            --          (4.33)
  EXTRAORDINARY LOSS                              --         (0.02)         (1.66)         (0.02)
                                           ---------     ---------      ---------      ---------
  EARNINGS (LOSS) PER SHARE                $    0.26     $   (2.61)     $   (0.72)     $   (3.58)
                                           =========     =========      =========      =========
  
  WEIGHTED AVERAGE NUMBER
     OF SHARES OUTSTANDING                    25,435        25,541         25,645         25,749
                                           =========     =========      =========      =========
  The accompanying notes are an integral part of the condensed
                    consolidated financial statements.
  
                                    3
  FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
  September 28,    December 29,
  ASSETS                                                         1997             1996
  CURRENT ASSETS:                                                     (thousands)
  Cash and cash equivalents                                 $   1,916      $  22,203
     Accounts receivable, net                                    142,410        126,573
     Inventories                                                  94,301        102,610
     Other current assets                                         53,476         55,718
                                                               ---------      ---------
       Total current assets                                      292,103        307,104
  
  PROPERTY, PLANT AND EQUIPMENT, NET                             207,676        195,373
  
  COST IN EXCESS OF ASSETS ACQUIRED, NET                          80,624         82,471
  
  DEBT ISSUANCE COSTS, NET                                        17,771         18,628
  
  DEFERRED INCOME TAXES                                           24,111             --
  
  OTHER ASSETS                                                    20,343         16,270
                                                               ---------      ---------
  
  TOTAL ASSETS                                                 $ 642,628      $ 619,846
                                                               =========      =========
  
  LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
  CURRENT LIABILITIES:
     Short-term borrowings                                     $   4,871      $   3,692
     Current portion of long-term debt                             9,434         14,505
     Accounts payable                                             87,339         84,930
     Accrued interest                                              7,273          9,012
     Other accrued liabilities                                    66,170         58,384
                                                               ---------      ---------
       Total current liabilities                                 175,087        170,523
                                                               ---------      ---------
  
  LONG-TERM DEBT                                                 528,872        483,344
                                                               ---------      ---------
  
  OTHER LIABILITIES                                               27,074         24,082
                                                               ---------      ---------
  
  COMMITMENTS AND CONTINGENCIES                                       --             --
                                                               ---------      ---------
  
  STOCKHOLDERS' EQUITY (DEFICIT):
     Preferred Stock, par value $1.00 per share:
     Authorized 5,000,000 shares - none issued                        --             --
     Common Stock, par value $.01 per share:
       Authorized 50,000,000 shares, Issued 26,908,680 and
       26,753,262 shares, respectively; Outstanding
       24,919,680 and 25,198,862 shares, respectively                269            267
     Additional paid-in capital                                   85,743         84,579
     Retained earnings (accumulated deficit)                    (140,251)      (120,174)
     Other                                                       (14,964)        (9,312)
                                                               ---------      ---------
                                                                 (69,203)       (44,640)
  
     Common Stock held in treasury, at cost; 1,989,000
       shares at September 28, 1997 and 1,554,400 Shares
       at December 29, 1996, respectively                        (19,202)       (13,463)
                                                               ---------      ---------
  
       Total stockholders' equity (deficit)                      (88,405)       (58,103)
                                                               ---------      ---------
  
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)         $ 642,628      $ 619,846
                                                               =========      =========
  The accompanying notes are an integral part of the condensed
                    consolidated financial statements.
  
                                    4
  FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
  39 Week Periods Ended
                                                                             September 28,  September 29,
                                                                                 1997           1996
  OPERATING ACTIVITIES:                                                             (thousands)
  Net income (loss)                                                       $ (18,479)     $ (92,193)
     Adjustments to reconcile  net income (loss) to net cash
       provided by operating activities:
        Depreciation and amortization                                           16,409         16,861
        Amortization of debt issuance costs and debt discount                    7,380         10,283
        Extraordinary loss on extinguishment of debt                            42,599            403
        Loss from discontinued operations                                           --        111,594
        Other operating activities, net                                          9,274         (4,095)
        Changes in operating assets and liabilities, net of acquisitions       (26,807)        (7,558)
                                                                             ---------      ---------
  
        Net cash provided by continuing operations                              30,376         35,295
        Net cash provided by discontinued operations                                --         14,415
                                                                             ---------      ---------
        Net cash provided by operating activities                               30,376         49,710
                                                                             ---------      ---------
  
  INVESTING ACTIVITIES:
     Capital expenditures                                                      (25,865)       (14,536)
     Decrease (increase) in restricted cash                                     12,143        (33,149)
     Proceeds from sale of discontinued operations                                  --         45,425
     Loan to shareholder                                                        (5,000)            --
     Other investing activities                                                 (2,930)         1,745
     Discontinued operations investing activities                                   --         (4,828)
                                                                             ---------      ---------
  
        Net cash used for investing activities                                 (21,652)        (5,343)
                                                                             ---------      ---------
  
  FINANCING ACTIVITIES:
     Net proceeds from short-term borrowings                                     1,179          2,970
     Net proceeds from revolving loans                                          31,000             --
     Proceeds from long-term debt                                              453,500             --
     Repayments of long-term debt                                             (450,270)       (19,034)
     Premiums and payments associated with debt extinguishment                 (42,565)            --
     Debt issuance costs                                                       (15,617)            --
     Purchase of treasury stock                                                 (5,739)        (5,789)
     Other financing activities                                                   (499)            70
     Discontinued operations financing activities                                   --        (12,184)
                                                                             ---------      ---------
  
        Net cash used for financing activities                                 (29,011)       (33,967)
                                                                             ---------      ---------
  
  NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                         (20,287)        10,400
  
  CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                              22,203          6,162
                                                                             ---------      ---------
  
  CASH AND CASH EQUIVALENTS AT END OF PERIOD                                 $   1,916      $  16,562
                                                                             =========      =========
  The accompanying notes are an integral part of the condensed
                    consolidated financial statements.
  
                                    5
  FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  1.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  
       Foamex International Inc.'s (the "Company") condensed  consolidated balance
  sheet as of December 29, 1996 has been condensed  from the audited  consolidated
  balance  sheet at that date.  The  condensed  consolidated  balance  sheet as of
  September 28, 1997, the condensed consolidated  statements of operations for the
  thirteen  week  and  thirty-nine  week  periods  ended  September  28,  1997 and
  September 29, 1996 and the condensed  consolidated  statements of cash flows for
  the  thirty-nine  week periods  ended  September 28, 1997 and September 29, 1996
  have been  prepared by the Company  and have not been  audited by the  Company's
  independent  accountants.   In  the  opinion  of  management,  all  adjustments,
  consisting only of normal recurring adjustments, considered necessary for a fair
  presentation  of the financial  position,  results of operations  and cash flows
  have been included.
  
       Certain information and note disclosures normally included in the financial
  statements prepared in accordance with generally accepted accounting  principles
  have been condensed or omitted in accordance  with the rules and  regulations of
  the Securities and Exchange Commission.  These condensed  consolidated financial
  statements  should be read in conjunction  with the Company's 1996  consolidated
  financial  statements  and notes  thereto as set forth in the  Company's  Annual
  Report on Form 10-K for the fiscal year ended December 29, 1996.
  
  2.   DISCONTINUED OPERATIONS
  
       In  December  1996,  the  Company  completed  the  sale of its  partnership
  interests  in  JPS  Automotive  L.P.  ("JPS  Automotive")  for a sale  price  of
  approximately  $220.1  million  including  $200.1  million  of JPS  Automotive's
  indebtedness.  The sale price is subject to a post-closing adjustment.  The sale
  included the net assets of the  automotive  textiles  business  segment.  During
  1996, the Company sold the  outstanding  common stock of Perfect Fit Industries,
  Inc. ("Perfect Fit"), a wholly-owned  subsidiary,  for an adjusted sale price of
  approximately  $44.2  million.  The sale  included  the net  assets  of the home
  comfort products business segment.
  
       The  Company's  condensed  consolidated  financial  statements  reflect the
  discontinuation  of the home comfort  products and automotive  textile  business
  segments.  In  addition  to  the  interest  and  debt  issuance  expense  of JPS
  Automotive,  interest and debt issuance  expense was  allocated to  discontinued
  operations  based on the estimated debt to be retired from the net proceeds from
  the sale of Perfect  Fit and JPS  Automotive.  A summary of the  results for the
  discontinued operations is as follows:
  13 Week Period Ended    39 Week Period Ended
                                                                     September 29, 1996      September 29, 1996
                                                                                     (thousands)
  Net sales                                                       $  36,540           $ 244,305
            Gross profit                                                        3,842              38,296
            Income from operations                                                596              17,072
            Interest and debt issuance expense                                  3,101              16,905
            Loss on disposal of discontinued operations,
                net of income taxes                                           (71,713)           (111,010)
            Other income (expense)                                                 93                (975)
            Loss from discontinued operations before
                benefit from income taxes                                     (74,125)           (111,818)
            Benefit for income taxes                                             (549)               (224)
            Loss from discontinued operations, net of income taxes            (73,576)           (111,594)
  6
  FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  3.   INVENTORIES
  
       The components of inventories consist of:
  September 28,     December 29,
                                             1997              1996
                                                   (thousands)
  Raw materials and supplies          $ 49,067          $ 61,559
       Work-in-process                       17,568            13,453
       Finished goods                        27,666            27,598
                                           --------          --------
  
       Total                               $ 94,301          $102,610
                                           ========          ========
  4.   EARNINGS (LOSS) PER SHARE
  
       Earnings  (loss)  per share is  calculated  by  dividing  net income by the
  weighted average shares of common stock  outstanding.  Common stock  equivalents
  have been included in the weighted  average  shares of common stock  outstanding
  for 1997 and 1996.
  
       In February 1997, the Financial Accounting Standards Board issued Statement
  of Financial  Accounting  Standards ("SFAS") No. 128, "Earnings Per Share". SFAS
  No. 128  specifies  new  standards  designed to improve the  earnings  per share
  ("EPS") information provided in financial statements by simplifying the existing
  computational guidelines,  revising the disclosure requirements,  and increasing
  the  comparability  of EPS data on an international  basis.  Some of the changes
  made to simplify the EPS computations  include: (i) eliminating the presentation
  of primary EPS and replacing it with basic EPS,  with the  principal  difference
  being that common stock  equivalents  are not considered in computing basic EPS,
  (ii)  eliminating  the  modified  treasury  stock  method and the three  percent
  materiality provision and (iii) revising the contingent share provisions and the
  supplemental EPS data  requirements.  Fully diluted earnings per share under the
  provisions of SFAS No.128 would not differ significantly from earnings per share
  presented on the consolidated  statement of operations.  In addition,  under the
  provisions of SFAS No. 128, the Company would have reported the following  basic
  per share information:
  13 Week Periods Ended               39 Week Periods Ended
                                                     September 28,      September 29,     September 28,   September 29,
                                                           1997              1996              1997            1996
                                                                    (thousands except per share data)
  Basic loss per share                               $0.26            $(2.64)            $(0.73)        $(3.62)
       Weighted  average shares  outstanding             24,959            25,251             25,198         25,450
  7
  FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  5.   LONG-TERM DEBT
  
       Long-term debt consists of:
  September 28,       December 29,
                                                                                 1997               1996
                                                                                      (thousands)
  9 7/8% senior subordinated notes due 2007 (1)                            $150,000          $     --
       Foamex L.P. term loans (7.83% interest rate
           at September 28, 1997) (2)                                            298,000                --
       Foamex L.P. revolving loan (7.62% interest rate
           at September 28, 1997) (3)                                             31,000                --
       9 1/2% senior secured notes due 2000 (4)                                    4,523           106,793
       11 1/4% senior notes due 2002 (4)                                           5,825           141,400
       11 7/8% senior subordinated debentures due 2004 (net of
           unamortized debt discount of $116 and $769) (4)                        20,227           125,056
       Senior secured discount debentures due 2004, Series B
           (net of unamortized debt discount of $35,864) (5)                          --            80,881
       11 7/8% senior subordinated debentures due 2004, Series B (6)                  45             7,000
       Industrial revenue bonds (7)                                                7,000             7,000
       Foamex L.P. term loan (8.54% interest rate as of
           December 29, 1996) (7)                                                     --            11,000
       Subordinated note (net of debt discount of $969 and $1,198) (7)             6,046             5,817
       Other                                                                      15,640            12,902
                                                                                --------          --------
  
                                                                                 538,306           497,849
  
       Less current portion                                                        9,434            14,505
                                                                                --------          --------
  
       Long-term debt                                                           $528,872          $483,344
                                                                                ========          ========
  (1)  Subsidiary  debt of Foamex  L.P.  and Foamex  Capital  Corporation  ("FCC")
       (together  the  "Issuers"),  guaranteed  by General Felt  Industries,  Inc.
       ("General Felt"),  Foamex Fibers, Inc. ("Foamex Fibers") and certain future
       domestic subsidiaries of the Issuers.
  
  (2)  Subsidiary debt of Foamex L.P., guaranteed by the Company, General Felt and
       Foamex Fibers.
  
  (3)  Subsidiary debt of Foamex L.P. and General Felt,  guaranteed by the Company
       and Foamex Fibers.
  
  (4)  Subsidiary debt of the Issuers, guaranteed by the Company and General Felt.
  
  (5)  Subsidiary debt of FJPS and Foamex-JPS Capital  Corporation,  guaranteed by
       the Company.
  
  (6)  Subsidiary debt of the Issuers, guaranteed by General Felt.
  
  (7)  Subsidiary debt of Foamex L.P.
  8
  FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  5.   LONG-TERM DEBT (continued)
  
       Refinancing Plan
  
       On June 12, 1997, the Company  substantially  completed a refinancing  plan
  (the  "Refinancing  Plan") that included the  refinancing  of certain  long-term
  indebtedness  to reduce the  Company's  interest  expense and improve  financing
  flexibility.  In connection with the  Refinancing  Plan,  Foamex L.P.  purchased
  approximately  $342.3 million of aggregate  principal  amount of its public debt
  and  approximately  $116.7 million of aggregate  principal  amount of Foamex-JPS
  Automotive   L.P.'s  ("FJPS")  senior  secured  discount   debentures  due  2004
  ("Discount  Debentures")  and repaid $5.2 million of term loan borrowings  under
  its old credit facility. The Company incurred an extraordinary loss on the early
  extinguishment  of debt associated with the  Refinancing  Plan of  approximately
  $42.0 million (net of income taxes).  The Refinancing  Plan was funded by $347.0
  million of  borrowings  under a new $480.0  million  credit  facility  (the "New
  Credit  Facility") and the net proceeds from the issuance of $150.0 million of 9
  7/8% senior subordinated notes due 2007.
  
       In  addition,  on  October  1,  1997,  the  Company  redeemed  all  of  the
  outstanding: (i) 11 1/4% senior notes due 2002, (ii) 11 7/8% senior subordinated
  debentures  due 2004 and (iii) the 11 7/8% senior  subordinated  debentures  due
  2004,  Series B, constituting  approximately  $26.0 million of the approximately
  $30.0  million of  outstanding  public debt that was not tendered as part of the
  Refinancing Plan. The redemption was funded with borrowings under the New Credit
  Facility.  In connection with this  redemption,  the Company expects to incur an
  extraordinary  loss on the early  extinguishment  of debt of approximately  $1.6
  million (net of income taxes) in the fourth quarter of 1997.
  
       Term Loans and Revolving Loan
  
       On June 12, 1997,  Foamex L.P.  entered into the New Credit Facility with a
  group of banks that provides for term loans of up to $330.0 million which expire
  from June  2003 to June 2006 and  borrowings  of up to  $150.0  million  under a
  revolving  line of credit which  expires in June 2003.  In  connection  with the
  Refinancing  Plan,  Foamex L.P.  entered  into term loans of $298.0  million and
  borrowed $49.0 million under the revolving line of credit.
  
       The term loans are comprised of a (i) term A loan ("Term A") which provides
  up to $120.0  million of borrowings of which Foamex L.P.  borrowed $88.0 million
  in connection with the  Refinancing  Plan, (ii) term B loan ("Term B") of $110.0
  million and (iii) term C loan ("Term C") of $100.0 million.  The remaining $32.0
  million  available under the Term A is restricted and can only be used by Foamex
  L.P. to retire its public debt not tendered in connection  with the  Refinancing
  Plan with such  unused  availability  terminating  June 15,  1998.  Foamex  L.P.
  borrowed  $29.0 million under the Term A in connection  with the October 1, 1997
  redemption.
  
       Borrowings   under  the  New  Credit   Facility   are   collateralized   by
  substantially  all of the assets of Foamex L.P.,  General Felt and Foamex Fibers
  on a pari passu  basis  with the 9 1/2%  senior  secured  notes due 2000 and the
  industrial revenue bonds (collectively, the "Notes"); however, the rights of the
  holders  of the  applicable  issue of the  Notes  to  receive  payment  upon the
  disposition of the collateral securing such issue of Notes has been preserved.
  
       Pursuant to the terms of the New Credit Facility,  borrowed funds will bear
  interest at a floating rate equal to an applicable margin, as defined,  plus the
  higher of (i) the base rate of The Bank of Nova  Scotia,  in effect from time to
  time, or (ii) a rate that is equal to 0.5% per annum plus the federal funds rate
  in effect from time to time.  The applicable  margin is determined  based on the
  total net debt to EBDAIT ratio,  as defined,  and can range from no margin up to
  1.125% per annum for Term A and revolving loans, from 0.875% per annum to 1.375%
  per annum for Term B and from  1.125%  per annum to 1.625% per annum for Term C.
  At the option of Foamex L.P.,  portions of the  outstanding  loans under the New
  Credit Facility are convertible into LIBOR based loans
  
                                         9
  FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  5.   LONG-TERM DEBT (continued)
  
  which bear interest at a floating  rate equal to an applicable  margin for LIBOR
  based loans,  as defined,  plus the average  LIBOR,  as defined.  The applicable
  margin for LIBOR based loans is a rate that will generally  equal the applicable
  margin (discussed above) plus 1.0% per annum.
  
       9 7/8% Senior Subordinated Notes due 2007 ("Senior Subordinated Notes")
  
       The Senior  Subordinated  Notes  were  issued by Foamex  L.P.  and FCC in a
  private placement under Rule 144A of the Securities Act of 1933, as amended,  on
  June 12, 1997 in connection with the Refinancing  Plan. The Senior  Subordinated
  Notes bear interest at the rate of 9 7/8% per annum payable semiannually on each
  June 15 and December 15, commencing  December 15, 1997. The Senior  Subordinated
  Notes mature on June 15, 2007. The Senior  Subordinated Notes may be redeemed at
  the option of Foamex L.P., in whole or in part, at any time on or after June 15,
  2002, initially at 104.938% of their principal amount, plus accrued interest and
  liquidated  damages,  as defined,  if any, thereon to the date of redemption and
  declining to 100.0% on or after June 15, 2005. In addition, at any time prior to
  June 15, 2000,  Foamex L.P. may on one or more  occasions  redeem up to 35.0% of
  the initially outstanding principal amount of the Senior Subordinated Notes at a
  redemption  price  equal to  109.875%  of the  principal  amount,  plus  accrued
  interest and liquidated  damages, if any, thereon to the date of redemption with
  the cash proceeds of one or more Public Equity Offerings,  as defined.  Upon the
  occurrence  of  a  change  of  control,  as  defined,   each  holder  of  Senior
  Subordinated  Notes will have the right to require Foamex L.P. to repurchase the
  Senior  Subordinated  Notes at a price equal to 101.0% of the principal  amount,
  plus accrued interest and liquidated damages, if any, to the date of repurchase.
  The Senior Subordinated Notes are subordinated in right of payment to all senior
  indebtedness  and are pari passu in right of payment to the  subordinated  note.
  The Senior  Subordinated  Notes contain certain covenants that will limit, among
  other  things,  the ability of Foamex L.P.  (i) to pay  distributions  or redeem
  partnership interests, (ii) to make certain restrictive payments or investments,
  (iii) to incur additional  indebtedness or issue Preferred  Equity Interest,  as
  defined,  (iv) to merge,  consolidate  or sell all or  substantially  all of its
  assets or (v) to enter into  certain  transactions  with  affiliates  or related
  persons. The Senior Subordinated Notes are guaranteed by General Felt and Foamex
  Fibers and certain future domestic subsidiaries of the Issuers.
  
       The Issuers  have filed a  registration  statement  relating to an exchange
  offer in which the Issuers will offer to exchange the Senior  Subordinated Notes
  issued in the private  placement for new notes.  The terms of the new notes will
  be substantially identical in all respects (including principal amount, interest
  rate,  maturity  and  ranking)  to the terms of the Senior  Subordinated  Notes,
  except  that the new notes  will be  transferable  by  holders  thereof  without
  further registration under the Securities Act of 1933, as amended (except in the
  case of Senior  Subordinated  Notes held by  affiliates  of the  Issuers and for
  certain  other  holders),   and  are  not  subject  to  any  covenant  regarding
  registration under the Securities Act of 1933, as amended. The exchange offer is
  expected to be consummated during November 1997.
  
       Principal  payments on the  Company's  long-term  debt for the remainder of
  1997 and for the next five years are as  follows:  1997 - $4.3  million;  1998 -
  $12.7 million; 1999 - $21.6 million; 2000 - $32.1 million; 2001 - $32.1 million;
  2002 - $33.5 million; and thereafter - $403.1 million.
  
       Early Extinguishment of Debt - Refinancing Plan
  
       In  connection  with  the  Refinancing   Plan,  the  Company   incurred  an
  extraordinary  loss on the early  extinguishment of debt of approximately  $42.0
  million (net of income tax benefits of $25.7 million). The extraordinary loss is
  comprised of  approximately  $39.0 million for premium and consent fee payments,
  approximately  $16.2 million for the  write-off of debt issuance  costs and debt
  discount,  approximately $8.2 million for the loss associated with the effective
  termination and amendment of the interest rate swap agreements and approximately
  $4.3  million of  professional  fees and other  costs.  In  connection  with the
  Refinancing Plan, Foamex
  
                                         10
  FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  5.   LONG-TERM DEBT (continued)
  
  L.P. repaid $5.2 million in term loan  borrowings  under its old credit facility
  and purchased  approximately  $459.0  million of aggregate  principal  amount of
  public debt comprised of:
  
  o    $99.8 million of aggregate  principal  amount of its 9 1/2% senior  secured
       notes due 2000 for an aggregate consideration of 104.193% of principal plus
       accrued interest, comprised of a tender price of 102.193% and a consent fee
       of 2.0%;
  
  o    $130.1  million of aggregate  principal  amount of its 11 1/4% senior notes
       due 2002 for an  aggregate  consideration  of  105.709% of  principal  plus
       accrued interest, comprised of a tender price of 103.709% and a consent fee
       of 2.0%;
  
  o    $105.5  million  of  aggregate  principal  amount  of  its 11  7/8%  senior
       subordinated debentures due 2004 for an aggregate consideration of 107.586%
       of principal plus accrued interest, comprised of a tender price of 105.586%
       and a consent fee of 2.0%;
  
  o    $6.9  million  of  aggregate   principal  amount  of  its  11  7/8%  senior
       subordinated debentures,  series B, due 2004 for an aggregate consideration
       of 107.586% of principal plus accrued interest, comprised of a tender price
       of 105.586% and a consent fee of 2.0%; and
  
  o    $116.7 million of aggregate principal amount of the Discount Debentures for
       an aggregate  consideration of 9.0% of principal  amount,  which represents
       approximately  116.2%  of the  accreted  book  value as of June  12,  1997,
       comprised of a tender price of 88.0% and a consent fee of 2.0%.
  
       Early Extinguishment of Debt - Other
  
       In  addition,  during 1997 the  Company  incurred  extraordinary  losses of
  approximately  $0.6  million  (net of  income  tax  benefits  of  $0.4  million)
  associated  with the early  extinguishment  of  approximately  $11.8  million of
  long-term  debt funded with  approximately  $12.1  million of the  remaining net
  proceeds  from the sale of Perfect Fit. The  extraordinary  loss is comprised of
  approximately  $0.4 million of premium payments and  approximately  $0.6 million
  for the write-off of debt issuance costs. The long-term debt was comprised of:
  
  o    $2.5 million of  aggregate  principal  amount of its 9 1/2% senior  secured
       notes due 2000.
  
  o    $5.5 million of aggregate  principal amount of its 11 1/4% senior notes due
       2002.
  
  o    Bank term loan  borrowings  of $3.8 million  under Foamex L.P.'s old credit
       facility.
  
       Interest Rate Swaps
  
       The  Company  uses  derivative  financial  instruments  to manage  interest
  expense.  All  derivative  financial  instruments  are  classified  as "held for
  purposes  other  than  trading".  The  Company  does  not  use  derivatives  for
  speculative purposes.
  
       Interest  rate swap  agreements  are used to  manage  interest  expense  by
  changing the  interest  rate  characteristics  of certain  debt  instruments  to
  approximate current market conditions.  The amended interest rate swap agreement
  matures  in June  2007  which  is  consistent  with  the  underlying  debt.  The
  differential  paid or received on interest rate swap agreements is recognized on
  an accrual basis as an adjustment to interest and debt
  
                                         11
  FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  5.   LONG-TERM DEBT (continued)
  
  issuance expense.  
  
       In connection with the Refinancing  Plan,  Foamex L.P.'s existing  interest
  rate swap agreements with a notional amount of $300.0 million were considered to
  be effectively  terminated  since the underlying  debt was  extinguished.  These
  interest  rate swap  agreements  had an estimated  fair value  liability of $8.2
  million  at  the  date  of  the  Refinancing  Plan  which  is  included  in  the
  extraordinary  loss  on the  early  extinguishment  of  debt.  In lieu of a cash
  payment  for the  estimated  fair  value  of the  existing  interest  rate  swap
  agreements,  Foamex L.P. entered into an amendment of the existing interest rate
  swap  agreements  resulting in one interest rate swap  agreement with a notional
  amount of $150.0 million through June 2007.  Accordingly,  the $8.2 million fair
  value  liability has been recorded as a deferred  credit which will be amortized
  as a reduction of interest and debt issuance  expense on a  straight-line  basis
  over the life of the amended  interest  rate swap  agreement.  Under the amended
  interest rate swap agreement, Foamex L.P. is obligated to make fixed payments of
  5.75% per annum through December 1997 and variable  payments based on the higher
  of LIBOR at the  beginning  or the end of the  period for the  remainder  of the
  agreement, in exchange for fixed payments by the swap partner at 6.44% per annum
  for the life of the  agreement,  payable  semiannually  in arrears.  The amended
  interest rate swap agreement can be terminated by either party in June 2002, and
  annually thereafter, for a cash settlement based on the fair market value of the
  amended  interest rate swap  agreement.  Interest and debt  issuance  expense is
  subject to  fluctuations  in LIBOR during the term of the swap agreement  except
  during   1997.   Foamex  L.P.  is  exposed  to  credit  loss  in  the  event  of
  nonperformance by the swap partner; however, the occurrence of this event is not
  anticipated.  The  effect  of the  interest  rate  swaps  described  above was a
  favorable  adjustment to interest and debt issuance  expense of $0.5 million and
  $0.9  million  for the  thirteen  week  periods  ended  September  28,  1997 and
  September  29,  1996,  respectively,  and $2.2  million and $2.8 million for the
  thirty-nine  week  periods  ended  September  28, 1997 and  September  29, 1996,
  respectively.
  
  6.   ENVIRONMENTAL MATTERS
  
       As of September 28, 1997,  the Company has accruals of  approximately  $3.8
  million for environmental  matters.  In addition,  as of September 28, 1997, the
  Company  has  net  receivables  of   approximately   $1.0  million  relating  to
  indemnification   for  environmental   liabilities,   net  of  an  allowance  of
  approximately  $1.0 million  relating to potential  disagreements  regarding the
  scope of the  indemnification.  The Company believes that realization of the net
  receivables established for indemnification is probable.
  
       On May 5,  1997,  there  was an  accidental  chemical  spill  at one of the
  Company's manufacturing facilities that was contained on site. The Company is in
  the process of  disposing  of the  contaminated  soil which is estimated to cost
  approximately  $0.6  million.  As of September  28, 1997,  the Company has spent
  approximately $0.5 million for remediation costs related to this chemical spill.
  The  actual  cost and the  timetable  for the  clean-up  of the site  cannot  be
  predicted with any degree of certainty at this time; therefore,  there can be no
  assurance  that the  clean-up of the site will not result in a more  significant
  environmental liability in the future.
  
       The Company has reported to appropriate state authorities that it has found
  soil  and  groundwater  contamination  in  excess  of  state  standards  at four
  additional  facilities and soil  contamination  in excess of state  standards at
  three other  facilities.  The Company has begun  remediation  and is  conducting
  further  investigations into the extent of the contamination at these facilities
  and, accordingly, the extent of the remediation that may ultimately be required.
  The actual cost and the  timetable of any such  remediation  cannot be predicted
  with any degree of certainty at this time. As of September 28, 1997, the Company
  has  environmental  accruals of  approximately  $2.9  million for the  remaining
  potential remediation costs for these facilities based on engineering estimates.
  
                                         12
  FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  6.   ENVIRONMENTAL MATTERS (continued)
  
       Federal  regulations  require that by 1998 all  underground  storage  tanks
  ("USTs") be removed or upgraded in most states to meet applicable standards. The
  Company has six USTs that will require removal or permanent  in-place closure by
  the end of  1998.  Due to the age of these  tanks,  leakage  may  have  occurred
  resulting  in soil and  possibly  groundwater  contamination.  The  Company  has
  accrued approximately $0.3 million for the estimated removal and remediation, if
  any,  associated with the USTs.  However,  the full extent of contamination and,
  accordingly,  the actual cost of such  remediation  cannot be predicted with any
  degree of certainty at this time. The Company believes that its USTs do not pose
  a  significant  risk  of  environmental   liability  because  of  the  Company's
  monitoring  practices for USTs and conditional  approval for permanent  in-place
  closure for certain USTs. However, there can be no assurance that such USTs will
  not result in significant environmental liability in the future.
  
       The Company has been designated as a Potentially  Responsible Party ("PRP")
  by the United States Environmental Protection Agency (the "EPA") with respect to
  thirteen  sites,  with an  estimated  total  liability  to the  Company  for the
  thirteen  sites of less than  approximately  $0.5  million.  Estimates  of total
  clean-up costs and fractional allocations of liability are generally provided by
  the EPA or the  committee of PRP's with respect to the  specified  site. In each
  case, the participation of the Company is considered to be immaterial.
  
       Although it is possible that new information or future  developments  could
  require the Company to reassess its potential  exposure  relating to all pending
  environmental  matters,  management  believes  that,  based  upon all  currently
  available  information,  the resolution of such  environmental  matters will not
  have a material adverse effect on the Company's operations,  financial position,
  capital expenditures or competitive position.  The possibility exists,  however,
  that new  environmental  legislation  and/or  environmental  regulations  may be
  adopted,  or other  environmental  conditions  may be found to  exist,  that may
  require expenditures not currently anticipated and that may be material.
  
  7.   LITIGATION
  
       As of November 3, 1997, Foamex L.P. and Trace  International  Holdings Inc.
  ("Trace Holdings") were two of multiple defendants in actions filed on behalf of
  approximately  5,500 persons in various  United States  federal and state courts
  and one Canadian  provincial  court by  recipients of breast  implants,  some of
  which allege substantial  damages,  but most of which allege unspecified damages
  for  personal  injuries  of various  types.  Three of these cases seek to allege
  claims on behalf of all breast implant  recipients or other  allegedly  affected
  parties,  but only one class has been  approved or certified  by the court,  and
  that is a class  limited to Louisiana  residents  or persons who received  their
  implants in Louisiana. In addition,  three cases have been filed alleging claims
  on behalf of  approximately  725 residents of Australia and New Zealand.  During
  1995,  Foamex  L.P.  and Trace  Holdings  were  granted  summary  judgments  and
  dismissed  as  defendants  from all cases in the  federal  courts of the  United
  States and the state  courts of  California.  Appeals for these  decisions  were
  withdrawn and the decisions are final.  Although  breast implants do not contain
  foam,  certain  silicone gel implants were produced  using a  polyurethane  foam
  covering  fabricated by independent  distributors or fabricators  from bulk foam
  purchased  from Foamex L.P. or Trace  Holdings.  Neither  Foamex L.P.  nor Trace
  Holdings  recommended,  authorized  or  approved  the use of its foam for  these
  purposes.  Foamex  L.P.  believes  that the  number of suits and  claimants  may
  increase,  but  not  significantly.  While  it is not  feasible  to  predict  or
  determine the outcome of these actions, based on management's present assessment
  of the merits of pending claims,  after consultation with the general counsel of
  Trace  Holdings,  management  believes that the  disposition of matters that are
  pending or that may reasonably be  anticipated to be asserted  should not have a
  material adverse effect on either Foamex L.P.'s or Trace Holdings'  consolidated
  financial  position or results of operations.  In addition,  Foamex L.P. is also
  indemnified  by  Trace  Holdings  for  any  such  liabilities  relating  to foam
  manufactured  prior to the  capitalization  of  Foamex  L.P.  in  October  1990.
  Although Trace Holdings has paid Foamex L.P.'s  litigation  expenses pursuant to
  such  indemnification,  and  management  believes  Trace  Holdings  will be in a
  position to continue to pay such
  
                                         13
  FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  7.   LITIGATION (continued)
  
  expenses, there can be no assurance that Trace Holdings will be able to continue
  to provide such  indemnification.  Based on  information  available at this time
  with  respect  to  the  potential  liability,  the  Company  believes  that  the
  proceedings  should not  ultimately  result in any  liability  that would have a
  material  adverse  effect on the financial  position or results of operations of
  the Company. If management's  assessment of Foamex L.P.'s liability with respect
  to these actions is incorrect, such actions could have a material adverse effect
  on the Company.
  
       The  Company is party to various  other  lawsuits,  both as  defendant  and
  plaintiff,  arising  in the  normal  course of  business.  It is the  opinion of
  management  that the  disposition of these lawsuits will not  individually or in
  the  aggregate,  have a material  adverse  effect on the  financial  position or
  results  of  operations  of  the  Company.  If  management's  assessment  of the
  Company's  liability  with respect to these actions is  incorrect,  such actions
  could have a material  adverse  effect on the Company's  consolidated  financial
  position.
  
  8.   RELATED PARTY TRANSACTION
  
       On July 1,  1997,  Trace  Holdings  borrowed  $5.0  million  pursuant  to a
  promissory  note with an aggregate  principal  amount of $5.0 million  issued to
  Foamex L.P. on June 12, 1997. The  promissory  note is due and payable on demand
  or, if no demand is made,  on July 7, 2001,  and bears  interest  at 2 3/8% plus
  three-month LIBOR, as defined, per annum payable quarterly in arrears commencing
  October 1, 1997.  The  promissory  note is  included in the other  component  of
  stockholders' equity (deficit).
  
       During June 1997,  Foamex L.P. and Trace Foam Company,  Inc. ("Trace Foam")
  amended  their  management  services  agreement  to increase the annual fee from
  $1.75 million to $3.0 million, plus reimbursement of expenses incurred.
  
       On June 12, 1997, a promissory note issued to Foamex L.P. by Trace Holdings
  was amended. The amended promissory note is an extension of a promissory note of
  Trace Holdings that was due in July 1997. The aggregate  principal amount of the
  amended  promissory  note was  increased to  approximately  $4.8 million and the
  maturity of the promissory  note was extended.  The  promissory  note is due and
  payable on demand or, if no demand is made, on July 7, 2001,  and bears interest
  at 2 3/8% plus  three-month  LIBOR, as defined,  per annum payable  quarterly in
  arrears.   The  promissory   note  is  included  in  the  other   components  of
  stockholders' equity (deficit).
  
       In  connection  with  the  Refinancing   Plan,  Foamex  L.P.  made  a  cash
  distribution of  approximately  $1.5 million to Trace Foam as a result of Foamex
  L.P.'s  distribution to FJPS and FMXI, Inc. of the Discount  Debentures,  a note
  with a principal  amount of  approximately  $56.2 million (net of  approximately
  $20.6 million of original issue discount) due from FJPS and a promissory note in
  the  aggregate  principal  amount  of $2.0  million  due from the  Company.  The
  distribution to Trace Foam reduced retained  earnings  (accumulated  deficit) of
  the Company.
  
  9.   SUBSEQUENT EVENT
  
       On October 6, 1997, the Company sold substantially all of the net assets of
  its  needlepunch  carpeting,  tufted  carpeting and  artificial  grass  products
  business  located at its facilities in Dalton,  Georgia to Bretlin,  Inc. for an
  aggregate sale price of  approximately  $41.2 million,  subject to  post-closing
  adjustments.  The Company expects to realize an immaterial gain on the sale (net
  of income taxes) in the fourth  quarter of 1997.  The Company used $38.8 million
  of the net sale proceeds to repay outstanding term loan borrowings under the New
  Credit Facility. In connection with this repayment, the Company expects to incur
  an extraordinary loss on the early  extinguishment of debt of approximately $0.6
  million (net of income tax benefits) during the fourth quarter of 1997.
  
                                         14
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS
  
       The Company operates in the flexible polyurethane and advanced polymer foam
  products  industry.  The Company's  operations are conducted through its largest
  subsidiary Foamex L.P., together with Foamex L.P.'s  wholly-owned  subsidiaries,
  General Felt, Foamex Fibers, Foamex Canada Inc., Foamex Latin America, Inc., and
  Foamex Asia, Inc. The following  discussion  should be read in conjunction  with
  the condensed consolidated financial statements and related notes thereto of the
  Company  included in this report.  Certain  information in this report  contains
  forward-looking statements and should be read in conjunction with the discussion
  regarding forward-looking statements set forth on pages 3 and 4 of the Company's
  1996 Annual Report on Form 10-K.
  
       On June 12, 1997, the Company substantially  completed the Refinancing Plan
  which included the repurchase of $342.3 million of aggregate principal amount of
  Foamex L.P.'s public debt and $116.7  million of aggregate  principal  amount of
  the Discount Debentures and the payment of $5.2 million of Foamex L.P. term loan
  borrowings under its old credit facility.  The Company incurred an extraordinary
  loss on the early extinguishment of debt associated with the Refinancing Plan of
  approximately  $42.0 million (net of income tax benefits of approximately  $25.7
  million).  The Refinancing Plan was funded by $347.0 million of borrowings under
  the New  Credit  Facility  and the net  proceeds  from the  issuance  the Senior
  Subordinated  Notes.  See  Note  5  to  the  condensed   consolidated  financial
  statements  for further  discussion.  As a result of the  Refinancing  Plan, the
  Company's  total  long-term  debt  increased  $63.9  million to $556.5  million.
  However,  the Company expects the Refinancing Plan to result in interest expense
  savings of approximately  $3.5 million in the second half of 1997 as compared to
  the first half of 1997, and annualized interest expense savings of approximately
  $8.0 million,  as compared to the debt structure prior to the Refinancing  Plan,
  assuming no material  changes in interest rates.  The Company's  future interest
  expense,  and the ability to realize the expected  savings in interest  expense,
  will vary based on a variety of factors, including fluctuation in interest rates
  in general.  As a result of the Refinancing Plan, variable rate debt comprises a
  larger percentage of the Company's overall indebtedness than in the past, and as
  a result,  future  fluctuations  in interest rates will have a greater impact on
  the Company's interest expense than in the past.
  
       In  addition,  on  October  1,  1997,  the  Company  redeemed  all  of  the
  outstanding: (i) 11 1/4% senior notes due 2002, (ii) 11 7/8% senior subordinated
  debentures  due 2004 and (iii) the 11 7/8% senior  subordinated  debentures  due
  2004,  Series B, constituting  approximately  $26.0 million of the approximately
  $30.0  million of  outstanding  public debt that was not tendered as part of the
  Refinancing Plan. The redemption was funded with borrowings under the New Credit
  Facility.  In connection with this  redemption,  the Company expects to incur an
  extraordinary  loss on the early  extinguishment  of debt of approximately  $1.6
  million (net of income tax benefits) in the fourth quarter of 1997.
  
       Also,  on October 6, 1997,  the Company sold  substantially  all of the net
  assets of its  needlepunch  carpeting,  tufted  carpeting and  artificial  grass
  products  business  located at its facilities in Dalton,  Georgia  ("Dalton") to
  Bretlin,  Inc.  for an  aggregate  sale price of  approximately  $41.2  million,
  subject  to  post-closing  adjustments.   The  Company  expects  to  realize  an
  immaterial gain on the sale (net of income taxes) in the fourth quarter of 1997.
  Dalton's  revenues  were $10.7  million and $9.3 million for the  thirteen  week
  periods ended September 28, 1997 and September 29, 1996, respectively, and $35.1
  million and $32.1 million for the  thirty-nine  week periods ended September 28,
  1997 and September 29,1996,  respectively.  As of September 28, 1997, Dalton had
  $7.5 million, $14.8 million, $12.3 million and $2.0 million of inventories,  net
  plant, property and equipment, net goodwill and other assets, respectively.  The
  Company used $38.8  million of the net sale proceeds to repay  outstanding  term
  loan  borrowings  under  the  New  Credit  Facility.  In  connection  with  this
  repayment,  the  Company  expects  to incur an  extraordinary  loss on the early
  extinguishment  of  debt of  approximately  $0.5  million  (net  of  income  tax
  benefits) during the fourth quarter of 1997.
  
       During  July 1997,  the  Company  announced  the  creation  of a new senior
  management   operating  committee  to  simplify  the  Company's  management  and
  reporting  structure and to position the Company to achieve its strategic  goals
  which include: (i) to focus on its core flexible polyurethane  operations in the
  automotive,   carpet  cushion,  technical,   cushioning  and  furniture  markets
  (furniture  sales were  previously  combined  with  cushioning  sales),  (ii) to
  maximize  revenue  growth  by  increasing  market  share  in  existing  markets,
  introducing  new and 
  
                                         15
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS
  
  enhanced  foam  products   with  higher   margins  and  pursuing   international
  opportunities and (iii) to continue to lower its cost structure.
  
       The principal  suppliers to the foam  industry  announced raw material cost
  increases  effective  April 1997.  The impact of the raw material cost increases
  were not  significant  during the second quarter of 1997.  However,  the Company
  estimates  the raw  material  cost  increases,  net of sale price  increases  to
  customers,  had an unfavorable  impact of approximately  $2.0 million during the
  third quarter of 1997.  There can be no assurance  that chemical  suppliers will
  not increase  raw material  costs in the future or that the Company will be able
  to  implement  selling  price  increases  to offset any such raw  material  cost
  increases.
  
       During  1996,  the  Company  sold  Perfect  Fit  and JPS  Automotive  which
  comprised the home comfort products and automotive  textile  business  segments,
  respectively,   of  the  Company.   Accordingly,   the  accompanying   condensed
  consolidated statements of operations for the thirteen week and thirty-nine week
  periods ended  September 29, 1996 and the  condensed  consolidated  statement of
  cash flows for the thirty-nine  week period ended September 29, 1996 reflect the
  home comfort products and automotive  textile business  segments as discontinued
  operations.  See Note 2 to the condensed  consolidated  financial statements for
  further discussion.
  
       Operating  results  for 1997  are  expected  to be  influenced  by  various
  internal and external factors.  These factors include,  among other things,  (i)
  continued  implementation of the continuous  improvement  program to improve the
  Company's profitability, (ii) additional raw material cost increases, if any, by
  the Company's chemical  suppliers,  (iii) the Company's success in passing on to
  its  customers  selling  price  increases  to  recover  such raw  material  cost
  increases, and (iv) fluctuations in interest rates.
  
  13 Week  Period  Ended  September  28, 1997  Compared  to 13 Week  Period  Ended
  September 29, 1996
  
  Results of Operations
  
       Net sales for the third quarter of 1997 were $233.4  million as compared to
  $236.8 million in the third quarter of 1996, a decrease of $3.4 million or 1.4%.
  Carpet  cushion  products net sales for the third quarter of 1997 decreased 6.4%
  to $72.0 million from $77.0  million in the third quarter of 1996  primarily due
  to a change in product mix and competitive  pricing  pressure  resulting from an
  excess  supply of foam trim,  the primary  component of rebond  carpet  cushion.
  Cushioning  products net sales for the third quarter of 1997  increased  5.7% to
  $60.2 million from $57.0  million in the third quarter of 1996  primarily due to
  an increase in net sales from both new and existing customers of bedding related
  products.  Furniture  products net sales for the third  quarter of 1997 of $29.6
  million were  consistent as compared to net sales of $29.0 million for the third
  quarter of 1996.  Automotive  products  net sales for the third  quarter of 1997
  decreased  6.4% to $52.3 million from $55.9 million in the third quarter of 1996
  primarily due to decreased net sales volume resulting from reduced car and light
  truck builds due to temporary production shut-downs at several Chrysler and Ford
  facilities  for new model  conversions  and slower  than  expected  start-up  of
  several new platforms during the third quarter of 1997.  Technical  products net
  sales for the third quarter of 1997  increased  8.0% to $19.3 million from $17.9
  million  in the third  quarter  of 1996  primarily  due to  increased  net sales
  volume.
  
       Gross profit as a percentage of net sales  decreased to 16.3% for the third
  quarter of 1997 from 16.9% in the third  quarter  of 1996  primarily  due to the
  unfavorable   impact  of  the   unrecovered   raw  material  cost  increases  of
  approximately  $2.0 million during the third quarter of 1997, offset by improved
  material and production  efficiencies and  manufacturing  cost containment which
  includes favorable raw material efficiencies and an increased impact of the 1995
  restructuring and operational plan in 1997 as compared to 1996.
  
       Income from operations  decreased to $22.3 million for the third quarter of
  1997 from  $24.5  million  in the third  quarter  of 1996  primarily  due to the
  reasons discussed above and an increase in selling,  general and  administrative
  expenses of $0.3 million for the third quarter of 1997. The increase in selling,
  general and  
  
                                         16
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS
  
  administrative   expenses  is  primarily   due  to  increases  in  research  and
  development  costs and travel and promotion costs  associated with the launching
  of new products  and  international  expansion  offset by a decrease in employee
  compensation and incentives.
  
       Income from  continuing  operations  decreased to $6.5 million or $0.26 per
  share for the third  quarter of 1997 as  compared  to $7.4  million or $0.29 per
  share in the third quarter of 1996. The decrease is primarily due to the reasons
  cited above,  offset by a decrease in interest and debt issuance expense of $1.7
  million.  The decrease in interest and debt issuance expense is primarily due to
  the  effects  of the  Refinancing  Plan,  as  previously  discussed.  Loss  from
  discontinued  operations  in the third  quarter of 1996  represents  the loss on
  disposal  of JPS  Automotive  and the  operating  losses of Perfect  Fit and JPS
  Automotive which were sold during 1996. See Note 2 to the condensed consolidated
  financial  statements for further discussion.  The effective income tax rate for
  continuing  operations  increased  to 38.1% for the third  quarter  of 1997 from
  34.2% in the third  quarter  of 1996  primarily  due to the impact in 1996 of an
  income  tax  benefit  associated  with the  reversal  of  income  tax  valuation
  allowances.
  
       The  extraordinary  loss on early  extinguishment  of debt of approximately
  $0.4 million (net of income tax benefits of  approximately  $0.3 million) during
  the third  quarter  of 1996  relates to the  write-off  of debt  issuance  costs
  associated  with the early  extinguishment  of $12.0  million  of bank term loan
  borrowings.
  
  39 Week  Period  Ended  September  28, 1997  Compared  to 39 Week  Period  Ended
  September 29, 1996
  
  Results of Operations
  
       Net sales for 1997 were $702.4  million as  compared  to $696.3  million in
  1996, an increase of $6.1 million or 0.9%. Carpet cushion products net sales for
  1997  decreased 1.0% to $214.9 million from $217.2 million in 1996 primarily due
  to a change in product mix and competitive  pricing  pressure  resulting from an
  excess  supply of foam trim,  the primary  component of rebond  carpet  cushion.
  Cushioning  products net sales for 1997  increased  4.4% to $167.6  million from
  $160.5  million in 1996  primarily due to an increase in net sales from both new
  and existing customers of bedding related products. Furniture products net sales
  for 1997 of $92.1  million  were  consistent  as  compared to net sales of $91.5
  million  for 1996.  Automotive  products  net sales for 1997  decreased  2.2% to
  $171.4  million for 1997 from $175.2 million for 1996 primarily due to increased
  selling  prices  implemented  during the first quarter of 1996 offset by reduced
  net sales  volume in 1997 as compared  to 1996  resulting  from  reduced car and
  light truck builds due to temporary  production  shut-downs at several  Chrysler
  and Ford facilities,  slower than expected start-up of several new platforms and
  labor  strikes at both  Chrysler  and General  Motors  plants  during the second
  quarter of 1997.  Technical  products net sales for 1997 increased 8.8% to $56.4
  million from $51.9 million in 1996 primarily due to increased net sales volume.
  
       Gross profit as a percentage of net sales  increased to 17.9% for 1997 from
  16.4% in 1996 primarily due to selling price  increases,  improved  material and
  production efficiencies and manufacturing cost containment which include (i) the
  impact during 1997 of the selling  prices  initiated in 1996 to offset  previous
  raw material cost increases,  (ii) favorable raw material efficiencies and (iii)
  an increased  favorable impact of the 1995 restructuring and operational plan in
  1997 as compared to 1996.  These  increases  were offset by  approximately  $2.0
  million of unrecovered  raw material cost increases  during the third quarter of
  1997.
  
       Income  from  operations  increased  to $77.8  million  for 1997 from $71.0
  million in 1996  primarily  due to improved  gross  profit  margins as discussed
  above, offset by a $4.6 million increase in selling,  general and administrative
  expenses for 1997 as compared to the comparable period for 1996. The increase in
  selling,  general and  administrative  expenses is primarily due to increases in
  employee compensation and incentives, research and development costs, and travel
  and  promotion  costs   associated  with  the  launching  of  new  products  and
  international expansion.
  
       Income from continuing  operations  increased to $24.1 million or $0.94 per
  share for 1997 as  compared  to $19.8  million  or $0.77 per share in 1996.  The
  increase is primarily  due to the reasons  cited above.  Loss from  discontinued
  operations for 1996  represents the loss on the disposals of Perfect Fit and JPS
  Automotive and their 
  
                                         17
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS
  
  operating  losses  which  were sold  during  1996.  See Note 2 to the  condensed
  consolidated  financial statements for further discussion.  The effective income
  tax rate for  continuing  operations  increased  to 39.2% for 1997 from 38.5% in
  1996  primarily  due to the impact in 1996 of an income tax  benefit  associated
  with the reversal of income tax valuation allowances.
  
       The  extraordinary  loss on early  extinguishment  of debt  during  1997 of
  approximately  $42.6 million (net of income tax benefits of approximately  $26.1
  million)  relates to premium and consent fee  payments,  the  write-off  of debt
  issuance costs associated with the early  extinguishment of approximately $476.0
  million of aggregate principal amount of debt in connection with the Refinancing
  Plan and other debt  extinguishment  during  1997.  See Note 5 to the  condensed
  consolidated financial statements for further discussion. The extraordinary loss
  on early extinguishment of debt of approximately $0.4 million (net of income tax
  benefits of  approximately  $0.3 million)  during 1996 primarily  relates to the
  write-off of debt issuance costs  associated  with the early  extinguishment  of
  $12.0 million of bank term loan borrowings.
  
  Liquidity and Capital Resources
  
       Liquidity and Capital Resources
  
       The Company's  operating cash requirements  consist  principally of working
  capital   requirements,   scheduled   payments  of  principal  and  interest  on
  outstanding  indebtedness  and capital  expenditures.  The Company believes that
  cash flow from operating activities,  cash on hand and periodic borrowings under
  revolving  credit  agreements,  if  necessary,  will be  adequate  to  meet  its
  operating cash  requirements.  The ability to meet  operating cash  requirements
  could  be  impaired  if the  Company  were  to fail to  comply  with  any of the
  covenants   contained  in  its  credit   agreements  or   indentures   and  such
  noncompliance was not cured or waived by the lenders or bondholders. The Company
  was in compliance with such covenants as of September 28, 1997 and expects to be
  in compliance with such covenants for the foreseeable future. The ability of the
  Company to receive  distributions  from its  subsidiaries  is  restricted by the
  terms of its existing financing agreements.
  
       Cash and cash  equivalents  decreased  $20.3  million  during  1997 to $1.9
  million at  September  28, 1997 from $22.2  million at December  29,  1996.  The
  decrease in cash and cash equivalents was primarily due to: (i) $25.9 million of
  cash  used for  capital  expenditures,  (ii) $5.7  million  of cash used for the
  purchase of treasury  stock,  (iii) $6.5 million of cash used for  distributions
  and a loan to a  shareholder,  (iv)  $10.6  million  of cash used for  financing
  activities after considering the decrease in restricted cash offset by (v) $30.4
  million of cash provided by operating activities. The $10.6 million of cash used
  for financing activities reflects the: (a) $450.3 million repayment of long-term
  debt, (b) $15.6 million of cash used for debt issuance costs,  (c) $42.5 million
  of cash used for  premium  and  consent  fee  payments  and other  cash  charges
  associated with the Refinancing Plan and other debt extinguishment offset by (d)
  $485.7  million  of cash  proceeds  from  long-term  debt,  revolving  loans and
  short-term  borrowings and (e) the decrease of restricted cash of $12.1 million.
  Cash flow from continuing operations decreased $4.9 million to $30.4 million for
  1997 as compared to $35.3 million for 1996. Cash flow from continuing operations
  decreased  for 1997 as  compared  to 1996  primarily  due to the use of cash for
  operating assets offset by an increase in income from continuing operations.
  
       Working  capital  decreased  $19.6  million  for 1997 to $117.0  million at
  September  28, 1997 from $136.6  million at December 29,  1996.  The decrease in
  working  capital is  primarily  due to the $20.3  million  decrease in cash,  as
  previously  discussed  and  a  $10.0  million  net  increase  in  other  current
  liabilities,  offset by a $5.1  million  increase  in net  operating  assets and
  liabilities,  as  discussed  below,  and a $3.9 million  decrease in  short-term
  borrowings and current portion of long-term  debt. The net operating  assets and
  liabilities (comprised of accounts receivable, inventories and accounts payable)
  increased  $5.1  million to $149.4  million at  September  28,  1997 from $144.3
  million at December 29, 1996 primarily due to an increase in accounts receivable
  offset by an  increase in accounts  payable and a decrease in  inventories.  The
  increase in accounts receivable is primarily due to an increase in net sales for
  September 1997 as compared to December 1996. The increase in accounts payable is
  primarily due to the timing of payments.  The decrease in  inventories is due to
  reduced levels of major chemicals and foam trim inventories  offset by increased
  work-in-process  inventories  which is the  result of  increased  production  in
  September 1997 as compared to December 1996.
  
                                         18
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS
  
       During  1997,  the Company  spent  approximately  $25.9  million on capital
  expenditures and expects to maintain or reduce spending for capital expenditures
  for the  foreseeable  future since  significant  capital  projects (e.g. the new
  Mexico City facility) are expected to be completed during 1997.
  
       As of September 28, 1997, there was approximately $31.0 million outstanding
  of  revolving  credit  borrowings  under the New  Credit  Facility  with  unused
  availability of approximately  $102.6 million.  Borrowings by Foamex Canada Inc.
  as of  September  28, 1997 were  approximately  $2.9  million  under a revolving
  credit  agreement  with  unused  availability  of  approximately  $1.4  million.
  Borrowings  by  Foamex  Latin  America,  Inc.  as of  September  28,  1997  were
  approximately   $2.0  million  under  a  revolving   credit  agreement  with  no
  availability.
  
       Interest Rate Swaps
  
       In connection with the Refinancing  Plan,  Foamex L.P.'s existing  interest
  rate swap agreements with a notional amount of $300.0 million were considered to
  be effectively  terminated  since the underlying  debt was  extinguished.  These
  interest  rate swap  agreements  had an estimated  fair value  liability of $8.2
  million  at  the  date  of  the  Refinancing  Plan  which  is  included  in  the
  extraordinary  loss  on the  early  extinguishment  of  debt.  In lieu of a cash
  payment  for the  estimated  fair  value  of the  existing  interest  rate  swap
  agreement,  Foamex L.P. entered into an amendment of the existing  interest rate
  swap  agreements  resulting in one interest rate swap  agreement with a notional
  amount of $150.0 million through June 2007.  Accordingly,  the $8.2 million fair
  value  liability has been recorded as a deferred  credit which will be amortized
  as a reduction of interest and debt issuance  expense on a  straight-line  basis
  over the life of the amended  interest  rate swap  agreement.  Under the amended
  interest rate swap agreement, Foamex L.P. is obligated to make fixed payments of
  5.75% per annum through December 1997 and variable  payments based on the higher
  of LIBOR at the  beginning  or the end of the  period for the  remainder  of the
  agreement, in exchange for fixed payments by the swap partner at 6.44% per annum
  for the life of the  agreement,  payable  semiannually  in arrears.  The amended
  interest rate swap agreement can be terminated by either party in June 2002, and
  annually thereafter, for a cash settlement based on the fair market value of the
  amended  interest rate swap  agreement.  Interest and debt  issuance  expense is
  subject to  fluctuations  in LIBOR during the term of the swap agreement  except
  during   1997.   Foamex  L.P.  is  exposed  to  credit  loss  in  the  event  of
  nonperformance by the swap partner; however, the occurrence of this event is not
  anticipated.  The  effect  of the  interest  rate  swaps  described  above was a
  favorable  adjustment to interest and debt issuance  expense of $0.5 million and
  $0.9  million  for the  thirteen  week  periods  ended  September  28,  1997 and
  September  29,  1996,  respectively,  and $2.2  million and $2.8 million for the
  thirty-nine  week  periods  ended  September  28, 1997 and  September  29, 1996,
  respectively.
  
       Environmental Matters
  
       The Company is subject to  extensive  and changing  environmental  laws and
  regulations.  Expenditures to date in connection  with the Company's  compliance
  with such laws and  regulations  have not had a material  adverse  effect on its
  operations,  financial position,  capital expenditures or competitive  position.
  The  amount  of  liabilities   recorded  by  the  Company  in  connection   with
  environmental  matters as of September 28, 1997 was approximately  $3.8 million.
  In  addition,  as of  September  28,  1997 the Company  has net  receivables  of
  approximately $1.0 million for indemnification of environmental liabilities from
  former  owners,   net  of  a  $1.0  million  allowance   relating  to  potential
  disagreements  regarding  the  scope  of  the  indemnification.  Although  it is
  possible that new information or future  developments  could require the Company
  to  reassess  its  potential  exposure  to all  pending  environmental  matters,
  including  those   described  in  the  footnotes  to  the  Company's   condensed
  consolidated  financial  statements,  management  believes that,  based upon all
  currently   available   information,   the   resolution   of  all  such  pending
  environmental  matters will not have a material  adverse effect on the Company's
  operations, financial position, capital expenditures or competitive position.
  
       The possibility exists, however, that new environmental  legislation and/or
  environmental  regulations may be adopted, or other environmental conditions may
  be found to exist, that may require  expenditures not currently  anticipated and
  that may be material.
  
                                         19
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS
  
  Inflation and Other Matters
  
       There was no significant impact on the Company's  operations as a result of
  inflation for the periods presented. In some circumstances, market conditions or
  customer  expectations  may prevent the Company from increasing the price of its
  products to offset the inflationary pressures that may increase its costs in the
  future.  Effective in January 1997,  the  Company's  operations in Mexico became
  subject to highly  inflationary  accounting  for financial  reporting  purposes.
  Translation adjustments resulting from fluctuations in the exchange rate between
  the Mexican Peso and the U.S. dollar are included in the Company's  consolidated
  statement of  operations  as compared to  stockholders'  equity  (deficit).  The
  effect of  translation  adjustments  on the 1997 results of operations  have not
  been material.
  
       The Company's  automotive  products customers are predominantly  automotive
  original  equipment  manufacturers or other automotive  suppliers.  As such, the
  sales of these  product  lines are  directly  related  to the  overall  level of
  passenger car and light truck  production in North America.  Also, the Company's
  sales are  sensitive  to sales of new and  existing  homes,  changes in personal
  disposable  income  and  seasonality.  The  Company  typically  experiences  two
  seasonally  slow periods  during each year, in early July and in late  December,
  due to scheduled plant shutdowns and holidays.
  
       In February 1997, the Financial Accounting Standards Board issued Statement
  of Financial  Accounting  Standards ("SFAS") No. 128, "Earnings Per Share". SFAS
  No. 128  specifies  new  standards  designed to improve the  earnings  per share
  ("EPS") information provided in financial statements by simplifying the existing
  computational guidelines,  revising the disclosure requirements,  and increasing
  the  comparability  of EPS data on an international  basis.  Some of the changes
  made to simplify the EPS computations  include: (i) eliminating the presentation
  of primary EPS and replacing it with basic EPS,  with the  principal  difference
  being that common stock  equivalents  are not considered in computing basic EPS,
  (ii)  eliminating  the  modified  treasury  stock  method and the three  percent
  materiality provision and (iii) revising the contingent share provisions and the
  supplemental EPS data  requirements.  Fully diluted earnings per share under the
  provisions  of SFAS No. 128 would not differ  significantly  from  earnings  per
  share presented on the consolidated statement of operations.  In addition, under
  the  provisions  of SFAS No. 128, the Company  would have reported the following
  basic per share information:
  13 Week Periods Ended             39 Week Periods Ended
                                                      September 28,    September 29,     September 28,   September 29,
                                                           1997             1996              1997           1996
                                                                    (thousands except per share data)
  Basic loss per share                              $0.26          $(2.64)              $(0.73)         $(3.62)
       Weighted  average shares  outstanding            24,959          25,251               25,198          25,450
  20
  Part II - Other Information
  
  Item 1.    Legal Proceedings
  
             Reference  is  made  to  the  description  of the  legal  proceedings
             contained in the Company's  Annual Report on Form 10-K for the fiscal
             year ended December 29, 1996 and in the Company's  Quarterly  Reports
             on Form 10-Q for the fiscal  quarters  ended  March 30, 1997 and June
             29, 1997.
  
             The  information  from  Notes 6 and 7 of the  condensed  consolidated
             financial  statements  of  the  Company  as  of  September  28,  1997
             (unaudited) is incorporated herein by reference.
  
  Item 2.    Changes in Securities
  
             None.
  
  Item 3.    Defaults Upon Senior Securities
  
             None.
  
  Item 4.    Submission of Matters to a Vote of Security Holders.
  
             None.
  
  Item 5.    Other Information
  
             None.
  
  Item 6.    Exhibits and Reports on Form 8-K
  
             (a)  Exhibits
  
  3.1(a)          - Certificate of Limited Partnership of Foamex L.P.
  3.2.1(a)        - Fourth Amended and Restated  Agreement of Limited  Partnership
                  of Foamex  L.P.,  dated as of December  14,  1993,  by and among
                  FMXI, Inc. ("FMXI") and Trace Foam Company, Inc. ("Trace Foam"),
                  as general  partners,  and Foamex  International  Inc.  ("Foamex
                  International"),   as  a  limited   partner  (the   "Partnership
                  Agreement").
  3.2.2(b)        - First Amendment to the Partnership  Agreement,  dated June 28,
                  1994.
  3.2.3(c)        - Second Amendment to the Partnership Agreement,  dated June 12,
                  1997.
  3.3(a)          - Certificate of Incorporation of FMXI.
  3.4(a)          - By-laws of FMXI.
  3.5(k)          - Certificate of  Incorporation  of Foamex  Capital  Corporation
                  ("FCC").
  3.6(k)          - By-laws of FCC.
  3.7(g)          - Certificate of Incorporation of General Felt Industries,  Inc.
                  ("General Felt").
  3.8(g)          - By-laws of General Felt.
  3.9(p)          - Certificate of Incorporation of Foamex Fibers,  Inc.  ("Foamex
                  Fibers")
  3.10(p)         - By-laws of Foamex Fibers.
  3.11(a)         - Certificate of Incorporation of Foamex International.
  3.12(a)         - By-laws of Foamex International.
  4.1.1(d)        -  Indenture,  dated as of June 12,  1997,  by and among  Foamex
                  L.P.,  FCC, the Subsidiary  Guarantors and The Bank of New York,
                  as  Trustee,   relating  to  $150,000,000  principal  amount  of
                  9 7/8% Senior Subordinated Notes due 2007,  including the form
                  of Senior Subordinated Note and Subsidiary Guarantee.
  
                                         21
  4.1.2(d)        - Registration  Rights Agreement,  dated as of June 12, 1997, by
                  and among Foamex L.P., FCC, General Felt, Foamex Fibers, and all
                  future direct or indirect  domestic  subsidiaries of Foamex L.P.
                  or FCC, and Donaldson, Lufkin & Jenrette Securities Corporation,
                  Salomon  Brothers Inc. and Scotia  Capital  Markets,  as Initial
                  Purchasers.
  4.2.1(e)        -  Indenture,  dated as of June 3, 1993,  among  Foamex L.P. and
                  FCC, as joint and several obligors,  General Felt, as Guarantor,
                  and Shawmut Bank, National Association ("Shawmut"),  as trustee,
                  relating  to  $160,000,000  principal  amount  of 9 1/2%  Senior
                  Secured  Notes due 2000,  including  the form of Senior  Secured
                  Note.
  4.2.2(a)        - First Supplemental  Indenture,  dated as of November 18, 1993,
                  among Foamex L.P. and FCC, as Issuers,  General Felt and Perfect
                  Fit Industries, Inc. ("Perfect Fit"), as Guarantors and Shawmut,
                  as trustee, relating to the Senior Secured Notes.
  4.2.3(a)        - Second Supplemental Indenture,  dated as of December 14, 1993,
                  among Foamex L.P. and FCC, as Issuers, Foamex L.P., General Felt
                  and Perfect Fit, as Guarantors and Shawmut, as trustee, relating
                  to the Senior Secured Notes.
  4.2.4(f)        - Third Supplemental  Indenture,  dated as of August 1, 1996, by
                  and among  Foamex  L.P.  and FCC, as Issuers,  Foamex  L.P.,  as
                  parent  guarantor,  General Felt, as guarantor,  Perfect Fit, as
                  withdrawing  guarantor,  and Fleet National Bank  ("Fleet"),  as
                  trustee relating to the Senior Secured Notes.
  4.2.5(c)        - Fourth  Supplemental  Indenture,  dated as of May 28, 1997, by
                  and among  Foamex  L.P.  and FCC, as Issuers,  Foamex  L.P.,  as
                  Parent  Guarantor,  General Felt, as  Guarantor,  and Fleet,  as
                  Trustee.
  4.2.6(e)        - Company Pledge Agreement,  dated as of June 3, 1993, by Foamex
                  L.P.  in favor of  Shawmut,  as trustee  for the  holders of the
                  Senior Secured Notes.
  4.2.7(p)        - Amendment  No. 1 to Company  (Foamex  L.P.) Pledge  Agreement,
                  dated June 12, 1997.
  4.2.8(e)        - Company Pledge Agreement,  dated as of June 3, 1993, by FCC in
                  favor of  Shawmut,  as  trustee  for the  holders  of the Senior
                  Secured Notes.
  4.2.9(p)        - Amendment No. 1 to Company (FCC) Pledge Agreement,  dated June
                  12, 1997.
  4.2.10(e)       -  Subsidiary  Pledge  Agreement,  dated as of June 3, 1993,  by
                  General Felt in favor of Shawmut,  as trustee for the holders of
                  the Senior Secured Notes.
  4.2.11(p)       - Amendment No. 1 to Subsidiary (General Felt) Pledge Agreement,
                  dated June 12, 1997.
  4.2.12(e)       -  Company  Security  Agreement,  dated as of June 3,  1993,  by
                  Foamex  L.P.  and FCC in favor of  Shawmut,  as trustee  for the
                  holders of the Senior Secured Notes.
  4.2.13(p)       - Amendment  No. 1 to  Company,  Foamex  L.P.  and FCC  Security
                  Agreement, dated June 12, 1997.
  4.2.14(e)       - Subsidiary  Security  Agreement,  dated as of June 3, 1993, by
                  General Felt in favor of Shawmut,  as trustee for the holders of
                  the Senior Secured Notes.
  4.2.15(p)       - Amendment  No. 1 to  Subsidiary  Security  Agreement  (General
                  Felt), dated June 12, 1997.
  4.2.16(e)       - Collateral  Assignment of Patents and Trademarks,  dated as of
                  June 3, 1993, by Foamex L.P. in favor of Shawmut, as trustee for
                  the holders of the Senior Secured Notes.
  4.2.17(p)       -  Amendment  No. 1 to  Collateral  Assignment  of  Patents  and
                  Trademarks (Foamex L.P.), dated June 12, 1997.
  4.2.18(e)       - Collateral  Assignment of Patents and Trademarks,  dated as of
                  June 3, 1993,  by FCC in favor of  Shawmut,  as trustee  for the
                  holders of the Senior Secured Notes.
  4.2.19(p)       -  Amendment  No. 1 to  Collateral  Assignment  of  Patents  and
                  Trademarks (FCC), dated June 12, 1997.
  4.2.20(e)       - Collateral  Assignment of Patents and Trademarks,  dated as of
                  June 3, 1993,  by General  Felt in favor of Shawmut,  as trustee
                  for the holders of the Senior Secured Notes.
  4.2.21(p)       -  Amendment  No.1  to  Collateral  Assignment  of  Patents  and
                  Trademarks (General Felt), dated June 12, 1997.
  4.2.22(p)       - Amended and Restated  Receivables  Security Agreement,  by and
                  among Fleet  National  Bank,  Citicorp USA, Inc. and The Bank of
                  Nova Scotia, dated as of June 12, 1997.
  4.2.23(p)       -  Intercreditor  Agreement  by and among Fleet,  Citicorp  USA,
                  Inc.,  and The Bank of Nova  Scotia,  dated as of June 12,  1997
                  (re: Senior Secured Notes).
  4.3             - Intentionally omitted.
  
                                         22
  4.4             - Intentionally omitted.
  4.5.1(d)        - Credit  Agreement,  dated as of June 12,  1997,  by and  among
                  Foamex L.P.,  General Felt,  Trace Foam,  FMXI, the institutions
                  from time to time party  thereto as  lenders,  the  institutions
                  from time to time party thereto as issuing  banks,  and Citicorp
                  USA, Inc. and The Bank of Nova Scotia, as Administrative Agents.
  4.5.2(p)        - Foamex International  Guaranty,  dated as of June 12, 1997, in
                  favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.3(p)        - Partnership Guaranty, dated as of June 12, 1997, made by Trace
                  Foam and FMXI in favor of  Citicorp  USA,  Inc.,  as  Collateral
                  Agent.
  4.5.4(p)        - Foamex  Guaranty,  dated as of June 12,  1997,  made by Foamex
                  L.P. in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.5(p)        - GFI Guaranty,  dated as of June 12, 1997, made by General Felt
                  in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.6(p)        - Subsidiary Guaranty, dated as of June 12, 1997, made by Foamex
                  Fibers in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.7(p)        - Subsidiary Guaranty, dated as of June 12, 1997, made by Foamex
                  Latin  America,   Inc.  in  favor  of  Citicorp  USA,  Inc.,  as
                  Collateral Agent.
  4.5.8(p)        - Subsidiary Guaranty, dated as of June 12, 1997, made by Foamex
                  Mexico,  Inc.  in favor of Citicorp  USA,  Inc.,  as  Collateral
                  Agent.
  4.5.9(p)        - Subsidiary Guaranty, dated as of June 12, 1997, made by FCC in
                  favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.10(p)       - Subsidiary Guaranty, dated as of June 12, 1997, made by Foamex
                  Mexico II, Inc. in favor of Citicorp  USA,  Inc.,  as Collateral
                  Agent.
  4.5.11(p)       - Subsidiary Guaranty, dated as of June 12, 1997, made by Foamex
                  Asia, Inc. in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.12(p)       - Partnership Pledge Agreement,  dated as of June 12, 1997, made
                  by Trace Foam Company,  Inc., FMXI, and Foamex  International in
                  favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.13(p)       - Foamex Pledge  Agreement,  dated as of June 12, 1997,  made by
                  Foamex L.P. in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.14(p)       - GFI  Pledge  Agreement,  dated  as of June 12,  1997,  made by
                  General  Felt in favor of  Citicorp  USA,  Inc.,  as  Collateral
                  Agent.
  4.5.15(p)       - Subsidiary Pledge  Agreement,  dated as of June 12, 1997, made
                  by FCC in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.16(p)       - Subsidiary Pledge  Agreement,  dated as of June 12, 1997, made
                  by Foamex Fibers in favor of Citicorp  USA,  Inc., as Collateral
                  Agent.
  4.5.17(p)       - Subsidiary Pledge  Agreement,  dated as of June 12, 1997, made
                  by Foamex Latin America, Inc. in favor of Citicorp USA, Inc., as
                  Collateral Agent.
  4.5.18(p)       - Subsidiary Pledge  Agreement,  dated as of June 12, 1997, made
                  by  Foamex  Asia,  Inc.  in  favor of  Citicorp  USA,  Inc.,  as
                  Collateral Agent.
  4.5.19(p)       - Subsidiary Pledge  Agreement,  dated as of June 12, 1997, made
                  by Foamex  Mexico,  Inc.  in favor of  Citicorp  USA,  Inc.,  as
                  Collateral Agent.
  4.5.20(p)       - Subsidiary Pledge  Agreement,  dated as of June 12, 1997, made
                  by Foamex  Mexico II, Inc. in favor of Citicorp  USA,  Inc.,  as
                  Collateral Agent.
  4.5.21(p)       - Foamex Security Agreement,  dated as of June 12, 1997, made by
                  Foamex L.P. in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.22(p)       - GFI Security  Agreement,  dated as of June 12,  1997,  made by
                  General  Felt in favor of  Citicorp  USA,  Inc.,  as  Collateral
                  Agent.
  4.5.23(p)       - Subsidiary Security Agreement, dated as of June 12, 1997, made
                  by Foamex Fibers in favor of Citicorp  USA,  Inc., as Collateral
                  Agent.
  4.5.24(p)       - Subsidiary Security Agreement, dated as of June 12, 1997, made
                  by Foamex Latin America, Inc. in favor of Citicorp USA, Inc., as
                  Collateral Agent.
  4.5.25(p)       - Subsidiary Security Agreement, dated as of June 12, 1997, made
                  by Foamex  Mexico,  Inc.  in favor of  Citicorp  USA,  Inc.,  as
                  Collateral Agent.
  
                                         23
  4.5.26(p)       - Subsidiary Security Agreement, dated as of June 12, 1997, made
                  by Foamex  Mexico II, Inc. in favor of Citicorp  USA,  Inc.,  as
                  Collateral Agent.
  4.5.27(p)       - Subsidiary Security Agreement, dated as of June 12, 1997, made
                  by  Foamex  Asia,  Inc.  in  favor of  Citicorp  USA,  Inc.,  as
                  Collateral Agent.
  4.5.28(p)       - Subsidiary Security Agreement, dated as of June 12, 1997, made
                  by FCC in favor of Citicorp USA, Inc., as Collateral Agent.
  4.6             - Commitment letter,  dated July 17, 1997, from The Bank of Nova
                  Scotia to Foamex Canada Inc.
  4.7(a)          - Subordinated  Promissory Note, dated as of May 6, 1993, in the
                  original principal amount of $7,014,864  executed by Foamex L.P.
                  to John Rallis ("Rallis").
  4.8(a)          - Marely Loan  Commitment  Agreement,  dated as of December  14,
                  1993, by and between Foamex L.P. and Marely s.a. ("Marely").
  4.9(a)          - DLJ Loan Commitment Agreement,  dated as of December 14, 1993,
                  by  and  between  Foamex  L.P.  and  DLJ  Funding,   Inc.  ("DLJ
                  Funding").
  4.10.1(p)       -  Promissory  Note,  dated  June  12,  1997,  in the  aggregate
                  principal  amount of  $5,000,000,  executed by Trace Holdings to
                  Foamex L.P.
  4.10.2(p)       -  Promissory  Note,  dated  June  12,  1997,  in the  aggregate
                  principal  amount of  $4,794,828,  executed by Trace Holdings to
                  Foamex L.P.
  10.1.1(p)       -  Amendment  to  Master  Agreement,  dated as of June 5,  1997,
                  between Citibank, N.A. and Foamex L.P.
  10.1.2(p)       -  Amended  confirmation,  dated  as of June 13,  1997,  between
                  Citibank, N.A. and Foamex L.P.
  10.2(h)         - Reimbursement  Agreement,  dated as of March 23, 1993, between
                  Trace Holdings and General Felt.
  10.3(h)         -  Shareholder   Agreement,   dated  December  31,  1992,  among
                  Recticel, s.a. ("Recticel"), Recticel Holding Noord B.V., Foamex
                  L.P.,  Beamech Group  Limited,  LME-Beamech,  Inc.,  James Brian
                  Blackwell,  and Prefoam AG relating to foam  technology  sharing
                  arrangement.
  10.4.1(k)       - Asset Transfer Agreement, dated as of October 2, 1990, between
                  Trace  Holdings  and Foamex  L.P.  (the  "Trace  Holdings  Asset
                  Transfer Agreement").
  10.4.2(k)       - First  Amendment,  dated as of December 19, 1991, to the Trace
                  Holdings Asset Transfer Agreement.
  10.4.3(k)       - Amended and Restated Guaranty,  dated as of December 19, 1991,
                  made by Trace Foam in favor of Foamex L.P.
  10.5.1(k)       - Asset Transfer Agreement, dated as of October 2, 1990, between
                  Recticel  Foam  Corporation  ("RFC") and Foamex  L.P.  (the "RFC
                  Asset Transfer Agreement").
  10.5.2(k)       - First  Amendment,  dated as of December 19,  1991,  to the RFC
                  Asset Transfer Agreement.
  10.5.3(k)       - Schedule 5.03 to the RFC Asset  Transfer  Agreement (the "5.03
                  Protocol").
  10.5.4(h)       - The 5.03 Protocol  Assumption  Agreement,  dated as of October
                  13,  1992,  between  RFC and  Foamex  L.P.  10.5.5(h)  n  Letter
                  Agreement  between  Trace  Holdings and Recticel  regarding  the
                  Recticel Guaranty, dated as of July 22, 1992.
  10.6(l)         - Supply Agreement, dated June 28, 1994, between Foamex L.P. and
                  Foamex International.
  10.7.1(l)       - First Amended and Restated Tax Sharing Agreement,  dated as of
                  December 14,  1993,  among  Foamex  L.P.,  Trace Foam,  FMXI and
                  Foamex International.
  10.7.2(d)       - First Amendment to Amended and Restated Tax Sharing  Agreement
                  of Foamex L.P.,  dated as of June 12, 1997,  by and among Foamex
                  L.P., Foamex International, FMXI and Trace Foam.
  10.8.1(m)       - Tax Distribution  Advance Agreement,  dated as of December 11,
                  1996, by and between Foamex L.P. and Foamex-JPS Automotive.
  10.8.2(d)       - Amendment No. 1 to Tax Distribution  Advance Agreement,  dated
                  as of June 12,  1997,  by and  between  Foamex  L.P.  and Foamex
                  International.
  10.9.1(h)       - Trace Foam Management  Agreement between Foamex L.P. and Trace
                  Foam, dated as of October 13, 1992.
  10.9.2(l)       - Affirmation  Agreement re: Management  Agreement,  dated as of
                  December 14, 1993, between Foamex L.P. and Trace Foam.
  10.9.3(d)       - First Amendment to Management Agreement,  dated as of June 12,
                  1997, by and between Foamex L.P. and Trace Foam.
  
                                         24
  10.10.1(k)      - Salaried Incentive Plan of Foamex L.P. and Subsidiaries.
  10.10.2(k)      - Trace Holdings 1987 Nonqualified Stock Option Plan.
  10.10.3(k)      - Equity Growth Participation Program.
  10.10.4(o)      - The Foamex L.P.  Salaried  Pension Plan  (formerly the General
                  Felt Industries,  Inc. Retirement Plan for Salaried  Employees),
                  effective as of January 1, 1995.
  10.10.5(u)      - The Foamex L.P.  Hourly  Pension  Plan  (formerly  "The Foamex
                  Products  Inc.  Hourly  Employee  Retirement  Plan),  as amended
                  December 31, 1995.
  10.10.6(u)      - Foamex L.P. 401(k) Savings Plan effective October 1, 1997.
  10.10.7(a)      - Foamex L.P.'s 1993 Stock Option Plan.
  10.10.8(a)      - Foamex L.P.'s Non-Employee Director Compensation Plan.
  10.11.1(o)      -  Employment  Agreement,  dated as of February 1, 1994,  by and
                  between Foamex L.P. and William H. Bundy.
  10.11.2(q)      -  Employment  Agreement,  dated  as of July  26,  1995,  by and
                  between Foamex L.P. and Salvatore J. Bonanno.
  10.12.1(a)      - Warrant Exchange Agreement,  dated as of December 14, 1993, by
                  and between Foamex L.P. and Marely.
  10.12.2(a)      - Warrant Exchange Agreement,  dated as of December 14, 1993, by
                  and between Foamex L.P. and DLJ Funding.
  10.13(t)        - Warrant Exchange Agreement,  dated as of June 29, 1997, by and
                  between Foamex International and Shawmut Bank.
  10.14(o)        - Stock  Purchase  Agreement,  dated as of December 23, 1993, by
                  and  between  Transformacion  de Espumas u Fieltros,  S.A.,  the
                  stockholders which are parties thereto, and Foamex L.P.
  10.15(r)        - Asset Purchase Agreement,  dated as of August 29, 1997, by and
                  among General  Felt,  Foamex L.P.,  Bretlin,  Inc. and The Dixie
                  Group.
  10.15.1(s)      - Addendum to Asset Purchase  Agreement,  dated as of October 1,
                  1997, by and among General Felt, Foamex L.P., Bretlin,  Inc. and
                  The Dixie Group.
  27              - Financial Data Schedule. 
  
  ----------------------------
  
  (a)  Incorporated   herein  by  reference  to  the  Exhibit  to  Foamex   L.P.'s
       Registration Statement on Form S-1, Registration No. 33-69606.
  
  (b)  Incorporated  herein by reference to the Exhibit to the Form 10-K of Foamex
       for the fiscal year ended January 1, 1995.
  
  (c)  Incorporated  herein by reference  to the Exhibit to the Current  Report on
       Form 8-K of Foamex reporting an event that occurred May 28, 1997.
  
  (d)  Incorporated  herein by reference  to the Exhibit to the Current  Report on
       Form 8-K of Foamex reporting an event that occurred June 12, 1997.
  
  (e)  Incorporated  herein  by  reference  to the  Exhibit  to  the  Registration
       Statement of Foamex and FCC on Form S-4, Registration No. 33-65158.
  
  (f)  Incorporated  herein by reference to the Exhibit to the Form 10-Q of Foamex
       for the quarterly period ended June 30, 1996.
  
  (g)  Incorporated  herein  by  reference  to the  Exhibit  to  the  Registration
       Statement of Foamex,  FCC and General Felt on Form S-1,  Registration  Nos.
       33-60888, 33-60888-01, and 33-60888-02.
  
  (h)  Incorporated  herein by reference to the Exhibit to the Form 10-K Statement
       of Foamex and FCC for fiscal 1992.
  
                                         25
  (i)  Incorporated  herein by reference to the Exhibit to the Form 10-K of Foamex
       L.P. for fiscal 1994.
  
  (j)  Incorporated  herein by reference to the Exhibit to the Form 10-Q of Foamex
       for the quarterly period ended September 30, 1996.
  
  (k)  Incorporated  herein  by  reference  to the  Exhibit  to  the  Registration
       Statement  of Foamex and FCC on Form S-1,  Registration  Nos.  33-49976 and
       33-49976-01.
  
  (l)  Incorporated  herein  by  reference  to the  Exhibit  to  the  Registration
       Statement  of FJPS,  FJCC and Foamex  L.P.  on Form S-4,  Registration  No.
       33-82028.
  
  (m)  Incorporated  herein by  reference  to the Exhibit to the Annual  Report on
       Form 10-K of Foamex for the fiscal year ended December 29, 1996.
  
  (n)  Incorporated  herein by reference to the Exhibit to the Form 10-Q of Foamex
       for the quarterly period ended July 2, 1995.
  
  (o)  Incorporated  herein by reference to the Exhibit to the Form 10-K of Foamex
       L.P. for fiscal 1993.
  
  (p)  Incorporated  herein  by  reference  to the  Exhibit  in  the  Registration
       Statement of Foamex on Form S-4, Registration No. 333-30291.
  
  (q)  Incorporated  herein by reference to the Exhibit to the Form 10-K of Foamex
       L.P. for the fiscal year ended December 31, 1995.
  
  (r)  Incorporated  herein  by  reference  to the  Current  Report on Form 8-K of
       Foamex L.P. reporting an event that occurred on August 29, 1997.
  
  (s)  Incorporated  herein  by  reference  to the  Current  Report on Form 8-K of
       Foamex L.P. reporting an event that occurred on October 6, 1997.
  
  (t)  Incorporated  by  reference  to the  Exhibit  to the  Form  10-Q of  Foamex
       International for the quarterly period ended July 3, 1994.
  
  (u)  Incorporated  by  reference  to the Exhibit to the Form 10-Q of Foamex L.P.
       for the quarterly period ended September 28, 1997.
  
       Certain  instruments  defining  the rights of  security  holders  have been
  excluded herefrom in accordance with Item  601(b)(4)(iii) of Regulation S-K. The
  registrant  hereby  agrees  to  furnish  a copy of any  such  instrument  to the
  Commission upon request.
  
           (b) Foamex L.P. filed the following Current Reports on Form 8-K:
  
                Form 8-K reporting an event that occurred on August 29, 1997.
  
                Form 8-K reporting an event that occurred on October 6, 1997.
  
                                         26
  SIGNATURES
  
       Pursuant to the  requirements  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.
  
                                            FOAMEX INTERNATIONAL INC.
  
  Date:   November 12, 1997                 By: /s/ Kenneth R. Fuette
                                                -------------------------
                                                Kenneth R. Fuette
                                                Chief Financial Officer
  
                                         27