UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

      For the fiscal year                                  Commission File
      ended June 30, 1999                                  Number 0-5200

                                 BONTEX, INC.
             Exact name of Registrant as specified in its charter

         VIRGINIA                                          54-0571303
      State of Incorporation                               IRS Employer No.

      ONE BONTEX DRIVE, BUENA VISTA, VIRGINIA              24416-1500
         Address of principal executive offices             Zip code

                 Registrant's telephone number  (540) 261-2181

Securities registered pursuant to Section 12(b) of the Act:None

Securities registered pursuant to Section 12(g) of the Act:
                                                Title of Class
                                          $.10 par value common stock

Indicate by check mark whether the Registrant (1) has filed all annual,
quarterly and other reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months with the
Commission, and (2) has been subject to the filing requirements for at least the
past 90 days: ( x ) Yes ( ) No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of the Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K ( )

Aggregated market value of the voting stock held by non-affiliates of the
Registrant: $1,700,685 at August 31, 1999

On August 30, 1999, the Registrant had 1,572,824 shares of $.10 par value common
stock outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE:

(1)  Portions of the Registrant's Annual Report to Stockholders are incorporated
     by reference into Parts I and II hereof.

(2)  Portions of the Registrant's Proxy Statement dated September 28, 1999
     issued in connection with the annual meeting of shareholders to be held
     October 28, 1999 are incorporated by reference into Part III hereof.


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                                TABLE OF CONTENTS


                                     PART I

ITEM                                                                    PAGE

1.      Business..........................................................3
2.      Properties........................................................9
3.      Legal Proceedings.................................................9
4.      Submission of Matters to a Vote of Security Holders..............10


                                     PART II


5.      Market for the Registrant's Common Equity and Related Stockholder
        Matters..........................................................11
6.      Selected Financial Data..........................................12
7.      Management's Discussion and Analysis of Financial Condition
          and Results of Operations......................................12
7A.     Quantitative and Qualitative Disclosures About Market Risk.......12
8.      Financial Statements and Supplementary Data......................12
9.      Changes in and Disagreements with Accountants on Accounting
          and Financial Disclosure.......................................13


                                    PART III


10.     Directors and Executive Officers of the Registrant...............13
11.     Executive Compensation...........................................13
12.     Security Ownership of Certain Beneficial Owners and Management...13
13.     Certain Relationships and Related Transactions...................13


                                     PART IV


14.     Exhibits, Financial Statement Schedules and Reports on Form 8-K..13



                                        2

<PAGE>



                                     PART I


ITEM 1. BUSINESS

        On January 2, 1997, the Company completed a plan which changed, among
several items, its name to Bontex, Inc. from Georgia Bonded Fibers, Inc. For
further information see General Business below.

        Except for the historical data set forth herein, the following
discussion contains forward-looking information. The Company's actual results
may differ materially from these projected results because of inherent
limitations with such model characteristics and assumptions. Factors that could
cause or contribute to such differences include, but are not limited to, level
of sales to key customers, actions of competitors, fluctuations in the prices of
primary raw materials and foreign currency exchange rates.

GENERAL BUSINESS

        Bontex, Inc. (all references hereinafter to the "Registrant," "Company"
or "Bontex" refer collectively to Bontex, Inc. and its wholly-owned and
majority-owned subsidiaries unless otherwise indicated by context) was
incorporated in June 1946 under the laws of the State of New Jersey. The Company
originally began as a leather processing operation, and today, Bontex is a
leading worldwide manufacturer and distributor of uncoated and coated
elastomeric wet web impregnated fiberboard products. The Company's products are
generally described by the trademark BONTEX, and are marketed to various
industries, including footwear, headwear, luggage, leathergoods, allied
industries, belt backing, gasketing, furniture, electronic integrated component
packaging, and automotive industries. Bontex is a market leader in many of the
areas in which the Company competes.

        The Company believes it has been negatively affected by the well
publicized situation in Asia related to the currency and economic crisis. During
the past two years, the currencies of a number of key Asian countries, including
Korea, Thailand, and Indonesia, have devalued. The devaluations against the US
dollar have made locally sourced materials less expensive, in some cases, than
Bontex products. This has put additional pressure on margins and has negatively
affected sales as noted in Management's Discussion and Analysis incorporated by
reference in Part II, Item 7 of this report. Sales have also been negatively
impacted by excessive inventories of footwear that have led to a reduction of
footwear production. Even though economic conditions in Asia have reduced the
Company's near-term growth expectations, management believes that the market
ultimately will rebound. A two-year correction period is expected by many
experts in relation to the global shoe inventory. Nonwoven materials, however,
continue to erode sales of cellulose based products. Bontex is placing greater
emphasis on the marketing of nonwoven products, and working to develop new
markets for impregnated cellulose products in an effort to increase sales.

        On January 2, 1997, the Company received the final State regulatory
approvals of its proposal, which was adopted by the Company's stockholders at
the Annual Meeting of Stockholders held on November 7, 1996, to change the state
of incorporation of the Company to Virginia and effect Amended and Restated
Articles of Incorporation (the "Reorganization"). As a result of the
restructuring, the Company was reincorporated as a Virginia corporation, with
its principal place of business at One Bontex Drive, Buena Vista, Virginia
24416-1500, and the name of the Company was changed to "Bontex, Inc." The
Company's common stock is traded on the Nasdaq SmallCap Market under the symbol
"BOTX." The restructuring did not result in any material change in the business,
management, assets, liabilities, or net worth of the Company. For further
information, refer to Report on Form 8-K, Reorganization of Georgia Bonded
Fibers, Inc., dated January 2, 1997, and Proxy Statement for meeting of
Shareholders held on November 7, 1996.


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<PAGE>



ORGANIZATION

        The Company maintains corporate headquarters, manufacturing, converting,
sales office, and a warehouse facility in Buena Vista, Virginia; a wholly-owned
manufacturing subsidiary, Bontex S.A. in Stembert, Belgium; a wholly-owned
distribution and converting subsidiary, Bontex Italia S.r.l. in Villafranca,
Verona, Italy; a wholly-owned distribution subsidiary, Bontex de Mexico, S.A. de
C.V. in Leon, Mexico, and a majority owned distribution subsidiary, Bontex Hong
Kong Limited in Hong Kong; and a sales office and warehouse in Newark, New
Jersey, which the Company plans to sell during fiscal year 2000, but currently
is still in use. See the discussion under "Item 2. Properties," below. The
Company utilizes a wholly-owned foreign sales corporation organized and existing
under the laws of the Virgin Islands to facilitate export sales. Additionally,
Bontex maintains a network of liaison offices, Bontex Korea, Bontex Taiwan,
Bontex China, Bontex Indonesia, Bontex Philippines, and Bontex Australia to
service Asian markets.

        The Company currently employs 86 full-time and 2 part-time employees in
Buena Vista, Virginia; 2 full-time and 1 part-time employees in Newark, New
Jersey; 75 full-time and 2 part-time employees in Belgium; 9 full-time employees
in Italy; 2 full-time and 1 part-time employees in Mexico and 1 full-time
employee in Hong Kong. Revenue per employee was approximately $221,000 and
$200,000 in fiscal years 1999 and 1998, respectively.

        There is no labor union at the United States operations and management
knows of no union activity at the present time. There are labor unions at the
Company's European operations. Although the Company believes that relations with
its employees are positive, there can be no assurance that the Company will not
experience work stoppages in the future.

PRODUCTS

        BONTEX elastomeric wet web fiberboard materials are primarily used as an
insole material in footwear, as well as visorboard in headwear, dielectric
sealing base in automotive door panels, backing substrate, stiffener and
laminating base in luggage, leathergoods, and allied products. All BONTEX
fiberboard products are designed to be "environmentally-friendly," because
Bontex uses recycled and primary cellulose fibers originally derived from trees,
a renewable resource. Bontex has the American Podiatric Medical Association
(APMA) Seal of Acceptance for BONTEX elastomeric wet web products, BONFOAM,
SUREFOAM, and MAXXON, cushion insole materials. BONFOAM, SUREFOAM, and MAXXON
trademarks are the sole property of the Registrant. The podiatric seal of
acceptance is granted after stringent clinical and laboratory tests have been
carried out on approved products which demonstrate conformity to APMA
guidelines, and assist in foot health and comfort. The APMA Seal of Acceptance
for approved BONTEX products should enhance product acceptance in the
marketplace. Bontex has the SATRA Quality mark and laboratory accreditation at
its Belgium facility.

        Bontex USA manufactures uncoated and coated BONTEX fiberboard products;
breathable (moisture vapor transmission) cushion foams, that are marketed under
trademarks BON-FOAM, MAXXON and SURE-FOAM, and are sold in a variety of grades
for use as shock absorbing insole material; BONTEX 200 RECYCLED and BONTEX 300
RECYCLED, which are produced from 100 percent recovered paper with a minimum 80
percent "post-consumer waste" for use in footwear, visorboard in headwear, a
backing substrate, stiffener pieces and laminating base; BON-PEL, a hybrid
nonwoven substrate, which is exceptionally strong and flexible; BONTEX 48 MA, an
uncoated visorboard for use in military headwear, which has been approved by
NATICK military laboratory. Bontex USA also combines certain products, such as
foams, fabrics, and vinyls, with BONTEX fiberboard. Additionally, Bontex USA is
the exclusive distributor globally to the footwear industry of an expanded
polyurethane material manufactured by Aero E.A.R. Specialty Composites, under
the trademarks MAXXON LS and CONFOR. MAXXON LS and CONFOR have moisture vapor
transmission characteristics and are used for sock-linings and cushion insoles
in various types of footwear. CONFOR is a trademark of E.A.R. Specialty
Composites. Bontex also markets a range of nonwoven products under the name
Bon-stitch. During 1999, Bontex

                                        4

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introduced a broad range of footwear materials, including Bontex 90 Insole
Seatboard, economical insole products, Astral foam with the newest stay-dry
technologies, Bon-Stitch linings and Bon-Stitch next generation nonwoven
insoles.

        Bontex S.A., Stembert, Belgium, manufactures uncoated BONTEX products.
Bontex Italia, S.r.l. is a distribution company and operates converting
equipment primarily servicing the Italian market.

        The Company's converting facilities continue to show increased volume
and open new market areas in coated and composite items converted on BONTEX
substrates. The Company's marketing emphasis is to capitalize on the positive
performance of these products. Management believes that Bontex is well
positioned for growth due to the high quality and market acceptance of its
products, as well as its significant market penetration in developed and
developing markets.

        The Company's research efforts are directed primarily toward developing
new products and processing techniques, and improving product performance, often
in close association with customers. The Company customizes many composite
products with BONTEX fiberboard products. These products have increased sales of
combination packages, primarily designed to take advantage of the current
increased emphasis on comfort in footwear products. A series of dual-density
(two-layer) foam packages have been designed, and management believes that sales
of these products have been positive since their introduction.

        Bontex has completed implementation of the International Organization
for Standardization quality assurance system ISO 9001 at both the United States
and Belgium manufacturing facilities. Bontex SA was certified ISO 9001 during
1996, and Bontex USA during 1997. The impact of ISO 9001 on sales is anticipated
to be minimal; however, management regards ISO 9001 qualification as important
to maintaining a competitive edge in quality globally.

COMPETITION

        The industry in which the Company operates is highly competitive.
Participants in the industry compete through quality and price, including the
ability to control costs, risk management, innovation, and customer service.
Presently, it is management's opinion that the Company offers superior product
quality and customer service in major markets globally. In the United States,
there is one other manufacturer of BONTEX type material. There are, however,
other materials which may be substituted for the same applications. The Company
estimates that during fiscal year 1999, its products were in approximately 45 to
50 percent of non-rubber footwear manufactured in the United States. This
estimate is based on Footwear Industries of America (FIA) data as to total
sales.

        There are manufacturers who purchase BONTEX type materials for coating,
laminating, and converting into innersoles for footwear, visors for headwear,
and dielectric sealing base in automotive door panels. There is more competition
in these segments, and no comparative market statistics are available.

        In Europe, there are six major manufacturers of material similar to
BONTEX. These competitors are located in Germany, Italy, Finland, Slovenia,
Taiwan and the former USSR. The Company estimates that it sells approximately 45
percent of the BONTEX type materials sold in the European Union. These estimates
are based on SATRA Common Market statistics as to total sales, and other
generally available industry information.

        There are a number of manufacturers of elastomeric fiberboard materials
in Asia; however, there are an estimated fourteen competitors operating in the
Peoples Republic of China, which impacts selling prices. There is a 5 percent
duty on BONTEX products going into Taiwan. The Company has petitioned the US
trade representatives to eliminate these duties. Bontex has received
notification that the Republic of China (R.O.C.) has agreed to reduce and
phase-out these duties, but no definitive time-frame has been announced.


                                        5

<PAGE>



        As there are many customers globally who purchase BONTEX and convert it
into innersoles and other application components, the actual total worldwide
market penetration is difficult to estimate.

RISK MANAGEMENT PROGRAM

        In areas where Bontex has exposure to market risk for commodities,
interest rates and foreign currencies, the Company attempts to manage these
risks with its Risk Management Program (RMP). The general policy for the RMP for
foreign currency exposure is to match currency denominations of the Company's
assets and liabilities. The RMP has proven to be effective in reducing the
Company's exposure to fluctuations in currency exchange rates. However, some
exposure remains and as such Bontex continues to have some gains and losses
related to currency fluctuation. The Mexican peso and Canadian dollar are
examples of currencies for which effective hedging is not available in a cost
efficient manner and Bontex is currently forced to accept the risk of doing
business in these and other such markets. The $40,000 of exchange losses during
1999 were mainly due to declines in value of the Mexican peso, Canadian dollar
and the overall strength of the US dollar during that period. For market risk
with commodity positions, such as pulp and latex, the Company uses a combination
of futures and purchase contracts to fix our prices in a manner intended to
limit our exposure. For interest rate market risk, the Company has on a limited
basis used interest rate swaps. As with all such risks, absolute or total
coverage of all exposures is not within our policy, but a closely monitored
approach is regarded as being effective based on current circumstances.

TRADEMARKS

        Bontex utilizes trademarks on nearly all of its products, and believes
having such distinctive trademarks which are readily identifiable is an
important factor in creating and maintaining a market for its goods and
services. This further serves to identify the Company and distinguish its goods
from goods of others. The Company considers its BONTEX trademark and other
trademarks to be among its most valuable assets, and has registered these
trademarks in over 70 countries. Bontex continues to vigorously protect its
trademarks against infringement. The Company's operations are not dependent to
any significant extent upon any single or related group of patents, licenses or
concessions.

PRODUCTION AND SALES

        Refer to Note 3 of Notes to the Consolidated Financial Statements in the
Company's Annual Report to Stockholders wherein information is provided
regarding foreign and domestic operations and export sales for the last three
fiscal years. Such information is incorporated in Part II, Item 8 of this report
by reference, pursuant to General Instruction G(2).

        Historically, Bontex has had a significant global presence, and one of
its major strategic objectives is to continue to expand this presence. The
Company's sales are diversified among a large customer base, as well as numerous
geographic regions. Asia, where an estimated 70 percent of global shoe
production occurs, is the largest market for Bontex products. The Company has
one of the largest customer bases in the industries it serves. The Company
offers a wide range of elastomeric products for use in a variety of
applications. However, the majority of the Company's sales are to the footwear
industry. The Company intends to continue its strategy of developing and
broadening non-footwear sales.

        Credit terms offered by the Company to meet competition have been longer
than terms normally available to the Company from its vendors. Some seasonality
exists in that the second half of each fiscal year is usually more productive
and consequently more profitable than the first half. This seasonality is
largely because of customers' buying cycles with scheduled vacations, shutdowns
and holidays, which normally occur during the first half of each fiscal year.
Substantially all sales to Asia are denominated in US dollars, negotiated
letters of credit and sight drafts, and are covered by foreign credit insurance.
During the past three years, no single customer accounted for 10 percent or more
of the Company's consolidated net sales.

                                        6

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        Foreign operations, principally in Belgium and Italy, constitute a
significant portion of the Company's business. Production of BONTEX elastromeric
fiberboard products is allocated between the United States and Belgium
manufacturing facilities based on such factors as availability of capacity,
production efficiencies, logistical considerations, and foreign currency
exchange rates. The Company is currently operating at less than full capacity.
During the past three fiscal years, approximately 40 percent of total production
was manufactured in the United States. The backlog of firm orders in the United
States at the end fiscal 1999 was about three weeks production or approximately
$1 million in sales. The current backlog at Bontex USA is approximately two
weeks. In Europe, the backlog at the end of fiscal year 1999 was about three
weeks production or approximately $750,000 in sales. The current estimated
backlog at Bontex S.A. is approximately two weeks. The Company expects all the
orders in the backlog will be manufactured and shipped during the next fiscal
year.

        The Company sells most of its products directly to customers through its
own sales force and commissioned sales representatives throughout the United
States. The Company also sells products through distributors and other
intermediaries who may convert and resell these products to others. Bontex USA
mainly services North and South America, as well as certain Asian markets. Over
the past three years, Bontex USA's export sales to markets outside of the United
States have increased from 46% to 62%. This primarily reflects the decline of
the domestic market and continued emphasis on overseas markets. Bontex USA
maintains leased bonded warehouses in St. Louis, Missouri; Leon, Mexico;
Cambridge, Ontario, Canada; and Montreal, Quebec, Canada. The Company
established Bontex de Mexico, S.A. de C.V., as a marketing distribution company
in Leon, Mexico to directly facilitate sales in Mexico.

        Bontex S.A. markets its products through its own sales force,
distributors and sales representatives in most countries in Europe, Central and
Eastern Europe, Africa, the Middle East, as well as certain Asian markets. The
Company's wholly-owned subsidiary, Bontex Italia S.r.l., services the Italian
market directly and through localized converters and commissioned
representatives. Over the past few years a greater portion of footwear,
especially athletic shoes, is strobel stitched using nonwoven materials in place
of Bontex cellulose type products. In fiscal 1999, the Company began
successfully marketing Bon-stitch, a broad range of nonwoven materials. The
Company plans to expand its strategic alliances to further leverage its Bontex
trademark and marketing capabilities.

        The Company maintains six Bontex liaison offices in select Asian
markets, a network of sales representatives in various countries where BONTEX is
marketed, as well as leased bonded warehouses in Korea for the year ended June
30, 1999, Taiwan, and the Peoples Republic of China. For certain of its foreign
markets, the Company uses individual distributors. One distributor represented
approximately 15.2 percent of the Company's net consolidated sales, and the
Company believes that it is well positioned to replace any of these distributors
without materially impacting the Company's marketing or financial operations.
The Bontex liaison office in Australia continues to perform the coordination of
Asian operations covering, among other countries, Japan, Korea, Taiwan, Hong
Kong, Philippines, Indonesia, New Zealand, Australia, Singapore and Malaysia.
The Company has established a sales subsidiary, Bontex Hong Kong Limited, in
Hong Kong, to replace a distributor for Hong Kong and the PRC New Territories.

STATUS OF PROPOSED PROJECT IN MALAYSIA

        On July 27, 1994, the Company's Board of Directors authorized management
to investigate the establishment of a manufacturing facility in Malaysia. Bontex
Sdn Bhd was incorporated during fiscal 1996, and was considered not only as a
way of enabling the Company to strengthen its presence in Asia, but also to
expand its global manufacturing network. Due to economic conditions in Asia and
in the footwear industry for elastomeric cellulose materials, Bontex Sdn Bhd was
dissolved as per resolution of the Company's Board of Directors dated August 27,
1998.


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MATERIALS AND SUPPLIES

        The Company purchases a broad range of raw materials sourced throughout
the world in connection with its manufacturing activities. More than one
supplier is available for all major raw materials. Bontex S.A. appears to have
available and receives adequate quantities of water and steam for processing.
The manufacturing facility in the United States has an adequate supply of
processing water from wells and river sources.

        The Company attempts to minimize the effects of cyclical changes in raw
material costs through purchase contracts, forward purchasing, pulp futures and
the application of technologies to improve process efficiencies. Principal cost
factors include the cost of raw materials, specifically pulp and latex, two
primary raw materials for the Company's products. Currently market pulp prices
are stable at around $535 per ton for NBSK pulp, but may be showing signs of
increasing. Management intends to continue to prudently apply technology to
manufacture high quality products while attempting to reduce costs in all areas
of operations in an effort to maintain competitive selling prices. There can be
no assurance, however, that increased raw material prices will not continue to
have an adverse effect on the Company's operations or competitive position in
the future.

        Bontex USA maintains a limited private fleet of tractors and trailers
for long haul delivery of its products to customers throughout the United States
and Canada and to east coast ports for export shipments, in addition to
back-hauling of certain raw materials to reduce operating costs. The Company
also participates in numerous equipment interchange agreements for containers
with steamship lines to facilitate exports.

REGULATORY AND ENVIRONMENTAL MATTERS

        As with other related manufacturers, the Company is subject to
regulations by various federal, state, foreign and local agencies concerning
compliance with environmental control statutes. These regulations impose
limitations on the use of chemicals in manufacturing processes and discharge of
effluent and emissions into the environment, and establish standards for solid
and hazardous waste disposal, treatment, and storage, as well as require the
Company to obtain and operate in compliance with the conditions of environmental
permits. The Company believes that it is in substantial compliance with such
existing domestic and foreign environmental statutes and regulations. Failure to
comply with applicable environmental control standards could result in
interruption of operations or could require additional expenditures at these
facilities.

        In recent years, various agencies have increased their screening and
testing of the effects of chemicals or mixtures, including those that occur
naturally. The Company's product formulations, in some instances, may include
compounds that are or will be subject to these tests. The Company continually
devotes significant resources to improve product formulation for, among other
things, comfort, health, cost, quality and other performance features.

        The Company has made and intends to continue to make capital
investments, operating expenditures, and production adjustments in connection
with compliance with environmental laws and regulations. Since the Company is
essentially comprised of two fiberboard plants, Bontex USA and Bontex S.A.,
water quality discharge remains a primary environmental concern. Both plants are
operating new waste water treatment facilities, which the Company believes to be
operating within compliance of applicable environmental requirements.

        Bontex USA is also impacted by regulations concerning air emissions
relating to the operation of certain coating and converting equipment. The
Company entered into a Consent Order with the Virginia Department of
Environmental Quality pursuant to which the Company committed to take
appropriate corrective action with respect to air quality emissions and to
achieve compliance by December 31, 1997. The air emission control equipment was
installed and appears to be operating within compliance of applicable
environmental requirements.


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        The actual costs of future environmental compliance may differ from
projected costs due to, among other things, continued emergence of new
environmental laws and regulations and improving efficiencies in environmental
control or process technology developments.

ITEM 2. PROPERTIES

        For information about liens and security interests held by banks on the
Company's properties, see Note 4 of Notes to Consolidated Financial Statements
contained in the Company's 1999 Annual Report to Stockholders, incorporated in
Part II, Item 8 of this Report by reference, pursuant to General Instruction
G(2).

        The properties of the Company consist primarily of plant and equipment
to manufacture and distribute the Company's products. The Company's corporate
headquarters, manufacturing and converting facility in Buena Vista, Virginia
continues to be modernized, upgraded, and expanded. In Stembert, Belgium, the
subsidiary's plant is one of the most modern and highest capacity in the world
for producing BONTEX type products, and the Company continues to invest in new
equipment to maintain its high capacity and high level of efficiency. Bontex
Italia S.r.l. operates from a modern distribution facility with new converting
equipment. During fiscal 1999, the Company spent approximately $390,000,
$637,000 and $40,000 to refurbish, upgrade and install equipment at Bontex USA,
Bontex S.A., and other subsidiaries, respectively.

        In Newark, New Jersey, the Company owns an office building and
warehouse. A sales office is maintained at the Newark building, and the
warehouse has been used for the distribution of the Company's products in the
northeastern region of the United States. In June 1997, the Company's Board of
Directors, in response to decreasing demand in the domestic markets, approved a
plan to restructure the Company's operations in the Northeast. The restructuring
plan focuses on the Company's Newark, New Jersey operation and will involve
closing the Company's current Newark warehouse facility. The Company expects the
restructuring to generate operating efficiency improvements which should
contribute to the long-term profitability of the Company. The Company plans to
dispose of the warehouse facility within the next year. The related
restructuring charges at June 30, 1999 are immaterial to the financial
statements, because the net realizable value of the Newark warehouse facility
exceeds the net carrying amount of approximately $64,000. Future cash outlays
and expenditures for the restructuring are not expected to be material.

        The total cost of capital expenditures, including the capital
expenditures planned for environmental regulations at both Bontex USA and Bontex
S.A. as discussed in the previous section regarding regulations, is estimated
not to exceed $300,000 for fiscal year 2000. The Company believes that cash
generated from operations and credit facilities will be sufficient to meet these
capital requirements.

        The Company continues to manage the utilization of its assets in an
effort to meet global growth objectives, marketplace forces, productivity and
technology changes. The Company considers all its properties well maintained,
and adequate for present and future requirements.

ITEM 3. LEGAL PROCEEDINGS

        In March 1998, a civil complaint was filed in the Superior Court of New
Jersey, Law Division, Essex County, by Patricia Surmonte Tischio, a director of
Bontex (the "Company") against the Company, James C. Kostelni, the President and
Chief Executive Officer of the Company, and Mr. Kostelni's spouse. Both Mrs.
Tischio and Mrs. Kostelni are daughters of the Company's founder and serve as
co-executors and co-trustees of, and are designed beneficiaries under, an estate
and certain trusts, which in the aggregate beneficially own approximately 43
percent of the Company's outstanding common stock. The case was transferred to
the United States District Court for the Western District of Virginia.


                                        9

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        On February 23, 1999, the United States District Court of the Western
District of Virginia granted the Motion for Judgement on the Pleadings filed by
the defendants with regard to the tortious interference with contractual
relations and conspiracy claims, dismissing those claims with prejudice. No
appeal was taken from the Court's ruling by Mrs. Tischio. The court declined to
enter declaratory judgment regarding plaintiff"s alleged lifetime contract with
the Company. The court also found that the case presented a nonjusticiable issue
for the breach of contract, promissory estoppel and wrongful discharge in
violation of public policy claims and dismissed those claims without prejudice.

        In the normal course of business, the Company is subject to proceedings,
lawsuits and other claims which are subject to many uncertainties, for which
their outcomes are not predictable with assurance. There are no legal
proceedings, lawsuits or other claims pending against or involving the Company,
which in the opinion of management, will have a material adverse impact upon the
financial condition of the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year covered by this report.

Executives of the Registrant:

        Pursuant to General Instruction G(3) of Form 10-K, the following list is
included as an unnumbered Item in Part I of this report in lieu of being
included in the Proxy Statement for the Annual Meeting of Stockholders to be
held on October 28, 1999.

        The names, ages and positions of the executives of the Company as of
September 23, 1999 are listed below with their business experience with the
Company for the past five years. Executive officers are appointed annually by
the Board of Directors at the annual meeting of stockholders. There is no
agreement or understanding between any executive and any other pursuant to which
the executive was selected. Mr. James C. Kostelni is the brother-in- law to Mrs.
Patricia S. Tischio. Mr. Jeffrey C. Kostelni and Mr. Charles W. J. Kostelni are
the sons of Mr. James C. Kostelni and the nephews of Mrs. Patricia S. Tischio.

        Previous and present duties and responsibilities:
<TABLE>
<CAPTION>

                                                   Position and Business
Name and Age                                       Experience for Past Five Years
<S>     <C>    <C>    <C>    <C>    <C>    <C>

James C. Kostelni, 64                              Chairman of the Board, President, and Chief
                                                   Executive Officer (since 1994), President and Chief
                                                   Operating Officer (since 1971) of the Company.  Mr.
                                                   Kostelni has a Bachelor of Science Degree in
                                                   Business Administration. Director.

Jeffrey C. Kostelni, 33                            Senior Vice President (since 1999); Chief Financial
                                                   Officer and Treasurer (since 1994) of the Company;
                                                   General Sales Manager of Bontex S.A., a subsidiary
                                                   of the Company in Belgium (1995-1999).   Mr.
                                                   Kostelni has a Bachelor of Science Degree in
                                                   Accountancy and is a Certified Public Accountant.
                                                   Director.


                                       10

<PAGE>



Charles W. J. Kostelni, 35                         Senior Vice President (since 1999), General Manager
                                                   (U.S. operations only) (since 1998), Corporate
                                                   Secretary (since 1997), Corporate Controller (since
                                                   1996) of the Company and General Sales Manager of
                                                   Bontex S.A., a subsidiary of the Company in
                                                   Belgium (since 1999).  Prior thereto, Assistant
                                                   Controller (1994-1996) of the Company and
                                                   Assistant Vice President, Union Bank of Switzerland,
                                                   New York (1991-1995).  Mr. Kostelni has a Bachelor
                                                   of Science Degree in Accountancy and is a Certified
                                                   Public Accountant.

David A. Dugan, 52                                 Controller (since 1988) and Assistant Corporate
                                                   Secretary (since 1997); prior thereto, Corporate
                                                   Secretary (1993-1997) of the Company.   Mr. Dugan
                                                   has a Masters in Business Administration and is a
                                                   Certified Public Accountant.

Patricia S. Tischio, 60                            Office Manager (since 1989) and Assistant Corporate
                                                   Secretary (1994-1997) of the Company.  Mrs.
                                                   Tischio has a Bachelor of Arts Degree in English.
                                                   Director.

Larry E. Morris, 53                                Technical Sales Director (since 1998) of  the
                                                   Company; prior thereto, Technical (1983-1998),
                                                   Sales Director (1993-1998).  Director.

Michael  J. Breton, 59                             Corporate Director of International Operations of the
                                                   Company (since 1993), and General Manager of
                                                   Bontex S.A., a subsidiary of the Company (since
                                                   1987).   Mr. Breton has a Bachelor of Science Degree
                                                   in Paper Technology. Director.
</TABLE>


                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
        STOCKHOLDER MATTERS

        The information set forth under the caption "Common Stock and Dividend
Data" on page 4 of the Company's 1999 Annual Report to Stockholders is
incorporated herein by reference, pursuant to General Instruction G(2).

        The following lists the securities sold by Bontex within the past three
years which were not registered under the Securities Act of 1933: On January 22,
1997, as part of the Executive Compensation Agreement between Bontex, Inc. and
James C. Kostelni, President and Chief Executive Officer of the Company, Mr.
Kostelni was granted a stock option to purchase up to 80,000 shares of the
Company's common stock at a price of $4.50 per share, which was the fair market
value of the shares on the date of grant. The option was exercisable on the date
of grant and had a maximum term of ten years. The option was granted in a
private placement in reliance on Section 4(2) under the Securities Act of 1933.


                                       11

<PAGE>



        On November 21, 1997, each of Jeffrey Kostelni and Charles Kostelni was
granted an option to purchase up to 20,000 shares of Company common stock at a
price of $5.63 per share, which was the fair market value of the shares on the
date of grant. The options were exercisable from the date of grant and had a
maximum term of ten years. The options were granted in a private placement in
reliance on Section 4(2) of the Securities Act of 1933.

        On July 1, 1998, all of the above options were canceled, unexercised,
upon voluntary agreement of the parties, in order to expedite the Company's
application to transfer its common stock listing from The Nasdaq Stock Market to
the Nasdaq SmallCap Market. A proposal was presented and approved at the
Company's 1998 Annual Stockholders Meeting to issue new options to replace the
canceled options. On January 28, 1999, James C. Kostelni was granted an option
to purchase up to 72,000 shares of Company common stock at a price of $4.50 per
share. The option was exercisable on the date of grant and expires on January
22, 2007. Also on January 28, 1999, both Jeffrey C. Kostelni and Charles W. J.
Kostelni were granted options to purchase up to 20,000 shares of Company common
stock at a price of $5.63 per share. The options were exercisable on the date of
grant and expire on November 21, 2007. Each of these options were granted in a
private placement in reliance on Section 4(2) of the Securities Act of 1933.

ITEM 6. SELECTED FINANCIAL DATA

        The five year data for the fiscal years 1999, 1998, 1997, 1996, and 1995
are included in the "Summary of Selected Ten Year Data" on page 4 of the
Company's 1999 Annual Report to Stockholders and is incorporated herein by
reference, pursuant to General Instruction G(2).

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

        "Management's Discussion and Analysis" on pages 5 through 10 of the
Company's 1999 Annual Report to Stockholders is incorporated herein by
reference, pursuant to General Instruction G(2).

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

        Quantitative and qualitative disclosures about market risk in
"Management's Discussion and Analysis" on pages 9 and 10 of the Company's 1999
Annual Report to Stockholders is incorporated herein by reference, pursuant to
General Instructions G(2).

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

        The following consolidated financial statements of the Registrant and
the independent auditors' report included on pages 11 through 26 of the 1999
Annual Report to Stockholders, are herein incorporated by reference, pursuant to
General Instruction G(2):

          1.   Consolidated Statements of Income (Loss) and Comprehensive Income
               (Loss) for the Years Ended June 30, 1999, 1998 and 1997

          2.   Consolidated Statements of Changes in Stockholders' Equity for
               the Years Ended June 30, 1999, 1998, and 1997.

          3.   Consolidated Balance Sheets as of June 30, 1999 and 1998.

          4.   Consolidated Statements of Cash Flows for the Years Ended June
               30, 1999, 1998, and 1997.

          5.   Notes to Consolidated Financial Statements


                                       12

<PAGE>



          6.   Independent Auditors' Report


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
        AND FINANCIAL DISCLOSURE

        There have been no changes in independent auditors and no disagreements
with independent auditors on any matter of accounting principles or practices,
financial statement disclosure, or auditors' scope or procedure.

                                PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

        For information with respect to the executives of the Registrant, see
"Executives of the Registrant" at the end of Part I of this Report. For
information with respect to the Directors of the Registrant, see "Election of
Directors" at pages 4 through 6 of the Proxy Statement for the Annual Meeting of
Stockholders to be held October 28, 1999, which information is incorporated
herein by reference. The information with respect to compliance with Section
16(a) of the Exchange Act, which is set forth under the caption "Section 16(a)
Beneficial Ownership Reporting Compliance" at page 18 of the Proxy Statement for
the Annual Meeting of Stockholders to be held October 28, 1999, is incorporated
herein by reference pursuant to General Instruction G(3).

ITEM 11.  EXECUTIVE COMPENSATION

        The information set forth under the captions "Executive Compensation,"
"Compensation Committee Report on Executive Compensation" and "Stock
Performance" at pages 9 through 18 of the Proxy Statement for the Annual Meeting
of Stockholders to be held October 28, 1999, is incorporated herein by reference
pursuant to General Instruction G(3).

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The information pertaining to stockholders beneficially owning more than
five percent of the Registrant's common stock and the security ownership of
management, which is set forth under the caption "Stockholdings of Certain
Owners and Management" on pages 2 through 4 of the Proxy Statement for the
Annual Meeting of Stockholders to be held on October 28, 1999, is incorporated
herein by reference pursuant to General Instruction G(3).

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information set forth under the caption "Related Party Transaction"
on page 15 of the Proxy Statement for the Annual Meeting of Stockholders to be
held on October 28, 1999, is incorporated herein by reference pursuant to
General Instruction G(3).

                                  PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

          (a)  List of documents filed as part of this report:

          1.   Financial Statements: All financial statements of the Registrant
               as set forth under Item 8 of this Report on Form 10-K.


                                       13

<PAGE>



          2.   Financial statement schedules and the location in this Form 10-K
               are as follows:

               SCHEDULE
               NUMBER            DESCRIPTION                                PAGE

               (a)               Independent Auditors' Report
                                 on Financial Statement Schedule             17

               (d)  II           Valuation and Qualifying Accounts for the
                                 years ended June 30, 1999, 1998 and 1997    18

               All other schedules are omitted, as the required information is
               inapplicable, or the information is presented in the consolidated
               financial statements or related notes.

          3.   Exhibits to this Form 10-K are as follows:

     EXHIBIT
     NUMBER    DESCRIPTION

     3(i)      Amended and Restated Articles of Incorporation of the Company, as
               amended (incorporated herein by reference to Exhibit No. (iii) of
               Form 10-Q for the fiscal quarter ended December 31, 1996)

     3(ii)     Amended and Restated Bylaws of Bontex, Inc. (incorporated herein
               by reference to Exhibit No. 3(i) of Form 10-Q for quarter ended
               March 31, 1998)

     10(i)     *Executive Compensation Agreement dated January 22, 1997,
               between Bontex, Inc. and James C. Kostelni (incorporated herein
               by reference to Exhibit 10(i) of Form 10-Q for quarter ended
               March 31, 1997)

     10(ii)    *Life Insurance Agreement between Georgia Bonded Fibers Inc.
               and James C. Kostelni incorporated herein by reference to Exhibit
               10.4 of Form 10-Q for quarter ended December 31, 1993)

     10(iii)   *Bontex S.A. Pension Plan (incorporated herein by reference to
               Exhibit No. 10(iv) of Form 10-K for the fiscal year ended June
               30, 1994)

     10(iv)    *Georgia Bonded Fibers, Inc. Annual Incentive Plan
               (incorporated herein by reference to Exhibit No. 10(v) of Form
               10-K for the fiscal year ended June 30, 1994)

     10(v)     *Supplemental Executive Compensation Agreement dated May 26,
               1994, between Georgia Bonded Fibers, Inc. and James C. Kostelni
               (incorporated herein by reference to Exhibit No. of Form 10-K for
               the fiscal year ended June 30, 1994)

     10(vi)    Special Consent Order between the Company and the State Water
               Control Board dated July 22, 1994 (incorporated herein by
               reference to Exhibit No. 10(vii) of Form 10-K for the fiscal year
               ended June 30, 1994)

     10(vii)   Amended Consent Order between the Company and the Commonwealth
               of Virginia, Department of Environmental Quality dated January
               10, 1997. (incorporated herein by reference to Exhibit No. 10(iv)
               of Form 10-Q for the quarter ended December 31, 1996)

                                       14

<PAGE>




     10(viii)  Related party Marketing Agreement between Bontex, Inc. and
               Maxcomm, Inc. dated February 16, 1999

     13        1999 Annual Report to Stockholders (such report, except to the
               extent incorporated herein by reference, is being furnished for
               the information of the Commission only and is not to be deemed
               filed as part of this Report on Form 10-K)

     21        Subsidiaries of the Company

     27        Financial Data Schedule

        *Management contract or compensatory plan or agreement required to be
filed as an Exhibit to this Form 10-K pursuant to Item 14 (c).

          (b)  Reports on Form 8-K: None

          (c)  Exhibits - The response to this section of Item 14 is submitted
               as a separate section of this report.

          (d)  Financial statement schedules required by Regulation S-X are
               submitted as a separate section of this report.

                                       15

<PAGE>




                                  SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, hereunto duly authorized on this 28th day of
September, 1999.

                                          BONTEX, INC.


                                          by /s/James C. Kostelni
                                             Chairman of the Board

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

                                                      Date

/s/James C. Kostelni                            September 28, 1999
------------------------------------            ------------------
James C. Kostelni
Chairman of the Board, President and
Chief Executive Officer
Director

/s/Jeffrey C. Kostelni                          September 28, 1999
------------------------------------            ------------------
Jeffrey C. Kostelni
Treasurer and
Chief Financial Officer
Director

/s/Charles W. J. Kostelni                       September 28, 1999
------------------------------------            ------------------
Charles W. J. Kostelni
Corporate Controller and
Corporate Secretary

/s/Michael J. Breton                            September 28, 1999
------------------------------------            ------------------
Michael J. Breton
Corporate Director of International
Operations and General Manager,
Bontex S.A.
Director

/s/Larry E. Morris                              September 28, 1999
------------------------------------            ------------------
Larry E. Morris
Technical Sales Director
Director

/s/Patricia S. Tischio                          September 28, 1999
------------------------------------            ------------------
Patricia S. Tischio
Director


                                      16

<PAGE>



/s/William J. Binnie                            September 28, 1999
------------------------------------            ------------------
William J. Binnie
Director

/s/William B. D'Surney                          September 28, 1999
------------------------------------            ------------------
William B. D'Surney
Director

/s/Frank Mayorshi                               September 28, 1999
------------------------------------            ------------------
Frank Mayorshi
Director

/s/Joseph F. Raffetto                           September 28, 1999
------------------------------------            ------------------
Joseph F. Raffetto
Director

/s/Robert J. Weeks                              September 28, 1999
------------------------------------            ------------------
Robert J. Weeks
Director



                                      17


<PAGE>



INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders of Bontex, Inc.:

Under date of August 20, 1999, we reported on the consolidated balance sheets of
Bontex, Inc. and subsidiaries as of June 30, 1999 and 1998, and the related
consolidated statements of income (loss) and comprehensive income (loss),
changes in stockholders' equity, and cash flows for each of the years in the
three-year period ended June 30, 1999, as contained in the 1999 annual report to
stockholders. These consolidated financial statements and our report thereon are
incorporated by reference in the accompanying annual report on Form 10-K for the
year 1999. In connection with our audits of the aforementioned consolidated
financial statements, we also audited the related consolidated financial
statement schedule as set forth under Item 14(a)2 of the accompanying annual
report on Form 10-K for the year 1999. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this financial statement schedule based on our audits.

In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.



                                                   KPMG LLP
Roanoke, Virginia
August 20, 1999


                                       18

<PAGE>

<TABLE>
<CAPTION>


                         SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
                                 BONTEX, INC. AND SUBSIDIARIES


                                 Balance at   Charges to    Charged to                       Balance
                                      Beginning     Costs and       Other                          at End
         Description                  of Period     Expenses      Accounts*     Deductions**     of Period
         -----------                  ---------     --------     ----------     ------------     ---------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

YEAR ENDED JUNE 30, 1999
Reserves and allowances
deducted from asset accounts:
Allowances for doubtful accounts       $ 268,000     $ (39,000)    $ (7,000)      $  94,000      $ 128,000
YEAR ENDED JUNE 30, 1998
Reserves and allowances
deducted from asset accounts:
Allowances for doubtful accounts       $ 119,000     $ 252,000     $      -       $ 103,000      $ 268,000
YEAR ENDED JUNE 30, 1997
Reserves and allowances
deducted from asset accounts:
Allowances for doubtful accounts       $ 134,000     $  75,000     $ (7,000)      $  83,000      $ 119,000
</TABLE>


*Foreign currency translation  (loss)
**Uncollectable accounts written off, net of recoveries.


                                       19

<PAGE>



                                  Exhibit Index

     3(i)      Amended and Restated Articles of Incorporation of the Company, as
               amended (incorporated herein by reference to Exhibit No. (iii) of
               Form 10-Q for the fiscal quarter ended December 31, 1996)

     3(ii)     Amended and Restated Bylaws of Bontex, Inc. (incorporated herein
               by reference to Exhibit No. 3(i) of Form 10-Q for quarter ended
               March 31, 1998)

     10(i)     *Executive Compensation Agreement dated January 22, 1997,
               between Bontex, Inc. and James C. Kostelni (incorporated herein
               by reference to Exhibit 10(i) of Form 10-Q for quarter ended
               March 31, 1997)

     10(ii)    *Life Insurance Agreement between Georgia Bonded Fibers Inc.
               and James C. Kostelni incorporated herein by reference to Exhibit
               10.4 of Form 10-Q for quarter ended December 31, 1993)

     10(iii)   *Bontex S.A. Pension Plan (incorporated herein by reference to
               Exhibit No. 10(iv) of Form 10-K for the fiscal year ended June
               30, 1994)

     10(iv)    *Georgia Bonded Fibers, Inc. Annual Incentive Plan
               (incorporated herein by reference to Exhibit No. 10(v) of Form
               10-K for the fiscal year ended June 30, 1994)

     10(v)     *Supplemental Executive Compensation Agreement dated May 26,
               1994, between Georgia Bonded Fibers, Inc. and James C. Kostelni
               (incorporated herein by reference to Exhibit No. of Form 10-K for
               the fiscal year ended June 30, 1994)

     10(vi)    Special Consent Order between the Company and the State Water
               Control Board dated July 22, 1994 (incorporated herein by
               reference to Exhibit No. 10(vii) of Form 10-K for the fiscal year
               ended June 30, 1994)

     10(vii)   Amended Consent Order between the Company and the Commonwealth
               of Virginia, Department of Environmental Quality dated January
               10, 1997. (incorporated herein by reference to Exhibit No. 10(iv)
               of Form 10-Q for the quarter ended December 31, 1996)

     10(viii)  Related party Marketing Agreement between Bontex, Inc. and
               Maxcomm, Inc. dated February 16, 1999

     13        1999 Annual Report to Stockholders (such report, except to the
               extent incorporated herein by reference, is being furnished for
               the information of the Commission only and is not to be deemed
               filed as part of this Report on Form 10-K)

     21        Subsidiaries of the Company

     27        Financial Data Schedule

        *Management contract or compensatory plan or agreement required to be
filed as an Exhibit to this Form 10-K pursuant to Item 14 (c).



                                       20