SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549


                                  FORM 10-K
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<S>                                                  <C>
       ANNUAL REPORT PURSUANT TO SECTION 13 OR       TRANSITION REPORT PURSUANT TO SECTION 13
       15(d)                                         OR 15(d)
-------                                         -----

  X    OF THE SECURITIES EXCHANGE ACT OF 1934        OF THE SECURITIES EXCHANGE ACT OF 1934
-------                                         -----
       For the Fiscal Year Ended September 27,       For the transition period from __________
       1998                                          to ___________
</TABLE>

                          Commission File No. 1-6922



                             GUILFORD MILLS, INC.
            (Exact name of Registrant as specified in its charter)


<TABLE>
<CAPTION>

<S>                                                                                          <C>
                    DELAWARE                                                                 13-1995928
(State or other jurisdiction of incorporation or organization)                   (I.R.S. Employer Identification No.)



             4925 WEST MARKET STREET                                                            27407
           GREENSBORO, NORTH CAROLINA                                                         (Zip Code)
    (Address of principal executive offices)
</TABLE>


       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (336) 316-4000


           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:



                                               Name of Each Exchange on which
           Title of Each Class                 Registered
           -------------------                 ----------

           Common Stock, $.02 par value          New York Stock Exchange

           Preferred Stock Purchase Rights       New York Stock Exchange


       SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None

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 twelve (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
                                      ---      ---

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

Aggregate market value of the voting stock (which consists solely of shares of
common stock) held by non-affiliates of the registrant at December 18, 1998 (a
total of 19,550,386 shares of common stock), computed by reference to the last
reported sale price $16.875 the Registrant's common stock on the New York Stock
Exchange on such date: $329,912,764.

Number of shares of the Registrant's  common stock  outstanding as of December
18, 1998:  23,135,342.

                       DOCUMENTS INCORPORATED BY REFERENCE
Certain portions of the annual report to stockholders for the fiscal year ended
September 27, 1998 are incorporated by reference into Parts I, II and IV of this
report.

Certain portions of the Registrant's definitive proxy statement pursuant to
Regulation 14A of the Securities Exchange Act of 1934, which will be filed with
the Commission on or about December 24, 1998, are incorporated by reference into
Part III of this report.

Certain portions of the Form 8-K and Form 8-K/A Current Report pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, filed January 31,
1996 and April 1, 1996 respectively, are incorporated by reference into Part I
of this report.


<PAGE>


GUILFORD MILLS, INC.


                                    PART I


ITEM 1.  BUSINESS

GENERAL

   Guilford Mills, Inc. (the "Company") is a fabric producer which processes and
sells warp knit, circular knit, flat woven and woven velour fabrics as well as
lace. The Company knits synthetic yarn, primarily polyester, nylon and acetate,
on warp knitting machinery, which it then dyes and finishes. The Company sells
these finished knit fabrics for use in a broad range of apparel, automotive,
industrial/specialty and home fashions products. The Company also designs,
knits, dyes, prints and finishes elastomeric and circular knit fabrics for sale
principally to swimwear, dress and sportswear manufacturers. Additionally, the
Company produces flat wovens and woven velour fabrics for use in automotive
products. The Company knits lace fabrics for the apparel, intimate apparel and
home fashions markets. Lace fabrics are also cut and sewn into finished home
fashions products which are sold directly to retailers.

   On June  27,  1997,  the  Company  acquired  an  additional  20%  ownership
interest  in Grupo  Ambar,  S.A.  de C.V.  ("Grupo  Ambar").  The  acquisition
increased  the  Company's  ownership  interest  in Grupo  Ambar to 95%.  Grupo
Ambar is a leading manufacturer of knit textile fabrics in Mexico.

   On January 17, 1996, the Company acquired 100% of the outstanding capital
stock of Hofmann Laces, Ltd., Raschel Fashions Interknitting, Ltd., and Curtains
and Fabrics, Inc. (collectively "Hofmann Laces"). Hofmann Laces designs and
produces lace fabrics for the intimate apparel, apparel and home fashions
markets. It also cuts and sews lace and other fabrics into finished home
fashions products. It produces stretch knit fabrics for the apparel swimwear and
intimate apparel markets. For information regarding this acquisition, reference
is made to the Company's Form 8-K, filed with the Securities and Exchange
Commission on January 31, 1996, and Form 8-K/A, filed with the Commission on
April 1, 1996, and which are incorporated herein by reference.

   The Company  was  incorporated  under the laws of Delaware in August  1971,
and is the  successor  by  merger to  businesses  previously  conducted  since
1946.   Guilford  Mills,  Inc.  and  its  predecessors  and  subsidiaries  are
referred to as the "Company", unless the context indicates otherwise.

PRODUCT DEVELOPMENT

   Working closely with the Company's customers, the Company's research and
development departments, consisting of 111 full-time U.S. employees, nine
employees of Guilford Europe Limited, a United Kingdom corporation and an
indirect wholly-owned subsidiary of the Company ("Guilford Europe"), and five
employees of Grupo Ambar, are primarily responsible for the creation of new
fabrics and styles. Sample warping and knitting machines are used to develop new
fabrics which can be placed into production after customer acceptance. Total
expenditures for research and development for fiscal years 1998, 1997 and 1996,
were approximately $19.6 million, $14.9 million, and $13.8 million,
respectively.

   The Company has numerous trademarks, trade names, patents and certain
licensing agreements which it uses in connection with the advertising and
promotion of its products. Management believes that the loss or expiration of
such trademarks, trade names and licensing agreements would not have a material
adverse effect on the Company's operations.

WORKING CAPITAL PRACTICES

   The Company primarily produces inventory based on customer orders and
significant amounts of inventory are not required to meet rapid delivery to the
Company's customers or to assure a continuous allotment of goods from suppliers.
Customers are allowed to return goods for valid reasons and customer
accommodations are not significant. To minimize the credit risk on such accounts
and to obtain larger credit lines for many customers, the Company maintained
credit insurance covering $37.0 million of certain outstanding accounts
receivable as of September 27, 1998. In addition, approximately 11% of accounts
receivable are factored without recourse. The Company has the ability to borrow
against such receivables, although it has traditionally not done so as the
related borrowing terms are less favorable than other available sources of
financing. The Company generally takes advantage of discounts offered by
vendors.

MARKETING

   The Company sells its fabrics for use in a broad range of apparel,
automotive, home fashions and specialty products. For the fiscal years ended
September 27, 1998, September 28, 1997, and September 29, 1996, the percentage
of the Company's worldwide sales attributable to each market was
as follows:


                  1998      1997      1996
                --------  ---------  --------
Apparel           38.3%     39.1%      41.1%
Automotive        37.7      36.7       40.6
Home Fashions     17.5      14.8       11.7
Specialty          6.5       9.4        6.6
                ========  =========  ========

Total            100.0%    100.0%     100.0%
                ========  =========  ========

   The Company promotes its fabrics primarily through its sales force. This is
supplemented by advertising in trade publications, in conjunction with yarn
producers, and to a lesser extent by participating in trade shows.

                                       2

<PAGE>

   In the United States, the Company has sales offices in New York City, Los
Angeles, Greensboro, Detroit, San Francisco and Atlanta. Hofmann Laces maintains
an office in Hong Kong. Export markets for the Company's U.S. operations are
serviced by commission agents throughout the world. Guilford Europe services the
United Kingdom market with its own marketing group from its Alfreton
administrative offices. Export markets are serviced by in-house personnel based
in the United Kingdom, Belgium, Germany and Brazil and by commission agents in
most continental European Union countries. Grupo Ambar services the Mexican
market from its Mexico City administrative office.

   Reference is made to Note 14 of the Consolidated Financial Statements in the
Company's Annual Report to Stockholders for the fiscal year ended September 27,
1998 (the "Annual Report"), which note is incorporated herein by reference, for
financial information relating to sales, income and assets of Guilford Europe
and Grupo Ambar for the last three fiscal years.

   The Company experiences seasonal fluctuations in its sales of apparel
fabrics, with the highest sales occurring in the period from April to September.
Sales of fabrics for use in automotive, home fashions and specialty products
experience insignificant seasonal fluctuations.

   The Company has a large number of customers. No customer accounted for 10% or
more of total net sales during fiscal 1998, 1997 or 1996.

   The backlog of orders believed to be firm as of the end of the current and
preceding fiscal years is not deemed to be material for an understanding of the
Company's business as most orders are deliverable within a few months.

EXPORT SALES

   U.S.  export  sales,  as a  percentage  of  total  worldwide  sales  of the
Company,  were approximately 5.4% in fiscal 1998, 5.5% in fiscal 1997 and 5.0%
in fiscal 1996.

RAW MATERIALS

   In the United States, Europe and Mexico, the Company's fabrics are
constructed primarily of synthetic yarns: nylon, polyester and spandex. In
fiscal 1998, the Company purchased approximately 85% of such yarns and
internally produced the balance of nylon and polyester yarns. The Company
purchases its nylon and polyester yarns from several domestic and foreign fiber
producers. Spandex is purchased substantially from one domestic producer. The
Company uses acetate, cotton and rayon to a lesser extent. One domestic fiber
producer supplied substantially all of the acetate yarn. In fiscal 1998, all
yarns were readily available and were purchased from numerous sources.
Management believes that an adequate supply of yarns is available to meet the
Company's requirements.

   The chemicals and dyes used in the dyeing and finishing processes are
available in large quantities from various suppliers. The foam backing used in
the automotive fabric lamination process is purchased from two suppliers in the
United States and three suppliers in Europe. In fiscal 1998, there was an
adequate supply of foam.

ENVIRONMENTAL MATTERS

   The production processes, particularly dyeing and finishing operations,
involve the use and discharge of certain chemicals and dyes into the air and
sewage disposal systems. The Company installs pollution control devices as
necessary to meet existing and anticipated national, state and local pollution
control regulations. The Company, including Guilford Europe and Grupo Ambar,
does not anticipate that compliance with national, state, local and other
provisions which have been enacted or adopted regulating the discharge of
materials into the environment, or otherwise relating to the protection of the
environment, will have a material adverse effect upon its capital expenditures,
earnings or competitive position.

   Reference is made to Note 13 of the Consolidated Financial Statements in the
Annual Report, which note is incorporated herein by reference, for information
regarding certain other environmental matters.

COMPETITION

   Historically, the textile industry has been both highly competitive and
cyclical in nature. The textile industry has also been characterized by periods
of strong demand, resulting in over-expansion of production facilities, followed
by periods of over-supply. For a number of years, the domestic textile industry
has been adversely affected by imports of garments comprised of fabrics
manufactured abroad. The principal methods of competition in the textile
industry are pricing, styling and design, customer service and quality. The
weight of each competitive factor varies with the product line involved.

   In the United States, the Company has five major warp knit competitors and
many other smaller competitors in the apparel and home fashions markets. The
Company also competes with some apparel manufacturers that have warp knit
equipment to manufacture their own fabrics. Some of these companies are
divisions of large, well-capitalized companies while others are small
manufacturers. In circular knits, the Company has four major competitors and
numerous smaller competitors. In the automotive market, the Company has three
major competitors and several smaller competitors. Guilford Europe competes with
two warp knitters in the United Kingdom and several in France. It also competes
with many producers of circular knit and flat woven fabrics. Grupo Ambar
competes primarily with four warp knitters in Mexico in the apparel markets and
one warp knitter in Mexico's automotive industry.

EMPLOYEES
   As of December 4, 1998, the Company employed 6,836 full-time employees
worldwide. Approximately 1,307 employees (including 431 in Guilford Europe and
509 in Grupo Ambar) are represented by collective bargaining agreements.

SAFE HARBOR-FORWARD-LOOKING STATEMENTS

From time to time, the Company may publish forward-looking statements relative
to such matters as anticipated financial performance, business prospects,
technological developments, new products, research and development activities
and similar matters. The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking statements.

                                       3
<PAGE>

All statements other than statements of historical fact included in or
incorporated by reference into this Form 10-K, including, without limitation the
statements under "Management's Discussion and Analysis of Financial Condition
and Results of Operations" are, or may be deemed to be, forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Important factors that could
cause actual results to differ materially from those discussed in such
forward-looking statements include:

 1. general economic factors including, but not limited to, changes in interest
    rates, foreign currency translation rates, consumer confidence, housing
    starts, trends in disposable income, changes in consumer demand for goods
    produced, and cyclical or other downturns
 2. the overall level of automotive production and the production of specific
    car models
 3. fashion trends
 4. information and technological advances including Year 2000 issues
 5. cost and availability of raw materials, labor and natural and other
    resources
 6. domestic and foreign competition
 7. domestic and foreign governmental regulations and trade policies
 8. reliance on major customers
 9. success of marketing, advertising and promotional campaigns
10. inability to achieve cost reductions through consolidation and restructuring
    of acquired companies

ITEM 2.  PROPERTIES

   The Company currently maintains a total of 16 manufacturing and warehousing
facilities in North Carolina (seven of which are leased, and one of which a
portion is subleased to an unrelated entity), one manufacturing facility in
Georgia, two manufacturing facilities in Pennsylvania, and seven manufacturing
facilities and one leased warehousing facility in New York. Hofmann Laces has
five retail stores in New York and one in North Carolina, all of which are
leased. The Company's operations based in England include two manufacturing
facilities, one in Alfreton in Derbyshire and one in Sudbury in Suffolk, each
owned by the Company, and one leased warehousing facility. The Company's
operations based in Mexico include two manufacturing facilities and two
warehouses (leased) in Xalostoc, and five retail stores, four of which are
leased, in the Federal District and the state of Mexico. Management believes the
facilities and manufacturing equipment are in good condition, well maintained,
suitable and adequate for present production. Utilization of the facilities
fluctuates from time to time due to the seasonal nature of operations and market
conditions.

   The Company has ceased operations in the facility in Gainesville, Georgia and
intends to sell the building.


ITEM 3.  LEGAL PROCEEDINGS

   Reference is made to Note 13 of the Consolidated Financial Statements in the
Annual Report, which note is incorporated herein by reference, for information
regarding certain environmental matters.

   Several purported class action lawsuits have been filed on behalf of
purchasers of the Company's common stock against the Company and certain of its
officers and directors. These lawsuits purport to allege claims under Section
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder, in connection with the Company's public disclosure of
accounting irregularities at the Hofmann Laces unit in fiscal year 1998.
Specifically, the actions allege that, during the class period (January 20, 1998
through October 26, 1998), defendants materially misrepresented the Company's
financial condition and overstated the Company's reported earnings. No specific
amount of damages is sought in these complaints. The Company intends to
vigorously defend the lawsuits.

   The Company is also involved in various litigation arising in the ordinary
course of business.

   Although the final outcome of these legal and environmental matters cannot be
determined, based on the facts presently known, it is management's opinion that
the final resolution of these matters will not have a material adverse effect on
the Company's financial position or future results of operations.

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

   No matter was submitted to a vote of security holders during the Company's
fourth quarter.

                                       4
<PAGE>





ITEM 4B.   EXECUTIVE OFFICERS OF THE REGISTRANT (AS OF DECEMBER 4, 1998)

Name                 Age Office or Business Experience


Charles A. Hayes     63  Chairman of the Board and Chief Executive Officer
                         (since 1976); President and Chief Operating Officer
                         (from 1991 to 1995); President (from 1968 to 1976) and
                         Executive Vice President (from 1961 to 1968).


John A. Emrich       54  Member  of  the  Board  of  Directors  (since  1995);
                         President and Chief  Operating  Officer (since 1995);
                         Senior  Vice   President   and   President/Automotive
                         Business    Unit   (from   1993   to   1995);    Vice
                         President/Planning and Vice  President/Operations for
                         the Apparel  and Home  Fashions  Business  Unit (from
                         1991  to  1993);  Director  of  Operations  with  FAB
                         Industries,  Inc.  (from  1990 to 1991) and holder of
                         various  executive  positions  with the Company (from
                         1985 to 1990).


Terrence E. Geremski 51  Member  of  the  Board  of  Directors  (since  1993);
                         Executive Vice President and Chief Financial  Officer
                         (since 1997), Senior Vice President,  Chief Financial
                         Officer  and  Treasurer  (from  1996 to  1997);  Vice
                         President,  Chief  Financial  Officer  and  Treasurer
                         (from 1992 to 1996);  Vice  President and  Controller
                         with  Varity  Corporation  (from  1989 to 1991);  and
                         Vice President,  Chief Financial  Officer,  Treasurer
                         and holder of other  executive  positions with Dayton
                         Walther Corp. (from 1979 to 1989).


Byron McCutchen       51 Senior Vice President and President/Fibers (since
                         1995); Senior Vice President of Fibers (from 1994 to
                         1995); Worldwide Business Manager-Dacron(R)
                         Filament-E.I. DuPont Co. (from 1991 to 1994); and
                         Specialty Business Manager- Dacron(R)-E.I. DuPont
                         Co.(from 1990 to 1991).


Mark E. Cook         39  Treasurer   (since   1997);   Director  of  Corporate
                         Finance,  Worthington Industries,  Inc. (from 1995 to
                         1997);   Director  of   Corporate   Finance,   Blount
                         International, Inc. (from 1989 to 1995).


Nathan M. Dry        53  Vice  President/Commercial   Products  (since  1998);
                         Vice   President/Product   Development  and  Research
                         (from  1996  to  1998);   President   of  Dyeing  and
                         Printing Lumberton, Inc. (from 1990 to 1996)


Phillip D. McCartney 56  Vice President/Technical Operations (since 1989);
                         formerly holder of various executive positions with FAB
                         Industries, Inc. (from 1984 to 1989).


Lewis R. Morrison, Jr.57 Vice President/Fibers Purchasing (since 1998);
                         Executive Vice President/Apparel Home Fashions (from
                         1997 to 1998); Vice President/Fibers Purchasing (1997);
                         Director, Packaging Resin, North American Hoechst
                         Celanese Corporation (from 1992 to 1997); Vice
                         President of World Marketing Engineering Plastics (from
                         1990 to 1992).


Richard E. Novak     55  Vice President/Human Resources (since 1996); Principal
                         of Nova Consulting Group (from 1994 to 1996); Senior
                         Vice President/Human Resources of Joseph Horne Company,
                         Inc. (from 1987 to 1994).


Deborah Poole        43  Vice President/Information Systems (since 1997);
                         Director of Information Services (from 1992 to 1997).

Christopher J. Richard 42Vice President (since 1998) and President/U.S.
                         Automotive (since 1997); Vice President of Sales and
                         Marketing, Garden State Tanning (from 1994 to 1997);
                         holder of various executive positions with Collins &
                         Aikman Corporation (from 1983 to 1994).


Kim A. Thompson      40  Vice President/Corporate Controller (since 1997);
                         Director of Financial Reporting (from 1994 to 1997);
                         holder of executive positions with Collins and Aikman
                         Corporation (from 1980 to 1994).


 No family relationships exist between any executive officers of the Company.


                                       5
<PAGE>




                                  PART II

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

      Reference is made to the information set forth on page 35 in the section
entitled "Common Stock Market Prices and Dividends" in the Annual Report, filed
as Exhibit 13 to this report, which page is incorporated herein by reference.

ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>

   (IN  THOUSANDS  EXCEPT  PER  SHARE
   DATA)                                 1998       1997       1996       1995       1994
                                         ----       ----       ----       ----       ----
<S>                                   <C>        <C>        <C>        <C>        <C>
   RESULTS OF OPERATIONS
   ---------------------
   Net sales                          $894,534   $894,709   $830,320   $782,518   $703,700
   Income before extraordinary item     33,146    43,238      33,978     33,636     25,124
   Net income                           30,206    43,238      33,978     33,636     25,124

   PER SHARE DATA (1)
   ------------------
   Basic:
      Income   before   extraordinary
      item                                1.32      1.92        1.59       1.60       1.22
      Net income                          1.20      1.92        1.59       1.60       1.22

   Diluted:
      Income   before   extraordinary
      item                                1.30      1.78        1.47       1.48       1.14
      Net income                          1.19      1.78        1.47       1.48       1.14

   Cash dividends                         0.44      0.42        0.40       0.40       0.40

   BALANCE SHEET DATA
   ------------------
   Working capital                     211,278   213,974     177,658    178,233    153,165
   Total assets                        789,457   729,796     728,830    586,371    565,338
   Long-term debt                      176,872   134,560     209,435    166,368    164,611
   Stockholders' investment            385,177   408,896     298,059    267,549    244,060
</TABLE>

               (1)All share data has been restated to reflect the effect of a
                  three-for-two stock split effected in May 1997 in the form of
                  a 50% stock dividend.

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

      Reference is made to the information set forth on pages 13 through 20 in
the section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Annual Report, which pages are
incorporated herein by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The Company does not hold or issue any financial instruments for trading
or other speculative purposes.

      During August 1998, the Company entered into two treasury lock agreements
to provide interest rate protection related to an anticipated debt transaction.
The agreements effectively fixed the 10-year U.S. Treasury rate at 5.4% on an
aggregate notional amount of $87,500. At September 27, 1998, the treasury lock
agreements had an inherent loss of $6,181, which was deferred. The agreements
were terminated in November 1998, resulting in a payment of $4,366, which will
be amortized as additional interest expense over the period of the related debt.

      The Company enters into forward currency exchange contracts in the normal
course of business to manage exposure against fluctuations in the purchase price
of capital equipment. Counter-parties for these instruments are major financial
institutions. The fair values of these contracts are estimated by obtaining
quotes from brokers or reference to publicly available information. At
September 27, 1998 and September 28, 1997, deferred gains and losses on
foreign exchange contracts are not material to the consolidated financial
statements.

      The carrying amounts of cash and cash equivalents, trade receivables and
trade payables, and short-term debt, approximate fair value because of the short
maturity of these instruments. The carrying amount of long-term debt
approximates the fair value based upon current rates offered for similar debt.

                                       6
<PAGE>




ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      Reference is made to information set forth on pages 21 through 34 of the
Annual Report, which pages are incorporated herein by reference.

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

      None.


                                   PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

   The information to be included under the captions "Directors and Nominees"
and "Additional Information" contained in the section entitled "ELECTION OF
DIRECTORS" in the Company's definitive proxy statement, which will be filed with
the Commission on or about December 24, 1998 pursuant to Regulation 14A under
the Securities Exchange Act of 1934 (the "Proxy Statement"), is incorporated
herein by reference.

ITEM 11.  EXECUTIVE COMPENSATION

   The information to be included in the section "EXECUTIVE COMPENSATION" in the
Proxy Statement is incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

   The information to be included in the section "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT" in the Proxy Statement is incorporated herein
by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

   The information to be included in the section "CERTAIN TRANSACTIONS" in the
Proxy Statement is incorporated herein by reference.


                                   PART IV

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

(A) DOCUMENTS FILED AS A PART OF THIS REPORT:

   1. FINANCIAL STATEMENTS (reference is made to pages 21 through 34 of the
      Annual Report, which pages are incorporated herein by reference):

      Consolidated  Balance  Sheets as of September 27, 1998 and September 28,
      1997

      Consolidated Statements of Income for the Years Ended September 27, 1998,
      September 28, 1997 and September 29, 1996

      Consolidated Statements of Stockholders' Investment for the Years Ended
      September 27, 1998, September 28, 1997 and September 29, 1996

      Consolidated Statements of Cash Flows for the Years Ended September 27,
      1998, September 28, 1997 and September 29, 1996

      Notes to Consolidated Financial Statements

      Statement of Management's Responsibility

      Report of Independent Public Accountants


                                       7
<PAGE>


    2.  FINANCIAL STATEMENT SCHEDULE:

      Schedule II - Analysis of Valuation and Qualifying Accounts for the Years
      Ended September 27, 1998, September 28, 1997 and September 29, 1996

3. EXHIBITS:

EXHIBIT NO.    DESCRIPTION OF EXHIBIT
-----------    ----------------------
(3)(a)         Restated Certificate of Incorporation of the Company, as
               amended through January 14, 1988 (incorporated by reference to
               Exhibit 3 (a) (1) to the Company's Annual Report on Form 10-K for
               the fiscal year ended July 3, 1988).

(3) (b)        By-Laws of the Company, as amended through November 5, 1998.

(4) (a)        Rights Agreement dated as of August 23, 1990 between the
               Company and The First National Bank of Boston, as Rights Agent
               (incorporated by reference to Exhibit 1 to the Company's Current
               Report on Form 8-K filed with the SEC on September 7, 1990).

(4) (b)        Appointment of Successor Rights Agent, dated January 28,
               1994, between the Company and Wachovia Bank of North Carolina,
               N.A. (incorporated by reference to Exhibit (4)(e) to the
               Company's Annual Report of Form 10-K for the fiscal year ended
               October 1, 1995 (the "1995 Annual Report")).

(10)(a)*       Guilford Mills, Inc. Non-Qualified Profit Sharing Plan for
               Certain of its Executive Officers and Key Employees, effective
               July 1, 1989 (incorporated by reference to Exhibit (10) (a) (7)
               to the Company's Annual Report on Form 10-K for the fiscal year
               ended July 1, 1990 (the "1990 Annual Report")).

(10) (b)*      First Amendment, dated September 1, 1993, to the Guilford
               Mills, Inc. Non-Qualified Profit-Sharing Plan (incorporated by
               reference to Exhibit (10)(b) to the Company's Annual Report on
               Form 10-K for the fiscal year ended September 28, 1997 (the "1997
               Annual Report")).

(10) (c)*      Second Amendment, dated November 1, 1996, to the Guilford
               Mills, Inc. Non-Qualified Profit-Sharing Plan (incorporated by
               reference to Exhibit (10)(c) to the 1997 Annual Report).

(10) (d)*      Guilford Mills, Inc. 1991 Stock Option Plan (the "1991
               Plan") (incorporated by reference to Exhibit 28 (a) to the
               Company's Registration statement on Form S-8 (Registration No.
               33-47109) filed with the SEC on April 10, 1992 (the "Form S-8")).

(10) (e)*      Amendments to the 1991 Plan (incorporated by reference to
               Exhibit (10) (a) to the Company's Quarterly Report on Form 10-Q
               for the fiscal quarter ended March 30, 1997 (the "3/30/97
               10-Q")).

(10) (f)*      Amendment to the 1991 Plan.

(10) (g)*      Form of Stock Option Contract for key employees in the 1991
               Plan (relating to incentive stock options) (incorporated by
               reference to Exhibit 28 (b) to the Form S-8).

(10) (h)*      Form of Stock Option Contract for Director participants in
               the 1991 Plan (incorporated by reference to Exhibit 28 (d) to the
               Form S-8).

(10) (i)*      Form of Stock Option Contract between the Company and
               certain of its officers pursuant to the 1991 Plan (incorporated
               by reference to Exhibit (10) (b) to the Quarterly Report on Form
               10-Q for the fiscal quarter ended June 29, 1997 (the "6/29/97
               10-Q")).

(10) (j)*      Guilford   Mills,   Inc.  1989   Restricted   Stock  Plan  (the
               "Restricted  Plan")  (incorporated  by  reference to Exhibit 10
               (b) (2) to the 1990 Annual Report).

(10) (k)*      Amendment to the Restricted Plan (incorporated by reference
               to Exhibit (10) (g) to the Annual Report on Form 10-K for the
               fiscal year ended October 2, 1994 (the "1994 Annual Report")).

(10) (l)*      Amendment to the Restricted Plan (incorporated by reference
               to Exhibit (10) (b) to the 3/30/97 10-Q).

                                       8
<PAGE>

(10) (m)*      Form of Restricted Stock Agreement between the Company and
               certain of its officers pursuant to the Restricted Plan
               (incorporated by reference to Exhibit (10) (a) to the 6/29/97
               10-Q).

(10) (n)*      Amended and Restated Phantom Stock Agreement between the
               Company and Charles A. Hayes dated September 21, 1994
               (incorporated by reference to Exhibit (10) (m) to the 1994 Annual
               Report).

(10) (o)*      Form of Executive Retirement and Death Benefit Agreements
               between the Company and certain of its executive officers and key
               employees (incorporated by reference to Exhibit (10) (d) (1) to
               the 1990 Annual Report).

(10) (p)*      Form of Pension and Death Benefit Agreement between the
               Company and certain of its executive officers and key employees
               (incorporated by reference to Exhibit (10) (d) (2) to the 1990
               Annual Report).

(10) (q)*      Form of Deferred Compensation Agreement between the Company
               and certain of its officers and key employees (incorporated by
               reference to Exhibit (10) (d) (3) to the 1990 Annual Report).

(10) (r)*      Guilford Mills, Inc. Excess Benefit Plan (incorporated by
               reference to Exhibit (10) (a) to the Quarterly Report on Form
               10-Q for the fiscal quarter ended December 29, 1996 ("12/29/96
               10-Q")).

(10) (s)*      Guilford   Mills,   Inc.   Trust   for   Non-Qualified    Plans
               (incorporated  by reference to Exhibit (10) (b) to the 12/29/96
               10-Q).

(10) (t)*      Guilford Mills, Inc. Senior Managers' Life Insurance Plan
               and related Plan Agreement (incorporated by reference to Exhibit
               (10) (r) to the Annual Report on Form 10-K for the fiscal year
               ended June 28, 1992 ("1992 Annual Report")).

(10) (u)*      Guilford  Mills,  Inc.  Senior  Managers'  Pre-Retirement  Life
               Insurance Agreement  (incorporated by reference to Exhibit (10)
               (s) to the 1992 Annual Report).

(10) (v)*      Guilford Mills, Inc. Senior Managers' Supplemental
               Retirement Plan and related Plan Agreement (incorporated by
               reference to Exhibit (10) (t) to the 1992 Annual Report).

(10) (w)*      Form of Severance Agreement between the Company and certain
               of its officers and employees (incorporated by reference to
               Exhibit (10) (u) to the 1992 Annual Report).

(10) (x)*      Form of Amendment to Severance Agreement between the Company
               and certain of its officers and employees (incorporated by
               reference to Exhibit (10) (v) to the 1994 Annual Report).

(10) (y)*      Form of Second Amendment to Severance Agreement between the
               Company and certain of its officers and employees (incorporated
               by reference to Exhibit (10) (w) to the 1994 Annual Report).

(10) (z)       Stockholders' Agreement, dated as of April 30, 1991 by and
               among the Company, Maurice Fishman and Charles A. Hayes
               (incorporated by reference to Exhibit (10) (e) to the Company's
               Annual Report on Form 10-K for the fiscal year ended June 30,
               1991).

(10) (a)(a)    Amendment, dated June 29, 1994, to Stockholders' Agreement, dated
               as of April 30, 1991, by and among the Company, Maurice Fishman
               and Charles A. Hayes (incorporated by reference to Exhibit (10)
               (y) to the 1994 Annual Report).

(10) (b)(b)    Second Amendment dated January 1, 1995, to Stockholders'
               Agreement, dated as of April 30, 1991, by and among the Company,
               Maurice Fishman and Charles A. Hayes (incorporated by reference
               to Exhibit (10)(y) to the 1995 Annual Report).

(10) (c)(c)    Third Amendment dated June 22, 1995, to Stockholders' Agreement,
               dated as of April 30, 1991, by and among the Company, Maurice
               Fishman and Charles A. Hayes (incorporated by reference to
               Exhibit (10)(z) to the 1995 Annual Report).

(10) (d)(d)    Fourth Amendment dated May 23, 1997, to Stockholders' Agreement,
               dated as of April 30, 1991, by and among the Company, Charles A.
               Hayes and Maurice Fishman (incorporated by reference to Exhibit
               (10)(e) to the 6/29/97 10-Q).

                                       9
<PAGE>

(10) (e)(e)    Stockholders' Agreement, dated as of June 22, 1990, by and among
               the Company, Charles A. Hayes, George Greenberg and Maurice
               Fishman (incorporated by reference to Exhibit (10) (f) to the
               1990 Annual Report).

(10) (f)(f)    Amendment dated January 1, 1995, to Stockholders' Agreement,
               dated as of June 22, 1990, by and among the Company, Charles A.
               Hayes, George Greenberg and Maurice Fishman (incorporated by
               reference to Exhibit (10) (b)(b) to the 1995 Annual Report).

(10) (g)(g)    Second Amendment dated June 22, 1995, to Stockholders' Agreement,
               dated as of June 22, 1990, by and among the Company, Charles A.
               Hayes, George Greenberg and Maurice Fishman (incorporated by
               reference to Exhibit (10)(c)(c) to the 1995 Annual Report).

(10) (h)(h)    Third Amendment dated May 23, 1997, to Stockholders' Agreement,
               dated as of June 22, 1990, by and among the Company, Charles A.
               Hayes, Maurice Fishman and George Greenberg (incorporated by
               reference to Exhibit (10)(d) to the 6/29/97 10-Q).

(10) (i)(i)*   Summary of Short Term Incentive Plan (incorporated by
               reference to Exhibit (10) (f)(f) to the 1997 Annual Report).

(10) (j)(j)*   Management Compensation Trust Agreement between the Company and
               North Carolina Trust Company dated July 1, 1991 (incorporated by
               reference to Exhibit (10) (y) to the 1992 Annual Report).

(10) (k)(k)*   Amendment to the Management Compensation Trust Agreement between
               the Company and North Carolina Trust Company dated April 1, 1992
               (incorporated by reference to Exhibit (10) (z) to the 1992 Annual
               Report).

(10) (l)(l)*   Second Amendment to the Management Compensation Trust Agreement
               between the Company and North Carolina Trust Company dated July
               1, 1992 (incorporated by reference to Exhibit (10) (a) (a) to the
               1992 Annual Report).

(10) (m)(m)    Revolving Credit Agreement, dated September 26, 1995, by and
               between the Company, as borrower, Gold Mills, Inc. as Guarantor,
               and the banks listed therein (incorporated by reference to
               Exhibit (10)(I) (i) to the 1995 Annual Report).

(10) (n)(n)*   Employment Agreement, dated January 17, 1996, by and among
               Hofmann Laces, Ltd., Raschel Fashion Interknitting, Ltd.,
               Curtains and Fabrics, Inc. and Bruno Hofmann (incorporated by
               reference to Exhibit 2.1(a) to the Company's Current Report on
               Form 8-K, dated January 31, 1996 (the "1996 8-K")).

(10) (o)(o)*   Amended and Restated Employment Agreement, dated February 25,
               1998, by and among Raschel Fashion Interknitting, Ltd., Hofmann
               Laces, Ltd., Curtains and Fabrics, Inc. and Bruno Hofmann
               (incorporated by reference to Exhibit (10) (a) to the Company's
               Quarterly Report on Form 10-Q for the fiscal quarter ended March
               29, 1998 (the "3/29/98 10-Q")).

(10) (p)(p)    Stock Purchase Agreement, dated January 12, 1996, by and between
               Guilford Mills, Inc. and Bruno Hofmann and Amendment No. 1
               thereto, dated January 17, 1996 (incorporated by reference to
               Exhibit 2.1 to the 1996 8-K).

(10) (q)(q)    Second Amendment to Stock Purchase Agreement, dated February 25,
               1998 by and between the Company and Bruno Hofmann (incorporated
               by reference to Exhibit (10) (b) to the 3/29/98 10-Q).

(13)           Annual Report to Stockholders of the Company for the fiscal year
               ended September 27, 1998 (only those portions of such report
               incorporated by reference to the Annual Report on Form 10-K are
               filed herewith).

(21)           Subsidiaries of the Registrant.

(23)           Consent of Independent Public Accountants.

(27)           Financial Data Schedule

*Items denoted with an asterisk represent management contracts or compensatory
plans or arrangements.

(B) REPORTS ON FORM 8-K

      Not Applicable.


                                       10
<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, thereunto duly authorized.

                                              GUILFORD MILLS, INC.

                                            By:  /s/Terrence  E. Geremski
                                                 -----------------------------
                                                 Terrence E. Geremski
                                                 Executive Vice President and
                                                 Chief Financial Officer


Dated:  December 23, 1998

      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.
<TABLE>
<CAPTION>


           SIGNATURE                             TITLE                         DATE
           ---------                             -----                         ----




<S>                                <C>                                   <C>
/s/ Charles A. Hayes               Chairman of the Board of Directors    December 23, 1998
--------------------------------   and Chief Executive Officer
Charles A. Hayes                   (Principal
                                   Executive Officer)


/s/ John A. Emrich
--------------------------------   Director; President and Chief         December 23, 1998
John A. Emrich                     Operating
                                   Officer



/s/ Terrence E. Geremski           Director; Executive Vice              December 23, 1998
--------------------------------   President and Chief Financial
Terrence E. Geremski               Officer  (Principal  Financial and
                                   Accounting Officer)


/s/ George Greenberg               Vice Chairman of the Board of         December 23, 1998
--------------------------------   Directors
George Greenberg



/s/ Maurice Fishman                Vice  Chairman of the Board  of       December 23, 1998
--------------------------------   Directors
Maurice Fishman


/s/ Tomokazu Adachi                Director                              December 23, 1998
--------------------------------
Tomokazu Adachi


/s/ Donald B. Dixon                Director                              December 23, 1998
--------------------------------
Donald B. Dixon


                                   Director                              December 23, 1998
--------------------------------
Paul G. Gillease


/s/ Stephen C. Hassenfelt          Director                              December 23, 1998
--------------------------------
Stephen C. Hassenfelt
</TABLE>

                                       11
<PAGE>
<TABLE>
<CAPTION>



           SIGNATURE                             TITLE                         DATE
           ---------                             -----                         ----


<S>                                <C>                                   <C>
/s/ Bruno Hofmann                  Director                              December 23, 1998
--------------------------------
Bruno Hofmann


/s/ Sherry R. Jacobs               Director                              December 23, 1998
--------------------------------
Sherry R. Jacobs


/s/ Stig A. Kry                    Director                              December 23, 1998
--------------------------------
Stig A. Kry


/s/ Grant M. Wilson                Director                              December 23, 1998
--------------------------------
Grant M. Wilson


/s/ Jacobo Zaidenweber             Director                              December 23, 1998
--------------------------------
Jacobo Zaidenweber
</TABLE>



                                       12
<PAGE>



<TABLE>
<CAPTION>


                         INDEX TO FORM 10-K SCHEDULE


<S>                                                                                <C>
Report of Independent Public Accountants..........................               F-1

Schedule II - Analysis of Valuation and Qualifying Accounts for the Years
Ended September 27, 1998, September 28, 1997 and September 29,
1996..............................................................               F-2
</TABLE>

                                       13
<PAGE>




                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders and Board of Directors of Guilford Mills, Inc.:

      We have audited in accordance with generally accepted auditing standards,
the financial statements included in the Guilford Mills, Inc. Annual Report to
the Stockholders incorporated by reference in this Form 10-K, and have issued
our report thereon dated November 24, 1998. Our audit was made for the purpose
of forming an opinion on those statements taken as a whole. The schedule on page
F-2 is the responsibility of the Company's management and is presented for
purposes of complying with the Securities and Exchange Commission's rules and is
not part of the basic financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.



                                                   /s/ ARTHUR ANDERSEN LLP
                                                   ---------------------------
                                                   ARTHUR ANDERSEN LLP

Greensboro, North Carolina,
November 24, 1998

                                      F-1

<PAGE>



                              GUILFORD MILLS, INC.

                                   SCHEDULE II
                  ANALYSIS OF VALUATION AND QUALIFYING ACCOUNTS
  For the Years Ended September 27, 1998, September 28, 1997 and September 29,
                                      1996
                                 (In Thousands)
<TABLE>
<CAPTION>



                                              Additions
                                              Charged                                  
                                  Balance        to                            Balance
                                 Beginning    Cost and                           End
                                 of Period    Expenses    Deductions  Other   of Period
                                 ----------   ----------  ----------  -------  ---------
                                                             (1)       (2)

<S>                               <C>           <C>           <C>       <C>    <C>
For the Year Ended September
29, 1996
   Reserve deducted from
   assets to
   which it applies -

      Allowance for doubtful                                            
      accounts................    $8,867        $245          $(9)     $384    $9,487
                                  =========   =========   =========   ======   =========

For the Year Ended September
28, 1997:
   Reserve deducted from
   assets to
   which it applies -
      Allowance for doubtful
      accounts...............     $9,487      $3,262      $(3,303)      $42    $9,488
                                  =========   =========   =========   ======   =========


For the Year Ended September
27, 1998:
   Reserve deducted from
   assets to
   which it applies -
      Allowance for doubtful
      accounts..............      $9,488      $2,578      $(2,564)     $(52)   $9,450
                                  =========   =========   =========   ======   =========
</TABLE>



(1)   Deductions are for the purpose for which the reserve was created.
(2)   Other amounts represent the effect of exchange rate fluctuations and the
      purchase of a business.
(3)   See Notes to Consolidated Financial Statements.

                                      F-2
<PAGE>

                                Exhibit Index




(3) (b)        By-Laws of the Company, as amended through November 5, 1998.


(10) (f)*      Amendment to the 1991 Plan.

(13)           Annual Report to Stockholders of the Company for the fiscal year
               ended September 27, 1998 (only those portions of such report
               incorporated by reference to the Annual Report on Form 10-K are
               filed herewith).


(21)           Subsidiaries of the Registrant.


(23)           Consent of Independent Public Accountants.


(27)           Financial Data Schedule