UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20459

                                    FORM 10-Q
(Mark one)

 [X ]              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For The Quarterly Period Ended July 4, 1999

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

For the transition period from            to

Commission file number 1-6150

                              ALBA-WALDENSIAN, INC.
             (Exact name of registrant as specified in its Charter)
             Delaware                                 56-0359780
(State or other jurisdiction           (I.R.S.Employer Identification No.)
of incorporation or organization)

                        P.O. Box 100, Valdese, N.C. 28690
               (Address of principal executive offices)(Zip code)

                                 (828) 879-6500
               Registrant's telephone number, including area code

                                      NONE
Former name, former address and former fiscal year if changed since last report.

     Indicate  by check  mark  whether  registrant  (1) has  filed  all  reports
required to be filed by section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days. YES X NO

As of August 2, 1999, the number of common shares outstanding was 3,161,629.


<PAGE>


PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements
<TABLE>
<CAPTION>

                              ALBA-WALDENSIAN, INC.
                           Consolidated Balance Sheets
                                    ($000's)


                                                                         July 4,              December 31,
                                                                            1999                      1998
                                                                            ----                      ----
                                                                        (Unaudited)
<S>                                                                       <C>                      <C>

ASSETS
CURRENT ASSETS:
Cash                                                                         $85                       $15
Accounts receivable, net of allowance for
 doubtful accounts of $328 and $260, respectively                          9,648                     6,426
Inventories:
  Materials and supplies                                                   4,201                     3,076
  Work-in-process                                                          8,514                     7,048
  Finished goods                                                           3,561                     3,498
                                                                           -----                     -----
Total Inventories                                                         16,276                    13,622
                                                                          ------                    ------

Deferred income taxes                                                        906                       906
Prepaid expenses and other                                                 1,376                       602
                                                                           -----                       ---
Total Current Assets                                                      28,291                    21,571
                                                                          ------                    ------

PROPERTY AND EQUIPMENT                                                    42,166                    37,441
Less: accumulated depreciation                                          (20,757)                  (19,559)
                                                                         -------                   ------
Net Property and Equipment                                                21,409                    17,882
                                                                          ------                    ------

OTHER ASSETS:
Notes receivable                                                              13                        13
Trademarks and patents                                                       395                       427
Excess of cost over net assets acquired, net                               6,591                     6,886
                                                                           -----                     -----
                                                                           6,999                     7,326
                                                                           -----                     -----

TOTAL ASSETS                                                             $56,699                   $46,779
                                                                          ======                    ======
<FN>

See notes to consolidated financial statements.
</FN>
</TABLE>


<PAGE>
<TABLE>
<CAPTION>


                              ALBA-WALDENSIAN, INC.
                           Consolidated Balance Sheets
                          ($000's except share amounts)

                                                                         July 4,              December 31,
                                                                            1999                      1998
                                                                            ----                      ----
                                                                     (Unaudited)
<S>                                                                      <C>                        <C>

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt                                      $1,286                      $852
Accounts payable                                                          4,460                      2,989
Accrued expenses                                                           1,852                     2,842
                                                                           -----                     -----
Total Current Liabilities                                                  7,598                     6,683

LONG-TERM DEBT (Note 2)                                                   15,507                     8,383
DEFERRED COMPENSATION                                                        210                       200
DEFERRED INCOME TAX LIABILITY                                              1,864                     1,864
                                                                           -----                     -----
Total Liabilities                                                         25,179                    17,130
                                                                          ------                    ------

STOCKHOLDERS' EQUITY:
Common stock - authorized 5,000,000 shares,  $2.50 par value; issued:  3,773,000
 and 2,829,834 shares in 1999 and 1998 respectively; outstanding:
 3,154,629 and  2,361,231 in 1999 and 1998, respectively                   9,433                     7,075
Additional paid-in capital                                                 4,466                     6,823
Retained earnings                                                         20,720                    18,436
                                                                          ------                    ------
                                                                          34,619                    32,334
Less treasury stock - at cost
  (618,371 and 468,603 shares, respectively)                             (3,099)                   (2,685)
                                                                          -----                     -----
Total Stockholders' Equity                                                31,520                    29,649
                                                                          ------                    ------
TOTAL LIABILITIES AND
 STOCKHOLDERS' EQUITY                                                    $56,699                   $46,779
                                                                          ======                    ======
<FN>

See notes to consolidated financial statements.
</FN>
</TABLE>


<PAGE>


<TABLE>
<CAPTION>

                                                         ALBA-WALDENSIAN, INC.
                                                 Consolidated Statements of Operations
                                                              (Unaudited)
                                                   ($000's except per share amounts)

                                            Three Months Ended                Six Month Periods Ended
                                              July 4,          June 29,                 July 4,       June 29,
                                                 1999              1998                    1999           1998
                                                 ----              ----                    ----           ----
<S>                                            <C>              <C>                     <C>            <C>

Net sales                                     $19,321           $17,714                 $40,446        $36,010
Cost of sales                                  13,996            13,196                  29,013         27,022
                                               ------            ------                  ------         ------
Gross margin                                    5,325             4,518                  11,433          8,988
Selling, general and
 administrative expense                         3,548             3,222                   6,853          6,264
                                                -----             -----                   -----          -----
Operating income                                1,777             1,296                   4,580          2,724
                                                -----             -----                   -----          -----

Interest expense                                  343               220                     631            435
Other expenses                                     23                23                      46             42
                                                   --                --                      --             --
Total other expenses                             366                243                     677            477
                                                 ---                ---                     ---            ---

Income before income taxes                      1,411             1,053                   3,903          2,247
Provision for income taxes                        422               400                   1,369            854
                                                  ---               ---                   -----            ---
Net income                                       $989              $653                  $2,534         $1,393
                                                 ====              ====                  ======          =====

Net income per common share
         - Basic                                 $.32              $.19                   $.81            $.39
         - Diluted                               $.30              $.18                    $.76           $.38

Weighted average number of shares
  of common stock outstanding
         - Basic                                3,138             3,450                   3,139         3,590
         - Diluted                              3,334             3,585                   3,343          3,657


<FN>

See notes to consolidated financial statements.
</FN>
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                                                         ALBA-WALDENSIAN, INC.
                                            Consolidated Statements of Stockholders' Equity
                                                              (Unaudited)
                                                     ($000's except share amounts)

                                                               Additional
                                             Common              Paid-In      Retained          Treasury Stock
                                      Shares         Amount      Capital      Earnings       Shares         Amount            Total
                                      ------         ------      -------      --------       ------         ------            -----
<S>                                <C>               <C>          <C>          <C>          <C>              <C>            <C>
Balance at January 1, 1998         1,886,580         $4,716       $9,182       $13,651      (19,177)         $(137)         $27,412

Purchase of Treasury Stock                                                                 (295,000)        (2,328)          (2,328)

Net Income                                                                       1,393                                        1,393
                                                                                 -----                                        -----

Balance at June 28, 1998           1,886,580         $4,716       $9,182       $15,044      314,177)       $(2,465)         $26,477
                                   =========          =====        =====        ======      =======          =====           ======

Balance at January 1, 1999         2,829,834         $7,075       $6,823       $18,436     (468,603)       $(2,685)         $29,649

Purchase of Treasury Stock                                                                  (30,900)          (604)            (604)

Exercise of Stock Options                                                          (73)      39,120            190              117

Dividends Paid                                                                    (177)                                        (177)

Stock Split                          943,166          2,358       (2,357)                  (157,988)                              1

Net Income                                                                       2,534                                        2,534
                                                                                 -----                                        -----

Balance at July 4, 1999            3,773,000         $9,433       $4,466       $20,720     (618,371)        $(3,099)        $31,520
                                   =========          =====        =====        ======      =======           =====          ======
<FN>

See notes to consolidated financial statements.
</FN>
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                                         ALBA-WALDENSIAN, INC.
                                                 Consolidated Statements of Cash Flows
                                                              (Unaudited)
                                                               ($000's)
                                                                              Six Month Periods Ended
                                                                July 4,                           June 28,
                                                                   1999                               1998
                                                                   ----                               ----
<S>                                                             <C>                                <C>
OPERATING ACTIVITIES:
 Net income                                                     $ 2,534                            $ 1,393
  Adjustments to reconcile net income (loss)
   to net cash provided by operating activities:
    Depreciation and amortization                                 1,525                              1,216
    Provision for bad debts                                          60                                 90
    Loss on disposal of property                                    (2)                                  2
    Provision for inventory obsolescence                          1,004                                441
  Changes in operating assets and liabilities providing (using) cash:
     Accounts receivable                                        (3,210)                            (1,001)
     Refundable Income Taxes                                       (71)                                 --
     Inventories                                                (3,657)                                137
     Prepaid expenses and other                                   (774)                              (229)
    Accounts payable                                              1,471                               (90)
    Accrued expenses and other liabilities                        (531)                                308
    Income taxes payable                                          (459)                                 88
    Deferred compensation                                            10                                  1
                                                                     --                                  -
Net cash (used in) provided by operating activities             (2,100)                              2,356
                                                                 -----                               -----

INVESTING ACTIVITIES:
 Capital expenditures                                           (2,222)                            (1,770)
 Proceeds from notes receivable                                      --                                  2
                                                                     --                                  -
Net cash used in investing activities                           (2,222)                            (1,768)
                                                                 -----                              ------
FINANCING ACTIVITIES:
 Net borrowings under line
  of credit agreement                                             4,950                              5,490
 Principal payments notes and Capital Leases                      (554)                            (9,824)
 Payment of dividends                                             (177)                                 --
 Proceeds from Issuance of Long Term Debt                           660                              3,664
 Cash proceeds for issuance of stock options                        118                                 --
 Repurchase of capital stock                                      (605)                            (2,328)
                                                                  -----                            -------
Net cash provided by (used in) financing activities               4,392                            (2,998)
                                                                  -----                            -------

NET INCREASE (DECREASE) IN CASH                                      70                            (2,410)
CASH AT BEGINNING OF PERIOD                                          15                              2,416
                                                                     --                              -----
CASH AT END OF PERIOD                                              $ 85                                $ 6
                                                                     ==                                  =

</TABLE>

<PAGE>
<TABLE>
<CAPTION>



                                                         ALBA-WALDENSIAN, INC.
                                                 Consolidated Statements of Cash Flows
                                                              (Unaudited)
                                                               ($000's)

                                                                        Six Month Periods Ended
                                                                         July 4,                  June 29,
                                                                            1999                      1998
                                                                            ----                      ----

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
<S>                                                                       <C>                         <C>

  Cash paid during the period for:
    Interest                                                                $547                      $365
    Income taxes                                                          $1,900                      $766

<FN>

During the first six months of 1999, the Company acquired  production  equipment
totaling  $2,503,000 through the issuance of capital leases as compared $180,000
in 1988



See notes to consolidated financial statements.
</FN>
</TABLE>


<PAGE>


                              ALBA-WALDENSIAN, INC.
                    Notes to Consolidated Financial Statement
                                   (Unaudited)


1. UNAUDITED FINANCIAL INFORMATION

         In the opinion of the Company, the accompanying  unaudited consolidated
financial  statements  contain all  adjustments  necessary to present fairly the
financial  position as of July 4, 1999,  and the results of  operations  for the
three  and six  month  periods  ended  July 4,  1999 and June  29,  1998.  These
unaudited financial  statements should be read in conjunction with the Company's
most recent audited financial statements.

         The results of operations for the interim  periods are not  necessarily
indicative of the results to be expected for the full year.

         All per share and weighted average share  information for 1998 has been
restated to reflect the 3 for 2 stock  split  effected on November  16, 1998 and
the 4 for 3 split effected June 4, 1999.


2.   FINANCING

         On May 14, 1998,  the Company  entered  into a  three-year  $21,000,000
financing  facility with a major bank composed of up to a $15,000,000  revolving
loan,  based upon levels of accounts  receivable and  inventories,  a $3,000,000
term loan and a $3,000,000 credit line to fund future capital expenditures.  The
new facility bears interest at Prime plus 0.5% (or at the option of the Company,
portions  of the  facility  may be priced at LIBOR plus 2.25%) and is secured by
substantially all of the assets of the Company.

         The loan agreement requires that the Company maintain certain levels of
tangible  net worth and fixed  charge  coverage  ratios as well as limiting  the
level of capital  expenditures  ($16.2  million in 1999) and  prohibiting  other
financing (in excess of $10.5 million in 1999). At July 4, 1999, the Company was
in compliance with the covenants contained in the loan agreement.

         During the first six months of 1999, the Company secured  $2,503,000 of
capital lease financing  covering the acquisition of machinery during 1999. This
facility  is secured by only the  acquired  machinery,  bears  interest at rates
varying  from 7.56% to 7.96% and provides for level  monthly  payments  over its
five-year term.







3.       DIVIDENDS

     The  Company  declared  a  semi-annual  cash  dividend  of $.075  per share
($177,000) on its common stock payable on February 22, 1999 to  shareholders  of
record on February 12, 1999. Under the Company's loan agreement with a bank (see
Note 2),  dividends and  repurchases of Company stock may not exceed  $4,000,000
during  the  three-year  term of the loan.  As of July 4,  1999,  dividends  and
repurchases of Company stock have totaled $3,678,000.


4.   EARNINGS PER SHARE
<TABLE>
<CAPTION>

                      Six Month Period Ended June 28, 1998
                                                                 Income           Shares         Per-Share
                                                            (Numerator)    (Denominator)            Amount
(000's, except per share amounts)
<S>                                                              <C>               <C>               <C>
Basic EPS
  Net Income                                                     $1,393            3,590              $.39

Effect of Dilutive Securities
  Stock Options                                                      --               67

Diluted EPS
  Net Income                                                     $1,393            3,657              $.38
</TABLE>
<TABLE>
<CAPTION>


                       Six Month Period Ended July 4, 1999
                                                                 Income           Shares         Per-Share
                                                            (Numerator)    (Denominator)            Amount
(000's, except per share amounts)
<S>                                                              <C>               <C>                <C>
Basic EPS
  Net Income                                                     $2,534            3,139              $.81

Effect of Dilutive Securities
  Stock Options                                                      --              204                --

Diluted EPS
  Net Income                                                     $2,534            3,343              $.76

</TABLE>





5        SEGMENT INFORMATION

         The following table contains  selected  information with respect to the
Company's business segments:
<TABLE>
<CAPTION>

                                                                             Six Month Periods Ended
                                                                                 July 4,          June 28,
                                                                                    1999              1998
($000's)
<S>                                                                              <C>               <C>
Consumer Products
Net sales                                                                        $22,590           $19,637
Segment profit                                                                     3,320             2,259
  % Net sales                                                                      14.7%             11.5%
Segment assets                                                                    33,602               N/A

Health Products
Net sales                                                                        $17,856           $16,373
Segment profit                                                                     3,769             2,703
  % Net sales                                                                      21.1%             16.5%
Segment assets                                                                    12,487               N/A


Segment profit -
  Consumer Products                                                               $3,320            $2,259
  Health Products                                                                  3,769             1,495
                                                                                   -----             -----
    Total segment profit                                                           7,089             2,542
General and administrative expenses                                                2,509             1,114
Other expense, net                                                                   677               233
                                                                                     ---               ---
Income before income taxes                                                        $3,903            $1,195
<FN>

N/A = Information Not Available
</FN>
</TABLE>


<PAGE>



     Item 2.  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations

                         Liquidity and Capital Resources

         We currently have a three-year  $21,000,000  financing  facility with a
major  bank (see Note 2 of Notes to  Consolidated  Financial  Statements).  This
financing  facility  provides a revolving loan of up to  $15,000,000,  depending
upon levels of accounts  receivable and  inventories,  a term loan of $3,000,000
and a capital expenditure line of $3,000,000.  In addition, the facility permits
the Company to secure other outside  financing of capital  expenditures of up to
$10,500,000 in 1999. We have secured a total commitment of $10,500,000 for lease
financing in 1999 with two major financial  institutions  and through the second
quarter have funded $2,503,000 of capital expenditures under such leases.


         Working  capital  continues  to be adequate  to support  the  Company's
operations.  On July 4,  1999,  the  Company  had  current  working  capital  of
$20,693,000  with a current ratio of 3.7 to 1. This is comparable to $14,888,000
or  3.2 to 1 at  December  31,  1998.  Working  capital  increased  during  1999
primarily due to a $3,222,000  increase in accounts receivable from an unusually
low level of $6,426,000  at December 31, 1998 to  $9,648,000  while for the same
periods the number of outstanding days sales outstanding  decreased from 46.2 to
43.0.  Also,  inventories  have  increased by  $2,654,000  from  $13,622,000  to
$16,276,000,  partially due to a delay in the completion of certain large orders
originally  scheduled to ship in the second quarter.  Under the terms of our new
financing  facility,  all of our  excess  cash  is  used  daily  to  reduce  the
outstanding balance on our revolving credit line. This results in increasing the
amount  available to borrow under the revolver  while at the same time providing
for the maximum  short-term  investment  return on the Company's  available cash
balances.  However,  this  results in our not  reporting  normal  levels of cash
(current  asset) which have been  utilized to  temporarily  reduce our revolving
credit line (long-term liability).  Availability under our revolving credit line
totaled $4,358,000 at July 4, 1999.

         Liquidity  needs are  primarily  affected  by and  related  to  capital
expenditures and changes in the Company's business volume.  During the first six
months  of 1999,  these  needs  were  adequately  met  through  our $21  million
financing facility and $2,503,000 of lease financing.  Capital  expenditures for
the first six months of 1999 totaled $4,725,000,  reflecting continued expansion
of our seamless knitting capacity to meet the increasing demand for our seamless
products.  This level of capital  expenditures  compares to  $1,770,000  for the
first six months of 1998.

         We intend to  continue to  aggressively  expand our  seamless  knitting
capacity in 1999 in  response  to  increasing  demand for our  seamless  women's
apparel.  In  addition  to the 66%  capacity  increase  in 1998,  we have enough
knitting  machines  on order with  scheduled  delivery  dates in 1999 to further
increase  seamless  knitting  capacity  by another 85% from its  beginning  1999
levels. Capital expenditures in 1999 may approximate $16,000,000.  This level of
investment  in the  future of our  Company  will allow us to  capitalize  on the
expanding demand for seamless apparel.

         Cash utilized in operating  activities  was $2,100,000 in the first six
months of 1999 as compared to  $2,356,000  of cash  generated in the  comparable
period of 1998.  This  decrease in cash  provided in 1999 was primarily due to a
net increase of $3,210,000 in accounts receivable from an unusually low level of
$6,421,000  at December 31, 1998 to  $9,648,000  at July 4, 1999 coupled with an
increase in inventories of $3,657,000.

         Net cash used in  investing  activities  during the first six months of
1999 was  $2,222,000  compared to $1,770,000  in 1998.  The cash used in each of
these two periods was primarily for capital  expenditures to expand  capacities,
and to replace and update plant and equipment.  In addition to the $2,222,000 of
cash expenditures to acquire productive equipment during the first six months of
1999, the Company also acquired  $2,503,000 of equipment  through  capital lease
financing.  Financing activities in 1999 included $4,950,000 of funding from the
Company's  revolving line of credit,  the repurchase of 41,310 shares ($605,000)
of the  Company's  common  stock and the  payment of $177,000  (5.625  cents per
post-split share) in cash dividends.

         The Company  declared a  semi-annual  cash  dividend of $.075 per share
($.05625 per post-split  share) totaling $177,000 on its common stock payable on
February 22, 1999,  to  shareholders  of record on February 12, 1999.  Under the
Company's loan agreement with a bank, dividends and repurchases of Company stock
may not exceed  $4,000,000  during the  three-year  term of the loan. At July 4,
1999,  dividends and stock repurchases  totaled $3,678,000 from the inception of
the loan.

         On June 4, 1999,  we effected a 4 for 3 stock split in the form of a 33
1/3% stock dividend to  shareholders of record as of May 25, 1999. All per share
amounts and weighted average share information has been  retroactively  restated
to reflect  this stock  split.  Subsequent  to July 4, 1999,  we declared a cash
dividend  of $.075 per share  (post-split)  payable on August 24, 1999 to common
stockholders of record on August 14, 1999.



<PAGE>

<TABLE>
<CAPTION>

                                                         Results of Operations

Items as a percentage of sales are reflected in the following table:

                                               Three Month Periods Ended           Six Month Periods Ended
                                          July 4,         June 28,               July 4,          June 28,
                                             1999             1998                  1999              1998
                                             ----             ----                  ----              ----
(%)
<S>                                         <C>              <C>                   <C>               <C>
Net sales                                   100.0            100.0                 100.0             100.0
Cost of sales                                72.4             74.5                  71.7              75.0
                                             ----             ----                  ----              ----
Gross margin                                 27.6             25.5                  28.3              25.0
Selling, general and
 administrative expenses                     18.4             18.2                  16.9              17.4
                                             ----             ----                  ----              ----
Operating income                              9.2              7.3                  11.4               7.6
Other expense, net                            1.9              1.4                   1.8               1.3
                                              ---              ---                   ---               ---
Income before income taxes                    7.3              5.9                   9.6               6.3
Provision for income taxes                    2.2              2.2                   3.3               2.4
                                              ---              ---                   ---               ---
Net income                                    5.1              3.7                   6.3               3.9
</TABLE>


Three Month Periods Ended July 4, 1999 and June 28, 1998

         During the second quarter of 1999, the Company reached record levels of
revenues and earnings.  Second quarter  earnings of $989,000  increased 55.5% as
compared to $653,000 in the second quarter of 1998.  The quarterly  earnings per
share of 32 cents  (30 cents  fully  diluted)  represented  an  increase  of 67%
(diluted)  and was a record  second  quarter  for the  Company as compared to 19
cents (18 cents fully diluted) per share in the second quarter of 1998. Revenues
for the  1999-quarter  increased  9.1% reaching a second quarter record level of
$19,321,000 as compared to $17,714,000 for the prior year.

         Net sales by division  for the second  quarter of 1999  compared to the
second quarter of 1998 are set forth in the following table ($000's):
<TABLE>
<CAPTION>

                                          Three Month     Periods Ended
                                              July 4,          June 28,        Increase/       % Increase/
                                                 1999              1998       (Decrease)        (Decrease)
                                                 ----              ----       ----------        ----------

<S>                                           <C>                <C>                <C>               <C>
Consumer Products                             $10,529            $9,764             $765              7.8%
Health Products                                 8,792             7,950              842             10.6%
                                                -----             -----              ---
         Total                                $19,321           $17,714           $1,607              9.1%
</TABLE>

         Sales  of  Consumer  Products  increased  $765,000  during  the  second
quarter,  or 7.8% over the  comparable  quarter of 1998.  This increase  results
primarily from continuing  acceptance of the Company's  seamless women's apparel
as consumers continued to respond positively to the unsurpassed fit, comfort and
style of seamless intimates and combination innerwear/outerwear products.

         Sales of Health Products  increased $842,000 or 10.6% lead by increases
in treads and stockinettes.

         Gross  margins  increased in 1999 to 27.6% of net sales (25.5% in 1998)
as the result of  increased  volume,  higher  margins on new styles of  seamless
women's  apparel  developed  after the second  quarter of 1998 and tighter  cost
controls.

         Selling, general and administrative expenses increased 10.1% during the
second quarter of 1999, reflective of the higher volumes but remained relatively
constant as a percentage of net sales at 18.2% in 1998 and 18.4% in 1999.

         Interest expense  increased as a result of higher  borrowings under the
revolving  line of  credit  agreement  to fund  increased  capital  expenditures
necessary to continue our  aggressive  expansion of productive  capacity to keep
pace with the increasing demand for our products.

Six Month Periods Ended July 4, 1999 and June 28, 1998

         During the first half of 1999,  the Company  reached  record  levels of
revenues and earnings.  This year's  earnings of $2,534,000  increased  81.9% as
compared to  $1,393,000  in the same six months of 1998.  The 1999  earnings per
share of 81 cents (76 cents  fully  diluted)  represented  an  increase  of 100%
(diluted)  and was a record  first six months for the  Company as compared to 39
cents (38 cents fully diluted) per share in the six months of 1998. Revenues for
the 1999 year to date period  increased 12.3% reaching a first six months record
level of $40,446,000  as compared to $36,010,000  for the same six months of the
prior year.

         Net sales by division for the first six months of 1999  compared to the
first six months of 1998 are set forth in the following table ($000's):
<TABLE>
<CAPTION>

                                            Six Month     Periods Ended
                                              July 4,          June 28,        Increase/       % Increase/
                                                 1999              1998       (Decrease)        (Decrease)
                                                 ----              ----       ----------        ----------

<S>                                           <C>               <C>               <C>                <C>
Consumer Products                             $22,590           $19,637           $2,953             15.0%
Health Products                                17,856            16,373            1,483              9.1%
                                               ------            ------            -----
         Total                                $40,446           $36,010           $4,436             12.3%
</TABLE>

         Sales of Consumer  Products  increased  $2,953,000 during the first six
months,  or 15.0% over the comparable six months of 1998. This increase  results
primarily from continuing  acceptance of the Company's  seamless women's apparel
as consumers continued to respond positively to the unsurpassed fit, comfort and
style of seamless intimates and combination innerwear/outerwear products.

         Sales of Health Products increased $1,483,000 or 9.1% lead by increases
in treads and stockinettes.

         Gross  margins  increased in 1999 to 28.3% of net sales (25.0% in 1998)
as the result of  increased  volume,  higher  margins on new styles of  seamless
women's  apparel  developed  after the second  quarter of 1998 and tighter  cost
controls.

         Selling,  general and administrative expenses increased 9.4% during the
six  months  of  1999,  reflective  of the  higher  volumes  but  declined  as a
percentage of net sales from 17.4% in 1998 to 16.9% in 1999.

         Interest expense  increased as a result of higher  borrowings under the
revolving  line of  credit  agreement  to fund  increased  capital  expenditures
necessary to continue our  aggressive  expansion of productive  capacity to keep
pace with the increasing demand for our products.


FORWARD-LOOKING INFORMATION

         We  continue to expect the  long-term  growth of the  seamless  apparel
business to produce  outstanding revenue and earnings for Alba, however, we must
further develop and expand our manufacturing  processes and finishing capacities
to keep pace with the  marketplace's  demand for our  seamless  products and the
rapid expansion of our knitting  capacity.  Consumer  Products'  revenues in the
second quarter fell short of the 1st quarter as the Company  experienced  delays
in the completion of customer orders caused by production  capacity  limitations
and longer  production  cycles  associated with certain new technology yarns and
new product  designs.  While we are  implementing the steps necessary to shorten
these  production  processes  and to expand  finishing  capacity,  the effect of
certain of these efforts may not be felt until the latter part of 1999.

         Our Health  Products  Division has performed well through the first six
months of 1999 and we  anticipate  the Division to continue on its steady growth
pattern throughout the remainder of the year and into the year 2000.



YEAR 2000 COMPLIANCE

         We have addressed the Year 2000 compliance  issues in three parts;  our
products, our internal systems and third-parties.

         Our  Products  - Year  2000  compliance  is not an issue for any of our
products.  None of our products,  women's  hosiery,  women's intimate apparel or
health products contains date-sensitive-electronic  components or date-sensitive
software.

         Our Internal  Systems - We are confident  that all major systems within
Alba will be Year 2000 compliant before the turn of the century. For operational
reasons,  in late 1996 we decided to install a new integrated  manufacturing and
financial  reporting  management  information  system.  This new system involved
acquiring new system hardware, new PC-based local and wide-area networks and the
standardization  of PC software.  All of these hardware and software systems are
Year 2000  compliant.  The new  system  hardware,  the new  PC-based  local area
network and the new  financial  reporting  system are now  operational.  The new
manufacturing  system and the wide-area  network  should be  operational  in the
third  quarter  or  early  fourth  quarter  of  1999.   Additionally,   we  have
substantially   completed  our  review  of  all  other  date-sensitive   systems
throughout Alba with no material non-compliance problems noted. This review also
included non-information technology systems and equipment such as the electronic
components of our knitting and other manufacturing equipment.

         Third Parties - Like most all other  companies,  we are dependent  upon
our material  vendors,  suppliers and customers to ensure that we remain a going
concern.  We are unable to control the  actions of others with  respect to their
Year 2000 compliance.  However,  our material  suppliers,  service providers and
customers are mostly all very large  companies  within their own  industries and
have much at stake in ensuring their own compliance.  We are  questioning  these
third parties as to their  compliance plans and to date have not been advised of
any major non-compliance problems. We expect to complete this process during the
third  quarter and will then  develop  contingency  plans in  indicated  problem
areas,  as feasible.  The risks to Alba in this area are obviously  significant;
for example,  we could not operate without a continuous source of electricity to
our  manufacturing  plants and there are no realistic  contingency  alternatives
available.  Similarly,  there is very little that we can do to continue sales to
customers  who  themselves  are  unable to operate  due to their own  failure to
ensure Year 2000 compliance.

         We have not incurred and do not anticipate  that we will incur material
costs associated with the Year 2000 compliance  issue. Our operational  decision
in 1996 to replace our  manufacturing  and financial  reporting  systems had the
side benefit of eliminating most Year 2000 compliance issues for us.


THIS  QUARTERLY  REPORT ON FORM 1O-Q,  INCLUDING ANY  INFORMATION  INCORPORTATED
THEREIN BY  REFERENCE,  MAY  CONTAIN,  IN  ADDITION TO  HISTORICAL  INFORMATION,
CERTAIN   FORWARD-LOOKING   STATEMENTS  THAT  INVOLVE   SIGNIFICANT   RISKS  AND
UNCERTAINTIES.  SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON MANAGEMENT'S BELIEF
AS  WELL AS  ASSUMPTIONS  MADE  BY,  AND  INFORMATION  CURRENTLY  AVAILABLE  TO,
MANAGEMENT  PURSUANT TO THE SAFE  HARBOR  PROVISIONS  OF THE PRIVATE  SECURITIES
LITIGATION  REFORM ACT OF 1995.  FORWARD-LOOKING  STATEMENTS  CAN  GENERALLY  BE
IDENTIFIED  AS SUCH  BECAUSE THE CONTEXT OF THE  STATEMENT  USUALLY WILL INCLUDE
WORDS SUCH AS "THE COMPANY BELIEVES";  OR "ANTICIPATES",  OR "EXPECTS"; OR WORDS
OF SIMILAR  IMPORT.  SIMILARLY,  STATEMENTS  THAT DESCRIBE THE COMPANY'S  FUTURE
PLANS, OBJECTIVES,  ESTIMATES OR GOALS ARE ALSO FORWARD-LOOKING STATEMENTS. SUCH
STATEMENTS ADDRESS FUTURE EVENTS AND CONDITIONS CONCERNING CAPITAL EXPENDITURES,
EARNINGS, SALES, LIQUIDITY AND CAPITAL RESOURCES, AND ACCOUNTING MATTERS.

THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE EXPRESSED IN, OR
IMPLIED BY, THE FORWARD-LOOKING  STATEMENTS CONTAINED HEREIN. FACTORS THAT COULD
CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES  INCLUDE,  BUT ARE NOT LIMITED TO, THOSE
DISCUSSED IN ITEM 1  DESCRIPTION  OF BUSINESS;  AND  ELSEWHERE IN THE  COMPANY'S
ANNUAL  REPORT  ON FORM  1O-K  FOR THE  YEAR  ENDED  DECEMBER  31,  1998,  OR IN
INFORMATION  INCORPORATED THERIN BY REFERENCE, AS WELL AS FACTORS SUCH AS FUTURE
ECONOMIC CONDITIONS,  ACCEPTANCE BY CUSTOMERS OF THE COMPANY'S PRODUCTS, CHANGES
IN CUSTOMER  DEMAND,  LEGISLATIVE,  REGULATORY AND  COMPETITIVE  DEVELOPMENTS IN
MARKETS  IN  WHICH  THE  COMPANY  OPERATES  AND  OTHER  CIRCUMSTANCES  AFFECTING
ANTICIPATED  REVENUES AND COSTS. THE COMPANY UNDERTAKES NO OBLIGATION TO RELEASE
PUBLICLY THE RESULT OF ANY REVISIONS TO THESE FORWARD  LOOKING  STATEMENTS  THAT
MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES  AFTER THE DATE OF THIS REPORT OR
TO REFLECT THE OCCURRENCE OF OTHER ANTICIPATED EVENTS.



PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on FORM 8-K

 a.   Exhibits
         27.   Financial Data Schedule (filed in electronic format only)

 b.   Form 8-K
                 None


SIGNATURES
Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned there unto duly authorized.

                              ALBA-WALDENSIAN, INC.


Date: August 12, 1999                                 /s/ Glenn J. Kennedy
                                                      --------------------
                                                 Vice President and Treasurer
                                                 (Chief Financial Officer and
                                                  Principal Accounting Officer