UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                                QUARTERLY REPORT

        UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


                  For the Quarterly Period Ended March 31, 1999
                           Commission File No. 0-5200



                                  BONTEX, INC.
             (Exact name of registrant as specified in its charter)


              VIRGINIA                                54-0571303 
    (State or other jurisdiction of                (I.R.S. Employer 
     incorporation or organization)                Identification No.)


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



           Registrant's telephone number, including area code 540-261-2181


Indicate by checkmark whether the registrant (1) has filed all reports 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  (     )


Indicate the description and number of shares outstanding of each of the
issuer's classes of common stock as of the latest practicable date.


         Class                           Outstanding at May 7, 1999
Common Stock - $.10 par value                   1,572,824



<PAGE>



                                  BONTEX, INC.
                                    FORM 10-Q
                        NINE MONTHS ENDED MARCH 31, 1999


                                      INDEX



PART I. FINANCIAL INFORMATION                                         Page No.

        Item 1. Financial Statements

        CONDENSED CONSOLIDATED BALANCE SHEETS
        March 31, 1999 and 1998, June 30, 1998...............................3

        CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE
        INCOME (LOSS) AND CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
        STOCKHOLDERS' EQUITY
        Nine Months and Three Months Ended March 31, 1999 and 1998...........4

        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
        Nine Months Ended March 31, 1999 and 1998............................5

        CONDENSED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.......6

        Item 2. Management's Discussion and Analysis of Financial 
                Condition and Results of Operations.......................7-10


PART II. OTHER INFORMATION

        Item 1. Legal Proceedings...........................................11

        Item 4. Submission of Matters to a Vote of Security Holders.........11

        Item 5. Other Information...........................................12

        Item 6. Exhibits and Reports on Form 8-K............................12





                                        2

<PAGE>
<TABLE>
<CAPTION>



                          PART I. FINANCIAL INFORMATION
Item 1.  Financial Statements
                          BONTEX, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
             (Dollars in Thousands, Except Share and Per Share Data)

                                                                                     March 31,            June 30,
                                                                                    (unaudited)
                                                                                1999           1998         1998
<S>     <C>    <C>    <C>    <C>    <C>    <C>
ASSETS
Current assets:
    Cash and cash equivalents                                              $      349     $      807     $      517
    Trade accounts receivable, less allowance for doubtful
       accounts of $195 ($232 at March '98, $268 at June '98)                  11,633         10,332         11,618
    Other receivables                                                             377            775            417
    Inventories                                                                 7,023          6,886          6,436
    Deferred income taxes                                                         320            396            347
    Income taxes refundable                                                       120              9             56
    Other current assets                                                          289            685            338
                                                                           ----------     ----------     ----------
                TOTAL CURRENT ASSETS                                           20,111         19,890         19,729
                                                                           ----------     ----------     ----------

Property, plant and equipment:
    Land                                                                          366            368            369
    Buildings and building improvements                                         5,566          5,230          5,575
    Machinery, furniture and equipment                                         17,716         16,468         17,199
    Construction in progress                                                      986          1,082            781
                                                                           ----------     ----------     ----------
                                                                               24,634         23,148         23,924
    Less accumulated depreciation and amortization                             12,777         11,947         11,882
                                                                           ----------     ----------     ----------
       Net property, plant and equipment                                       11,857         11,201         12,042

Deferred income taxes                                                             533              -            187
Other assets, at cost less applicable amortization                                530            611            555
                                                                           ----------     ----------     ----------
                TOTAL ASSETS                                               $   33,031     $   31,702     $   32,513
                                                                           ==========     ==========     ==========

LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
    Short-term borrowings                                                  $   10,365     $    8,851     $    8,664
    Accounts payable                                                            6,715          5,950          7,133
    Accrued expenses                                                            1,509          1,970          1,520
    Income taxes payable                                                           31            340             41
    Long-term debt due currently                                                1,279            587          1,364
                                                                           ----------     ----------     ----------
                TOTAL CURRENT LIABILITIES                                      19,899         17,698         18,722

Long-term debt, less current portion                                            2,383          2,466          2,256
Deferred income taxes                                                              50             55             50
Other long-term liabilities                                                       700            346            594
                                                                           ----------     ----------     ----------
                TOTAL LIABILITIES                                              23,032         20,565         21,622
                                                                           ----------     ----------     ----------

Stockholders' equity:
    Preferred stock of no par value.  Authorized 10,000,000
       shares; none issued                                                          -              -              -
    Common stock of $.10 par value.  Authorized 10,000,000
       shares; issued and outstanding 1,572,824 shares                            157            157            157
    Additional capital                                                          1,551          1,551          1,551
    Retained earnings                                                           8,046          9,228          8,898
    Accumulated other comprehensive income                                        245            201            285
                                                                           ----------     ----------     ----------
                TOTAL STOCKHOLDERS' EQUITY                                      9,999         11,137         10,891
                                                                           ----------     ----------     ----------
                TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                 $   33,031     $   31,702     $   32,513
                                                                           ==========     ==========     ==========
</TABLE>

See accompanying condensed notes to unaudited condensed consolidated financial
statements.

                                        3

<PAGE>
<TABLE>
<CAPTION>



                          BONTEX, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF INCOME(LOSS)
                         AND COMPREHENSIVE INCOME (LOSS)
    AND CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                      (In Thousands, Except Per Share Data)
                                   (Unaudited)

Consolidated Statements of Income (Loss) and Comprehensive Income (Loss):

                                                                        Nine Months Ended                  Three Months Ended
                                                                             March 31,                           March 31,
                                                                      1999              1998              1999             1998
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Net Sales                                                           $  28,983         $  32,055         $  10,599         $  10,434
Cost of Sales                                                          21,922            22,770             7,748             7,598
                                                                     --------          --------          --------          --------

           Gross Profit                                                 7,061             9,285             2,851             2,836

Selling, General and Administrative Expenses                            7,601             8,606             2,704             2,868
                                                                     --------          --------          --------          --------

           Operating Income (Loss)                                       (540)              679               147               (32)
                                                                     --------          --------          --------          --------

Other (Income) Expense:
      Interest expense                                                    696               766               220               233
      Interest income                                                      (2)              (33)                -                (1)
      Foreign currency exchange loss                                       24               131               (13)               25
      Other, net                                                          (18)              (33)               25                (4)
                                                                     --------          --------          --------          --------
                Total Other Expense, Net                                  700               831               232               253
                                                                     --------          --------          --------          --------

Income (Loss) Before Income Taxes                                      (1,240)             (152)              (85)             (285)
Income Taxes (Benefit)                                                   (388)              (36)             (108)             (129)
                                                                     --------          --------          --------          --------

Net income (loss)                                                        (852)             (116)               23              (156)

Other Comprehensive Income (Loss)
      Foreign currency translation adjustment                             (40)             (262)             (367)             (148)
                                                                     --------          --------          --------          --------
Comprehensive Loss                                                 $     (892)       $     (378)      $      (344)       $     (304)
                                                                     ========          ========          ========          ========


Net income (loss) per share                                        $     (.54)       $     (.07)      $       .01        $     (.10)
                                                                     ========          ========          ========          ========


Condensed Consolidated Statements of Changes in Stockholders' Equity:

Stockholders' Equity, beginning balance                            $   10,891        $  11,515        $   10,343         $   11,441

      Net income (loss)                                                  (852)            (116)               23               (156)
      Other comprehensive income (loss)
           Foreign currency translation adjustment                        (40)            (262)            ( 367)              (148)
                                                                     --------          --------          --------          --------

Stockholders' Equity, ending balance                               $    9,999        $  11,137        $    9,999         $   11,137
                                                                     ========          ========          ========          ========
</TABLE>
     
See accompanying condensed notes to unaudited condensed consolidated financial
statements.

                                        4

<PAGE>

<TABLE>
<CAPTION>


                                  BONTEX, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars In Thousands)
                                   (unaudited)

                                                                                 Nine Months Ended
                                                                                     March 31,
                                                                                1999            1998
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Cash Flows from Operating Activities:
     Cash received from customers                                          $     31,500    $     35,182
     Cash paid to suppliers and employees                                       (31,968)        (34,712)
     Interest received                                                               10              68
     Interest paid                                                                 (751)           (846)
     Income taxes paid, net of refunds                                               15             190
                                                                           ------------    ------------
         Net cash used in operating activities                                   (1,194)           (118)
                                                                           ------------    ------------

Cash Flows from Investing Activities:
     Acquisition of property, plant and equipment                                  (845)         (1,382)
                                                                           ------------    ------------
         Net cash used in investing activities                                     (845)         (1,382)
                                                                           ------------    ------------

Cash Flows from Financing Activities:
     Increase in short-term borrowings, net                                       1,851           1,229
     Long-term debt incurred                                                        564             330
     Principal payments on long-term debt                                          (479)           (446)
                                                                           ------------    ------------
         Net cash provided by financing activities                                1,936           1,113
                                                                           ------------    ------------

Effect of Exchange Rate Changes on Cash                                             (65)           (179)
                                                                           ------------    ------------
Net Decrease in Cash and Cash Equivalents                                          (168)           (566)
Cash and Cash Equivalents at Beginning of Period                                    517           1,373
                                                                           ------------    ------------
Cash and Cash Equivalents at End of Period                                 $        349    $        807
                                                                           ============    ============

Reconciliation of Net Income (Loss) to Net Cash Used in
     Operating Activities:
     Net income (loss)                                                     $       (852)   $       (116)
     Adjustments to reconcile net income (loss) to net cash used in
         operating activities:
         Depreciation and amortization                                            1,026             974
         Provision for bad debts                                                    144             170
         Deferred income taxes                                                     (346)           (184)
         Change in assets and liabilities:
              (Increase) decrease  in trade accounts and other receivables         (135)          2,440
              Increase in inventories                                              (661)         (1,722)
              Decrease (increase) in other assets                                    55            (727)
              Decrease in accounts payable and accrued expenses                    (430)         (1,385)
              (Decrease) increase in income taxes                                   (79)            334
              Increase in other liabilities                                          84              98
                  Net cash used in operating activities                    $     (1,194)   $       (118)
                                                                           ============    ============

</TABLE>

See accompanying condensed notes to unaudited condensed consolidated financial
statements.

                                        5


<PAGE>

                         BONTEX, INC. AND SUBSIDIARIES
   CONDENSED NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                   MARCH 31, 1999 AND 1998 AND JUNE 30, 1998
                                  (Unaudited)

1.   The accompanying unaudited condensed consolidated financial statements have
     been prepared by Bontex, Inc. and its subsidiaries ("Bontex" or the
     "Company") in accordance with generally accepted accounting principles for
     interim financial reporting information and the instructions to Form 10-Q
     and Article 10 of Regulation S-X. Accordingly, they do not include all of
     the information and notes required by generally accepted accounting
     principles for complete financial statements. In the opinion of management,
     all material reclassifications and adjustments, consisting of normal
     recurring accruals, considered necessary for a fair presentation of the
     results of operations, financial position and cash flows for each period
     shown, have been included. Operating results for interim periods are not
     necessarily indicative of the results for the full year. The unaudited
     condensed consolidated financial statements and condensed notes are
     presented as permitted by Form 10-Q and do not contain certain information
     included in the Company's annual consolidated financial statements and
     notes. For further information, refer to the consolidated financial
     statements and notes thereto included in the Company's Annual Report on
     Form 10-K for the year ended June 30, 1998.

2.   The last in, first out (LIFO) method of inventory pricing is used by the
     Company in the United States. Inventories of the European subsidiaries are
     valued at the lower of cost or market using the first-in, first-out (FIFO)
     and weighted average bases. Inventories are summarized as follows:
<TABLE>
<CAPTION>

                                                           March  31,     June 30,
                                                        1999      1998      1998
                                                        (Dollars in Thousands)

<S>                                                   <C>       <C>       <C>    
      Finished goods                                 $  3,716  $  3,797  $  3,782
      Raw Materials                                     2,772     2,650     2,117
      Supplies                                            774       734       786
                                                     --------  --------  --------
        Inventories at FIFO and weighted average cost   7,262     7,181     6,685
      LIFO reserves                                      (239)     (295)     (249)
                                                     $  7,023  $  6,886   $ 6,436
                                                     ========  ========  ========
</TABLE>


3.   Business segment information related to the North American and European
     operations follows:
<TABLE>
<CAPTION>

                                      North American     European    Eliminations   Consolidated
                                        Operations      Operations
<S>                           <C> <C> 
      Nine Months Ended March 31, 1999

      Net Sales                           $ 11,471       $ 17,531       $  (19)       $ 28,983

      Net Loss                                (781)           (71)           -            (852)

      Nine Months Ended March 31, 1998

      Net Sales                           $ 13,273       $ 19,147       $ (365)       $ 32,055

      Net Income (Loss)                       (473)           357            -            (116)
</TABLE>

4.    Net income per share calculations are based on the weighted average number
      of shares outstanding of 1,572,824 shares for all periods.

                                        6

<PAGE>



                                  BONTEX, INC.
            ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS
              FOR THE NINE MONTHS AND QUARTER ENDED MARCH 31, 1999
                                   (Unaudited)


Except for historical data set forth herein, the following discussion
contains forward-looking statements within the meaning of the Private Securities
Litigation Act of 1995. Forward-looking statements include, for example,
statements about future results of operations or market conditions and involve
risks, uncertainties and assumptions. Actual results may differ materially from
these forward-looking statements. Factors that could cause or contribute to
those differences include, but are not limited to, the global economic crisis
emanating from Southeast Asia, excessive worldwide footwear inventories, a
shrinking domestic market for Bontex products, decreased sales to key customers,
increased competition from non-woven materials, the Year 2000 problem, the
increase in the relative prices of Bontex's products due to foreign currency
devaluations, increased pulp and latex prices, and capital illiquidity resulting
from the breach of loan ratios and/or an inability to identify additional
sources of financing.

RESULTS OF OPERATIONS

The results of operations for the first nine months of fiscal 1999 reflect
operating and net losses. During the first nine months, the Company generated a
consolidated operating loss of $540,000, and a net loss of $852,000 or $.54 per
share. Consolidated net sales decreased $3.1 million or 9.6% to $29 million for
the nine months ended March 31, 1999. The fluctuation in foreign currency
exchange rates resulted in a $813,000 translation increase in net sales.

Seasonality generally exists in that the first half of each fiscal year is
typically lower in volume than the second half, which is largely due to
customer's purchasing cycles, scheduled vacations, shutdowns, and holidays.

Gross profit as a percentage of net sales (i.e., Gross Margin) for the first
nine months of fiscal 1999 decreased compared to the same period last year from
29.0 to 24.4 percent. This decrease in profit margins is primarily attributed to
the $3.1 million or 9.6 percent decline in sales, which is a result of, among
other things, (i) the financial situation in Asia and South America, (ii) the
continued contraction of the U.S. domestic market for Bontex related products,
(iii) the overall worldwide decline in sales of footwear, especially in the
athletic category, and consequent higher inventories of footwear, and (iv) the
increased usage of non-woven made materials. Furthermore, competitive pricing
pressures have resulted in lower selling prices, which also have had a negative
impact on net sales and profit margins.

Net sales and net income for the third quarter reflects improvement over the
same period last year, as net sales increased $165,000 or 1.6% and net income
improved from a net loss of $156,000 to net income of $23,000.

The cost of pulp is expected to remain stable during the remainder of fiscal
year 1999. It is difficult to predict future raw material costs, however, and
there can be no assurance that raw material prices will not have an adverse
impact on the Company's operations or competitive position in the future. Bontex
plans to continue a long standing practice of reducing costs by utilizing
technology in raw materials, equipment and processes improvements.

Selling, General & Administrative (SG&A) expenses as a percent of net sales
decreased slightly from 26.9 percent to 26.2 percent during the first nine
months of fiscal 1999, as compared to the corresponding period in fiscal 1998.
The decreased SG&A percentage is mainly due to the positive impact of the
restructuring implemented in February 1999, which resulted in cost reductions at
the U.S. operations. Overall, consolidated SG&A expenses declined $1 million or 
11.7 percent, while sales decreased 9.6 percent. Bontex plans to implement 
additional measures in an effort to reduce total SG&A costs.


                                        7

<PAGE>



Interest charges in fiscal 1999 have decreased as a result of lower interest
rates, which have more than offset increased interest expenses relating to
higher borrowing levels. Foreign currency exchange losses have decreased as a
result, of among other things, the Company's Risk Management Program and more
stable currency exchange rates in the currencies in which the Company transacts
business.

Other comprehensive income, which consists of foreign currency translation
adjustment, totaled $40,000 for the nine months ended March 31, 1999, and
primarily reflects the fluctuation of the U.S. Dollar verses the Euro.

FINANCIAL CONDITION

Consolidated stockholders' equity decreased $892,000 from June 30, 1998, and
totaled $10 million at March 31, 1999. Financial ratios at March 31, 1999,
decreased from June 30, 1998, because of the negative operating results. The
$315,000 decrease in working capital primarily reflects the decrease in working
capital at Bontex USA, resulting from, among other things, increased short-term
liabilities to finance negative operating cash flows. The fluctuation in foreign
currency exchange rates resulted in a translation increase of $276,000 in
consolidated total assets as compared to March 31, 1998.

Cash balances mainly reflect financing and hedging positions at European
Operations.

Trade Accounts Receivable remain approximately the same from June 30, 1998 to
March 31, 1999. Even though sales have decreased, accounts receivable balances
remain approximately the same primarily due to the fact that a larger portion of
the Company's sales require extended credit terms.

The $587,000 increase in inventories from June 30, 1998, mainly corresponds to
the closure of pulp purchase contracts. Finished goods have decreased due to
decreased sales.

Other current assets decreased $49,000 to $289,000 from June 30, 1998, primarily
due to a decrease in deposits for pulp futures.

The $845,000 of additions from June 30, 1998, in PP&E is largely due to capital
additions at European Operations relating to increased capacity and efficiency
projects.

Accounts payable, accrued expenses and short-term borrowings increased $1.3
million from June 30, 1998, which primarily corresponds to funding negative
operating cash flows and higher inventory.

Management believes that existing credit facilities will be sufficient to
meet future operating and capital requirements based on present circumstances.
The Company may further alter its business strategy based on future revenues and
margin trends. As of March 31, 1999, Bontex USA was not in compliance with
certain financial ratios of its secured debt agreement, under which certain
current and noncurrent assets are pledged as collateral. Management is
negotiating with the bank for modified covenants and terms of the credit
agreement. There can be no assurance that Bontex will be able to obtain
satisfactory modifications. Accordingly, Bontex has classified $480,000 of
long-term debt as current. If Bontex cannot obtain a modified agreement and it
were unable to obtain refinancing, Bontex might have difficulty in obtaining
funds to meet operating and capital requirements, which could cause a material
adverse impact on its financial condition and results of operations.

FINANCIAL INSTRUMENTS

From time to time, the Company utilizes derivatives and other financial
instruments in the normal course of business. By their nature, all such
instruments involve risk, and the Company's maximum potential loss may exceed
amounts recorded in the balance sheet.

                                        8

<PAGE>




The Company is exposed to a variety of market risks, including the effects of
changes in foreign currency exchange rates, interest rates and commodity prices.
In the past, the Company has primarily used such derivative financial
instruments for the purpose of hedging currency and interest rates exposures.
For further information concerning the aforementioned financial instruments,
refer to the consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended June 30, 1998.

As part of the Company's Risk Management Program, the Company has explored
various alternatives to manage its exposure to highly volatile pulp prices, the
primary raw material for the Company's products. Historically, the Company's
primary and only available method of hedging its exposure to pulp price changes
was through forward purchasing and other purchase contracts. In connection with
purchasing pulp for future manufacturing requirements, the Company has entered
into a number of pulp futures, as deemed appropriate, to reduce the effects of
price fluctuations.

In accordance with hedge accounting, gains or losses are recorded as a component
of the underlying inventory purchase, because these contracts effectively meet
the risk reduction and correlation criteria. Gains or losses on hedges that are
terminated prior to the execution of the inventory purchase are recorded in
inventory until the inventory is sold. At March 31, 1999, the Company did not
hold any related derivatives for pulp futures.

FINANCIAL SITUATION IN ASIA

Asia is currently in a financial and economic crisis. During the past year, the
currencies of a number of key Asian countries have devalued, resulting in an
economic slowdown. Asia is the largest market for Bontex type products, as over
68 percent of the world's footwear is manufactured in Asia. Over the previous
three years, approximately a third of the Company's consolidated sales have been
derived from customers in Asia. The economic slowdown in Asia has decreased the
sale of Bontex type products there. The overall strength of the U.S. dollar and
the currency devaluations in Asia have resulted in additional pressure on
earnings, in part by increasing the relative prices of Bontex products versus
Asian competitors. Accordingly, the situation in Asia will continue to
negatively affect the Company's operations, and the economic crisis may further
spread to other markets, including South America.

In assessing the overall impact of the situation in Asia, management believes
sales and profits will improve in the near term as the situation improves.
Management cannot at this time accurately quantify the anticipated progress of
the situation in Asia on the Company's sales and profitability. Management's
assessment is based on a number of relevant sources, including information from
key customers, current sales trends, and other industry sources.

REFOCUSING

Management has implemented a dual focused approach composed of a definitive
Sales Action Plan and a Cost Reduction Program. In an effort to increase sales,
the Company plans to augment its product line for footwear and nonfootwear
related products and refine its marketing approaches in a number of key markets.
The Company hopes to develop several products that complement existing
manufacturing capabilities without significant capital investment or process
modifications.

The Company's Cost Reduction Program consists of a number of critical steps to
reduce its cost structure, especially concerning overhead and capacity issues.
To that end, the Company has taken steps effective February 1, 1999, in an
attempt to reduce costs by approximately $1.2 million on an annualized basis
through the rationalization of 14 percent of its U.S. staff, the listing for
sale of the Newark warehouse facility, and other measures to reduce overhead.
Costs to be incurred as a result of these actions are not considered material to
the financial statements, and accordingly, no related accruals were made as of
March 31, 1999. The positive impact of the Cost Reduction Program was partially
evident during the third quarter of fiscal 1999. Management believes that the
effects of both sales and cost initiatives will become more evident when fully
implemented over the next several months.


                                        9

<PAGE>



YEAR 2000 READINESS

Over the past two years, Bontex has invested approximately $175,000 in
information and non-information technology (IT) systems to improve data
efficiency and address the Company's Year 2000 systems exposure. The Year 2000
issue relates to computer programs using two digits rather than four to define
the applicable year. Inability to process data properly due to this phenomenon
may result in systems failures. The project to address the Company's Year 2000
systems exposure is substantially complete with approximately $25,000 remaining
to be invested. The IT systems, originally expected to be completed in November
1998, are now estimated to be completed during 1999, while an external vendor
completes customized software programs. The IT systems software has been tested,
and, with the exception of the customized software discussed above, all software
appears to operate as intended. Testing of non-IT systems is underway, with all
testing and necessary modifications, estimated to be completed by July 1999.

Bontex is in the process of assessing the Year 2000 readiness of its major
customers and vendors. The review is substantially complete with no material
risks identified. Major customers and vendors who have not responded, however,
could suffer disruptions from the Year 2000 problem. Furthermore, even if the
systems of Bontex's major customers and vendors are Year 2000 compliant, their
operations may suffer disruptions as a result of the Year 2000 problems of the
outside parties on which they rely. Therefore, there can be no assurances that
the Year 2000 will not significantly affect the Company's third parties.

The Company is currently in the process of formulating a contingency plan to
maintain operations in the event of its most likely worse-case Year 2000
scenario. Bontex intends to complete the plan before the end of 1999. Bontex
expects that the contingency plan will provide, if necessary, for manual
processing of accounting and financial information. The contingency plan,
however, would be unable to mitigate extreme Year 2000 effects, such as power or
communications failures, interrupted deliveries from major suppliers, or
decreased sales resulting from regional or worldwide recessions or disruptions
in the operations of major customers. Therefore, there can be no assurance that
the date change from 1999 to 2000 will not materially affect the Company's
operations and financial results.

RECENT ACCOUNTING PRONOUNCEMENTS

Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities," was issued in June 1998. This
Statement addresses the accounting for derivative instruments, including certain
derivative instruments embedded in other contracts, and hedging activities. The
Statement will be effective for all fiscal quarters of all fiscal years
beginning after June 15, 1999. Future adoption of this Statement could have a
material impact on the Company's consolidated financial position, or results of
operations. The Company is currently in process of reviewing the impacts of this
Statement.

SFAS No. 131, "Disclosure about Segments of an Enterprise and Related
Information," is effective for periods after December 15, 1997. Interim
information for SFAS No. 131 is presented in Note 3 of Condensed Notes to
Condensed Consolidated Financial Statements.


                                       10

<PAGE>



                           PART II. OTHER INFORMATION

                                  BONTEX, INC.
                                    FORM 10-Q
                    FOR THE NINE MONTHS ENDED MARCH 31, 1999

Item 1.  Legal Proceedings

           Please refer to Item 1, Legal Proceedings in Bontex, Inc.'s Quarterly
           Report on Form 10-Q for the quarter ended September 30, 1998, for a
           description of the civil lawsuit filed by Patricia Surmonte Tischio,
           a director and employee of Bontex (the "Company") in New Jersey state
           court on March 11, 1998. The case was transferred to the United
           States District Court for the Western District of Virginia in July
           1998.

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

           Please refer to Item 1, Legal Proceedings, in the Company's Quarterly
           Report on Form 10-Q for the quarter ended September 30, 1998, for a
           description of the civil lawsuit filed in September 1998 in the
           United States District Court for the District of Massachusetts by 
           Texon USA, Inc. The lawsuit was resolved without admission of 
           liability by the Company and in a manner that management believes 
           will not have a material impact on the Company. The lawsuit was 
           dismissed on May 11, 1999.


Item 4.  Submission of Matters to a Vote of Security Holders

         The Company's Annual Meeting of Shareholders was held on January 28,
         1999. The matters voted upon at the Meeting were as follows:

         (i)  The election of Jeffrey C. Kostelni, Joseph F. Raffetto and 
              Patricia S. Tischio as Class B directors, to serve until the 2001 
              Annual Meeting; and

         (ii) Approve a plan to grant stock options to certain executive 
              officers.



                                       11

<PAGE>




         All nominees for director names above were elected, and the stock
         option plan was approved.

            Election of Officers

                                                  AUTHORITY
                                                     FOR           WITHHELD  
                                                  ---------        --------
             Jeffrey C. Kostelni                  1,439,975         11,893

             Joseph F. Raffetto                   1,439,730         12,138

             Patricia S. Tischio                  1,439,975         11,893


                                                     FOR       AGAINST   ABSTAIN
                                                     ---       -------   -------
             Approve plan to grant stock options   1,146,770    56,530   248,568


Item 5.  Other Information

         None


Item 6.  Exhibits and Reports on Form 8-K

            (a)   Exhibits:

                  27 - Financial Data Schedule

            (b)   Report on Form 8-K:

                  None


                                       12

<PAGE>



                                   SIGNATURES

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


                                     BONTEX, INC.
                                     (Registrant)

     May 17, 1999                   /s/James C. Kostelni    
-----------------------             ---------------------------------
       (Date)                               James C. Kostelni
                                            Chairman of the Board
                                            and President


     May 17, 1999                    /s/Jeffrey C. Kostelni 
-----------------------              --------------------------------
        (Date)                              Jeffrey C. Kostelni
                                            Treasurer and
                                            Chief Financial Officer


      May 17, 1999                   /s/Charles W. J. Kostelni 
-----------------------              --------------------------------
        (Date)                              Charles W. J. Kostelni
                                            Corporate Controller
                                            and Secretary


                                       13

<PAGE>




                                  EXHIBIT INDEX


     27      Financial Data Schedule



                                      14