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, 2002
                           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 15, 2002
Common Stock - $.10 par value                               1,572,824




<PAGE>



                                  BONTEX, INC.
                                    FORM 10-Q
                   FOR THE THIRD QUARTER ENDED MARCH 31, 2002


                                      INDEX



PART I.           FINANCIAL INFORMATION                              Page No.

         Item 1.  Financial Statements

         CONDENSED CONSOLIDATED BALANCE SHEETS
         March 31, 2002 and June 30, 2001.................................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, 2002 and 2001......4

         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
         Nine Months Ended March 31, 2002 and 2001........................5

         CONDENSED NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
         STATEMENTS.......................................................6-8

         Item 2.  Management's Discussion and Analysis of Financial Condition
                  and Results of Operations...............................9-13

         Item 3.  Quantitative and Qualitative Disclosures About
                  Market Risk.............................................14


PART II.          OTHER INFORMATION

         Item 1.  Legal Proceedings.......................................15-16

         Item 4.  Submission of Matters to a Vote of Security Holders.....16

         Item 6.  Exhibits and Reports on Form 8-K........................16



                                        2

<PAGE>

<TABLE>
<CAPTION>


                          PART I. FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS
                          BONTEX, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


                                                                            MARCH 31, 2002          June 30, 2001
                                                                              (UNAUDITED)
<S>     <C>    <C>    <C>    <C>    <C>    <C>
ASSETS
Current assets:
   Cash and cash equivalents                                             $               773     $              320
   Trade accounts receivable, less allowance for doubtful
     accounts of $192 ($96 at June '01)                                                9,492                 10,700
   Other receivables                                                                     483                    629
   Inventories                                                                         5,148                  5,444
   Deferred income taxes                                                                 157                     35
   Other current assets                                                                  302                    166
                                                                          ------------------      -----------------
         TOTAL CURRENT ASSETS                                                         16,355                 17,294
                                                                          ------------------      -----------------

Property, plant and equipment:
   Land and land improvements                                                            277                    276
   Buildings and building improvements                                                 5,498                  5,259
   Machinery, furniture and equipment                                                 18,659                 17,691
   Construction in progress                                                              431                    387
                                                                          ------------------      -----------------
                                                                                      24,865                 23,613
   Less accumulated depreciation and amortization                                     15,057                 14,020
                                                                          ------------------      -----------------
         Net property, plant and equipment                                             9,808                  9,593

Other assets, net                                                                        338                    552
                                                                          ------------------      -----------------
         TOTAL ASSETS                                                    $            26,501     $           27,439
                                                                          ==================      =================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Short-term borrowings                                                 $             8,118     $            8,788
   Capital lease obligation - current                                                    127                      -
   Long-term debt due currently                                                        1,055                    578
   Accounts payable                                                                    7,819                  6,808
   Accrued expenses                                                                    1,746                  1,869
   Income taxes payable                                                                  224                    368
                                                                          ------------------      -----------------
         TOTAL CURRENT LIABILITIES                                                    19,089                 18,411

Long-term debt, less current portion                                                   1,198                  1,568
Capital lease obligation                                                                 315                      -
Deferred income taxes                                                                     35                      9
Other long-term liabilities                                                              591                    476
                                                                          ------------------      -----------------
         TOTAL LIABILITIES                                                            21,228                 20,464
                                                                          ------------------      -----------------

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
   Additional capital                                                                  1,551                  1,551
   Retained earnings                                                                   4,132                  5,935
   Accumulated other comprehensive income (loss)                                        (567)                  (668)
                                                                          ------------------      -----------------
         TOTAL STOCKHOLDERS' EQUITY                                                    5,273                  6,975
                                                                          ------------------      -----------------
         TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                        $            26,501     $           27,439
                                                                          ==================      =================
</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)

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS):


                                                             NINE MONTHS ENDED               THREE MONTHS ENDED
                                                                 MARCH 31,                       MARCH 31,
                                                            2002           2001             2002            2001
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Net Sales                                                $   26,514    $    31,472      $     9,070     $    11,576
Cost of Sales                                                20,675         24,158            7,100           8,917
                                                          ---------     ----------       ----------      ----------

         Gross Profit                                         5,839          7,314            1,970           2,659

Selling, General and Administrative Expenses                  7,317          7,849            2,443           2,761
                                                          ---------     ----------       ----------      ----------

         Operating Income (Loss)                             (1,478)          (535)            (473)           (102)
                                                          ---------     ----------       ----------      ----------

Other (Income) Expense:
     Interest expense                                           562            657              175             220
     Interest income                                             (1)            (7)              (1)             (1)
     Foreign currency exchange (gain) loss                       12             21               12              25
     Other, net                                                  51           (795)              43               1
                                                          ---------     ----------       ----------      ----------
Total Other (Income) Expense, Net                               624           (124)             229             245
                                                          ---------     ----------       ----------      ----------

Income (Loss) Before Income Taxes                            (2,102)          (411)            (702)           (347)
Income Tax Expense (Benefit)                                   (299)          (124)            (202)           (114)
                                                          ---------     ----------       ----------      ----------

Net income (loss)                                            (1,803)          (287)            (500)           (233)

Other Comprehensive Income (Loss)
     Foreign currency translation adjustment                    101           (297)             (18)           (191)
                                                          ---------     ----------       ----------      ----------
Comprehensive Income (Loss)                              $   (1,702)   $      (584)     $      (518)    $      (424)
                                                          =========     ==========       ==========      ==========

Net income (loss) per share                              $    (1.15)   $      (.18)     $      (.32)    $      (.15)
                                                          =========     ==========       ==========      ==========

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY:

Stockholders' Equity beginning balance                   $    6,975    $     8,948      $     5,791     $     8,788

     Net income (loss)                                       (1,803)          (287)            (500)           (233)
     Other comprehensive income (loss)
       Foreign currency translation adjustment                  101           (297)             (18)           (191)
                                                          ---------     ----------       ----------      ----------

Stockholders' Equity, ending balance                     $    5,273    $     8,364      $     5,273     $     8,364
                                                          =========     ==========       ==========      ==========
</TABLE>

See accompanying condensed notes to unaudited condensed consolidated financial
statements.


                                        4

<PAGE>

<TABLE>
<CAPTION>


                          BONTEX, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)


                                                                                     NINE MONTHS ENDED
                                                                                         MARCH 31,
                                                                                  2002               2001
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Cash Flows from Operating Activities:
   Cash received from customers                                                $   26,757        $    31,981
   Cash paid to suppliers and employees                                           (24,607)           (31,816)
   Interest received                                                                    1                  6
   Interest paid                                                                     (573)              (696)
   Income taxes paid, net of refunds                                                  216                (75)
                                                                                ---------         ----------
     Net cash provided by (used in) operating activities                            1,794               (600)
                                                                                ---------         ----------

Cash Flows from Investing  Activities:
   Proceeds from sale of property, plant and equipment                                 23                863
   Acquisition of property, plant and equipment                                      (573)              (524)
                                                                                ---------         ----------
     Net cash used in investing activities                                           (550)              (339)
                                                                                ---------         ----------

Cash Flows from Financing Activities:
   Increase (decrease) in short-term borrowings, net                                 (793)               665
   Long-term debt incurred                                                            583                 49
   Principal payments on long-term debt                                              (581)              (483)
                                                                                ---------         ----------
     Net cash provided by (used in) financing activities                             (791)               231
                                                                                ---------         ----------

Effect of Exchange Rate Changes on Cash                                                 0                (14)
                                                                                ---------         ----------
Net increase (decrease) in Cash and Cash Equivalents                                  453                (44)
Cash and Cash Equivalents at Beginning of Period                                      320                457
                                                                                ---------         ----------
Cash and Cash Equivalents at End of Period                                     $      773        $       413
                                                                                =========         ==========

Reconciliation of Net Loss to Net Cash Provide by (Used In) Operating
Activities:
   Net loss                                                                    $   (1,803)       $      (287)
   Adjustments to reconcile net loss to net cash provided by (Used In)
   Operating activities:
     Depreciation and amortization                                                    991                982
     Gain on Sale of Property, Plant and Equipment                                      -               (803)
     Provision for bad debts                                                           (3)                32
     Deferred income taxes                                                             34               (163)
     Change in assets and liabilities:
       Decrease in trade accounts and other receivables                             1,485                381
       Decrease (increase) in inventories                                             114               (751)
       Decrease (increase) in other assets                                             52               (100)
       Increase in accounts payable and accrued expenses                              806                 86
       Decrease in income taxes                                                      (143)              (101)
       Increase in other liabilities                                                  261                124
                                                                                ---------         ----------
       Net cash provided by (used in) operating activities                     $    1,794        $      (600)
                                                                                =========         ==========
</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, 2002 AND 2001 AND JUNE 30, 2001
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

1.   The accompanying unaudited condensed consolidated financial statements have
     been prepared by Bontex, Inc. and its subsidiaries ("Bontex" or the
     "Company") in accordance with accounting principles generally accepted in
     the United States of America 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 accounting principles generally accepted in the United States of America
     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, 2001.

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,
                                                                             2002                  2001

<S>     <C>    <C>    <C>    <C>    <C>    <C>
          Finished goods                                                $       3,544        $        4,020
          Raw Materials                                                         1,230                 1,180
          Supplies                                                                690                   659
                                                                         ------------          ------------
          Inventories at FIFO and weighted average cost                         5,464                 5,859
          LIFO reserves                                                           316                   415
                                                                         ------------          ------------
                                                                        $       5,148        $        5,444
                                                                         ============          ============
</TABLE>

3.   Business segment information related to the North American and European
     operations follows:

<TABLE>
<CAPTION>

                                                          North
                                                        American         European
                                                       Operations       Operations     Eliminations     Consolidated
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Nine Months Ended March 31, 2002

Net Sales                                            $       11,416   $      18,550  $       (3,452)  $         26,514

Net Loss                                                       (967)           (750)            (87)           (1,803)
</TABLE>


                                        6

<PAGE>



                          BONTEX, INC. AND SUBSIDIARIES
    CONDENSED NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    MARCH 31, 2002 AND 2001 AND JUNE 30, 2001
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                          North
                                                        American         European
                                                       Operations       Operations     Eliminations     Consolidated
<S>                     <C> <C>
Nine Months Ended March 31, 2001

Net Sales                                            $       12,635   $      19,140  $         (303)  $         31,472

Net Income (Loss)                                             (307)              20                -             (287)
</TABLE>

4.   Net loss per share has been computed on the basis of the weighted average
     number of common shares outstanding during each period (1,572,824 shares).
     Diluted earnings per share is not presented because the effect of stock
     options is anti-dilutive.

5.   On January 15, 2002, the Company's Belgian subsidiary settled its tax
     dispute with the Belgian tax authority for a total amount of approximately
     $397,000 or 447,000 Euros. The Company had previously accrued a liability
     for these tax items totaling $239,000 or 250,000 Euros. The additional
     $158,000 or 197,000 Euros not previously accrued was recorded in December
     2001, as additional tax expense. During the quarter ended December 31,
     2001, the Company reversed related commissions to distributors which will
     not require payment as a result of this tax settlement.

     During fiscal year 2000, the Ministere Des Finances, the Belgian tax
     authority, completed an examination of Bontex S.A.'s, the Company's Belgian
     subsidiary, tax returns for 1997, 1998 and 1999 and extended the tax
     examination to 1995 and 1996 based on certain items. Bontex S.A. received
     notices of proposed tax adjustments to these tax returns. The proposed tax
     adjustments arise from items which are considered disallowed expenses by
     tax authorities, including commissions paid to certain distributors and
     clients, certain travel expenses and various smaller items including
     allowances for doubtful receivables and certain insurance premiums. The
     proposed tax adjustments by the Belgian authorities approximated $820,000.
     The Company believed, based in part on written opinion of external counsel,
     it had meritorious legal defenses to many of the claims and the Company
     intended to defend such claims. The Company's best estimate of the most
     likely amount payable for the foregoing tax matters was $239,000, (or
     250,000 Euros, the local reporting currency for Bontex SA) and accordingly,
     a provision for this amount was accrued at June 30, 2000.

6.   The Company has a loan and security agreement with Congress Financial
     Corporation/First Union providing for a secured credit facility and a term
     loan. This credit facility provides for a revolving loan in an amount up to
     $2 million, based on a lending formula that evaluates, among other items,
     the current accounts receivable and inventory of Bontex USA, which are
     pledged as collateral in addition to certain non-current assets. This
     credit facility also requires Bontex USA to maintain a specified adjusted
     tangible net worth. At March 31, 2002, Bontex USA was in compliance with
     the debt covenant ratio. The lending availability fluctuates daily, and at
     March 31, 2002, Bontex USA had $2.0 million available, all of which was
     borrowed under this credit facility and term loan. This credit facility
     with Congress expired in January 2002. Congress does not intend to renew
     its credit facility with the Company. Accordingly, the entire amount of the
     term loan portion of this debt, $567,000, is classified as current.
     Congress has provided a number of extensions to the Company. The current
     extension is to June 10, 2002, and management is currently working with
     Congress for a further extension. The Company is seeking to refinance these
     loans.

                                        7

<PAGE>



                          BONTEX, INC. AND SUBSIDIARIES
    CONDENSED NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    MARCH 31, 2002 AND 2001 AND JUNE 30, 2001
                                   (UNAUDITED)


7.   Included in other income for the nine months ended March 31, 2001, is a
     gain of $803,000 from the sale of Bontex, Inc.'s warehouse facility in
     Newark, New Jersey.

8.   The Company is the process of reviewing certain financial transactions at
     Bontex Srl, the Company's Italian subsidiary. In that regard, the Company's
     management has severed the employment of the prior general manager,
     administrative and an accounting employee, as well as suspending a
     financial advisor. The ultimate outcome and total amount of questionable
     transactions from this review are not determinable at this time. Although
     the Company does maintain insurance for such matters, there can be no
     assurance that such matters will be covered either in whole or in part
     under the policy. Additionally, the Company has retained legal counsel and
     forensic auditors as part of the process of investigating and addressing
     the above matter. As of May 10, 2002, certain former employees of Bontex,
     Srl had made offers, through legal counsel, to repay the Company for
     certain irregular items at Bontex, Srl. At this time, it is too early for
     the Company to make a reasonable estimate of the financial impact of these
     items. Management is seeking to determine the extent of such amounts that
     may exist for all related parties associated with this matter.


                                        8

<PAGE>



                                  BONTEX, INC.
            ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS
                        NINE MONTHS ENDED MARCH 31, 2002
                                   (UNAUDITED)


The Company's consolidated financial statements and notes to the consolidated
financial statements should be read as an integral part of this discussion.
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, without limitation,
statements about financing plans, cash flows, availability of capital, growth
opportunities, benefits from new technologies, financial condition, capital
expenditures, future results of operations or market conditions and involve
certain risks, uncertainties and assumptions. The words "estimate," "project,"
"intend," "expect," "believe," and similar expressions are intended to identify
forward-looking statements. These and other forward-looking statements are found
at various places throughout this report, and you are cautioned not to place
undue reliance on these forward-looking statements. These forward-looking
statements should, therefore, be considered in light of various relevant
factors. 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, excessive worldwide footwear inventories, a shrinking
U.S. domestic market for Bontex products, decreased sales to key customers,
increased competition from non-woven materials, the reduction of prices by
competitors, the increase in the relative price of Bontex's products due to
foreign currency devaluations, increased pulp and latex prices, capital
illiquidity, unexpected foreign tax liabilities, the impact of any unusual items
resulting from ongoing evaluations of the Company's business strategies,
decreases in the Company's borrowing base, trading of Bontex common stock at a
level where closing bid prices are too low to remain listed on the Nasdaq
SmallCap Market, increased funding requirements for the Company's pension plan,
inability to recover deferred tax assets, an inability by Bontex to renew its
current credit facilities or obtain alternative financing, a market shift in
demand from higher-quality products to more economical grade products with lower
profit margins, higher energy prices, and increased costs of complying with
environmental laws, and the impact of changes in political, economic or other
factors, legal and regulatory changes or other external factors over which the
Company has no control.

RESULTS OF OPERATIONS

The results of operations for the nine months ended March 31, 2002 reflect lower
operating results compared to the same period last year. During the three months
ended March 31, 2002 and 2001, the Company generated consolidated operating
losses of $473,000 and $102,000, respectively. The consolidated net loss for the
quarter ended March 31, 2002 was $500,000 or $0.32 per share as compared to the
prior year's third quarter net loss of $233,000 or $0.15 per share. For the nine
months ended March 31, 2002, operating losses increased from $535,000 to
$1,478,000, and consolidated net losses increased from $287,000 or $0.18 per
share to a consolidated net loss of $1,803,000 or $1.15 per share. The increase
in operating losses as compared to last year is mainly due to the decrease in
consolidated sales and the resulting decrease in gross profits. The increase in
net losses is also impacted by the one-time net gain after the impact of taxes
of $482,000 or $0.31 per share from the sale in the prior year of the Company's
warehouse facility in Newark, New Jersey. An additional item contributing to the
increase in net losses, the Company has settled its tax dispute with the Belgian
tax authorities resulting in additional tax expense during the nine months ended
March 31, 2002 of approximately $158,000, as described in further detail in note
5 to the financial statements and in Item 1 of part 2 below.

Consolidated net sales decreased $2.5 million or almost 22 percent to $9.1
million for the third quarter ended March 31, 2002, compared to consolidated net
sales of $11.6 million for the third quarter ended March 31, 2001. For the nine
months ended March 31, 2002, consolidated net sales decreased $5.0 million or
15.8 percent to $26.5 million. The Company's sales declines are a result of two
primary factors. One is lower sales to Asia and South America, which continue to
experience economic problems. The other is lower sales to certain Asian
contractors manufacturing branded footwear for export to the U.S. domestic
retailers who have reduced orders because of

                                        9

<PAGE>



economic uncertainty in the U.S. market, particularly after the September 11,
2001 terrorist attacks. However, we have seen during the last part of March
orders return to more normal levels, but too late to have any material impact on
sales and operating income for the third quarter. Based on the recent increase
in orders, we expect operating results in the fourth fiscal quarter to be better
than the first three quarters.

Gross profit as a percentage of net sales (i.e., Gross Margin) for the third
quarter of fiscal year 2002 declined from 23.0 percent to 21.7 percent, and for
the nine months ended March 31, 2002, the gross profit percentage decreased from
23.2 percent to 22.0 percent. The overall decrease in profit margins is
primarily attributed to lower sales volumes. As with all manufacturers, the cost
structure of Bontex products is directly impacted by volumes, with lower volumes
resulting in higher per unit costs. Overall costs of raw materials remained
relatively stable.

The Company attempts to minimize the effects of cyclical changes in raw material
costs through purchase contracts, forward purchasing and the application of
technologies to improve process efficiencies. Principal cost factors include the
cost of raw materials, including pulp and latex, two primary raw materials for
the Company's products. The Company has entered into a number of purchase
commitments for certain commodities, including pulp, latex and natural gas, for
future manufacturing requirements in an effort to manage the effects of market
price fluctuations and to secure adequate raw material supplies. However, there
is no guarantee that these purchase commitments will result in lower purchase
prices for the Company. To the extent that these purchase commitments obligate
the Company to purchase pulp or latex at higher than the prevailing market
prices, they could result in higher costs.

Compared to the third quarter and nine months last year, Selling General &
Administrative (SG&A) expenses decreased slightly, although SG&A expenses
increased as a percent of net sales from 24.9 percent to 27.6 percent for the
nine months. The decrease in SG&A spending is mainly due to cost control efforts
and lower sales. The increase as a percentage of net sales is due to sales
decreasing at a higher rate than the overall decrease in SG&A expenses.

For the quarter and nine months ended March 31, 2002, interest expense decreased
$45,000 and $95,000, respectively. The decrease in interest expense is mainly
due to overall reduction in debt and lower interest rates in Europe.

Other comprehensive income (loss), which consists of foreign currency
translation adjustments, totaled $101,000 for the nine months ended March 31,
2002, compared to a loss of ($297,000) for the nine months ended March 31, 2001.
Changes in this account are the result of the fluctuation of the Euro versus the
US Dollar.

Income tax benefit during the quarter ended March 31, 2002 was $202,000, an
increase of $88,000 compared to the same period last year. This increase in
income tax benefit is due to the increase in losses in European operations. For
the nine months ended March 31, 2002, income tax benefit totaled $299,000 as
compared to the income tax benefit of $124,000 last year. The income tax benefit
would be higher due to higher operating losses, but these amounts reflects
certain tax adjustments totaling $158,000 relating to the settlement of the
Belgian tax issues, as described in Note 5 above and Item 3 below. This year's
tax provision represents the net tax provision for Bontex Belgium and Italy.
Because of the recurring losses at Bontex USA over the past several years,
deferred tax assets arising from the Company's operating losses are not being
recorded at Bontex USA.

As previously disclosed, management has implemented a strategic plan to increase
sales and profitability. Indications since January are that progress has been
made. The sales break even point for U. S. operations has been reduced as
compared to prior years. Plans for increasing core footwear sales are well
underway, and are expected to generate improved results in the upcoming fiscal
year.


                                       10

<PAGE>



FINANCIAL CONDITION

Consolidated stockholders' equity decreased $1,702,000 from June 30, 2001, and
totaled $5.3 million at the end of March 31, 2002. Financial ratios at March 31,
2002 generally decreased from June 30, 2001 because of the negative operating
results. Cash increased by $453,000 because of the timing of customer cash
receipts.

Trade accounts receivable decreased by $1.2 million to $9.5 million, primarily
because of the overall decrease in net sales. The $296,000 decrease in
inventories to $5.1 million is mainly because of lower raw material and finished
goods inventories resulting from lower sales.

Other current assets increased $136,000 to $302,000 at March 31, 2002 from June
30, 2001, primarily due to prepaid insurance for fiscal year 2002. The level of
other current assets is considered comparable with last year's March 31, 2001
balance of $253,000.

The $215,000 increase in net property, plant and equipment is due to fixed asset
additions, which were partially offset by depreciation for the nine-month
period. These fixed asset additions, primarily at the Company's European
manufacturing subsidiaries in Belgium and Italy, relate largely to certain
manufacturing and lamination equipment to improve production capabilities and
efficiencies. Additionally, approximately $480,000 of these fixed asset
additions were structured as capital leases.

Accounts payable, accrued expenses and short-term borrowings at March 31, 2002
increased $218,000 as compared to June 30, 2001. The current and long term
portions of long-term debt and capital lease obligations increased because of a
new mortgage on the Company's facility in Italy and capital additions at Bontex
SA in Belgium.

The Company has a loan and security agreement with Congress Financial
Corporation/First Union providing for a secured credit facility and a term loan
(the "Debt"). This credit facility provided for a revolving loan in an amount up
to $4 million, based on a lending formula that evaluates, among other items, the
current accounts receivable and inventory of Bontex USA, which are pledged as
collateral in addition to certain non-current assets. These credit facilities
also requires Bontex USA to maintain a specified adjusted tangible net worth. At
March 31, 2002, Bontex USA was in compliance with the debt covenant ratio. The
lending availability fluctuates daily, and at March 31, 2002, Bontex USA had
$2.0 million available, all of which was borrowed under this credit facility and
term loan.

This credit facility with Congress expired in January 2002. Congress does not
intend to renew its credit facility with the Company. Accordingly, the entire
amount of the term loan portion of this debt, $567,000, is classified as
current. Congress has provided a number of extensions to the Company. The
current extension is to June 10, 2002, and management is currently working with
Congress for a further extension. The Company is seeking to refinance these
loans

The Company has reduced the amount of indebtedness outstanding under the secured
credit facility and term loan from approximately $2.7 million as of June 30,
2001, to approximately $2.0 million as of March 31, 2002. As of March 31, 2002,
approximately $4.4 million of current assets, consisting of accounts receivable
and inventory, serve as collateral for the secured credit facility.
Additionally, all of the Company's other assets, current and non- current, serve
as the total collateral securing the term loan.

Under the Company's overall current financing and debt structure, the Company's
wholly-owned subsidiaries, Bontex SA (Belgium), Bontex Italia Srl and Bontex
Hong Kong, each have separate credit facilities with no cross- collateralization
of assets.


                                       11

<PAGE>



Management is focused on obtaining alternative financing to repay the Debt and
provide an ongoing credit facility sufficient to meet the Company's future
operating and capital requirements. Management is currently negotiating with
several potential lenders to obtain alterative financing. In addition, the
Company has retained an outside consulting firm to provide strategic assessment
and related advice.

If the Company is unable to refinance the Debt or is unable to pay its
indebtedness to Congress in full by the maturity date, it would cause a material
adverse impact on the Company's business, financial condition, liquidity and/or
results of operations.

The Company's common stock is listed on the Nasdaq SmallCap Market. A failure by
the Company to obtain alternative financing could result in a negative impact on
the trading of the Company's common stock and/or the Company's listing status on
the Nasdaq SmallCap Market.

The Nasdaq Stock Market, Inc. ("Nasdaq") has notified the Company that on March
5, 2002, the price of the Company's stock had closed for the previous thirty
consecutive trading days below the minimum $1.00 per share requirement under its
Marketplace Rules. Consequently, the Company has 180 calendar days (until
September 3, 2002) to demonstrate compliance with this minimum bid price
requirement. If at any time before the end of such period, the Company's common
stock has a closing bid price of $1.00 or more for ten consecutive trading days,
the Company will be in compliance with the minimum bid price requirement. In
addition, among other listing requirements, the Company must maintain a minimum
market value of the public float of its common stock of at least $1 million. The
Company's public float has been below this $1 million requirement.

If the Company's common stock is delisted from the Nasdaq SmallCap Market, any
trading in the common stock would thereafter be conducted in the
over-the-counter market in what is commonly referred to as the "pink sheets."
Consequently, the liquidity of the Company's common stock would likely be
impaired, not only in the number of shares which could be bought and sold, but
also through delays in the timing of transactions and a reduction in securities
analyst and news media coverage, if any, that the Company receives. As a result,
holders of the Company's common stock might find it more difficult to trade
their common stock promptly and at reasonable prices or to obtain accurate
quotations as to its price.

FINANCIAL INSTRUMENTS

The Company uses various 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. As is customary
for these types of instruments, the Company does not require collateral or other
security from other parties to these instruments. However, because the Company
manages exposure to credit risk through credit approvals, credit limits and
monitoring procedures, the Company believes that reserves for losses are
adequate.

The Company has periodically used derivative instruments for the purpose of
hedging commodity and interest rate exposures. As a policy, the Company does not
engage in speculative transactions, nor does the Company hold or issue financial
instruments for trading purposes.


PRODUCT DEVELOPMENT

The Company has a strategy to locate new technologies and bring them to the
marketplace, but it is not possible to predict their level of sales potential or
profitability at this time. Bontex has recently developed several new innovative
products for footwear and nonfootwear applications. During the past two
quarters, the Company has generated sales of approximately $200,000 from one of
these new products. Also, in February, 2002 the Company made a successful trial
run of another new product and has received another two purchase orders for
additional larger trial runs.

                                       12

<PAGE>



RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the FASB issued SFAS No. 141, "Business Combinations", and SFAS
No. 142, "Goodwill and Other Intangible Assets." Statement 141 specifies
criteria intangibles assets acquired in a purchase method business combination
must meet to be recognized and reported apart from goodwill. Statement 142 will
require that goodwill and intangible assets with indefinite useful lives no
longer be amortized, but tested for impairment at least annually in accordance
with the provisions of Statement 142. Statement 142 will also require that
intangible assets with definite useful lives be amortized over their respective
estimated useful lives to their residual values, and reviewed for impairment in
accordance with Statement 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of." The Company is required to
adopt the provisions of Statement 141 immediately, and Statement 142 is
effective July 1, 2002. The adoption of Statement 141 did not have a material
impact on the Company's results of operations, financial position or cash flows,
and the adoption of Statement 142 is not expected to have a material impact on
the Company's results of operations, financial position or cash flows.

In August 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations, which addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. The standard applies to legal obligations associated
with the retirement of long-lived assets that result from the acquisition,
construction, development and (or) normal use of the asset.

SFAS No. 143 requires that the fair value of a liability for an asset retirement
obligation be recognized in the period in which it is incurred if a reasonable
estimate of fair value can be made. The fair value of the liability is added to
the carrying amount of the associated asset and this additional carrying amount
is depreciated over the life of the asset. The liability is accreted at the end
of each period through charges to operating expense. If the obligation is
settled for other than the carrying amount of the liability, and entity would
recognize a gain or loss on settlement.

SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. The
adoption of SFAS No. 143 is not expected to have a material effect on the
financial position, results of operations or liquidity of the Company.

In October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which addresses financial accounting and
reporting for the impairment or disposal of long-lived assets. SFAS No. 144
supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long- Lived Assets to be Disposed of., however, it retains many of the
fundamental provisions of that Statement.

SFAS No. 144 also supersedes the accounting and reporting provisions of APB
Opinion No. 30, Reporting the Results of Operations-Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions, for the disposal of a segment of a business.
However, it retains the requirement in APB No. 30 to report separately
discontinued operations and extends that reporting to a component of an entity
that either ; has been disposed of (by sale, abandonment, or in a distribution
to owners) or is classified as held for sale. By broadening the presentation of
discontinued operations to include more disposal transactions, the FASB has
enhanced management's ability to provide information that helps the financial
statement users to assess the effects of a disposal transaction on the ongoing
operations of an entity.

SFAS No. 144 is effective for fiscal years beginning after December 15, 2001,
and interim periods within those fiscal years. Early application is encouraged.
The provisions of SFAS No. 144 generally are to be applied prospectively. The
adoption of SFAS No. 144 is not expected to have a material effect on the
financial position, results of operations or liquidity of the Company.


                                       13

<PAGE>



ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to certain risks related to interest rates, foreign
currency and commodity positions. Market risk is defined as the risk of loss
arising from adverse changes in market rates and prices. The following
disclosures provide certain forward-looking data concerning potential exposures
to market risk. In general, the Company's policy is not to speculate on interest
rates, foreign currencies and commodities in the markets.

There is no expected material foreign exchange risk for the Company's debt, as
these amounts are denominated in the local operating currencies of the
respective operations.

The table below provides information about the Company's financial instruments
that are sensitive to changes in interest rates. For debt obligations, the table
presents principal cash flows and related weighted average interest rates by
expected maturity dates.

Financial Instruments held for other than trading purposes at March 31, 2002
(dollars in thousands):

<TABLE>
<CAPTION>


                             EXPECTED MATURITY DATE

                                                                                       There                  Fair
                               2002         2003        2004       2005       2006    - after      Total      Value

<S>     <C>    <C>    <C>    <C>    <C>    <C>
LIABILITIES
Long-term debt
     Fixed Rate             $     488   $     558   $     378         -          -          -    $  1,424    $ 1,355
     Average interest rate       5.16%       5.18%       5.32%        -          -          -        5.21%

     Variable Rate          $     607   $      40   $      40   $    40   $     40   $     62    $    829    $   829
     Average Interest Rate       5.69%       4.91%       4.91%     4.91%      4.91%      4.91%       4.91%

</TABLE>


At March 31, 2002, the Company had no outstanding interest rate swap agreements.
Therefore, approximately $8.9 million of variable rate debt is subject to the
risk of interest rate changes. Additionally, approximately $8.9 million of the
Company's debt is denominated in Euro, and because the Euro is the operating
currency for the Company's wholly-owned subsidiaries for which the debt
pertains, this debt is not considered subject to the market risk associated with
foreign currencies. The above market risk sensitivity analysis does not fully
reflect the potential net market risk exposure, because other market risk
exposures may exist in other transactions.




                                       14

<PAGE>



                           PART II. OTHER INFORMATION

                                  BONTEX, INC.
                                    FORM 10-Q
                    FOR THE NINE MONTHS ENDED MARCH 31, 2002

ITEM 1.           LEGAL PROCEEDINGS

TAX

On January 15, 2002, the Company's Belgian subsidiary settled its tax dispute
with the Belgian tax authority for a total amount of approximately $397,000 or
447,000 Euros. The Company had previously accrued a liability for these tax
items totaling $239,000 or 250,000 Euros. The additional $158,000 or 197,000
Euros not previously accrued was recorded in December 2001, as additional tax
expense. During the quarter ended December 31, 2001, the Company reversed
related commissions to distributors which will not require payment as a result
of this tax settlement.

During fiscal year 2000, the Ministere Des Finances, the Belgian tax authority,
completed an examination of Bontex S.A.'s, the Company's Belgian subsidiary, tax
returns for 1997, 1998 and 1999 and extended the tax examination to 1995 and
1996 based on certain items. Bontex S.A. received notices of proposed tax
adjustments to these tax returns. The proposed tax adjustments arise from items
which are considered disallowed expenses by tax authorities, including
commissions paid to certain distributors and clients, certain travel expenses
and various smaller items including allowances for doubtful receivables and
certain insurance premiums. The proposed tax adjustments by the Belgian
authorities approximated $820,000. The Company believed, based in part on
written opinion of external counsel, it had meritorious legal defenses to many
of the claims and the Company intended to defend such claims. The Company's best
estimate of the most likely amount payable for the foregoing tax matters was
$239,000, (or 250,000 Euros, the local reporting currency for Bontex SA) and
accordingly, a provision for this amount was accrued at June 30, 2000.

ENVIRONMENTAL

Bontex USA received a renewal of its 5-year wastewater discharge permit on April
2, 2001. The new permit required the Company to expand its wastewater treatment
facility to increase the capacity of its equalization tank. The Company
completed this expansion during December 2001. Prior to receiving the new
permit, the Company had received a Notice of Violation (NOV) from the Virginia
Department of Environmental Quality (DEQ). In general, the DEQ stated in the NOV
that it had reason to believe that the Company's plant in Buena Vista, Virginia,
may be out of compliance with whole effluent toxic limits. In addition, the
Company has received two other NOVs from the DEQ. The first NOV alleges that in
June 2001, the Company's plant in Buena Vista, Virginia discharged wastewater
solids in violation of Virginia law and/or the Company's wastewater discharge
permit. The second NOV alleges, among other things, that the Company's plant in
Buena Vista, Virginia in November and December 2001, had experienced a series of
unusual discharges and the Company had not provided the DEQ advanced notice for
the use of ammonia in the treatment process. The Company submitted detailed
information to the DEQ relating to the Notices of Violation. At this stage, it
is too early for the Company to make a reasonable estimate of the potential
aggregate financial impact, if any, of these Notices of Violation.


                                       15

<PAGE>


OTHER

The Company is the process of reviewing certain financial transactions at Bontex
Srl, the Company's Italian subsidiary. In that regard, the Company's management
has severed the employment of the prior general manager, administrative and an
accounting employee, as well as suspending a financial advisor. The ultimate
outcome and total amount of questionable transactions from this review are not
determinable at this time. Although the Company does maintain insurance for such
matters, there can be no assurance that such matters will be covered either in
whole or in part under the policy. Additionally, the Company has retained legal
counsel and forensic auditors as part of the process of investigating and
addressing the above matter.

As of May 10, 2002, certain former employees of Bontex, Srl had made offers,
through legal counsel, to repay the Company for certain irregular items at
Bontex, Srl. At this time, it is too early for the Company to make a reasonable
estimate of the financial impact of these items. Management is seeking to
determine the extent of such amounts that may exist for all related parties
associated with this matter.

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

                  None.


ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

                  (a)      Exhibits:

                           Number           Description

                           10 (xii)         Second Amendment to Loan
                                            Modification, Reaffirmation and
                                            Forbearance Agreement dated May 10,
                                            2002, by and between Congress
                                            Financial Corporation and Bontex,
                                            Inc.


                  (b)      Reports on Form 8-K:

                           Form 8-K filed April 22, 2002, reporting the
                           notification from Congress Financial Corporation
                           regarding the extension of the secured term loan and
                           credit facility with Bontex, Inc. reported under Item
                           5.


                                       16

<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 15, 2002                            /s/James C. Kostelni
-------------------                         ---------------------------------
        (Date)                              James C. Kostelni
                                            Chairman of the Board
                                            and President

     May 15, 2002                           /s/Charles W. J. Kostelni
--------------------                        ---------------------------------
        (Date)                              Charles W. J. Kostelni
                                            Corporate Controller
                                            and Secretary


                                       17
<PAGE>

                                  EXHIBIT INDEX

         Number            Description

         10  (xii)         Second Amendment to Loan Modification,
                           Reaffirmation and Forbearance Agreement dated May 10,
                           2002, by and between Congress Financial Corporation
                           and Bontex, Inc.









                                       18