FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



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


For the quarterly period ended September 30, 1998
Commission file number 1-11438
                                WORLDTEX, INC.
             (Exact name of registrant as specified in its charter)



          Delaware                                            56-1789271
  (State or other jurisdiction of                          (I.R.S. Employer
  incorporation or organization)                          Identification No.)

212 12th Avenue, N.E., Hickory, North Carolina                   28601
  (Address of principal executive offices)                    (Zip Code)

                                 (828) 328-5381
              (Registrant's telephone number, including area code)


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  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 number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date:


           Date                     Class                 Shares Outstanding
    ------------------           ------------             ------------------
    September 30, 1998           Common Stock                 14,271,171

<PAGE>

                                 WORLDTEX, INC.

                                     INDEX
                                     -----



                                                                     PAGE NUMBER
                                                                     -----------

PART I - Financial Information

      Consolidated Condensed Balance Sheets at September
      30, 1998 and December 31, 1997                                      1

      Consolidated Condensed Statements of Income for the
      Nine Months and Three Months Ended September 30, 1998
      and 1997                                                            2

      Consolidated Condensed Statements of Cash Flows for
      the Nine Months Ended September 30, 1998 and 1997                   3

      Notes to Consolidated Condensed Financial Statements           4 - 11

      Management's Discussion and Analysis of Financial
      Condition and Results of Operations                           12 - 15


PART II - Other Information                                              16

<PAGE>

                                 WORLDTEX, INC.
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                             (Dollars in thousands)
<TABLE>
<CAPTION>
                                                      September 30, December 31,
                                                           1998         1997
                                                      ------------- ------------
                        ASSETS                          (Unaudited)
<S>                                                   <C>            <C>
Current assets:
   Cash                                                   $16,526       14,872
   Accounts and notes receivable, less allowance for
      doubtful accounts of $1,812 in 1998 and $2,085
      in 1997                                              46,149       46,320
   Inventories:
       Raw materials                                       16,168       15,401
       Work-in-process                                     14,534       13,976
       Finished goods                                      25,178       24,823
                                                         --------     --------
       Total inventories                                   55,880       54,200

   Prepaid expenses and other current assets                2,435        3,026
                                                         --------     --------
       Total current assets                               120,990      118,418

   Property, plant and equipment, at cost:
       Land                                                 2,966        2,820
       Buildings and leasehold improvements                36,700       34,172
       Machinery and equipment                            110,792       99,083
                                                         --------     --------
                                                          150,458      136,075
       Less accumulated depreciation and 
         amortization                                      42,077       36,915
                                                         --------     --------
       Property, plant and equipment - net                108,381       99,160

   Other assets                                            12,159       11,946
   Cost in excess of net assets of acquired
    businesses, net of accumulated amortization of
    $9,483 in 1998 and $7,600 in 1997                      81,506       82,915
                                                         --------     --------  
                                                         $323,036      312,439
                                                         ========      =======
                LIABILITIES AND STOCKHOLDERS' EQUITY
   Current liabilities:
    Short-term borrowings                                 $ 6,776        1,819
    Current installments of long-term debt                    612          620
    Accounts and notes payable - trade and                 
       other liabilities                                   30,179       28,236
    Income taxes payable                                    1,884            -
                                                          -------      -------
       Total current liabilities                           39,451       30,675

   Long-term debt
                                                          186,079      185,780
   Other long-term liabilities                              2,263        2,547
   Deferred income taxes                                   14,505       15,935
                                                          -------      -------
       Total liabilities                                  242,298      234,937

   Stockholders' equity:
    Preferred stock                                             -            -
    Common stock                                              147          147
    Paid-in capital                                        30,084       30,059
    Retained earnings                                      63,904       62,067
    Accumulated other comprehensive income                (11,048)     (13,273)
    Treasury stock, at cost                                (2,349)      (1,498)
                                                         --------     --------
       Total stockholders' equity                          80,738       77,502
   Commitments and contingencies                                -            -
                                                         --------     --------
                                                         $323,036      312,439
                                                         ========      =======
</TABLE>

    See accompanying notes to consolidated condensed financial statements.

<PAGE>

                                 WORLDTEX, INC.
                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
           (Dollars and shares in thousands except per share amounts)
                                    UNAUDITED

<TABLE>
<CAPTION>
                                    Nine Months Ended      Three Months Ended
                                       September 30,           September 30,
                                       1998     1997           1998     1997
                                       ----     ----           ----     ----

<S>                                  <C>        <C>            <C>       <C>   
Net sales                            $195,084   148,350        59,801    45,552
Cost of goods sold                    159,174   122,040        50,761    37,428
                                     --------  --------      --------  --------


   Gross profit                        35,910    26,310         9,040     8,124
Selling & administration expense       18,758    11,688         5,676     3,634
                                     --------  --------      --------  --------


   Operating profit                   17,152     14,622         3,364     4,490
Interest expense                      14,255      4,417         4,824     1,450
Other income (expense) - net             255         30           (90)     (129)
                                     --------  --------      --------  --------


   Income (loss) before income taxes   3,152     10,235        (1,550)    2,911
Provision for income taxes             1,314      3,492          (489)      863
                                     --------  --------      --------  --------


   Net income (loss)                 $ 1,838      6,743        (1,061)    2,048
                                     ========  ========      ========  ========

Net income (loss) per share
   Basic                             $   0.13      0.47         (0.07)     0.14
                                     ========  ========      ========  ========
   Diluted                           $   0.13      0.46         (0.07)     0.14
                                     ========  ========      ========  ========


Weighted average shares outstanding
   Basic                               14,401    14,417        14,341    14,429
                                     ========  ========      ========  ========
   Diluted                             14,642    14,809        14,466    14,749
                                     ========  ========      ========  ========

</TABLE>














     See accompanying notes to consolidated condensed financial statements.

<PAGE>

                                 WORLDTEX, INC.
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)
                                    UNAUDITED
<TABLE>
<CAPTION>


                                                           Nine Months Ended
                                                              September 30,
                                                            1998      1997
                                                            ----      ----
<S>                                                       <C>       <C>
Cash flows from operating activities:
Net income                                                $ 1,838    6,743
  Adjustments to reconcile net income to net
    cash provided by operating activities:
     Depreciation and amortization                          7,202    4,719
     Provision for losses on accounts receivable              399      167
     Deferred income taxes                                 (2,105)     183
     Change in assets and liabilities:
        Accounts and notes receivable                        (387)  (3,264)
        Inventories                                        (1,470)  (3,777)
        Prepaid expenses and other current assets             301       43
        Accounts and notes payable -
          trade and other current liabilities               2,518   (2,318)
        Income taxes payable                                1,964      209
                                                         -------- --------

        Net cash provided by
          operating activities                             10,260    2,705
                                                         -------- --------

Cash flows from investing activities:
  Capital expenditures                                    (14,970)  (5,826)
  Other investing activities                                   68      997
                                                         -------- --------

     Net cash used in investing activities                (14,902)  (4,829)
                                                         -------- --------

Cash flows from financing activities:
  Borrowings under line of credit arrangements              7,725    3,180
  Payments under line of credit arrangements               (1,884)  (2,395)
  Borrowings under revolving credit facility                    -   80,140
  Payments under revolving credit facility                      -  (73,500)
  Stock (purchased) issued                                   (825)     113
  Other financing activities                                 (331)  (1,108)
                                                         -------- --------
     Net cash provided by financing activities              4,685    6,430   
                                                         -------- --------
     Effects of exchange rate changes on cash               1,611    2,012

     Net increase in cash                                   1,654    6,318
Cash at beginning of year                                  14,872    2,117
                                                         -------- --------
Cash at end of period                                    $ 16,526    8,435
                                                         ======== ========

Supplemental  disclosure of cash flow  information:
  Cash paid during the period for:
     Interest                                            $ 10,606    5,110   
                                                         ======== ========
     Income taxes                                        $    584    4,619
                                                         ======== ========
</TABLE>


     See accompanying notes to consolidated condensed financial statements.

<PAGE>

                                 WORLDTEX, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                    UNAUDITED

Note 1 -- Basis of Presentation

     In the opinion of the  Company,  the  accompanying  unaudited  consolidated
condensed  financial  statements  contain all  adjustments  (consisting  of only
normal recurring  accruals)  necessary to present fairly the financial  position
and  results of  operations  for the  interim  periods  reported  hereon.  It is
suggested  that these  consolidated  condensed  financial  statements be read in
conjunction  with the  consolidated  financial  statements and the notes thereto
included in the Company's  annual report for the fiscal year ended  December 31,
1997.  The December 31, 1997 amounts  included in the financial  statements  are
derived from December 31, 1997 audited financial statements and notes thereto.

Note 2 -- Comprehensive Income

     The Company adopted  Statement of Financial  Accounting  Standards No. 130,
Reporting  Comprehensive  Income,  effective  January 1, 1998.  Foreign currency
translation  adjustments  for the nine months ended  September 30, 1998 and 1997
were  an  increase  of  $2,225  and a  decrease  of  $10,745,  respectively,  to
comprehensive  income.  Foreign currency  translation  adjustments for the three
months  ended  September  30,  1998 and 1997 were an  increase  of $3,609  and a
decrease of $1,307,  respective, to comprehensive income. No other comprehensive
income items were recorded by the Company in 1998 or 1997.  Comprehensive income
for the nine months and three  months  ended  September  30, 1998 was $4,063 and
$2,548, respectively.  Comprehensive income (loss) for the nine months and three
months ended September 30, 1997 was ($4,002) and $741, respectively.

Note 3 -- Revolving Credit Facilities

     The Company has a revolving credit facility  providing for borrowings in an
aggregate  principal  amount up to $25,000  with  interest at variable  interest
rates.  The credit  facility  terminates and borrowings  thereunder  will be due
December 1, 2002. No loans were  outstanding at September 30, 1998. At September
30, 1998,  the Company was not in compliance  with certain  financial  covenants
relating to the  revolving  credit  facility.  The lenders  under the  revolving
credit facility have waived such noncompliance.

Note 4 -- Supplemental Consolidating Financial Information

     The $175,000  Senior Notes are guaranteed by each of the U.S.  subsidiaries
of the Company,  which consist of Regal Manufacturing  Company,  Inc., Willcox &
Gibbs Filix of Delaware,  Inc., Regal Yarns of Argentina,  Inc., WTX Colombia I,
Inc., WTX Colombia II, Inc., Elastic Corporation of America,  Inc., and Elastex,
Inc. The guarantor subsidiaries are wholly owned subsidiaries of the Company and
the  guarantees  are full,  unconditional  and joint and  several.  There are no
restrictions on the ability of the guarantor  subsidiaries to make distributions
to the Company,  except those generally  applicable  under relevant  corporation
laws.

             Notes to consolidated condensed financial statements.

<PAGE>

Separate  financial  statements  of each  guarantor  subsidiary  have  not  been
presented  because  management  has  determined  that they are not  material  to
investors.  The  following  pages  include  summarized  consolidating  financial
information for the Company,  segregating the parent, the guarantor subsidiaries
and nonguarantor subsidiaries.



















































            Notes to consolidated condensed financial statements.

<PAGE>

                                 WORLDTEX, INC.
       Note 4 - Supplemental Consolidating Condensed Financial Information
                             (Dollars in thousands)

Consolidating Balance Sheet Information
September 30, 1998
<TABLE>
<CAPTION>
                                                 Guarantor    Non-Guarantor
                                                 Domestic        Foreign
                               Worldtex, Inc.   Subsidiaries  Subsidiaries  Elimination  Consolidated
                               --------------   ------------  ------------  -----------  ------------
<S>                            <C>              <C>           <C>           <C>          <C>
Assets
Current Assets
  Cash                               $ 2,833              39        13,654            -        16,526
  Accounts and notes 
    receivable, net                      195          21,522        24,432            -        46,149
  Inventories                              -          31,422        24,458            -        55,880
  Prepaid expenses and other           
    current assets                     1,701             116           618            -         2,435
                                   ---------       ---------     ---------    ---------     ---------
    Total current assets               4,729          53,099        63,162            -       120,990

Property, plant and equipment, 
  net                                    314          51,021        57,046            -       108,381
Other assets                           9,358           1,664         1,137            -        12,159
Cost in excess of net assets
  of acquired businesses, net             92          63,196        18,218            -        81,506
Intercompany investments             110,333               -             -     (110,333)            -
Intercompany advances                149,047          14,798             -     (163,845)            -
                                   ---------       ---------     ---------    ---------     ---------
                                    $273,873         183,778       139,563     (274,178)      323,036
                                   =========       =========     =========    =========     =========

Liabilities and Stockholders'
  Equity
Current Liabilities
  Short-term borrowings           $        -               -         6,776            -         6,776
  Current installments of         
    long-term debt                         -               -           612            -           612
  Accounts and notes
    payable-trade and                  
    other liabilities                  6,994           9,908        13,277            -        30,179
  Income taxes payable                   995          (2,019)        2,908            -         1,884
                                   ---------       ---------     ---------    ---------     ---------
    Total current liabilities          7,989           7,889        23,573            -        39,451

Long-term debt                       175,000           6,000         5,079            -       186,079
Other long-term liabilities                -               -         2,263            -         2,263
Deferred income taxes                 (4,652)          7,354        11,803            -        14,505
Intercompany payables                 14,798         127,471        21,576     (163,845)            0
                                   ---------       ---------     ---------    ---------     ---------
    Total liabilities                193,135         148,714        64,294     (163,845)      242,298
                                   ---------       ---------     ---------    ---------     ---------

Stockholders' equity
  Preferred stock                          -               -             -            -             -
  Common stock                           147              49        31,778      (31,827)          147
  Paid-in capital                     30,084          15,714             -      (15,714)       30,084
  Retained earnings                   63,904          19,301        54,539      (73,840)       63,904
  Accumulated other                  
    comprehensive income             (11,048)              -       (11,048)      11,048       (11,048)
  Less-Treasury stock, at cost        (2,349)              -             -            -        (2,349)
                                   ---------       ---------     ---------    ---------     ---------
    Total stockholders' equity        80,738          35,064        75,269     (110,333)       80,738
                                   ---------       ---------     ---------    ---------     ---------
                                    $273,873         183,778       139,563     (274,178)      323,036
                                   =========       =========     =========    =========     =========
</TABLE>


              Notes to consolidated condensed financial statements.

<PAGE>

                                 WORLDTEX, INC.
       Note 4 - Supplemental Consolidating Condensed Financial Information
                             (Dollars in thousands)

Consolidating Balance Sheet Information
December 31, 1997
<TABLE>
<CAPTION>
                                                 Guarantor    Non-Guarantor
                                                 Domestic        Foreign
                               Worldtex, Inc.   Subsidiaries  Subsidiaries  Elimination  Consolidated
                               --------------   ------------  ------------  -----------  ------------
<S>                            <C>              <C>           <C>           <C>          <C>    
Assets
Current Assets
  Cash                              $ 10,058             321         4,493            -        14,872
  Accounts and notes              
    receivable, net                        -          20,870        25,450            -        46,320
  Inventories                              -          28,251        25,949            -        54,200
  Prepaid expenses and other
    current assets                     1,402             511         1,113            -         3,026
                                   ---------       ---------     ---------    ---------     ---------
    Total current assets              11,460          49,953        57,005            -       118,418

Property, plant and equipment, net       230          46,977        51,953            -        99,160
Other assets                           9,480           1,495           971            -        11,946
Cost in excess of net assets
  of acquired businesses, net              -          64,619        18,296            -        82,915
Intercompany investments             102,246               -             -     (102,246)            -
Intercompany advances                146,164          14,798             -     (160,962)            -
                                   ---------       ---------     ---------    ---------     ---------
                                    $269,580         177,842       128,225     (263,208)      312,439
                                   =========       =========     =========    =========     =========


Liabilities and Stockholders'
  Equity
Current Liabilities
  Short-term borrowings           $        -               -         1,819            -         1,819
  Current installments of
    long-term debt                         -               -           620            -           620 
  Accounts and notes
    payable-trade and                  
    other liabilities                  3,600           8,529        16,107            -        28,236
  Income taxes payable                   567          (1,785)        1,218            -             0
                                   ---------       ---------     ---------    ---------     ---------
    Total current liabilities          4,167           6,744        19,764            -        30,675
                                   ---------       ---------     ---------    ---------     ---------

Long-term debt                       175,000           6,000         4,780            -       185,780
Other long-term liabilities                -               -         2,547            -         2,547
Deferred income taxes                 (1,887)          6,820        11,002            -        15,935
Intercompany payables                 14,798         123,577        22,587     (160,962)            -
                                   ---------       ---------     ---------    ---------     ---------
    Total liabilities                192,078         143,141        60,680     (160,962)      234,937
                                   ---------       ---------     ---------    ---------     ---------

Stockholders' equity
  Preferred stock                          -               -             -            -             -
  Common stock                           147              49        31,778      (31,827)          147
  Paid-in capital                     30,059          15,822             -      (15,822)       30,059
  Retained earnings                   62,067          18,830        49,040      (67,870)       62,067
 Accumulated other                   
   comprehensive income              (13,273)              -       (13,273)      13,273       (13,273)
  Less-Treasury stock, at cost        (1,498)              -             -            -        (1,498)
                                   ---------       ---------     ---------    ---------     ---------
    Total stockholders' equity        77,502          34,701        67,545     (102,246)       77,502
                                   ---------       ---------     ---------    ---------     ---------
                                    $269,580         177,842       128,225     (263,208)      312,439
                                   =========       =========     =========    =========     =========

</TABLE>

            Notes to consolidated condensed financial statements.



<PAGE>
                                WORLDTEX, INC.
     Note 4 - Supplemental Consolidating Condensed Financial Information
                            (Dollars in thousands)

<TABLE>
<CAPTION>
Consolidating Statements of Income
Information
Nine Months Ended September 30, 1998            Guarantor    Non-Guarantor
                                                 Domestic        Foreign
                              Worldtex, Inc.   Subsidiaries  Subsidiaries  Elimination  Consolidated
                              --------------   ------------  ------------  -----------  ------------

<S>                           <C>              <C>           <C>           <C>          <C>    
Net sales                            $     -         113,057        94,515      (12,488)     195,084

Cost of goods sold                         -          95,757        75,905      (12,488)     159,174
                                     -------         -------        ------     --------      -------

  Gross profit                             -          17,300        18,610            -       35,910

Selling and administrative 
  expense                              2,429           9,057         7,272            -       18,758
                                     -------         -------        ------      -------      -------

  Operating profit (loss)             (2,429)          8,243        11,338            -       17,152

Interest expense                      13,026             438           791            -       14,255
Intercompany interest expense         
  (income)                            (6,969)          5,966         1,003            -            -
Intercompany administrative           
  charges                             (2,171)          1,419           752            -            -
Other income (expense) - net             438              45          (228)           -          255
                                     -------         -------       -------      -------      -------

  Income (loss) before income         
    taxes                             (5,877)            465         8,564            -        3,152

Provision for income taxes            (1,746)             (6)        3,066            -        1,314

Undistributed earnings of 
  subsidiaries                         5,969               -             -       (5,969)           -
                                     -------         -------        ------     --------      -------

  Net income                         $ 1,838             471         5,498       (5,969)       1,838
                                     =======         =======        ======     ========      =======
</TABLE>
<TABLE>
<CAPTION>
Consolidating Statements of Income
Information
Nine Months Ended September 30, 1997            Guarantor    Non-Guarantor
                                                 Domestic        Foreign
                              Worldtex, Inc.   Subsidiaries  Subsidiaries  Elimination  Consolidated
                              --------------   ------------  ------------  -----------  ------------

<S>                           <C>              <C>            <C>          <C>          <C>    
Net sales                            $     -          52,948      105,980     (10,578)      148,350

Cost of goods sold                         -          47,346      85,272      (10,578)      122,040
                                     -------         -------       ------    --------       -------

  Gross profit                             -           5,602      20,708            -        26,310

Selling and administrative             1,876           2,508       7,304            -        11,688
                                     -------         -------       ------    --------       -------

  Operating profit (loss)             (1,876)          3,094       13,404           -        14,622

Interest expense                       3,575             158          684           -         4,417
Intercompany interest expense         
  (income)                            (1,919)            618        1,301           -             -
Intercompany administrative           
  charges                             (2,203)          1,452          751           -             -
Other income (expense) - net              89              49        (108)           -            30
                                     -------         -------       ------    --------       -------

  Income (loss) before income         
    taxes                             (1,240)            915       10,560           -        10,235                       

Provision for income taxes              (199)            278        3,413           -         3,492

Undistributed earnings of              7,784               -           -       (7,784)            -
                                     -------         -------       ------    --------       -------

  Net income                         $ 6,743             637       7,147       (7,784)        6,743
                                     =======         =======       ======    ========       =======
</TABLE>
              Notes to consolidated condensed financial statements.

<PAGE>
                                 WORLDTEX, INC.
       Note 4 - Supplemental Consolidating Condensed Financial Information
                             (Dollars in thousands)

<TABLE>
<CAPTION>
Consolidating Statements of Income
Information
Three Months Ended September 30, 1998           Guarantor    Non-Guarantor
                                                 Domestic        Foreign
                              Worldtex, Inc.   Subsidiaries  Subsidiaries  Elimination  Consolidated
                              --------------   ------------  ------------  -----------  ------------

<S>                           <C>              <C>           <C>           <C>          <C>    
Net sales                             $     -         36,553        28,231       (4,983)       59,801

Cost of goods sold                          -         32,587        23,157       (4,983)       50,761
                                      -------        -------        ------     --------       -------

  Gross profit                              -          3,966         5,074            -         9,040

Selling and administrative 
  expense                                 671          2,831         2,174            -         5,676
                                      -------        -------        ------      -------       -------

  Operating profit (loss)                (671)         1,135         2,900            -         3,364

Interest expense                        4,433            146           245            -         4,824
Intercompany interest expense 
  (income)                             (2,351)         2,052           299            -             -
Intercompany administrative 
  charges                                (716)           465           251            -             -
Other income (expense) - net               70             16          (176)           -           (90)
                                      -------        -------       -------      -------      --------
  Income (loss) before income 
    taxes                              (1,967)        (1,512)        1,929            -        (1,550)

Provision for income taxes               (545)          (651)          707            -          (489)

Undistributed earnings of 
  subsidiaries                            361              -             -         (361)            -
                                      -------        -------       -------      -------      --------

  Net income (loss)                   $(1,061)          (861)        1,222        (361)        (1,061)
                                      ========      ========       ======     ========       ========
</TABLE>
<TABLE>
<CAPTION>
Consolidating Statements of Income
Information
Three Months Ended September 30, 1997           Guarantor    Non-Guarantor
                                                 Domestic        Foreign
                              Worldtex, Inc.   Subsidiaries  Subsidiaries  Elimination  Consolidated
                              --------------   ------------  ------------  -----------  ------------

<S>                            <C>              <C>          <C>           <C>          <C>    

Net sales                            $     -          17,796        31,848       (4,092)       45,552

Cost of goods sold                         -          16,023        25,497       (4,092)       37,428
                                     -------         -------        ------     --------       -------

  Gross profit                             -           1,773         6,351            -         8,124

Selling and administrative 
  expense                                642             848         2,144            -         3,634
                                     -------         -------        ------      -------       -------

  Operating profit (loss)               (642)            925         4,207            -         4,490

Interest expense                       1,205              53           192            -         1,450
Intercompany interest expense 
  (income)                              (606)            176           430            -             -
Intercompany administrative 
  charges                               (428)            494           (66)           -             -
Other income (expense) - net              31              25          (185)           -          (129)
                                     -------         -------       -------      -------      --------

  Income (loss) before income 
    taxes                               (782)            227         3,466            -         2,911

Provision for income taxes              (103)             41           925            -           863

Undistributed earnings of 
  subsidiaries                         2,727               -             -       (2,727)            -
                                     -------         -------        ------     --------       -------

  Net income                         $ 2,048             186         2,541       (2,727)        2,048
                                     =======         =======        ======     ========       =======
</TABLE>
            Notes to consolidated condensed financial statements.
<PAGE>
                                 WORLDTEX, INC.
       Note 4 - Supplemental Consolidating Condensed Financial Information
                             (Dollars in thousands)
<TABLE>
<CAPTION>
Consolidating Statements of Cash Flows
Information
Nine  Months Ended September 30, 1998

                                                 Guarantor    Non-Guarantor
                                                  Domestic      Foreign
                               Worldtex, Inc.   Subsidiaries  Subsidiaries   Elimination  Consolidated
                               --------------   ------------  -------------  -----------  ------------
<S>                            <C>              <C>           <C>            <C>          <C>    
Cash flows from operating 
  activities:
Net income                            $ 1,838        471             5,498       (5,969)        1,838
Adjustments to reconcile net
 income to net
  Cash provided by operating 
    activities:
    Undistributed earnings of
      subsidiaries                     (5,969)         -                 -        5,969             -
    Depreciation and amortization          23      4,066             3,113            -         7,202
    Provision for losses on
      accounts Receivables                  -        229               170            -           399
    Deferred income taxes              (2,764)       533               126            -        (2,105)
    Change in assets and
      liabilities net of effects 
      of acquisitions:
       Accounts and notes receivable     (195)      (880)              688            -          (387)
       Inventories                          -     (3,172)            1,702            -        (1,470)
       Prepaid expenses and
         other current Assets            (576)       396               481            -           301
       Accounts and notes payable -
         Trade and other current 
           liabilities                  3,394      1,378            (2,254)           -         2,518
       Income taxes payable               704       (234)            1,494            -         1,964
                                     --------    -------           -------     --------       -------
         Net cash provided by
          (used in) operating 
          activities                   (3,545)     2,787            11,018            -        10,260
                                     --------    -------           -------     --------       -------

Cash flows from investing activities:
    Capital expenditures                 (107)    (6,795)           (8,068)           -       (14,970)
    Acquisitions, net of cash 
      acquired                         (2,209)         -                 -        2,209             -
    Other investing activities            216       (169)              (88)         109            68
                                     --------    -------           -------     --------       -------
      Net cash used in 
        investing activities           (2,100)    (6,964)           (8,156)       2,318       (14,902)
                                     --------    -------           -------     --------       -------

Cash flows from financing activities:
    Borrowings under line of
      credit arrangements                   -          -             7,725            -         7,725
    Payments under line of
      credit arrangements                   -          -            (1,884)           -        (1,884)
    Borrowings under
      revolving credit facility             -          -                 -            -             -
    Payments under revolving 
      credit facility                       -          -                 -            -             -
    Borrowings under long-term loans        -          -                 -            -             -
    (Payments) under long-term loans        -          -                 -            -             -
    Stock issued or (reacquired), net    (825)         -                 -            -          (825)
    Advances - affiliated companies    (2,885)     3,895              (930)         (80)            -
    Other financing activities            (94)         -               526         (763)         (331)
                                     --------    -------           -------     --------       -------
      Net cash provided by
        (used in) financing 
        activities                     (3,804)     3,895             5,437         (843)        4,685
                                     --------    -------           -------     --------       -------

Effects of exchange rate 
  changes on cash                       2,224          -               862       (1,475)        1,611
                                     --------    -------           -------     --------       -------
      Net increase (decrease)
        in cash                        (7,225)      (282)            9,161            -         1,654
                
Cash at beginning of year              10,058        321             4,493            -        14,872
                                     --------    -------           -------     --------       -------
Cash at end of period                 $ 2,833         39            13,654            -        16,526
                                     ========    =======           =======     ========       =======
</TABLE>

            Notes to consolidated condensed financial statements.

<PAGE>

                                 WORLDTEX, INC.
       Note 4 - Supplemental Consolidating Condensed Financial Information
                             (Dollars in thousands)

<TABLE>
<CAPTION>
Consolidating Statements of Cash Flows
Information
Nine  Months Ended September 30, 1997

                                                     Guarantor    Non-Guarantor
                                                      Domestic      Foreign
                                   Worldtex, Inc.   Subsidiaries  Subsidiaries  Elimination  Consolidated
                                   --------------   ------------  ------------  -----------  ------------

<S>                                <C>              <C>           <C>           <C>          <C>    
Cash flows from operating 
  activities:
Net income                            $ 6,743            637         7,147       (7,784)        6,743
Adjustments to reconcile net
 income to net
  Cash provided by operating 
    activities:
    Undistributed earnings of 
      subsidiaries                     (7,784)             -             -        7,784             -
    Depreciation and amortization          27          1,748         2,944            -         4,719
    Provision for losses on
      accounts Receivable                   -             40           127            -           167
    Deferred income taxes               1,659              3           303       (1,782)          183
    Change in assets and
      liabilities net of 
      effects of acquisitions:
       Accounts and notes  
         receivable                      (199)        (1,645)       (1,420)           -        (3,264)
       Inventories                          -         (1,756)       (2,021)           -        (3,777)
       Prepaid expenses and
         other current Assets            (117)           244           (84)           -            43
     Accounts and notes payable -
        Trade and other current 
          liabilities                    (455)         1,027        (2,890)           -        (2,318)

     Income taxes payable                 335             39          (165)           -           209
                                      -------        -------      --------      -------        ------
       Net cash provided by
         (used in) operating 
         activities                       209            337          3,941       (1,782)       2,705
                                      -------        -------      --------      -------        ------
         
Cash flows from investing activities:
  Capital expenditures                     (1)        (1,961)        (3,864)           -       (5,826)
  Acquisitions, net of cash 
    acquired                           10,721              -              -      (10,721)           -
  Other investing activities               96            887             14            -          997
                                      -------        -------        -------      -------       ------
    Net cash used in investing 
      activities                       10,816         (1,074)       (3,850)     (10,721)       (4,829)
                                      -------       --------       --------     --------       ------
Cash flows from financing activities:
  Borrowings under line of credit
    arrangements                            -              -         3,180            -         3,180
  Payments under line of credit
    arrangements                            -              -        (2,395)           -        (2,395)
  Borrowings under revolving 
    credit facility                    80,140             -             -            -        80,140
  Payments under revolving
    credit facility                   (73,500)             -             -            -       (73,500)
  Borrowings under long term loans          -              -             -            -             -
  (Payments) under long term loans          -              -             -            -             -    
  Stock issued or (reacquired), net       113              -             -            -           113             
  Advances - affiliated companies      (5,349)           654         5,850       (1,155)            -
  Other financing activities           (1,871)             -           204          559        (1,108)
                                     --------        -------       -------      -------       -------
    Net cash provided by (used in)
      financing activities               (467)           654         6,839         (596)        6,430
                                     --------        -------       -------      --------       ------
Effects of exchange rate changes 
  on cash                             (10,746)             -          (341)      13,099         2,012
                                     --------        -------      --------      -------        ------
    Net increase (decrease) 
      in cash                            (188)           (83)        6,589            -         6,318
Cash at beginning of year                 428            174         1,515            -         2,117
                                      -------        -------       -------      -------        ------
Cash at end of period                 $   240             91         8,104            -         8,435
                                      =======        =======       =======      =======        ======
</TABLE>
              Notes to consolidated condensed financial statements.

<PAGE>
                                 WORLDTEX, INC.
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS
---------------------

Sales for the nine months  ended  September  30,  1998 were  $195.1  million and
earnings were $1.8 million,  compared with sales of $148.4  million and earnings
of $6.7 million for the comparable period in 1997.  Diluted income per share was
$.13 for the 1998 nine month period  compared  with $.46 in 1997.  Sales for the
quarter  ended  September  30,  1998 were  $59.8  million  and net loss was $1.1
million,  compared  with sales of $45.6 million and net income of $2 million for
the comparable 1997 period.

The following table sets forth the percentages  which certain income and expense
items bear to net sales:

<TABLE>
<CAPTION>
                                  Nine Months Ended       Three Months Ended
                                    September 30,            September 30,
                                 1998         1997         1998         1997
                                 ----         ----         ----         ----
<S>                             <C>          <C>          <C>          <C>

Net sales                       100.0%       100.0%       100.0%       100.0%
                                ------       ------       ------       ------

Gross margin                     18.4%        17.7%        15.1%        17.8%

Selling and administration 
  expense                          9.6%        7.9%         9.5%          8.0%
                                 ------      ------       ------        ------

  Operating profit                8.8%         9.8%        5.6%          9.8%

Interest expense                  7.3%         3.0%         8.1%         3.1%

Other income - net                 .1%          .1%        (.1%)        (.3%)
                                ------       ------      -------      -------

Income before income taxes        1.6%         6.9%       (2.6%)         6.4%
                                ======       ======      =======      =======
</TABLE>

For the nine months ended  September 30, 1998,  sales increased by $46.7 million
or 31.5%  compared to the nine months ended  September 30, 1997. For the quarter
ended  September 30, 1998,  sales  increased by $14.2 million or 31.3%  compared
with the 1997 quarter.

Sales  from North  American  operations  increased  81.6% and 74.1% for the nine
months and the three  months  ended  September  30, 1998 from the  corresponding
period in 1997.  The sharp  increase in sales was primarily due to the inclusion
of the narrow  elastic  fabric  subsidiaries  acquired in the fourth  quarter of
1997. Excluding the contribution of these new subsidiaries, North American sales
for the nine  months  of 1998  were down  3.6%  compared  with the 1997  period,
principally due to overall weak demand by ladies' hosiery customers.

Sales from French  operations  decreased 14.4% and 12.6% for the nine months and
the three months ended September 30, 1998 from the corresponding period in 1997.
The changing

<PAGE>

                                 WORLDTEX, INC.
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

exchange  rate between the U.S.  dollar and the French franc  reduced the French
subsidiary sales by  approximately  3.9% for the nine months and increased sales
by  approximately  5.3% for the three months ended  September 30, 1998 (assuming
currency  translation  of 1998 sales at the rate  applicable  to 1997  results).
European sales were also affected by continuing  softness in the general textile
market in Europe.

Sales in the Company's South American operation  (including  intercompany sales)
increased 6.8% and 3.0% for the nine months and three months ended September 30,
1998 from the  corresponding  period in 1997. The reduced value of the Colombian
peso lowered South American sales by approximately  20.9% and 19.8% for the nine
months and three months ended September 30, 1998 (assuming currency  translation
of 1998 sales at the rate applicable to 1997 results).  The volume  increases in
South  America  reflect  the  continuing  efforts  to expand  production  in the
Company's lower cost operation.

Gross profit margins increased to 18.4% in the 1998 nine month period from 17.7%
in 1997,  primarily  because the Company's newly acquired narrow elastic fabrics
operations have traditionally produced higher margins than the Company's covered
elastic yarn  operations.  Selling and  administrative  expenses  increased as a
percentage of net sales to 9.6% from 7.9% for the nine months  ending  September
30, 1998  compared  with 1997,  primarily  because the fixed  component of these
expenses increased as a result of the recent acquisitions.

Interest  expense for the nine months and three months ended  September 30, 1998
increased  from  the  corresponding  periods  in 1997  due to the  $175  million
principal  amount  of the 9  5/8%  Senior  Notes  issued  December  1,  1997  in
connection  with  the  acquisitions  of  the  Company's  narrow  elastic  fabric
subsidiaries.

The Company had an effective  income tax rate of 41.7% for the nine months ended
September 30, 1998 compared to 34.1% for the same period in 1997.  This increase
resulted primarily due to the higher French corporate tax rate of 41.67% enacted
in the  fourth  quarter  of 1997 and a reduced  state tax  benefit  for  certain
unconsolidated operating losses.


LIQUIDITY;  CAPITAL RESOURCES
-----------------------------

The Company  meets both its  long-term and  short-term  liquidity  needs through
internally generated funds and outside borrowings.

Cash totaled $16.5 million at September 30, 1998, representing a net increase of
$1.6  million  for the  nine  months  then  ended.  Cash  flows  from  operating
activities  and from financing  activities  are the principal  indicators of the
Company's  liquidity.  During the first nine months of 1998,  $10.3  million was
generated in operating  activities  as a result of net income,  adjusted for the
effects  of  depreciation  and  amortization  and  changes  in the  balances  of
receivables,  payables,  inventories  and  prepaid  expenses  and other  current
assets.  During the first nine months of 1998, financing activities  contributed
$4.7 million, reflecting routine borrowings and repayments under

<PAGE>

                                 WORLDTEX, INC.
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

the Company's  credit  facilities.  During the first nine months of 1998,  $14.9
million  was  applied  toward the  purchase of  additional  equipment  and other
investing activities,  including the upgrading of certain equipment. The Company
anticipates  that its  capital  expenditures  during 1998 will  approximate  $17
million, primarily for the purchase of equipment.

EBITDA represents income before income taxes plus interest expense, depreciation
and  amortization  and is provided  as  additional  information  relating to the
Company's  debt  service  capacity.  EBITDA for the nine months and three months
ended September 30, 1998 was $24.6 million and $5.7 million  compared with $19.4
million  and  $5.9  million  for  the  prior  year  periods.   Depreciation  and
amortization  for the nine and three  months ended  September  30, 1998 was $7.2
million and $2.4  million  compared  with $3.1  million and $1.6  million in the
prior year periods.

Working  capital was $81.5  million at September  30, 1998 and $87.7  million at
December 31, 1997,  reflecting a decrease of $6.2 million and current  ratios of
3.1 and 3.9 respectively, at September 30, 1998 and December 31, 1997.

At September 30, 1998, the Company had outstanding $175 million principal amount
of  Senior  Notes.  No  amounts  were  outstanding  under the  Company's  Credit
Facility, and $25 million was available to be borrowed thereunder.  At September
30, 1998, the Company was not in compliance with certain financial  covenants in
its Credit  Facility,  which  noncompliance  has been waived by the lenders.  In
addition,  Filix Lastex,  S.A.,  Rubyco (1987),  Inc., and Fibrexa,  Ltda.,  had
available   approximately  $16.1  million,   $1.0  million,  and  $6.6  million,
respectively,  under various bank lines of credit and overdraft  facilities.  At
September 30, 1998,  Filix,  Rubyco and Fibrexa had outstanding debt under these
agreements  of $0, $0.2 and $6.6  million,  respectively.  The most  restrictive
covenant of the  Company's  Credit  Facility  and  Indenture  limits  short-term
borrowings by the Company's subsidiaries to a total of $15 million.

Worldtex believes that these lines of credit, together with internally generated
funds and access to other financing sources,  will provide sufficient  liquidity
for the Company's expected short-term and long-term cash requirements.


YEAR 2000 COMPLIANCE
--------------------

Many  existing  computer  programs use only the last two digits to define a year
and do not take  account of the  change in  century  that will occur in the year
2000.  If this problem is not  corrected,  computer  applications  could fail or
create mistakes.  As a result,  Worldtex established a Year 2000 project team in
1998 and retained an  independent  consulting  group to assist in assessing Year
2000  risks and to  recommend  necessary  remedial  action.  The  project  scope
includes both information technology and computer based embedded technology. The
project  team has  focused  its  efforts on  information  systems  software  and
hardware, manufacturing equipment and facilities, and third-party relationships.

<PAGE>

                                 WORLDTEX, INC.
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

The Company  adopted a multi-step  approach in conducting  the Year 2000 project
consisting  of:  (1)  identification,   (2)  assessment  and  prioritizing,  (3)
remediation   (including   upgrading  and  replacement)  and  testing,  and  (4)
contingency planning. The identification step was completed in April, 1998. Step
two was completed in August,  1998.  The Company has begun a worldwide  business
system replacement project that uses programs primarily from one vendor. The new
systems are expected to make  approximately 80 percent of the Company's business
computer  systems  Year 2000  compliant  and are  scheduled  to be  complete  by
year-end  1999.  Remediation  for other  information  systems and computer based
embedded  technology  systems  is 25 percent  complete  and is  scheduled  to be
complete by year-end 1999. The Company has initiated formal  communications with
its significant suppliers,  customers,  and other business partners to determine
the extent the Company may be  vulnerable  in the event  those  parties  fail to
properly  remediate  their own Year  2000  issues.  Monitoring  and  testing  of
critical system interfaces will be performed as the Year 2000 approaches.

The  estimated  cost for the Year 2000  project,  including  worldwide  business
system  replacement,  is  approximately  $5 million to $7  million.  The Company
estimates  that $3 million to $5 million  will be  capitalized  as hardware  and
software  purchases.  The remaining cost will be expensed as incurred during the
remediation  period.  The  Company  has not  incurred  significant  costs  as of
September 30, 1998, and project  implementation  will commence in fourth quarter
1998.

The Company believes,  although it cannot assure,  that its internal systems and
equipment  will be Year 2000  compliant in a timely  manner.  In  addition,  the
Company  cannot  predict  whether  systems  of third  parties  will be Year 2000
compliant in a timely manner.  The  implementation of the Company's new business
systems and  completion  of the Year 2000 project as  scheduled  will reduce the
possibility  of  significant  interruptions  of normal  operations.  The Company
believes its most  reasonably  likely worst case scenario is that  disruption of
its  distribution  system would occur,  through product delays from suppliers or
delayed orders from customers, which could result in the reduction or suspension
of the Company's operations.  The Company has not developed a specific Year 2000
contingency plan.  Contingency plans will be addressed as additional information
is available  regarding  the  Company's  remediation  and testing  steps and the
status of third-party Year 2000 readiness.

<PAGE>

                                 WORLDTEX, INC.
                           PART II - OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

   (a)   Exhibits

         Exhibit No.             Description

         11.1                    Computation of earnings per share

         27.1                    Financial Data Schedule (filed with EDGAR only)
      

   (b)   Reports on Form 8-K

         During the quarter ended  September 30, 1998,  the Company did not file
         any reports on Form 8-K.

<PAGE>

                                   SIGNATURE

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.

                                            WORLDTEX, INC.
                                              (Registrant)



Date:  November 16, 1998                    By: /S/ RICHARD J. MACKEY         
                                                ------------------------------
                                                Richard J. Mackey
                                                Chairman of the Board
                                                and Chief Financial Officer