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, 1996
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)


                                 (704) 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:

<TABLE>
<CAPTION>

         Date                       Class                     Shares Outstanding
         ----                       -----                     ------------------
   <S>                           <C>                               <C>     
   September 30, 1996            Common Stock                      14,473,271

</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                                 WORLDTEX, INC.

                                      INDEX
                                      -----

                                                            Page Number
                                                            -----------

PART I - Financial Information

<S>                                                              <C>
Consolidated Balance Sheets at September 30,                     1
1996 (Unaudited) and December 31, 1995

Consolidated Statements of Income                                2
(Unaudited) for the Nine Months and
Three Months Ended September 30, 1996 and 1995

Consolidated Statements of Cash Flows                            3
(Unaudited) for the Nine Months Ended
September 30, 1996 and 1995

Notes to Consolidated Financial                                  4
Statements (Unaudited)

Management's Discussion and Analysis of                          5-7
Financial Condition and Results of Operations


PART II - Other Information                                      8

</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                                 WORLDTEX, INC.
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)
                                                                                                   September 30,  December 31,
                                                                                                       1996          1995
                                                                                                       ----          ----
                             ASSETS                                                                (Unaudited)

<S>                                                                                                <C>          <C>      
Current assets:
   Cash                                                                                            $   5,291    $   1,845
   Accounts and notes receivable, less allowance for doubtful accounts of
       $2,821 in 1996 and $2,623 in 1995                                                              42,532       38,619
   Inventories:
     Raw materials                                                                                    12,124       12,728
     Work-in-process                                                                                   6,018        5,429
     Finished goods                                                                                   15,009       15,503
   Prepaid expenses and other current assets                                                           1,267        1,756
                                                                                                   ---------    ---------
     Total current assets                                                                             82,241       75,880

Property, plant and equipment, at cost:
     Land                                                                                              2,486        2,538
     Buildings and leasehold improvements                                                             30,682       29,729
     Machinery and equipment                                                                          92,602       84,598
                                                                                                   ---------    ---------
                                                                                                     125,770      116,865
     Less accumulated depreciation and amortization                                                   34,920       32,874
                                                                                                   ---------    ---------
     Property, plant and equipment - net                                                              90,850       83,991

Other assets                                                                                           4,945        4,724
Cost in excess of net assets of acquired businesses, net of accumulated
     amortization of $6,884 in 1996 and $6,126 in 1995                                                28,243       29,794
                                                                                                   ---------    ---------
                                                                                                   $ 206,279    $ 194,389
                                                                                                   =========    =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Current installments of long-term debt                                                          $   2,496    $   2,179
   Accounts and notes payable - trade and other liabilities                                           28,992       25,510
   Income taxes payable                                                                                1,628        3,045
                                                                                                   ---------    ---------
     Total current liabilities                                                                        33,116       30,734

Long-term debt                                                                                        73,497       69,441
Deferred income taxes                                                                                 16,054       15,275
                                                                                                   ---------    ---------
     Total liabilities                                                                               122,667      115,450

Stockholders' equity:
   Preferred stock                                                                                      --           --
   Common stock                                                                                          147          147
   Paid-in capital                                                                                    29,918       29,913
   Retained earnings                                                                                  54,381       45,973
   Cumulative foreign translation adjustment                                                              98        3,817
   Treasury stock, at cost                                                                              (932)        (911)
                                                                                                   ---------    ---------
     Total stockholders' equity                                                                       83,612       78,939

Commitments and contingencies                                                                      ---------    ---------
                                                                                                   $ 206,279    $ 194,389
                                                                                                   =========    =========

          See accompanying notes to consolidated financial statements.

</TABLE>


<PAGE>

<TABLE>
<CAPTION>

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

                                                         Nine Months Ended                 Three Months Ended
                                                           September 30,                      September 30,
                                                      1996              1995             1996              1995
                                                      ----              ----             ----              ----

<S>                                                <C>              <C>               <C>              <C>        
Net sales                                          $   155,189      $   142,809       $    50,150      $    47,314
Cost of goods sold                                     126,200          118,117            41,186           39,496
                                                   -----------      -----------       -----------      -----------

   Gross profit                                         28,989           24,692             8,964            7,818
Selling & administration expense                        11,536           10,988             3,588            3,524
                                                   -----------      -----------       -----------      -----------

   Operating profit                                     17,453           13,704             5,376            4,294
Interest expense                                        (4,291)          (4,074)           (1,488)          (1,551)
Other income (expense) - net                               356             (256)              129             (171)
                                                   -----------      -----------       -----------      -----------

   Income before income taxes                           13,518            9,374             4,017            2,572
Provision for income taxes                               5,111            4,481             1,536            2,177
                                                   ------------     -----------       -----------      -----------

   Net income                                      $     8,407      $     4,893       $     2,481      $       395
                                                   ===========      ===========       ===========      ===========

Net income per share                               $      0.58      $      0.34       $      0.17      $      0.03
                                                   ===========      ===========       ===========      ===========

Weighted average shares outstanding                     14,620           14,558            14,669           14,613
                                                   ===========      ===========       ===========      ===========

</TABLE>



          See accompanying notes to consolidated financial statements.


<PAGE>

<TABLE>
<CAPTION>

                                 WORLDTEX, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)
                                    UNAUDITED

                                                                                            Nine Months Ended
                                                                                              September 30,
                                                                                            1996        1995
                                                                                          --------    --------

<S>                                                                                       <C>         <C>     
Cash flows from operating activities:
Net income                                                                                $  8,407    $  4,893
   Adjustments to reconcile net income to net
     cash provided by operating activities:
       Depreciation and amortization                                                         4,534       4,238
       Provision for losses on accounts receivable                                             274         598
       Deferred income taxes                                                                 1,227       1,344
       Change in assets and liabilities:
         Accounts and notes receivable                                                      (5,441)     (6,512)
         Inventories                                                                          (329)      3,171
         Prepaid expenses and other current assets                                             431      (1,050)
         Accounts and notes payable - trade and other current liabilities                    3,496       1,379
         Income taxes payable                                                               (1,245)       (655)
                                                                                          --------    --------

         Net cash provided by operating activities                                          11,354       7,406
                                                                                          --------    --------

Cash flows from investing activities:
   Capital expenditures                                                                    (12,837)     (6,131)
   Purchase of Fibrexa, S.A., net of cash acquired                                            --        (4,045)
   Other investing activities                                                                 (123)        (34)
                                                                                          --------    --------

       Net cash used in investing activities                                               (12,960)    (10,210)
                                                                                          --------    --------

Cash flows from financing activities:
   Borrowings under line of credit arrangements                                             15,160       6,871
   Payments under line of credit arrangements                                              (14,572)     (6,808)
   Borrowings under revolving credit facility                                               94,700      37,610
   Payments on revolving credit facility                                                   (83,380)    (28,820)
   Stock issued or (reacquired), net                                                           (16)       --
   Other debt payments and financing activities                                             (6,754)     (6,082)
                                                                                          --------    --------
     Net cash provided by financing activities                                               5,138       2,771
                                                                                          --------    --------
       Effects of exchange rate changes on cash                                                (86)        (74)
                                                                                          --------    --------

       Net increase (decrease) in cash                                                       3,446        (107)
   Cash at beginning of year                                                                 1,845       3,151
                                                                                          --------    --------
   Cash at end of period                                                                  $  5,291    $  3,044
                                                                                          ========    ========
Supplemental  disclosure of cash flow  information:
  Cash paid during the period for:
       Interest                                                                           $  5,237    $  4,524
                                                                                          ========    ========
       Income taxes                                                                       $  5,749    $  2,481
                                                                                          ========    ========

</TABLE>


          See accompanying notes to consolidated financial statements.

<PAGE>


                                 WORLDTEX, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    UNAUDITED


1.   In the opinion of the  Company,  the  accompanying  unaudited  consolidated
     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   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, 1995. The December 31, 1995 amounts  included in the financial
     statements are derived from December 31, 1995 audited financial  statements
     and notes thereto.































          See accompanying notes to consolidated 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,  1996 were  $155.2  million and
earnings were $8.4 million compared with sales of $142.8 million and earnings of
$4.9 million for the comparable period in 1995. Earnings per share were $.58 for
the 1996 nine month  period  compared  with $.34 in 1995.  Sales for the quarter
ended  September  30, 1996 were $50.2  million  and net income was $2.5  million
compared  to  sales of $47.3  million  and net  income  of $.4  million  for the
comparable  1995 period.  Earnings per share were $.17 for the third  quarter of
1996, compared to $.03 in the 1995 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,

                                               1996     1995     1996     1995
                                              ------   ------   ------   ------

<S>                                           <C>      <C>      <C>      <C>   
Net sales                                     100.0%   100.0%   100.0%   100.0%
                                              -----    -----    -----    -----

Gross margin                                  18.7%    17.3%    17.9%    16.5%

Selling and administration expense             7.4%     7.7%     7.2%     7.4%
                                              -----    -----    -----    -----

Operating profit                              11.3%     9.6%    10.7%     9.1%

Interest expense                              (2.8%)   (2.8%)   (3.0%)   (3.3%)

Other income (expense) - net                    .2%     (.2%)     .3%      .4%
                                              -----    -----    -----    -----

Income before income taxes                     8.7%     6.6%     8.0%     5.4%
                                              -----    -----    -----    -----

</TABLE>


For the nine months ended  September 30, 1996,  sales increased by $12.4 million
or 8.7% compared to the nine months ended  September  30, 1995.  For the quarter
ended September 30, 1996,  sales increased by $2.8 million or 6% compared to the
1995 quarter.

Sales from North  American  operations  decreased  2.3% and increased 7% for the
nine months and the three months ended September 30, 1996 from the corresponding
periods in 1995. Sales from French  operations  increased 10.2% and 5.6% for the
nine months and three months  ended  September  30, 1996 from the  corresponding
periods in 1995. Sales from South American  operations,  acquired by the Company
in April 1995, were 6.7% and 7.2% of consolidated  sales for the nine months and
the three months ended September 30, 1996.


The  volume  decreases  for the nine  months of 1996 in North  America  resulted
primarily because of slower retail sales for pantyhose that contain covered yarn
and  continued  competitive  pressures  caused by excess  capacity.  The  volume
improvement  in North  American  sales for the three months ended  September 30,
1996 over the prior year third  quarter  resulted  primarily  from the expansion
into non-panty hose end-uses.  Sales from the French  operations  increased over
the prior year same period due primarily to increased demand at the retail level
for woven fabrics  containing  covered yarn. The continued  expansion in end-use
applications has enabled the Company to increase sales in the European markets.


<PAGE>

                                 WORLDTEX, INC.

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Gross profit margins  increased  primarily  because the Company's fixed expenses
were spread over higher sales. The increase was also  attributable to the margin
contributed  by the  Colombian  operation  which was  acquired  in April,  1995.
Selling and  administrative  expenses  decreased  as a  percentage  of net sales
because the fixed  component of these  expenses  were spread over a higher sales
base.

Interest expense for the nine months ended September 30, 1996,  increased due to
increased  borrowings of revolving  credit for capital  requirements  within the
U.S.  operations  and increased  borrowings  resulting  from the  acquisition of
Fibrexa.  Interest  expense  for the three  months  ended  September  30,  1996,
decreased due to lower interest rates resulting  primarily from decreases in the
prime rate.


The  Company  had an  effective  income tax rate of 37.8% and 38.2% for the nine
months and the three months ended September 30, 1996 compared to 47.8% and 84.6%
for the same  periods in 1995.  In July 1995,  the French  parliament  enacted a
provision  increasing  the tax rate from  33.33%  to  36.67%.  The 1995  quarter
included an increase to the beginning of the year deferred tax liability of $ .9
million and an increase to reflect the  increase in taxes on current year income
of $ .4 million.  These  adjustments  increased  the 1995  effective tax rate by
approximately  13.6% for the nine  months and 49.7% for the three  months  ended
September 30, 1995.

Liquidity;  Capital Resources
-----------------------------

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

At  September  30,  1996,  $17.1  million was  outstanding  under the  Company's
Revolving  Credit  Agreement and  approximately  $17.9 million was available for
future borrowings.  In addition,  Filix Lastex,  S.A., Rubyco (1987),  Inc., and
Fibrexa Ltda., had available  approximately $17.5 million, $.5 million, and $1.7
million,  respectively,  under  various  bank  lines  of  credit  and  overdraft
facilities.  The most restrictive covenant of the Company's Credit Agreement and
Note Agreement limit  short-term  borrowings by the Company's  subsidiaries to a
total of approximately  $15.4 million at September 30, 1996.  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.

Cash totaled $5.3 million at September 30, 1996,  representing a net increase of
$3.4  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 1996,  $11.4  million was
generated from 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 other assets and liabilities. During the
first  nine  months of 1996,  financing  activities  contributed  $5.1  million,
reflecting routine borrowings and repayments under the Company's lines of credit
and revolving credit facility. During the first nine months of 1996, $13 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  1996  will   aggregate
approximately $15.1 million, primarily for the purchase of equipment.

Working  capital was $49.1 million at September  30, 1996,  and $45.1 million at
December 31, 1995,  reflecting  an increase of $4 million and current  ratios of
2.5 at September 30, 1996 and December 31, 1995.

A large customer of the Company's Regal  subsidiary,  Ithaca  Industries,  Inc.,
filed a prepackaged plan of reorganization  under the Federal Bankruptcy Code on
October 8, 1996 in Wilmington,  Delaware. Regal is owed $2.1 million from Ithaca
Industries,  Inc. as of  October 8, 1996.  Under  the terms of  the  plan, trade


<PAGE>


                                 WORLDTEX, INC.

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


creditors will be unimpaired and will be paid in full. Accordingly,  the Company
contemplates  that  Regal  will be paid in full,  although  the  Company  cannot
predict the course of such bankruptcy proceeding.

Worldtex is authorized  to repurchase up to one million  shares of common stock.
The Company  purchased  3,500 shares during the three months ended September 30,
1996. A total of 191,300  shares have been  purchased and are carried at cost as
Treasury Stock.



<PAGE>




                                 WORLDTEX, INC.

                           PART II - OTHER INFORMATION

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

<TABLE>
<CAPTION>

         (a)  Exhibits

          Exhibit No.           Description
          -----------           -----------

          <S>                   <C>
          11.1                  Computation of net income per common and common
                                equivalent shares

          27.1                  Financial Data Schedule (filed with EDGAR only)

</TABLE>

         (b)  Reports on Form 8-K

         During the quarter ended  September 30, 1996,  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 13, 1996                   By /s/ Richard J. Mackey
                                           --------------------------------
                                                  Richard J. Mackey
                                                  Chairman of the Board
                                                  and Chief Financial Officer



<PAGE>

                                INDEX TO EXHIBITS


<TABLE>
<CAPTION>

        Exhibit No.            Description
       -----------             -----------

          <S>                  <C>
          11.1                 Computation of Net Income per Common and Common
                               Equivalent Shares

          27.1                 Financial Data Schedule (filed with EDGAR only)

</TABLE>