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 March 31, 1999
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.)


915 Tate Boulevard, S.E., Suite 106, Hickory, North Carolina            28602
(Address of principal executive offices)                              (Zip Code)
       

                                 (828) 322-2242
              (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>
  May 12, 1999                Common Stock                       14,271,171

</TABLE>

<PAGE>


                                 WORLDTEX, INC.

                                      INDEX
                                      -----


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

PART II - Financial Information

      Consolidated Statements of Operations (Unaudited) for
      the Three Months Ended March 31, 1999 and 1998                    1

      Consolidated Statements of Comprehensive Loss
      (Unaudited) for the Three Months Ended March 31, 1999             1
      and 1998

      Consolidated Balance Sheets at March 31, 1999
      (Unaudited) and December 31, 1998                                 2

      Consolidated Statements of Cash Flows (Unaudited) for
      the Three Months Ended March 31, 1999 and 1998                    3

      Notes to Consolidated Condensed Financial Statements
      (Unaudited)                                                      4 - 10

      Management's Discussion and Analysis of Financial
      Condition and Results of Operations                              11 - 15

PART II - Other Information                                            16

<PAGE>


                                 WORLDTEX, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands except per share amounts)
                                    UNAUDITED

<TABLE>
<CAPTION>
                                                   Three Months Ended
                                                        March 31,
                                                    1999        1998
                                                    ----        ----
<S>                                              <C>         <C>
Net sales                                        $ 78,017      69,229
Cost of goods sold                                 64,489      55,177
                                                 --------    --------

  Gross profit                                     13,528      14,052
Selling and administration expense                  5,852       5,813
Goodwill amortization                                 841         584
                                                 --------    --------

  Operating profit                                  6,835       7,655
Interest expense                                    4,906       4,547
Other income (expense) - net                         (509)        236
                                                 --------    --------

  Income before income taxes                        1,420       3,344
Provision for income taxes                            605       1,193
                                                 --------    --------

  Net income                                     $    815       2,151
                                                 ========    ========

Net income per share:
  Basic                                          $   0.06        0.15
                                                 ========    ========
  Diluted                                        $   0.06        0.15
                                                 ========    ========

Weighted average shares outstanding:
  Basic                                            14,271      14,429
                                                  =======     =======
  Diluted                                          14,271      14,782
                                                  =======     =======
</TABLE>


                                 WORLDTEX, INC.
                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
                                 (In thousands)
                                    UNAUDITED

<TABLE>
<CAPTION>
                                                   Three Months Ended
                                                        March 31,
                                                    1999        1998
                                                    ----        ----
<S>                                              <C>         <C>
Net income                                       $    815       2,151

Other comprehensive loss:

  Foreign translation adjustment                   (4,757)     (2,574)
                                                 --------    --------
   Comprehensive loss                            $ (3,942)      ( 423)
                                                 ========    ========
</TABLE>


          See accompanying notes to consolidated condensed financial statements

<PAGE>


                                 WORLDTEX, INC.
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                     March 31,     December 31,
                                                       1999           1998
                                                       ----           ----
                                                    (Unaudited)
                          ASSETS
<S>                                                <C>               <C>
Current assets:
  Cash and cash equivalents                         $   9,374          6,715
  Accounts and notes receivable, less allowance        51,737         42,885
   for doubtful accounts of $1,992 in 1999 and
   $2,041 in 1998
  Inventories                                          55,119         58,515
  Prepaid expenses and other current assets             3,623          3,982
                                                    ---------       --------
      Total current assets                            119,853        112,097

Property, plant and equipment - net                   110,514        113,652

Other assets                                           13,431         12,850
Cost in excess of net assets of acquired
   businesses, net of accumulated amortization     
   of $9,682 in 1999 and $9,146 in 1998                83,367         85,521
                                                    ---------       --------
                                                    $ 327,165        324,120
                                                    =========       ========

                  LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
  Short-term borrowings                             $   7,231          7,308
  Current installments of long-term debt                  502            525
  Accounts payable - trade and other liabilities       38,217         29,412
  Income taxes payable                                  2,518          1,700
                                                    ---------       --------
      Total current liabilities                        48,468         38,945

Long-term debt                                        197,839        198,246
Other long-term liabilities                               534            569
Deferred income taxes                                  10,785         12,878
                                                    ---------       --------
      Total liabilities                               257,626        250,638
                                                    ---------       --------

Commitments and contingencies

Stockholders' equity:
  Preferred stock                                           -              -
  Common stock (shares issued of 14,701 in 1999           147            147
   and 1998)
  Paid-in capital                                      30,084         30,084
  Retained earnings                                    56,983         56,169
  Accumulated other comprehensive loss                (15,326)       (10,569)
  Treasury stock, at cost (shares purchased of         (2,349)        (2,349)
   430 in 1999 and 1998)                            ---------       --------

Total stockholders' equity                             69,539         73,482
                                                    ---------       --------
                                                    $ 327,165        324,120
                                                    =========       ========
</TABLE>

          See accompanying notes to consolidated condensed financial statements

<PAGE>

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

<TABLE>
<CAPTION>

                                                             Three Months Ended
                                                                  March 31,
                                                              1999        1998
                                                              ----        ----
<S>                                                         <C>          <C>
Cash flows from operating activities:
Net income                                                  $   815       2,151
  Adjustments to reconcile net income to net
   cash provided by operating activities:
     Depreciation                                             3,092       1,787
     Amortization                                               841         584
     Provision for losses on accounts receivable                121         132
     Deferred income taxes                                   (1,169)       (422)
     Change in assets and liabilities:
        Accounts and notes receivable                       (10,232)     (4,221)
        Inventories                                           1,931        (532)
        Prepaid expenses and other current assets               301        (101)
        Accounts payable - trade and other liabilities        9,327       7,493
        Income taxes payable                                    997         499
                                                            -------      ------

        Net cash provided by operating activities             6,024       7,370
                                                            -------      ------

Cash flows from investing activities:
  Capital expenditures                                       (3,036)     (3,323)
  Other investing activities                                   (745)       (315)
                                                            -------      ------

     Net cash used in investing activities                   (3,781)     (3,638)
                                                            -------      ------

Cash flows from financing activities:
  Borrowings under line of credit arrangements                    -         925
  Payments under line of credit arrangements                   (118)       (506)
  Borrowings under revolving credit facility                  2,000           -
  Payments under revolving credit facility                        -           -
  Other financing activities                                 (1,822)       (310)
                                                            -------      ------

     Net cash provided by financing activities                   60         109
                                                            -------      ------
     Effects of exchange rate changes on cash                   356          69
                                                            -------      ------

     Net increase in cash                                     2,659       3,910
Cash at beginning of year                                     6,715      14,872
                                                            -------      ------
Cash at end of period                                       $ 9,374      18,782
                                                            =======      ======

Supplemental disclosure of cash flow information:
  Cash paid during the period for:
     Interest                                               $   655         453
                                                            =======      ======
     Income taxes                                           $ 6,511       3,662
                                                            =======      ======
</TABLE>

          See accompanying notes to consolidated condensed financial statements

<PAGE>

                                 WORLDTEX, INC.
               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   UNAUDITED
                             (Dollars in thousands)

Note 1 - Basis of Presentation

      In the opinion of the Company,  the  accompanying  unaudited  consolidated
financial  statements  contain all  adjustments  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,
1998. The December 31, 1998 amounts  included in these financial  statements are
derived from December 31, 1998 audited financial statements and notes thereto.

Note 2 - Summary of Significant Accounting Policies

      Inventories  are stated at the lower of cost  (determined  on a  first-in,
first-out  basis) or market.  As of March 31, 1999 and December  31,  1998,  the
major classes of inventory were:

<TABLE>
<CAPTION>
                                                       1999        1998
                                                       ----        ----
     <S>                                           <C>           <C>   
     Raw materials                                 $ 13,939      16,032
     Work-in-process                                 14,844      14,749
     Finished goods                                  26,336      27,734
                                                   --------      ------
       Total inventories                           $ 55,119      58,515
                                                   ========      ======

</TABLE>

      Property,  plant  and  equipment  are  recorded  at cost  and  depreciated
primarily using the straight-line  method over the estimated useful lives of the
related  assets.  Repairs  and  maintenance  costs are  charged  to  expense  as
incurred.  As of March 31,  1999 and  December  31,  1998,  property,  plant and
equipment consisted of:

<TABLE>
<CAPTION>
                                                               1999        1998
                                                               ----        ----
     <S>                                                  <C>           <C>   
     Land                                                   $ 3,110       3,255
     Buildings and leasehold improvements                    38,130      39,246
     Machinery and equipment                                111,456     111,417
                                                          ---------     -------
                                                            152,696     153,918
     Less accumulated depreciation and amortization          42,182      40,266
                                                          ---------     -------
                                                          $ 110,514     113,652
                                                          =========     =======

</TABLE>

Note 3 - Supplemental Consolidating Financial Information

      Long-term  debt includes  $175,000 of senior notes which are guaranteed by
each of the U.S.  subsidiaries of the Company.  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.  Separate  financial


              Notes to consolidated condensed financial statements

<PAGE>

                                 WORLDTEX, INC.
               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   UNAUDITED
                             (Dollars in thousands)


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 3 - Supplemental Consolidating Financial Information
                             (Dollars in thousands)

Consolidating Statements of Income
March 31, 1999

<TABLE>
<CAPTION>
                                                        Guarantor       Non-Guarantor
                                           Worldtex,    Domestic        Foreign
                                             Inc.       Subsidiaries    Subsidiaries     Elimination    Consolidated
                                          ----------    ------------    -------------    -----------    ------------
<S>                                       <C>             <C>            <C>             <C>             <C>   
Net sales                                 $        -        53,444         31,062          (6,489)         78,017

Cost of goods sold                                 -        45,804         25,174          (6,489)         64,489
                                          ----------      --------       --------        --------        --------

  Gross profit                                     -         7,640          5,888               -          13,528

Selling and administrative expense               718         3,635          2,340               -           6,693
                                          ----------      --------       --------        --------        --------
  Operating profit (loss)                       (718)        4,005          3,548               -           6,835

Interest expense                               4,529            93            284               -           4,906
Intercompany interest expense (income)        (2,701)        2,469            232               -               -
Intercompany administrative charges             (654)          404            250               -               -
Other income (expense) - net                      53            25           (587)              -            (509)
                                          ----------      --------       --------        --------        --------
  Income (loss) before income taxes           (1,839)        1,064          2,195               -           1,420

Provision for income taxes                      (744)          552            797               -             605

Undistributed earnings of subsidiaries         1,910             -              -          (1,910)              -

  Net income                              $      815           512          1,398          (1,910)            815
                                          ==========      ========       ========        ========        ========


Consolidating Statements of Income
March 31, 1998

                                                        Guarantor       Non-Guarantor
                                           Worldtex,    Domestic        Foreign
                                             Inc.       Subsidiaries    Subsidiaries     Elimination    Consolidated
                                          ----------    ------------    -------------    -----------    ------------
<S>                                       <C>             <C>            <C>             <C>             <C>   
Net sales                                 $        -        38,691         33,577          (3,039)         69,229

Cost of goods sold                                 -        31,553         26,663          (3,039)         55,177
                                          ----------      --------       --------        --------        --------

  Gross profit                                     -         7,138          6,914               -          14,052

Selling and administrative expense               729         3,195          2,473               -           6,397
                                          ----------      --------       --------        --------        --------

  Operating profit (loss)                       (729)        3,943          4,441               -           7,655

Interest expense                               4,153           138            256               -           4,547
Intercompany interest expense (income)        (2,239)        1,889            350               -               -
Intercompany administrative charges             (727)          477            250               -               -
Other income (expense) - net                     209            16             11               -             236
                                          ----------      --------       --------        --------        --------

  Income (loss) before income taxes           (1,707)        1,455          3,596               -           3,344

Provision for income taxes                      (575)          505          1,263               -           1,193

Undistributed earnings of subsidiaries         3,283             -              -          (3,283)              -
                                          ----------      --------       --------        --------        --------

  Net income                              $    2,151           950          2,333          (3,283)          2,151
                                          ==========      ========       ========        ========        ========  
</TABLE>

              Notes to consolidated condensed financial statements

<PAGE>


                                 WORLDTEX, INC.
            Note 3 - Supplemental Consolidating Financial Information
                             (Dollars in thousands)

Consolidating Balance Sheet
March 31, 1999

<TABLE>
<CAPTION>
                                                        Guarantor       Non-Guarantor
                                           Worldtex,    Domestic        Foreign
                                             Inc.       Subsidiaries    Subsidiaries     Elimination    Consolidated
                                          ----------    ------------    -------------    -----------    ------------
<S>                                       <C>             <C>            <C>             <C>             <C>   
Assets
Current Assets
  Cash                                    $    1,279           560          7,535               -           9,374
  Accounts and notes receivable, net               -        28,271         23,466               -          51,737
  Inventories                                      -        33,072         22,047               -          55,119
  Prepaid expenses and other current
    assets                                     2,792           106            725               -           3,623
                                          ----------      --------       --------        --------        --------
    Total current assets                       4,071        62,009         53,773               -         119,853

Property, plant and equipment, net               387        58,873         51,254               -         110,514
Other assets                                   8,972         3,315          1,144               -          13,431
Cost in excess of net assets of
  acquired businesses, net                      (192)       67,335         16,224               -          83,367
Intercompany investments                     102,727             -              -        (102,727)              -
Intercompany advances                        158,785        14,798              -        (173,583)              -
                                          ----------      --------       --------        --------        --------
                                          $  274,750       206,330        122,395        (276,310)        327,165
                                          ==========      ========       ========        ========        ========

Liabilities and Stockholders' Equity
Current Liabilities
  Short-term borrowings                  $         -             -          7,231               -           7,231
  Current installments of long-term
    debt                                           -             -            502               -             502
Accounts payable-trade and
other liabilities                              8,510        13,655         16,052               -          38,217
  Income taxes payable                         1,696        (1,249)         2,071               -           2,518
                                          ----------      --------       --------        --------        --------
    Total current liabilities                 10,206        12,406         25,856               -          48,468

Long-term debt                               187,000         6,000          4,839               -         197,839
Other long-term liabilities                        -             -            534               -             534
Deferred income taxes                         (6,793)        7,037         10,541               -          10,785
Intercompany payables                         14,798       147,793         10,992        (173,583)              -
                                          ----------      --------       --------        --------        --------
    Total liabilities                        205,211       173,236         52,762        (173,583)        257,626
                                          ----------      --------       --------        --------        --------
Stockholders' equity
  Preferred stock                                  -             -              -               -               -
  Common stock                                   147            49         31,778         (31,827)            147
  Paid-in capital                             30,084        15,822              -         (15,822)         30,084
  Retained earnings                           56,983        17,223         53,181         (70,404)         56,983
Accumulated other comprehensive loss         (15,326)            -        (15,326)         15,326         (15,326)
  Less-Treasury stock, at cost                (2,349)            -              -               -          (2,349)
                                          ----------      --------       --------        --------        --------
    Total stockholders' equity                69,539        33,094         69,633        (102,727)         69,539
                                          ----------      --------       --------        --------        --------
                                          $  274,750       206,330        122,395        (276,310)        327,165
                                          ==========      ========       ========        ========        ========
</TABLE>


              Notes to consolidated condensed financial statements

<PAGE>


                                 WORLDTEX, INC.
            Note 3 - Supplemental Consolidating Financial Information
                             (Dollars in thousands)

Consolidating Balance Sheets
December 31, 1998

<TABLE>
<CAPTION>
                                                        Guarantor       Non-Guarantor
                                           Worldtex,    Domestic        Foreign
                                             Inc.       Subsidiaries    Subsidiaries     Elimination    Consolidated
                                          ----------    ------------    -------------    -----------    ------------
<S>                                       <C>             <C>            <C>             <C>             <C>   
Assets
Current Assets
  Cash and cash equivalents               $    2,596            14          4,105               -           6,715
  Accounts and notes receivable, net               -        19,486         23,399               -          42,885
  Inventories                                      -        33,815         24,700               -          58,515
  Prepaid expenses and other current  
    assets                                     2,594           183          1,205               -           3,982
                                          ----------      --------       --------        --------        --------
    Total current assets                       5,190        53,498         53,409               -         112,097

Property, plant and equipment, net               337        58,710         54,605               -         113,652
Other assets                                   9,240         2,456          1,154               -          12,850
Cost in excess of net assets
of acquired businesses, net                        -        68,048         17,473               -          85,521
Intercompany investments                     105,572             -              -        (105,572)              -
Intercompany advances                        155,820        14,798              -        (170,618)              -
                                          ----------      --------       --------        --------        --------
                                          $  276,159       197,510        126,641        (276,190)        324,120
                                          ==========      ========       ========        ========        ========
Liabilities and Stockholders' equity
Current Liabilities
  Short-term borrowings                   $        -             -          7,308               -           7,308
  Current installments of long-term
    debt                                           -             -            525               -             525
  Accounts payable-trade and  
    other liabilities                          5,216         9,440         14,756               -          29,412
  Income taxes payable                         1,091        (1,641)         2,250               -           1,700
                                          ----------      --------       --------        --------        --------
    Total current liabilities                  6,307         7,799         24,839               -          38,945

Long-term debt                               187,000         6,000          5,246               -         198,246
Other long-term liabilities                        -             -            569               -             569
Deferred income taxes                         (5,428)        6,870         11,436               -          12,878
Intercompany payables                         14,798       144,260         11,560        (170,618)              -
                                          ----------      --------       --------        --------        --------
    Total liabilities                        202,677       164,929         53,650        (170,618)        250,638
                                          ----------      --------       --------        --------        --------
Stockholders' equity
  Common stock                                   147            49         31,778         (31,827)            147
  Paid-in capital                             30,084        15,822              -         (15,822)         30,084
  Retained earnings                           56,169        16,710         51,782         (68,492)         56,169
  Accumulated other comprehensive loss       (10,569)            -        (10,569)         10,569         (10,569)
  Less-Treasury stock, at cost                (2,349)            -              -               -          (2,349)
                                          ----------      --------       --------        --------        --------
    Total stockholders' equity                73,482        32,581         72,991        (105,572)         73,482
                                          ----------      --------       --------        --------        --------
                                          $  276,159       197,510        126,641        (276,190)        324,120
                                          ==========      ========       ========        ========        ========

</TABLE>

              Notes to consolidated condensed financial statements

<PAGE>

                                 WORLDTEX, INC.
            Note 3 - Supplemental Consolidating Financial Information
                             (Dollars in thousands)

Consolidating Statements of Cash Flows
March 31, 1999

<TABLE>
<CAPTION>
                                                        Guarantor       Non-Guarantor
                                           Worldtex,    Domestic        Foreign
                                             Inc.       Subsidiaries    Subsidiaries     Elimination    Consolidated
                                          ----------    ------------    -------------    -----------    ------------
<S>                                       <C>             <C>            <C>             <C>             <C>   
Cash flows from operating activities:
  Net income                              $      815           512          1,398          (1,910)            815
  Adjustments to reconcile net income
    to net cash provided by (used in)
    operating activities:
   Undistributed earnings of
     subsidiaries                             (1,910)            -              -           1,910               -
   Depreciation and amortization                   5         2,489          1,439               -           3,933
   Provision for losses on accounts
     receivable                                    -            16            105               -             121
    Deferred income taxes                     (1,366)          167             30               -          (1,169)
  Change in assets and liabilities net
     of effects of acquisitions:
    Accounts and notes receivable                  -        (8,800)        (1,432)              -         (10,232)
    Inventories                                    -           743          1,188               -           1,931
    Prepaid expenses and other
     current assets                             (198)           75            424               -             301
    Accounts payable - trade and
     other current liabilities                 3,294         4,215          1,818               -           9,327
    Income taxes payable                         605           392              -               -             997
                                          ----------      --------       --------        --------        --------
     Net cash provided by (used
      in) operating activities                 1,245          (191)         4,970               -           6,024
                                          ----------      --------       --------        --------        --------

Cash flows from investing activities:
  Capital expenditures                           (56)       (1,937)        (1,043)              -          (3,036)
  Acquisitions, net of cash acquired           4,985             -              -          (4,985)              -
  Other investing activities                     205          (859)           (91)              -            (745)
                                          ----------      --------       --------        --------        --------
     Net cash (used in) provided  
      by investing activities                  5,134        (2,796)        (1,134)         (4,985)         (3,781)
                                          ----------      --------       --------        --------        --------

Cash flows from financing activities:
  Borrowings under line of credit
     arrangements                                  -             -              -               -               -
  Payments under line of credit 
     arrangements                                  -             -           (118)              -            (118)
  Borrowings under revolving credit 
     facility                                  2,000             -              -               -           2,000
  Payments under revolving credit 
     facility                                      -             -              -               -               -
  Advances - affiliated companies             (2,966)        3,533            259            (826)              -
  Other financing activities                  (1,974)            -            (83)            235          (1,822)
                                          ----------      --------       --------        --------        --------
     Net cash provided by (used
      in) financing activities                (2,940)        3,533             58            (591)             60
                                          ----------      --------       --------        --------        --------
Effects of exchange rate changes in
 cash                                         (4,756)            -           (464)          5,576             356
                                          ----------      --------       --------        --------        --------
     Net increase in cash                     (1,317)          546          3,430               -           2,659
Cash at beginning of year                      2,596            14          4,105               -           6,715
                                          ----------      --------       --------        --------        --------
Cash at end of period                     $    1,279           560          7,535               -           9,374
                                          ==========      ========       ========        ========        ========

</TABLE>

              Notes to consolidated condensed financial statements

<PAGE>


                                 WORLDTEX, INC.
            Note 3 - Supplemental Consolidating Financial Information
                             (Dollars in thousands)

Consolidating Statements of Cash Flows
March 31, 1998

<TABLE>
<CAPTION>
                                                        Guarantor       Non-Guarantor
                                           Worldtex,    Domestic        Foreign
                                             Inc.       Subsidiaries    Subsidiaries     Elimination    Consolidated
                                          ----------    ------------    -------------    -----------    ------------
<S>                                       <C>             <C>            <C>             <C>             <C>   
Cash flows from operating activities:
  Net income                              $    2,151           950          2,333          (3,283)          2,151
  Adjustments to reconcile net income
    to net cash provided by (used in)
    operating activities:
   Undistributed earnings of
     subsidiaries                             (3,283)            -              -           3,283               -
   Depreciation and amortization                  10         1,351          1,010               -           2,371
   Provision for losses on accounts
     receivable                                    -            76             56               -             132
   Deferred income taxes                        (989)          458            109               -            (422)
  Change in assets and liabilities net
    of effects of acquisitions:
   Accounts and notes receivable                 (94)       (1,977)        (2,150)              -          (4,221)
   Inventories                                     1        (1,713)         1,180               -            (532)
   Prepaid expenses and other 
     current assets                             (253)          (15)           167               -            (101)
   Accounts payable - trade and
    other current liabilities                  3,256         3,410            827               -           7,493
   Income taxes payable                          443             5             51               -             499
                                          ----------      --------       --------        --------        --------
     Net cash provided by
      operating activities                     1,242         2,545          3,583               -           7,370
                                          ----------      --------       --------        --------        --------

Cash flows from investing activities:
  Capital expenditures                            (1)       (1,871)        (1,451)              -          (3,323)
  Acquisitions, net of cash acquired           2,517             -              -          (2,517)              -
  Other investing activities                      25          (329)           (11)              -            (315)
                                          ----------      --------       --------        --------        -------- 
     Net cash (used in) provided
      by investing activities                  2,541        (2,200)        (1,462)         (2,517)         (3,638)
                                          ----------      --------       --------        --------        -------- 

Cash flows from financing activities:
  Borrowings under line of credit 
     arrangements                                  -             -            925               -             925
  Payments under line of credit 
     arrangements                                  -             -           (506)              -            (506)
  Borrowings under revolving credit  
     facility                                      -             -              -               -               -
  Payments under revolving credit  
     facility                                      -             -              -               -               -
  Advances - affiliated companies                983          (576)          (366)            (41)              -
  Other financing activities                     (31)            -            (43)           (236)           (310)
                                          ----------      --------       --------        --------        -------- 
     Net cash provided by (used
      in) financing activities                   952          (576)            10            (277)            109
                                          ----------      --------       --------        --------        --------
Effects of exchange rate changes in 
  cash                                        (2,574)            -           (151)          2,794              69
                                          ----------      --------       --------        --------        --------
     Net increase (decrease) in
      cash                                     2,161          (231)         1,980               -           3,910
Cash at beginning of year                     10,058           321          4,493               -          14,872
                                          ----------      --------       --------        --------        --------
Cash at end of period                     $   12,219            90          6,473               -          18,782
                                          ==========      ========       ========        ========        ========

</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 three months ended March 31, 1999 were $78.0  million and earnings
were $.8  million  compared  with sales of $69.2  million  and  earnings of $2.2
million for the comparable  period in 1998.  Operating profit plus  depreciation
and  amortization  ("EBITDA") for the three months ended March 31, 1999 and 1998
was $10.8 million and $10.0 million, respectively.  Earnings per share were $.06
in the first quarter of 1999 compared to $.15 in the first quarter of 1998.

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

<TABLE>
<CAPTION>
                                                  Three Months Ended
                                                      March 31,

                                                   1999      1998
                                                  ------    ------
     <S>                                           <C>       <C> 
     Net sales                                    100.0%    100.0%
                                                  ------    ------

     Gross margin                                  17.3      20.3

     Selling and administrative expense             7.5       8.4

     Goodwill amortization                          1.1        .8
                                                  ------    ------
     Operating profit                               8.7      11.1

     Interest expense                               6.3       6.6

     Other income (expense) - net                   (.6)       .3
                                                  ------    ------
     Income before income taxes                     1.8%      4.8%
                                                  ======    ======
</TABLE>

Quarterly  revenues  benefited from the acquisition of a manufacturing  facility
from Fruit of the Loom in December 1998.  That  acquisition,  as well as organic
growth of  approximately  5% in narrow elastic  fabrics as compared to the first
quarter of 1998, led to total sales of narrow elastic  fabrics of  approximately
$32 million in the quarter.  This comprised 41% of total  revenues,  which is in
line with the Company's  1999 target of 40% of total  revenue.  Covered  elastic
yarn  revenues  were  approximately  $46  million  in the  quarter,  which  were
approximately  3% below  the  first  quarter  of 1998.  The  decline  was due to
continued  demand and  currency  issues in Europe,  which  offset  quarter  over
quarter growth in the Americas of 5%.


<PAGE>

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


Gross profit in the quarter was $13.5 million or 17.3% compared to $14.1 million
or  20.3%  in the  first  quarter  of  1998.  The  decrease  was  due to  higher
depreciation and changes in product mix. Selling and administrative expenses and
goodwill  amortization  in the  quarter  were $6.7  million  or 8.7% of sales as
compared  to $6.4  million or 9.2% of sales in the first  quarter of 1998.  As a
result, operating income was $6.8 million in the first quarter, compared to $7.7
million in the first quarter of 1998.

Interest  expense for the three months ended March 31, 1999  increased  from the
corresponding  period in 1998 by $.4 million due to additional  debt  associated
with the Fruit of the Loom acquisition in December 1998.

The Company had an effective income tax rate of 42.6% for the three months ended
March 31,  1999  compared to 35.7% for the same  period in 1998.  This  increase
resulted primarily because of lower taxable income in relation to non-deductible
differences and a reduced state tax benefit for certain state net operating loss
carryforwards.

LIQUIDITY AND CAPITAL RESOURCES

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

Cash totaled $9.4 million at March 31, 1999, representing a net increase of $2.7
million for the three months then ended.  Cash flows from  operating  activities
and from  financing  activities  are the  principal  indicators of the Company's
liquidity.  During the first three months of 1999,  $6.0  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 prepaid expenses and other current assets. During the
first three  months of 1999,  $3.0  million was  utilized  for the  purchase and
upgrading of equipment and facilities.  The Company anticipates that its capital
expenditures  during  1999  will  approximate  $15  million,  primarily  for the
purchase of equipment.  In addition, the Company anticipates $3 to $5 million of
the total  will be spent for  management  information  systems  (see  "Year 2000
Compliance" below).

EBITDA  represents  operating  profit plus  depreciation and amortization and is
provided as  additional  information  relating  to the  Company's  debt  service
capacity.  EBITDA for the three  months  ended March 31, 1999 and 1998 was $10.8
million and $10.0 million,  respectively.  Depreciation and amortization for the
three months  ended March 31, 1999 and 1998 was $3.9  million and $2.4  million,
respectively.  The Company had previously  announced that,  effective October 1,
1998, it shortened the asset lives on certain manufacturing equipment associated
with its covered elastic yarn business.  Asset lives for existing equipment were
shortened to approximately  10 to 14 years, on average,  as compared to 14 to 20
years in the past. The new policy also applies to all new capital  expenditures.
Annual depreciation expense for 1999 will be in an estimated range of $12 to $13
million, with the increased  depreciation having no effect on EBITDA. During the
first  quarter,  depreciation  expense  was $3.1  million,  an  increase of $1.3

<PAGE>

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


million or 73% from the first quarter of 1998. Approximately $1.0 million of the
increase  resulted from the change in lives,  which  affected 1999 first quarter
earnings per share by $.04.

Working  capital  was $71.3  million  at March 31,  1999 and  $73.1  million  at
December 31, 1998,  reflecting a decrease of $1.8 million and current  ratios of
2.5 and 2.9 respectively, at March 31, 1999 and December 31, 1998.

The Company has a domestic revolving credit facility that provides for revolving
credit borrowings in an aggregate  principal amount of up to $25.0 million.  The
revolving credit facility terminates and all amounts borrowed thereunder will be
due December 1, 2002. Loans under the revolving credit facility bear interest at
rates based upon a base rate (the higher of the NationsBank,  N.A. prime rate or
the Federal Funds rate),  certificates of deposit rates or Eurodollar  rates, in
each case plus an applicable  margin.  Loans under the revolving credit facility
are  guaranteed by all U.S.  subsidiaries  of the Company and are required to be
secured by liens on the accounts receivable and inventory of the Company and its
U.S.  subsidiaries,  100% of the outstanding capital stock of the Company's U.S.
subsidiaries  and 65% of the  outstanding  capital stock of each of the non-U.S.
subsidiaries.

At March 31,  1999,  the Company had total  indebtedness  of $205.6  million and
$13.0  million was  available for future  borrowings  under the domestic  credit
facility. In addition, at such date the Company's foreign subsidiaries had $22.7
million  of U.S.  dollar  equivalent  credit  availability  under  bank lines of
credit.  Amounts  outstanding  as of March  31,  1999  were  $7.2  million.  The
Company's most  restrictive  loan covenant limits  short-term  borrowings by the
Company's  foreign  subsidiaries to a total of $15.0 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 in use around the world use only the last two
digits to define a year rather  than four digits 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.  Worldtex
established  a Year  2000  project  team in 1998  and  retained  an  independent
consulting  group to  provide  assistance  in  assessing  Year 2000 risks and to
provide  recommendations  for  remediation.  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.

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

<PAGE>

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


computer systems Year 2000 compliant and are scheduled to be complete during the
third quarter of 1999.  Remediation for other  information  systems and computer
based  embedded  technology  systems is scheduled to be complete by December 31,
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 to $7 million.  The Company  estimates
that $3 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 had  incurred  approximately  $1.8  million in costs as of March 31,
1999, primarily for the purchase of software and hardware.

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 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
likely worst case scenario is the disruption of the distribution system (product
delays from suppliers  and/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.

EUROPEAN MONETARY UNION - EURO

The Company conducts business in multiple  currencies,  including the currencies
of various European  countries in the European Union which are  participating in
the single  European  currency by adopting the Euro as their common  currency on
January 1, 1999, the date that the Euro began trading on currency exchanges. The
legal currencies of the  participating  countries will remain legal tender for a
transition  period  between  January 1, 1999 and  January  1,  2002.  During the
transition period, wire transfers can be made in the Euro with payment for goods
and services in either the Euro or the legacy currency.  Between January 1, 2002
and July 1, 2002,  the  participating  countries  will  introduce Euro notes and
coins and eventually  withdraw all legacy currencies.  Currency rates during the
transition  period  will no longer be  computed  from one legacy to another  but
instead will first be converted  into the Euro.  The Company is  addressing  the
issues  involved  with  the  introduction  of the  Euro  and the  impact  on its
business,  both strategically and operationally.  Based on current  information,
the  Company  does not expect  the Euro  conversion  to have a material  adverse
effect on the financial position or results of operations of the Company.


<PAGE>

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


FORWARD-LOOKING STATEMENTS

Certain  statements in this  Management's  Discussion  and Analysis of Financial
Condition and Results of Operations  which are other than  historical  facts are
intended  to be  "forward-looking  statements"  within  the  meaning  of federal
securities laws. Words such as "expects", "believes", "anticipates", "projects",
"estimates",  "plan", variations of such words and other similar expressions are
intended to identify  such  forward-looking  statements.  These  statements  are
subject  to  various  risks and  uncertainties,  many of which are  outside  the
control of the Company. Risks and uncertainties include, but are not limited to,
the financial  strength of the apparel industry,  the level of consumer spending
for apparel, changing consumer preferences,  the competitive pricing environment
within the hosiery  market  segment of the apparel  industry,  foreign  currency
translation,  success of new  product  introductions,  and other  risk  factors.
Therefore,  actual  outcomes  and  results  may differ  materially  from what is
expressed  or  forecasted  in, or implied by, such  forward-looking  statements,
which reflect management's judgment only as of the date hereof. The Company does
not intend to update  publicly  this  information  to reflect  new  information,
future events or otherwise

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no significant  change in market risk during the first quarter of
1999 from that which was reported in the  Company's  annual  report on Form 10-K
for 1998 filed March 30, 1999.

<PAGE>

                                WORLDTEX, INC.

                         PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

(a)   Exhibits

      EXHIBIT NO.                        DESCRIPTION

      10.1                               First  Amendment  To Credit  Agreement,
                                         dated  as  of  March  29,  1999,  among
                                         Worldtex,  the Guarantors,  the Lenders
                                         and Nationsbank,  N.A. as Agent - filed
                                         herewith.

      11.1                               Computation  of  earnings  per  share -
                                         filed herewith

      27.1                               Financial  Data  Schedule  (filed  with
                                         EDGAR only)

(b)   Reports on Form 8-K

      During the  quarter  ended  March 31,  1999,  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: May 14, 1999                        By: /S/ MARTY R. KITTRELL          
                                              --------------------------------
                                              Marty R. Kittrell
                                              Senior Vice President
                                              and Chief Financial Officer