FORM 10-Q

                  SECURITIES AND EXCHANGE COMMISSION
                        Washington, DC 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, 1998

                                  OR

(   )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
       OF THE SECURITIES EXCHANGE ACT OF 1934

       For the transition period from ____________ to ___________
       For Quarter Ended                 Commission File Number

       ______________________                  000-14712

                 Fountain Powerboat Industries, Inc.
         (Exact name of registrant as specified in its charter)

            Nevada                             56-1774895         
(State or other jurisdiction          (I.R.S. Identification No.)
    of incorporation or
       organization)

      Whichard's Beach Road
      P.O. Drawer 457
      Washington, NC                             27889            
(Address of Principal Executive Offices)       (Zip Code)


Registrant's telephone number, including area code: (919) 975-2000


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 issurer's  classes
of common stock as of the latest practicable date.


            Class                    Outstanding at March 31, 1998
Common stock, $.01 par value                 4,755,108 shares

<PAGE>


            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

                              INDEX


PART I.  Financial Information.                          Page No.
                                                       
         Review Report of Independent Certified
            Public Accountants...........................   3

         Consolidated Balance Sheets - Assets,
            March 31, 1998 and June 30, 1997............    4

         Consolidated Balance Sheets - Liabilities &
            Shareholders' Equity, March 31, 1998
            and June 30, 1997............................   5

         Consolidated Statements of Income -
            Three and Nine Months Ended March 31, 1998
            and March 31, 1997.........................    6-7

         Consolidated Statements of Cash Flows -
            Nine Months Ended March 31, 1998
            and March 31, 1997........................     8-9

         Notes to Consolidated Financial Statements ....  10-14

         Management's Discussion and Analysis of
            Results of Operations and
            Financial Condition.......................... 15-17

               

PART II. Other Information.

Item 2.  Changes in Securities............................. 17


Item 6.  Exhibits and Reports on Form 8 and Form 8-K....... 17

         Signature........................................  18

                                    -2-
<PAGE>


                         PRITCHETT, SILER & HARDY
                       CERTIFIED PUBLIC ACCOUNTANTS     
                           430 EAST 400 SOUTH
                        SALT LAKE CITY, UTAH 84111
                     (801)328-2727 FAX (801)328-1123 





To the Board of Directors
FOUNTAIN POWERBOAT INDUSTRIES, INC.
Washington, North Carolina



We have made a review of the accompanying consolidated balance sheet of 

Fountain Powerboat Industries, Inc. as of March 31, 1998, and the related

consolidated statements of income and cash flows for the three and nine 

months then ended,in accordance with standards established by the American

Institute of Certified Public Accountants.


A review of interim financial information consists

principally of obtaining an understanding  of the system 

for the preparation of interim financial information, applying analytical 

procedures to financial data, and making inquiries of Company personnel 

responsible for financial and accounting matters.  It is substantially less

in scope than an audit conducted in accordance with generally accepted 

auditing standards, the objective of which is the expression of an opinion

regarding the financial statements taken as a whole.  Accordingly, we do not

express such an opinion.

Based on our review, we are not aware of any material

modifications that should be made to the consolidated financial

statements referred to above for them to be in conformity with generally

accepted accounting principles.



/s/ PRITCHETT, SILER & HARDY,  P.C.

PRITCHETT, SILER & HARDY, P.C.

April 29, 1998
Salt Lake City, Utah
      



                                     -3-
<PAGE>

                               
            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
                                     
                        CONSOLIDATED BALANCE SHEETS
                                     
                                  ASSETS
                                     
               (Unaudited - See Accountants' Review Report)
                                     


                                         March 31,       June 30,
                                            1998           1997
                                       ___________     ___________
CURRENT ASSETS:
  Cash and cash equivalents           $    300,765    $ 2,994,503
  Certificates of deposit                        -        696,155
  Accounts receivable, net               4,304,521      1,867,747
  Inventories                            7,544,386      3,937,757
  Prepaid expenses                       1,410,593      1,131,703
  Deferred tax assets                    1,055,833        369,268
                                       ___________     ___________
    Total Current Assets                14,616,098     10,997,133
                                       ___________     ___________
PROPERTY, PLANT AND EQUIPMENT           31,066,946     24,554,322
  Less:  Accumulated depreciation      (13,693,373)   (12,335,166)
                                       ___________     ___________
                                        17,373,573     12,219,156
                                       ___________     ___________
OTHER ASSETS                               610,319        497,607
                                       ___________     ___________
TOTAL ASSETS                           $32,599,990    $23,713,896
                                       ___________     ___________
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                    -4-                                     
                                [Continued]
<PAGE>


                                     
           FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
                                     
                        CONSOLIDATED BALANCE SHEETS
                                     
                   LIABILITIES AND STOCKHOLDERS' EQUITY
                                     
               (Unaudited - See Accountants' Review Report)
                                     
                                [Continued]


                                           March 31,     June 30,
                                              1998         1997
                                          ___________   ___________
CURRENT LIABILITIES:
 Current portion/long-term debt             $ 892,794    $ 595,607
 Accounts payable                           2,703,641    1,987,508
 Accrued expenses                           1,415,724      860,786
 Dealer territory service accrual           1,655,075    1,637,572
 Customer deposits                            464,070      310,042
 Allowance for boat repurchases               200,000      200,000
 Reserve for warranty expense                 500,000      500,000
 Net liabilities of discontinued operations   135,066      213,697
     Income taxes payable                   1,272,771            -
                                          ___________   ___________
     Total Current Liabilities              9,239,141    6,305,212
                                          ___________   ___________
LONG-TERM DEBT, LESS CURRENT PORTION        9,315,083    7,677,771
NOTE PAYABLE - RELATED PARTY                  415,821            -
DEFERRED TAX LIABILITY                      1,131,589      369,268
                                          ___________   ___________
     Total Liabilities                     20,101,634   14,352,251
                                          ___________   ___________

COMMITMENTS AND CONTINGENCIES [NOTE 6]              -            -

STOCKHOLDERS' EQUITY:
  Common stock, $.01 par value,
    200,000,000 shares authorized,
    4,755,108 shares issued                    47,551       47,251
  Capital in excess of par value           10,624,940   10,517,740
  Retained earnings (Deficit) accumulated   1,936,613   (1,092,598)
                                           ___________   ___________
                                           12,609,104    9,472,393
  Less: Treasury stock                       (110,748)    (110,748)
                                           ___________   ___________
       Total Stockholders' Equity          12,498,356    9,361,645
                                           ___________   ___________
                                          $32,599,990  $23,713,896
                                           ___________   ___________
                                     
                                     
                                     
                                     
                                     
                                     
The accompanying notes are an integral part of these financial statements.
                                     
                                       -5-
<PAGE>
      

                   FOUNTAIN POWERBOAT INDUSTRIES, INC.
                                     
                   CONSOLIDATED STATEMENTS OF OPERATIONS
               (Unaudited - See Accountants' Review Report)
                                     
                       For The Three Months Ended     For The Nine Months Ended
                                March 31                      March 31
                      ____________________________   _________________________ 
                               1998         1997          1998      1997
                      _______________  ___________   ___________   ___________


NET SALES               $  12,699,853   $12,575,520   $37,313,090  $37,401,438

COST OF SALES               8,727,403     9,931,764    26,456,149  28,131,994
                            __________  ____________  ____________  ___________

     Gross Profit           3,927,450     2,643,756    10,856,941   9,269,444

EXPENSES
  Selling Expense           1,920,241     2,447,690     3,869,103   4,668,438
  General & Administrative    567,434       629,295     2,089,473   1,848,203
  General & Administrative -
       related parties         73,853        63,321        73,853     233,934
                            ___________  ____________   ___________ __________

        Total Expenses      2,561,528     3,140,306     6,032,429   6,750,575

OPERATING INCOME(LOSS)     1,410,922      (496,550)    4,824,512   2,518,869

NON-OPERATING INCOME
   (EXPENSE):
   Other Income                21,934       110,052        62,099     237,923
   Interest Expense          (199,734)      (88,475)     (480,867)   (414,235)
                            ____________ ____________    ___________ __________

INCOME BEFORE INC. TAXES     1,233,122     (474,973)    4,405,744   2,342,557

CURRENT TAX EXPENSE            312,618     (192,802)    1,267,066     277,089

DEFERRED TAXES (BENEFIT)       147,574      136,000        75,756     136,000
                             _____________ __________   ___________ _________
 
INCOME(LOSS)FROM CONTINUING
     OPERATIONS                772,930     (418,171)    3,062,922   1,929,468

DISCONTINUED OPERATIONS:
     Loss from Operations of
     Fountain Power, Inc. and
     Mach Performance, Inc.         -             -             -           -
     Estimated loss on disposal
     of operations of Fountain
     Power, Inc. and Mach
     Performance, Inc.          60,310             -       33,710           -
                             ____________ _____________ ____________ ________

INCOME (LOSS) FROM
   DISCONTINUED OPER'S         (60,310)            -      (33,710)          -

NET INCOME (LOSS)         $     712,620  $  (418,171)   $3,029,212   1,929,468
                             ___________ ____________  ___________ ___________


                                [Continued]
                                    -6-
<PAGE>


                    FOUNTAIN POWERBOAT INDUSTRIES, INC.
                                     
                   CONSOLIDATED STATEMENTS OF OPERATIONS
               (Unaudited - See Accountants' Review Report)
                                     
                                [Continued]
                                     

                         For The Three Months Ended   For The Nine Months Ended
                                     March 31                March 31
                           _____________________________________________________
                                  1998         1997         1998       1997
                           _______________ ____________ ____________ ___________
 
BASIC EARNINGS(LOSS)PER SHARE:

  Continuing Operations     $      .16    $    (.09)   $      .65  $     .42

  Loss from Operations of
    Discontinued Segments            -            -             -          -

  Estimated Loss on Disposal
    of Discontinued Segments       .01            -           .01          -

TOTAL BASIC EARNINGS(LOSS)
  PER SHARE                        .15         (.09)          .64        .42

TOTAL SHARES OUTSTANDING     4,740,108     4,698,533    4,738,356  4,629,341


DILUTED EARNINGS(LOSS)
  PER SHARE:

  Continuing Operations      $     .15  $      (.09)    $     .60  $     .39

  Loss from Operations of
    Discontinued Segments            -            -             -          -
    Estimated Loss on Disposal
      of Discontinued Segments     .01            -             -          -

TOTAL DILUTED
     EARNINGS(LOSS)PER SHARE       .14         (.09)          .60        .39

DILUTED WEIGHTED
AVERAGE SHARES O/S           5,068,713     4,698,533    5,088,913  4,964,041












The accompanying notes are an integral part of these financial statements.
                                     
                                      -7-
<PAGE>


                    FOUNTAIN POWERBOAT INDUSTRIES, INC.
                                     
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
               (Unaudited - See Accountants' Review Report)
                                     

                                                 Nine Months Ended March 31,
                                              ________________ ________________
                                                   1998               1997
  CASH FLOWS FROM OPERATING ACTIVITIES:
  
Net Income                                     $  3,029,212      $  1,929,468
  
Adjustments to reconcile net income (loss) to net
   Cash provided by operating activities:
     Depreciation Expense                         1,418,965         1,239,151
     (Increase) decrease in accounts receivable  (2,436,774)          461,962
     (Increase) decrease in inventory            (3,606,629)         (970,094)
     (Increase) decrease in prepaid expenses        446,220          (829,090)
     (Increase) decrease in other assets           (112,712)         (659,983)
     Increase (decrease) in accounts payable        716,133           411,964
     Increase (decrease) in accrued expenses        229,995           976,705
     Increase (decrease) in dealer service territory
       Accrual                                      337,497                 -
     Increase (decrease) in customer deposits       154,028           (23,362)
     Net deferred taxes                             623,417             6,904
     Net liabilities of discontinued operations    (134,441)                -
                                                ____________________________  
      Net cash Provided by (Used in)
       Operating Activities                         664,911         2,543,625
  
CASH FLOWS FROM INVESTING ACTIVITIES:
  Construction of molds, plugs and other tooling  (1,060,026)      (1,232,148)
  Purchase of property plant and equipment         5,452,598)      (1,999,482)
  Proceeds from certificates of deposit, net         696,155                -
                                                 _____________    ____________ 
     Net Cash Provided by (Used) Investing
      Activities                                  (5,816,469)      (3,231,630)
  
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from long-term debt                     2,875,000        8,500,000
  Repayment of long-term debt                       (524,680)      (7,458,497)
  Note payable                                             -                -
  Proceeds from issuance of common stock             107,500        1,223,500
                                                 ______________   ____________ 
     Net Cash Provided by (Used in) Financing
      Activities                                   2,457,820        2,265,003
  
Net increase (decrease) in cash                   (2,693,738)       1,576,998
                                                 ______________   ____________ 
Cash at beginning of year                          2,994,503        1,360,619
 
Cash at end of period                                300,765        2,937,617
                                                _______________  ____________  

                                     
                                     
                                     
                                [Continued]
                                    -8-
<PAGE>


                    FOUNTAIN POWERBOAT INDUSTRIES, INC.
                                     
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
               (Unaudited - See Accountants' Review Report)
                                     
                                [Continued]
                                     
                                     
                                                 For the Nine Months Ended
                                                          March 31,
                                                 _____________________________
                                                      1998        1997
                                                 _____________ _______________
Supplemental Disclosures of Cash Flow information:
  Cash paid during the period for:
     Interest:
      Unrelated parties                           $ 570,688      $ 414,235
      Related parties                                17,672              -
                                                 _____________ ____________
                                                  $ 588,360      $ 414,235
                                                 _____________ _____________
     Income taxes                                 $ 796,467      $ 325,381
                                                 _____________ _____________

See accompanying Notes to Consolidated Financial Statements.
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                    -9-
<PAGE>
                                     
                                     
                FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
                      Notes to Consolidated Financial Statements
                     (Unaudited - See Accountants' Review Report)
                                     
                                     
1.  Basis of Presentation.
  
    Although these statements have been reviewed by our independent auditors,
they  are Unaudited.  The statements, in management's opinion, present fairly
the  Company's  financial  position and results of  its  operations  for  the
interim  periods  presented.  Certain information and  footnotes  disclosures
normally  included  in the financial statements have  been  omitted.   It  is
suggested that this unaudited interim period financial information be read in
conjunction  with the Company's audited financial statements for  the  fiscal
year  ended  June 30, 1997.  The results of operations for the  period  ended
March  31,  1998 are not necessarily indicative of the operating results  for
the full year.


2.  Accounts Receivable.

    As  of  March 31, 1998, accounts receivable were $4,304,521  net  of  the
allowance for bad debts of $31,928.  This represents a increase of $2,436,774
from the $1,867,747 in net accounts receivable recorded at June 30, 1997.  Of
the  $4,304,521  balance at March 31, 1998, $2,923,299 has subsequently  been
collected  as of April 30, 1998, and the remaining $1,381,222 is believed  to
be fully collectible.



3.  Inventories.

     Inventories  at  March  31,  1998 and June 30,  1997  consisted  of  the
following:


                                     March 31,       June 30,
                                       1998            1997
                                     __________      __________

Parts and supplies.................$  4,816,961 $     2,985,615
Work-in-process....................   2,759,796         882,323
Finished goods.....................       -             169,819
Sportswear.........................     107,629           -0-
Obsolete inventory reserve.........    (140,000)       (100,000)

Total..............................$  7,544,386   $   3,937,757
                                     =============  =============


                                    -10-
<PAGE>




                FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
                      Notes to Consolidated Financial Statements
                     (Unaudited - See Accountants' Review Report)


4.  Revenue Recognition.

     The  Company  sells boats only to authorized dealers  and  to  the  U.S.
Government.  A sale is recorded when a boat is shipped to a dealer or to  the
Government, legal title and all other incidents of ownership have passed from
the Company to the dealer or to the Government, and an account receivable  is
recorded or payment is received from the dealer, from the Government, or from
the  dealer's  third-party commercial lender.  This is the  method  of  sales
recognition in use by most boat manufacturers.

      The  Company has developed criteria for determining whether a  shipment
should  be  recorded  as  a  sale  or as a deferred  sale  (a  balance  sheet
liability).   The criteria for recording a sale are that the  boat  has  been
completed  and shipped to a dealer or to the Government, that title  and  all
other  incidents of ownership have passed to the dealer or to the Government,
and  that there is no direct or indirect commitment to the dealer or  to  the
Government  to  repurchase the boat or to pay floor  plan  interest  for  the
dealer beyond the normal, published sales program terms.

     The sales incentive floor plan interest expense for each individual boat
sale  is accrued for the maximum six month (180 days) interest payment period
in  the same fiscal accounting period that the related boat sale is recorded.
The  entire six months' interest expense is accrued at the time of  the  sale
because  the Company considers it a selling expense.  The amount of  interest
accrued  is  subsequently adjusted to reflect the actual number  of  days  of
remaining  liability  for  floor  plan  interest  for  each  individual  boat
remaining in the dealer's inventory and on floor plan.

      Presently, the Company's normal sales program provides for the  payment
of  floor plan interest on behalf of its dealers for a maximum of six months.
The  Company  believes  that this program is currently competitive  with  the
interest  payment programs offered by other boat manufacturers, but may  from
time  to  time adopt and publish different programs as necessary in order  to
meet competition.


     





                                   -11-
<PAGE>
                                     
                FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
                      Notes to Consolidated Financial Statements
                     (Unaudited - See Accountants' Review Report)


 5.  Allowance and Qualifying Accounts.

     For  the  nine  months  ended March 31, 1998, the Company  adjusted  its
allowance and qualifying accounts as follows:

                   Balance at   Charged to              Balance
                   Beginning    Cost and    Additions   at End
                   of Period    Expense    (Deductions) of Period
                  ___________  __________  ____________ __________  
Allowance for
 boat repurchases   $ 200,000    $   -0-     $   -0-     $ 200,000

Allowance for
 doubtful accounts     31,928        -0-         -0-        31,928

Allowance for
 warranty claims      500,000        -0-         -0-       500,000

Allowance for
 inventory values     100,000        -0-        40,000     140,000

                    ----------    ----------   ---------- ---------
        Total       $ 831,928        -0-        40,000    $871,928
                    ==========    ==========   ========== =========

     In  management's opinion, the balances of the allowance  and  qualifying
accounts  are  adequate  to  provide for all  reasonably  anticipated  future
losses.

6.  Commitments and Contingencies.

      The Company makes available through third-party finance companies floor
plan  financing for many of its dealers.  Sales to participating dealers  are
approved by the respective finance companies.  If a participating dealer does
not  satisfy  its  obligations under the floor plan  financing  agreement  in
effect  with  its commercial lender(s) and boats are subsequently repossessed
by  the  lender(s),  then  under certain circumstances  the  Company  may  be
required  to repurchase the repossessed boats if it has executed a repurchase
agreement with the lender(s).
                                     
     At  March  31,  1998,  the Company had a total contingent  liability  to
repurchase  boats in the event of dealer defaults and if repossessed  by  the
commercial lenders amounting to approximately $22,642,000.



                                   -12-
<PAGE>
                                     
                FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
                      Notes to Consolidated Financial Statements
                     (Unaudited - See Accountants' Review Report)


     The  Company  has reserved for probable future losses it is expected  to
incur  upon the repossession and repurchase of boats from commercial lenders.
At March 31, 1998, the allowance for losses on boat repurchases was $200,000.
The amount of the allowance is based upon probable future events which can be
reasonably estimated.

     Additionally, as part of its normal sales program, the Company regularly
pays  a portion of dealers' interest charges for floor plan financing for  up
to  six months.  Such charges amounting to $367,118 for the third quarter  of
Fiscal 1998 are included in selling expenses in the accompanying statement of
operations.


7.  Transactions with Related Parties.

A.    Prior  to  1993,  the Company owned and operated an  aircraft.   During
Fiscal 1993, the aircraft was sold to an officer and director of the Company.
The  Company has been leasing airplane services from the officer and director
since  that  time.   During the first quarter of Fiscal 1998,  the  board  of
directors determined to acquire an airplane for the Company and approved  the
acquisition  of  an airplane from Mr. Fountain for $1,375,000.   The  Company
issued a note payable to Mr. Fountain for $415,821 and assumed the balance of
a note payable to General Electric Capital Corporation for $959,179.

B.    The Company paid or accrued the following amounts for services rendered
or for interest on indebtedness to related parties:

                                          Nine Months Ended
                                             March 31,
                                        1998           1997
                                      ________________________

Apartments            - rentals  $      3862    $     8,740

R.M. Fountain, Jr.    - aircraft
                        rental       137,219        161,872
                                   -----------    -----------
                                 $   141,081    $   170,612
                                   ===========    ===========

     At March 31, 1998 the Company had travel advances and other receivables
from employees in the amount of $23,694.   For the nine months ended March
31, 1998 the Company paid interest expense of  $17,672 to an Officer/Director
of the Company.

                                     
                                   -13-
<PAGE>
                                     



            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
                      Notes to Consolidated Financial Statements
                     (Unaudited - See Accountants' Review Report)

8.  Income Taxes.
     During  the third quarter of Fiscal 1998 ending March 31, 1998,  as  the
Company  has previously used up all of its net operating loss carry-forwards,
the Company has provided $312,618 for current income taxes.
                                     
9.  Stock Options.
     At March 31, 1998 there were 576,000 unexercised stock options, of which
516,000  were held by officers and directors of the Company at prices ranging
from  $3.583  to  $8.167 per share.    No options were exercised  during  the
third quarter of this Fiscal year.

10. Earnings Per Share.
     In calculating earnings (loss) per common and common equivalent share, the
net income was the same for the basic and diluted calculations.  Additionally, 
the weighted average common shares and common equivalent shares outstanding for
purposes of calculating earnings (loss) per share was as follows:

                                  For the Three months      For the nine months 
                                      Ended March 31,           Ended March 31,
                                  ____________________      ___________________
                                    1998       1997          1998       1997 
                                  __________ _________     _________ __________

Weighted average common           4,740,108  4,698,533     4,738,356  4,629,341
shares outstanding used in          
basic earnings per share for 
the years ending.

Effect of dilutive stock options    328,605          -       350,557    334,700
                                  __________  _________    __________ _________

Weighted average common shares        
and potential dilutive common 
equivalent shares outstanding 
used in dilutive earning per 
share                              5,068,713  4,698,533    5,088,913  4,964,041
                                  ___________ __________   __________ _________
   
For the three months ended March 31, 1997 the Company had 609,750 stock options
that could potentially dilute earning per share in the future that were not in-
cluded in the diluted computation because to do so would have been antidilutive
for the periods presented.
     
11. Discontinued Operations.
     Net (liabilities) of discontinued operations at March 31, 1998 consisted
of the following:

     Equipment, net                   507,464
     Accounts Payable                 (38,226)
     Warranty & returns reserve       (98,645)
     Customer Deposits                 (4,967)
     Estimated loss on disposal      (500,692)
                                     _________
                                   $ (135,066)
                                     _________





                                   -14-
<PAGE>
                                     
                                     
12.  Common Stock Split.
    
During  July  1997,  the Company approved a three-for-two  forward  stock 
split   of  all  its  previously  issued  and  outstanding  common  stock
including  options to purchase common stock (effectively  a  three  share
for  two  share stock dividend).  The shareholder record date was  August
1,  1997.  The split was accomplished during August.  The effect  of  the
common stock split has been reflected in these financial statements.

13.  Dissolution of Subsidiaries.

Effective October 1, 1997, Fountain  Trucking,Inc.,  Fountain  Sportswear,
Inc.,  Fountain  Aviation,  Inc.  and  Fountain Unlimited,  Inc. were 
dissolved.  In connection with the dissolution  of  the subsidiaries,  
the  operations  of  Fountain  Trucking,  Inc.  and   Fountain Sportswear,
Inc. were transferred to Fountain Powerboats, Inc.


Management's Discussion and Analysis of Results of Operations
     and Financial Condition

Results of Operations.

     The  operating  income for the third quarter ended March  31,  1998  was
$1,410,922 or $.30 per share versus $(496,550) or $(-.10) per share  for  the
corresponding period of the previous year.  Operating income as a percent  of
sales  for the third quarter of Fiscal 1998 was 11.1% versus (3.9%)  for  the
same  period the previous Fiscal year.  The net income for the third  quarter
of  Fiscal 1998 was $712,620 or $.15 per share.  This compares to a net Loss
amounting to $(418,171), or $(-.09) per share for the third quarter of Fiscal
1997.  For the third quarter of Fiscal 1998, our actual net income was better
than planned.

      Net  sales  were $12,699,853 for the third quarter of  Fiscal  1998  as
compared to $12,575,520 for the third quarter of the prior Fiscal year.  Unit
sales  volume for the third quarter of Fiscal 1998 was 109 boats as  compared
to  122  boats  for  the third quarter of 1997. A smaller number  of  larger,
higher  priced,  higher margin boats accounted for the overall  higher  sales
volume than the third quarter of the previous Fiscal year.

     For the third quarter of Fiscal 1998, the gross margin on sales rose  to
$3,927,450 (30.9%) as compared to $2,643,756 (21.0%) for the third quarter of
Fiscal 1997.

     Selling expenses were $1,920,241 for the third quarter of Fiscal 1998 as
compared  to  $2,447,690 for the third quarter of last  year.   Most  of  the
decrease for Fiscal 1998 was in  boat shows and wages.

      General and administrative expenses were $641,287 for the third quarter
of  Fiscal  1998 as compared to $692,616 for the third quarter of last  year.
Most of the increase was in legal expense and wages.

                                   -15-
<PAGE>
                                     
      Interest  expense for the third quarter of Fiscal 1998 was $199,734  as
compared to $88,475 for the third quarter of last year.  Interest expense for
the first nine months of Fiscal 1998 was $480,867 as compared to $414,235 for
the  first  nine  months of Fiscal 1997.  The increase  in  interest  expense
between the third quarter of Fiscal 1997 and the third quarter of Fiscal 1998
was  primarily  due to a change in the billing cycle following  the  December
1996  new  credit agreement  whereas several smaller loans were  consolidated
into a single loan with General Electric Capital Corporation.

     Other  non-operating (income)/expense for the third  quarter  of  Fiscal
1998  was  $(21,934) as compared to $(110,052) for the third quarter  of  the
last Fiscal year.

Financial Condition.

     The  Company's  cash  flows for the Nine months ended  March,  1998  are
summarized as follows:
                                     
Net cash used in operating activities.......     $   664,911
         "   " used in investing activities.....  (5,816,469)
         "   " provided by financing activities.   2,457,820

        Net decrease in cash...................  $(2,693,738)
                                                  ===========

This  net  decrease compared to a $1,576,998 net increase for the first  nine
months of the prior fiscal year.

     Cash used in the nine months of Fiscal 1998 to acquire additional 
property, plant, and equipment (investing activity) amounted to 
$6,512,624 of which  $1,060,026 was for plugs, molds, and other product 
tooling.

     On  December  31,  1996,  the  Company concluded  a  $10,000,000  credit
agreement with General Electric Capital Corporation.  Under the terms of  the
new  credit  agreement,  the  Company refinanced  substantially  all  of  its
interest  bearing debts and will have additional funds made available  to  it
for  expansion.  Initially, the Company borrowed $7,500,000 from  GE  Capital
Services  primarily to refinance existing debts.  All of the Company's  prior
interest  bearing  debts to MetLife Capital Corporation,  Deutsche  Financial
Services,  GE  Capital Corporation, Branch Bank & Trust  Leasing  Corp.,  and
other smaller creditors were paid off entirely.

     During  the  last  Fiscal year, the Company borrowed another  $1,000,000
from  GE  Capital  Services  to  fund  plant  and  equipment  additions.   An
additional $1,500,000 was borrowed from GE Capital services during the second
quarter of Fiscal 1998 to fund site development to accomodate testing of  the
65'  Super Cruiser, the initial yacht manufacturing facility and the  tooling
for the 65' Super Cruiser.
     
                                   -16-
<PAGE>
                                     
     
       The  interest  rate  on  the indebtedness to GE  Capital  Services  is
variable.   There  is a ten-year amortization of the debt  with  a  five-year
call.  The loan is secured by all of the Company's real and personal property
and  by  the  Company's  assignment of a $1,000,000 key  man  life  insurance
policy.

     For  the  remainder of 1998 and beyond, the Company expects to  generate
sufficient  cash  through  operations to  meet  its  needs  and  obligations.
Management  believes  that  the Company's sales and  production  volume  will
continue to grow with a corresponding increase in net earnings and cash flow.
Most of the Company's cash resources will be used to maintain and improve its
plant and equipment, for new product tooling and for line startup in the  new
interim yacht facility.  We anticipate finishing and shipping our first yacht
during the fourth quarter.

Cautionary Statement for Purposes of "Safe Harbor" Under the
Private Securities Reform Act of 1995.

      The  Company  may  from  time to time make forward-looking  statements,
including  statements  projecting, forecasting, or estimating  the  Company's
performance  and  industry  trends.   The  achievement  of  the  projections,
forecasts,  or estimates contained in these statements is subject to  certain
risks  and uncertainties, and actual results and events may differ materially
from those projected, forecasted, or estimated.

      The  applicable  risks and uncertainties include general  economic and
industry conditions that affect all businesses, as well as, matters that are
specific  to  the  Company  and  the markets it  serves.   For  example, the
achievement  of  projections,  forecasts,  or  estimates  contained  in the
Company's  forward-looking  statements  may  be  impacted  by  national and
international  economic  conditions; compliance with  governmental  laws and
regulations;  accidents  and  acts of God;  and  all  of  the  general risks
associated with doing business.

      Risks that are specific to the Company and its markets include but are
not  limited to compliance with increasingly stringent environmental laws and
regulations; the cyclical nature of the industry; competition in pricing and
new product development from larger companies with substantial resources; the
concentration of a substantial percentage of the Company's sales with  a few
major  customers, the loss of, or change in demand from, any of  which  could
have  a material impact upon the Company; labor relations at the Company and
at  its  customers and suppliers; and the Company's single-source supply and
just-in-time   inventory  strategies  for  some  critical  boat components,
including  high performance engines, which could adversely affect production
if  a  single-source supplier is unable for any reason to meet the Company's
requirements on a timely basis.


PART II.  Other Information.

ITEM 2:   Change in Securities.

     There  were no change in securities during the third quarter  of  Fiscal
     1998.

                                   -17-
<PAGE>
                                     
ITEM 6:   Exhibits and Reports on Form 8 and Form 8-K.

          (a) No Amendments on Form 8 were filed by the Registrant during the
          first nine months of Fiscal 1998.

          (b)  No Current Reports on Form 8-K were filed by the Registrant
          during the first nine months of Fiscal 1998.



                                     

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



                    FOUNTAIN POWERBOAT INDUSTRIES, INC.
                               (Registrant)
                                     
                                     
                                     
                                     
                                     
     By:  /s/ Joseph F. Schemenauer         Date:   May 8, 1998
     Joseph F. Schemenauer
     Vice President, Chief Financial
     Officer, and Designated Principal
     Accounting Officer








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