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        December 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

                                                 0-14712

                 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)

      1653 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: (252)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 January 31, 1999
Common stock, $.01 par value                    4,702,608 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,
            December 31, 1998 and June 30, 1998.........    4

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

          Consolidated Statements of Operations -
            Three and Six Months Ended December 31, 1998
            and December 31, 1997......................... 6-7

          Consolidated Statements of Cash Flows -
            Six Months Ended December 31, 1998
            and December 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............................. 18


Item 6.   Exhibits and Reports on Form 8 and Form 8-K....... 18


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













                                -2-

<PAGE>







          PRITCHETT, SILER & HARDY, P.C.
               430 East 400 South
           Salt Lake City, Utah 84111
                (801) 328-2727




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


We  have reviewed the accompanying consolidated balance sheet  of
Fountain Powerboat Industries, Inc. as of December 31, 1998,  and
the  related consolidated statements of income and cash flows for
the three and six months then ended.  All information included in
these   financial  statements  is  the  representation   of   the
management of Fountain Powerboat Industries, Inc.

We  conducted our review in accordance with standards established
by  the  American Institute of Certified Public  Accountants.   A
review  of interim financial information consists principally  of
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.


February 10, 1999
Salt Lake City, Utah







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


                                        December 31,   June 30,
                                            1998         1998
                                        ___________   ___________
CURRENT ASSETS:
  Cash and cash equivalents           $  2,727,330   $1,376,984
  Accounts receivable, net                 469,416    2,715,754
  Inventories                            7,442,027    7,077,540
  Prepaid expenses                       1,003,712      489,290
  Deferred tax assets                    1,280,493    1,058,967
                                        ___________   ___________
    Total Current Assets                12,932,981   12,718,535
                                        ___________   ___________
PROPERTY, PLANT AND EQUIPMENT           33,698,556   33,411,011


  Less:  Accumulated depreciation      (15,061,159) (14,254,156)
                                        ___________   __________
                                         18,637,397   19,156,855
                                        ___________   __________

DEFERRED TAX ASSETS                         208,293            -
OTHER ASSETS                                693,527      622,003
                                        ___________   ___________
TOTAL ASSETS                            $32,472,198  $32,497,393
                                        ___________   ___________
                                
                                
                                
                                
                           
                                
                                
                                
                                
                                
                                
                                
                               -4-
                                
                           [Continued]

<PAGE>


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


                                        December 31,   June 30,
                                            1998         1998
                                        ___________   ___________
CURRENT LIABILITIES:
  Current portion/long-term debt        $1,998,609    $ 981,365
  Notes payable - related party            157,910      415,821
  Accounts payable                       3,003,556    3,591,489
  Accrued expenses                       2,105,053    1,939,791
  Dealer territory service accrual       2,065,256    2,046,939
  Customer deposits                        362,984      510,967
  Allowance for boat repurchases           200,000      200,000
  Reserve for warranty expense             500,000      500,000
  Net liabilities of 
     discontinued operations                10,000      103,612

                                       ___________   ___________
    Total Current Liabilities           10,403,368   10,289,984

LONG-TERM DEBT, LESS CURRENT PORTION    11,668,835    9,499,895

DEFERRED TAX LIABILITY                           -      926,807

COMMITMENTS AND CONTINGENCIES [NOTE 6]           -            -

                                       ___________   ___________

  Total Liabilities                     22,072,203   20,716,686
                                        ___________   ___________

STOCKHOLDERS' EQUITY:
  Common stock, $.01 par value,
    200,000,000 shares authorized,
    4,755,108 shares issued                 47,026       47,026
  Capital in excess of par value        10,196,540   10,196,540
  Retained earnings                        267,177    1,647,889
                                        ___________   ___________
                                        10,510,743   11,891,454
  Less: Treasury stock                   (110,748)    (110,748)
                                        ___________   ___________
      Total Stockholders' Equity        10,399,995   11,780,707
                                        ___________   ___________
                                       $32,472,198  $32,497,393
                                        ___________   ___________
                                
                                
                                
 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 Six Months Ended
                               December 31,              December 31,
                         ________________________  ______________________
                              1998        1997        1998       1997
                         ____________  __________  __________  __________
NET SALES                 $13,254,267 $13,091,803 $25,676,494 $24,613,237
                         ____________  __________  __________  __________
COST OF SALES              10,238,921   9,143,760  20,077,832  17,711,833
                         ____________  __________  __________  __________
  Gross Profit              3,015,346   3,948,043   5,598,662   6,901,404

EXPENSES:
  Selling expense           2,151,203     883,669   4,094,385   1,916,763
  General and administrative  676,984     776,467   1,318,616   1,497,200
  General and administrative-
    Related parties             2,513         932       4,433      73,853
                         ____________  __________  __________  __________
        Total Expenses      2,830,700   1,661,068   5,417,434   3,487,816
                         ____________  __________  __________  __________
OPERATING INCOME BEFORE
  STRATEGIC CHARGE            184,649   2,286,975     181,228   3,413,588
STRATEGIC CHARGE           (2,440,000)          -  (2,440,000)          -
                         ____________  __________  __________  __________
OPERATING INCOME (LOSS)    (2,255,353)  2,286,975  (2,258,772)  3,413,588

NON-OPERATING INCOME
  (EXPENSE):
  Other income                 59,088      23,707      54,996      40,165
  Interest expense           (264,474)   (135,161)   (519,631)   (281,133)
  Interest expense-
      related party            (5,097)          -     (13,933)          -
                         _____________  _________  ___________  _________

INCOME (LOSS) BEFORE TAXES (2,465,837)  2,175,521  (2,737,340)  3,172,620

CURRENT TAX EXPENSE                 -     720,116           -     954,448
DEFERRED TAXES (BENEFIT)   (1,283,120)    109,154  (1,356,628)    (71,818)
                         _____________  _________  ___________  _________
INCOME (LOSS) FROM
  CONTINUING OPERATIONS    (1,182,717)  1,346,251  (1,380,712)  2,289,990

DISCONTINUED OPERATIONS:
  Income on disposal of
    operations of Fountain
    Power, Inc. and
    Mach Performance, Inc.          -           -           -      26,600
                          ____________  _________  __________  __________
INCOME FROM DISCONTINUED
  OPERATIONS                        -           -           -      26,600
                          ____________  _________  __________   ___________
NET INCOME (LOSS)        $(1,182,717)  $1,346,251  $(1,380,712)  $2,316,590
                         ____________  __________  ___________  ___________
                                
                               -6-
                                
                           [Continued]


<PAGE>


               FOUNTAIN POWERBOAT INDUSTRIES, INC.
                                
              CONSOLIDATED STATEMENTS OF OPERATIONS
          (Unaudited - See Accountants' Review Report)
                                
                           [Continued]
                                
                  For the Three Months Ended  For the Six Months Ended
                              December 31,          December 31,
                          ___________________   _____________________
                             1998       1997        1998       1997
                          _________  ________   __________  _________
EARNINGS (LOSS) PER SHARE:
  Continuing Operations      $(.25)      $.28       $(.29)     $.48
  Income from Operations of
    Discontinued Segments        -          -           -         -
  Estimated Loss on Disposal
    of Discontinued Segments     -          -           -       .01
                          _________  _________  __________  _________
EARNINGS (LOSS) PER SHARE    $(.25)      $.28       $(.29)     $.49
                          _________  _________  __________  _________
WEIGHTED AVERAGE SHARES
  OUTSTANDING             4,702,608  4,740,108   4,702,608  4,737,499
                          _________  _________  __________  _________

DILUTED EARNINGS PER SHARE:
  Continuing Operations      $ N/A      $ .27      $  N/A    $ .45
  Loss from Operations of
    Discontinued Segments      N/A        -           N/A        -
  Estimated Loss on Disposal
    of Discontinued Segments   N/A        -           N/A      .01
                           ________  _________  ___________  ________
DILUTED EARNINGS PER SHARE:  $ N/A      $.27       $  N/A     $.46
                           ________  _________  ___________  ________
DILUTED WEIGHTED AVERAGE
  SHARES OUTSTANDING          N/A    5,028,127        N/A   5,078,379
                           ________  _________  ___________  ________
                                
                                
                                
                                
                                
                                
                                
                                
                             
                                
                                
                                
 The accompanying notes are an integral part of these financial
                           statements.
                                
                               -7-


<PAGE>



       FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
                                
              CONSOLIDATED STATEMENTS OF CASH FLOWS
          (Unaudited - See Accountant's Review Report)
                                
        Increase (Decrease) in Cash and Cash Equivalents
                                
                                            For the Six Months Ended
                                                   December 31,
                                            __________________________
                                                1998         1997
                                            ___________   ____________
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                           $(1,380,712)  $2,316,590
                                            ___________   ___________
adjustments to reconcile net income (loss)
  to net cash provided by operating activities:
   Depreciation expense                       1,192,402      860,302
   Strategic Charge                           2,440,000            -
   Change in assets and liabilities:
     (Increase) decrease in 
       accounts receivable                    2,246,338    (2,256,197)
     (Increase) decrease in 
       inventories                           (1,293,310)   (2,316,031)
     (Increase) decrease in 
       prepaid expenses                        (514,422)      420,071
     Increase (decrease) in 
       accounts payable                        (587,933)      894,705
     Increase (decrease) in
       accrued expenses                         165,262       278,639
     Increase (decrease) in dealer
       territory service accrual                  18,317    (2,55,310)
     Increase (decrease) in 
       customer deposits                        (147,983)     (49,926)
     Net deferred taxes                       (1,356,629)     752,912
     Net liabilities of
      discontinued operations                    (93,612)    (138,923)
                                            ____________   ___________
    Net Cash Provided (Used) by
      Operating Activities                     $ 687,718    $ 506,832
                                            ____________   ___________
CASH FLOWS FROM INVESTING ACTIVITIES:
  (Purchase) sale of 
    certificates of deposit, net                      -      696,155
  Investment in molds, plugs, 
    and other tooling                          (398,078)    (869,007)
  Purchase of property, plant,
    and equipment                            (1,786,043)  (4,035,222)
  (Increase) in other assets                    (71,524)      (6,296)
                                            ___________   ___________
    Net Cash Provided (Used) by
      Investing Activities                  $(2,255,645)  $(4,214,370)
                                            ____________   ___________
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from long-term debt               $4,000,000    $2,875,000
  Repayment of long-term debt                  (813,816)     (316,776)
  Repayment of long-term debt - related party  (257,911)            -
  Proceeds from issuance of common stock              -       107,500
                                            ___________   ____________
    Net Cash Provided (Used) by Financing
      Activities                             $2,928,273    $2,665,724
                                            ___________   ____________
Net increase (decrease) in cash
     and cash equivalents                    $1,360,346   $(1,041,814)

Cash and cash equivalents at
     beginning of period                       1,376,984     2,994,503
                                            ___________   ____________
Cash and cash equivalents at
     end of period                           $2,737,330   $ 1,952,689
                                            ___________   ____________
                                
                               -8-
                           [Continued]
                                

<PAGE>


       FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
                                
              CONSOLIDATED STATEMENTS OF CASH FLOWS
          (Unaudited - See Accountant's Review Report)
                                
        Increase (Decrease) in Cash and Cash Equivalents
                                
                           [Continued]

                                
                                  For the Three Months Ended
                                          December 31,
                                  __________________________
                                        1998         1997
                                  ____________    __________

Supplemental Disclosures of Cash Flow information:
  Cash paid during the period for:
     Interest:
      Unrelated parties               $ 502,752    $ 272,297
      Related parties                    16,879            -
                                  _____________   ___________
                                      $ 519,631    $ 272,297
                                  _____________   ___________
     Income taxes                     $ 263,345    $   8,836
                                  _____________   ___________

Supplemental Disclosures of Noncash investing and financing
activities:
  For the six month period ended December 31, 1998:
     There were no non-cash investing and financing activities.
     
  For the six month period ended December 31, 1997:
     On September 30, 1997 the Company purchased an airplane for
     $1,375,000 from a related party through the issuance of a
     $415,821 note payable to the related party and assuming
     $959,179 underlying indebtedness on the plane.
                                
                                
                                
                                
                                
                                
                                
                                
                                
 The accompanying notes are an integral part of these financial
                           statements.
                                
                               -9-


<PAGE>


                FOUNTAIN POWERBOAT INDUSTRIES, INC.
                                
           Notes to Consolidated Financial Statements
                (Unaudited - See Accountants' Review Report)
                                
                                
NOTE 1  Basis of Presentation.
  
    Although these statements have been reviewed by our independent
auditors,  they  are unaudited.  In the opinion of management,  all
adjustments  (which  include  only  normal  recurring  adjustments)
necessary  to  present  fairly the financial position,  results  of
operations and cash flows at December 31, 1998 and for all  periods
presented have been made.

  Certain information and footnote disclosures normally included in
the  financial  statements  prepared in accordance  with  generally
accepted  accounting principles have been condensed or omitted  for
purposes of filing interim financial statements with the Securities
and  Exchange  Commission.  It is suggested  that  these  condensed
financial  statements  be read in conjunction  with  the  financial
statements  and  notes thereto included in the Company's  June  30,
1998  audited financial statements.  The results of operations  for
the  period  ended December 31, 1998 are not necessarily indicative
of the operating results for the full year.

2.  Accounts Receivable.

    As  of December 31, 1998, accounts receivable were $469,416 net
of  the  allowance  for bad debts of $34,679.   This  represents  a
decrease   of  $2,246,338  from  the  $2,715,754  in  net  accounts
receivable  recorded at June 30, 1998.  Of the $469,416 balance  at
December 31, 1998, $312,800 has subsequently been collected  as  of
January  31,  1998, and the remaining $156,616 is  believed  to  be
fully collectible.

3.  Inventories.

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

                                   December 31,      June 30,
                                       1998            1998
                                   ____________   _____________
Parts and supplies.................$  4,588,499   $   4,510,373
Work-in-process....................   2,698,694       2,235,394
Finished goods.....................     151,102         451,773
Sportswear.........................     123,733           -0-
Obsolete inventory reserve.........    (120,000)       (120,000)
                                   ____________   _____________
Total..............................$  7,442,027   $   7,077,540
                                   =============  =============


                                -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  six  months  ended December 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    30,000        -0-        4,679      34,679

Allowance for
 warranty claims     500,000      427,466    427,466     500,000

Allowance for
 inventory values    120,000        -0-         -0-      120,000

                   ----------   ----------  ----------  ---------
     Total          $850,000     $427,466   $432,145    $854,679
                   ==========   ==========  ==========  =========

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

     
6. Notes Payable and Line of Credit.

During September 1998 the Company concluded negotiations for a  new
$4,000,000  promissory  note  with  Transamerica  Business   Credit
Corporation  which  included restatement and amendment  of  certain
existing promissory notes with General Electric Capital Corporation
("GECC").   An  Omnibus Agreement was entered into  which  provides
that  all  the underlying collateral and encumbered property  would
apply  ratably  to  all  of  the  Notes  Payable.   The  $4,000,000
promissory note provides for thirty-nine monthly principal payments
in  the  amount of $100,000 beginning October 1, 1998 with a  final
payment  of the entire outstanding payment due on January 2,  2002.
Accrued  interest will be paid monthly in addition to the principal
payment.   Interest will be calculated at 2.7% per annum above  the
published  LIBOR  Rate  (London Interbank  Offered  Rates)  and  is
calculated  monthly.  The Company executed a restated  and  amended
Note to GECC in the amount of $9,007,797, which replaces a previous

                         -12-

<PAGE>


note  with the same outstanding balance.  The note provides for  39
monthly payments of $123,103 which includes principal and interest.
A  final  payment of the outstanding balance will be due on January
2,  2002.   Interest  is calculated at 2.7%  per  annum  above  the
published  LIBOR Rate.  The Company also executed  a  restated  and
amended  Note to GECC in the amount of $855,050, which  replaces  a
previous note with the same outstanding balance.  The note provides
for  seventy  monthly payments of $15,181 which includes  principal
and  interest.  A final payment of the outstanding balance will  be
due  on  April 1, 2004.  Interest  is calculated at 2.7% per  annum
above  the  published  LIBOR Rate.  All of the  notes  provide  for
prepayment  penalties  according to  a  predefined  timetable.   On
December 1, 1998, the two GECC loans were converted to fixed  rates
of 7.02% on the $9,007,797 loan and 7.26% on the $855,050 loan.

7.  Commitments and Contingencies.

Manufacturer  Repurchase Agreements - 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
December 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 $27,300,000.
The  Company has reserved for future losses it might incur upon the
repossession and repurchase of boats from commercial lenders.   The
amount of the allowance is based upon probable future events, which
can  be  reasonably estimated.  At December 31, 1998, the allowance
for boat repurchases was $200,000.

Dealer  Interest - The Company regularly pays a portion of dealers'
interest  charges for floor plan financing for up  to  six  months.
These  interest charges amounted to approximately $879,000 for  the
first   six  months  of  Fiscal  1999  and  are  included  in   the
accompanying  consolidated statements  of  operations  as  part  of
selling expense.  At December 31, 1998, the estimated unpaid dealer
incentive  interest  included  in  accrued  expenses  amounted   to
$511,197.


8.  Transactions with Related Parties.

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





                              -13-

<PAGE>


                                          Six Months Ended
                                             December 31,
                                     -------------------------
                                        1999           1998
                                     ----------    -----------
Apartments             - rentals    $   4,433      $   1,902

R.M. Fountain, Jr.     - Interest      16,879           -0-

                       - Aircraft
                         Rental          -0-          71,951
                                     -----------    -----------
                                    $  21,312      $  73,853
                                     ===========    ===========

     At December 31, 1998 the Company had travel advances and other
receivables from employees in the amount of $87,692, of which
$71,729 was due from an officer of the Company.  For the six months
ended December 31, 1998 the Company paid interest expense of
$16,879 to an Officer/Director of the Company.


9.  Income Taxes.
     For  the six-month period ended December 31, 1998, the Company
provided $-0- for current income taxes and a benefit  of $1,356,628
for deferred income taxes.
                                
10.  Stock Options.
     At  December  31,  1998 there were 606,000  unexercised  stock
options,  of  which 546,000 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 second quarter of this Fiscal
year.

11. Earnings Per Share.
     The  computation  of  earnings (loss) per  share  and  diluted
earnings  per  share  amounts are based upon the  weighted  average
number of outstanding common shares during the periods, plus,  when
their  effect is dilutive, additional shares assuming the  exercise
of  certain vested stock options, reduced by the number  of  shares
which could be purchased from the proceeds from the exercise of the
stock  options assuming they were exercised.  Diluted earnings  per
share  for  the six-month period ended December 31, 1998,  was  not
presented, as its effect was anti-dilutive.
     
12.  Strategic Charge.
      During December 1998, the Company designed and implemented  a
restructuring  plan  to  aggressively improve  the  Company's  cost
structure, refocus sales and marketing expenditures and divest  the
Company of certain non-realizable assets.   In connection with  the
restructuring plan the Company reviewed components of its  business
for   possible   improvement   of  future   profitability   through
reengineering or restructuring.  As part of this plan  the  Company
decided  to eliminate its racing program and write off the  balance
of excess yacht

                            -14-

<PAGE>


tooling  cost  along with other discontinued unused  tooling.   The
Company  expects to complete the majority of these  actions  during
the third and fourth quarter of Fiscal 1999.  The carrying value of
the  assets  held  was  reduced to fair value  based  on  estimated
realizable value based on future cash flows from use of  the  asset
or  sale of the related assets.  The resulting pretax adjustment of
$2,440,000  was recorded as a strategic charge in the statement  of
operations of the Company.


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

Results of Operations.

     The  operating income (before strategic charge) for the second
quarter  ended  December 31, 1998 was $184,649 or  $.04  per  share
versus  operating income of $2,286,975 or $.48 per  share  for  the
corresponding  period  of  the  previous  year.   Operating  income
(before  strategic  charge) as a percent of sales  for  the  second
quarter  of  Fiscal 1999 was 1.4% versus 17.5% for the same  period
the  previous Fiscal year.  The net loss for the second quarter  of
Fiscal 1999 was $(1,182,717) or $(.25) per share.  This compares to
net  income  amounting to $1,346,251, or $.28  per  share  for  the
second quarter of Fiscal 1998.   During the second quarter, it  was
determined that the Company make a strategic redirection  to  focus
its efforts on profitable growth (See Note 12).

      Net  sales were $13,254,267 for the second quarter of  Fiscal
1999 as compared to $13,091,803 for the second quarter of the prior
Fiscal  year.  Unit sales volume for the second quarter  of  Fiscal
1999  was 114 boats as compared to 117 boats for the second quarter
of  Fiscal 1998.   A smaller number of larger, higher priced, boats
accounted  for  the  overall higher sales volume  than  the  second
quarter of the previous Fiscal year.

      For  the  second quarter of Fiscal 1999, the gross margin  on
sales was $3,015,347 (22.8%) as compared to $3,948,043 (30.2%)  for
the second quarter of Fiscal 1998.

      Selling  expenses were $2,151,203 for the second  quarter  of
Fiscal 1999 as compared to $883,669 for the second quarter of  last
Fiscal  year.   Most  of  the  increase  for  Fiscal  1999  was  in
promotional racing and advertising expense.

          General and administrative expenses were $679,497 for the
second  quarter  of  Fiscal 1999 as compared to  $777,399  for  the
second  quarter of last Fiscal year.  Most of the decrease  was  in
legal expense.

      Interest  expense for the second quarter of Fiscal  1999  was
$269,571  as  compared to $135,161 for the second quarter  of  last
Fiscal year.  Interest expense is up due to an overall increase  in
long-term debt.

     
     
                               -15-

<PAGE>     
     

     Other non-operating (income)/expense for the second quarter of
Fiscal  1999 was $(59,088) as compared to $(23,707) for the  second
quarter of last Fiscal year.

Financial Condition.

     The  Company's cash flows for the second six months of  Fiscal
1999 are summarized as follows:
                                
   Net cash provided by operating activities ..... $   687,718
    "   "   used by investing activities  .......   (2,255,645)
    "   "   provided by financing activities.....    2,928,273

        Net increase in cash...................    $ 1,360,346
                                                    ===========

This net  increase compared to a $(1,041,814) net decrease for  the
second six months of the prior fiscal year.

     Cash  used  in the first six months of Fiscal 1999 to  acquire
additional  property,  plant,  and equipment  (investing  activity)
amounted to $2,255,645 of which $398,078 was for plugs, molds,  and
other product tooling.

      During  the  first  quarter of  Fiscal  1999,  the  Company
borrowed $4,000,000 to supplement and offset the cash used during
Fiscal  1998  to  increase  property,  plant  and  equipment   by
$6,937,699 and inventory by $3,139,783.  Refer to Note 6  to  the
Consolidated  Financial  Statements for  complete  notes  payable
details.  Both the General Electric Capital Corporation loan  and
the Transamerica Business Credit Corporation loans are 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 1999 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  return  to  net
earnings  and  positive  cash flow.  Most  of  the  Company's  cash
resources will be used to maintain its plant and equipment, for new
product tooling and for work in process inventory in the new  yacht
facility.
     
The Year 2000.

     A  current concern, known as the "Year 2000" or "Y2K"  Bug  is
expected  to effect a large number of computer systems and software
during  or  after the year 1999.  The concern is that any  computer
function that requires a date calculation may produce errors.   The
Year  2000 issue affects virtually all companies and organizations,
including  the  Company.  The Company plans  on  taking  all  steps
necessary to prevent these errors from occurring.  With respect  to
third  party providers whose services are critical to the  Company,
the Company intends to monitor the efforts of such vendors, as they
become Year 2000 compliant.  Management is

                             -16-
     
<PAGE>
     
     
not  presently  aware  of  any  Year 2000  issues  that  have  been
encountered by any such third party, which could materially  affect
the  Company's operations.  At present, the Company anticipates the
costs  of  upgrading some of its software and hardware in order  to
avoid  any  problems resulting from the Millennium  bug  will  cost
approximately  $300,000.  There is no assurance  that  the  Company
will  not experience operational difficulties as a result  of  Year
2000 issues.


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.









                                 -17-

<PAGE>



PART II.  Other Information.

ITEM 2:   Change in Securities.

     There  were no change in securities during the second  quarter
     of Fiscal 1999.


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 six months of Fiscal 1999.

      (b) No Current Reports on Form 8-K were filed by the
          Registrant during the first six months of Fiscal 1999.
                                
                                
                                
                                
                            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: February 11, 1999
      __________________________               __________________
     Joseph F. Schemenauer
     Vice President, Chief Financial
     Officer, and Designated Principal
     Accounting Officer
                                
                                
                                
                                
                                
                                
                                
                              -18-
<PAGE>