<PAGE>
                              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, 1997  
                                  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              (I.R.S. Identification No.)
        jurisdiction 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 January 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,
            December 31, 1997 and June 30, 1997.........    4
      
         Consolidated Balance Sheets - Liabilities &
            Shareholders' Equity, December 31, 1997
            and June 30, 1997............................   5
         Consolidated Statements of Income -
            Three Months Ended December 31, 1997
            and December 31, 1996......................... 6-7
         Consolidated Statements of Cash Flows -
            Three Months Ended December 31, 1997
            and December 31, 1996........................  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, 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, 1997, 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 6, 1998


<PAGE>
               FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
                          CONSOLIDATED BALANCE SHEETS
                                     ASSETS
                  (Unaudited - See Accountants' Review Report)
                                        December 31,   June 30,
                                             1997         1997
                                        ___________   ___________
CURRENT ASSETS:
  Cash and cash equivalents             $ 1,952,689    $2,994,503
  Certificates of deposit                         -      696,155
  Accounts receivable, net                4,123,944    1,867,747
  Inventories                             6,253,788    3,937,757
  Prepaid expenses                          711,632    1,131,703
  Deferred tax assets                       979,553      369,268
                                        ___________   ___________
     Total Current Assets                 14,021,606   10,997,133
                                        ___________   ___________
PROPERTY, PLANT AND EQUIPMENT            29,458,550   24,554,322
  Less:  Accumulated depreciation       (13,195,468) (12,335,166)
                                        ___________   ___________
                                          16,263,082  12,219,156
                                        ___________   ___________
OTHER ASSETS                                503,903      497,607
                                        ___________   ___________
TOTAL ASSETS                            $30,788,591  $ 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]
                                         December 31,   June 30,
                                             1997         1997
                                        ___________   ___________
CURRENT LIABILITIES:
  Current portion/long-term debt          $ 875,869    $ 595,607
  Accounts payable                        2,882,213    1,987,508
  Accrued expenses                        1,139,425      860,786
  Dealer territory service accrual        1,382,262    1,637,572
  Customer deposits                         260,116      310,042
  Allowance for boat repurchases            200,000      200,000
  Reserve for warranty expense              500,000      500,000
  Net liabilities of discontinued operations 74,774      213,697
     Income taxes payable                   824,730         -    
                                        ___________   ___________
     Total Current Liabilities             8,139,389    6,305,212
                                        ___________   ___________
LONG-TERM DEBT, LESS CURRENT PORTION      9,539,912    7,677,771
NOTE PAYABLE - RELATED PARTY                415,821            -
DEFERRED TAX LIABILITY                      907,735      369,268
                                        ___________   ___________
     Total Liabilities                    19,002,857   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 1,223,991   (1,092,598)
                                        ___________   ___________
                                         11,896,482    9,472,393
  Less: Treasury stock                     (110,748)    (110,748)
                                        ___________   ___________
       Total Stockholders' Equity        11,785,734    9,361,645
                                        ___________   ___________
                                          $30,788,591  $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 Six Months Ended
                            December 31           December 31
                          1997      1996      1997      1996

NET SALES          $13,091,803  $12,257,562  $24,613,237  $24,577,935
COST OF SALES        9,143,760    8,667,230   17,711,833   17,740,489
     Gross Profit    3,948,043    3,590,332    6,901,404    6,837,446
EXPENSES
 Selling Expense          883,669 1,201,995   1,916,763     2,186,040
 General & Administrative 776,467   516,360   1,497,200     1,182,340
 General & Administrative
   - related parties        932    86,781        73,853       170,613
   Total Expenses    1,661,068    1,805,136    3,487,816    3,538,993
OPERATING INCOME     2,286,975    1,785,196    3,413,588    3,298,453
NON-OPERATING INCOME
     (EXPENSE):
     Other Income         23,707      40,862      40,165    126,726
     Interest Expense   (135,161)   (162,000)   (281,133)   (321,053)
INCOME BEFORE INC. TAXES  2,175,521  1,664,058 3,172,620    3,104,127
CURRENT TAX EXPENSE       720,116   365,211     954,448       469,891
DEFERRED TAXES (BENEFIT)  109,154         -   (71,818)           -
INCOME FROM CONTINUING
     OPERATIONS          1,346,251  1,298,847  2,289,990   2,634,236
DISCONTINUED OPERATIONS:
     Loss from Operations of
     Fountain Power, Inc. and 
     Mach Performance, Inc.         -    286,597      -          286,597
     Estimated income on disposal
     of operations of Fountain 
     Power, Inc. and Mach 
     Performance, Inc.              -          -    26,600           -
INCOME (LOSS) FROM 
     DISCONTINUED OPER'S            -   (286,597)  26,600        (286,597)
NET INCOME                $1,346,251   $1,012,250   $2,316,590   $2,347,639
                                   [Continued]

                                      -6-

<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
                                 1997       1996         1997      1996

BASIC EARNINGS PER SHARE:
     Continuing Operations      $ .28       $ .28     $ .48     $ .57
     Loss from Operations of
      Discontinued Segments         -       (.06)         -       (.06)
     Estimated Income on Disposal
       of Discontinued Segments     -          -        .01        -
TOTAL BASIC EARNINGS 
     PER SHARE                    .28         .22       .49       .51
TOTAL SHARES OUTSTANDING   4,740,108  4,662,385  4,737,499  4,595,496
DILUTED EARNINGS
     PER SHARE:
     Continuing Operations     $  .27      $ .26        $.45     $.54
     Loss from Operations of
      Discontinued Segments         -      (.06)          -       (.06)
     Estimated Income on Disposal
       of Discontinued Segments     -         -         .01        -
TOTAL DILUTED 
     EARNINGS PER SHARE            .27      .20         .46       .48
DILUTED WEIGHTED
AVERAGE SHARES O/S          5,028,127  5,060,707  5,078,379    4,934,288
 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)

                               Six Months Ended December 31,
                                     1997         1996

  CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Income/Loss                 $2,316,590    $ 2,347,639
  Adjustments to reconcile net income (loss) to net 
       Cash provided by operating activities:
            Depreciation Expense     860,302        810,943
            (Increase) decrease in
               accounts receivable (2,256,197)      756,976
            (Increase) decrease
               in inventory        (2,316,031)   (1,511,706)
            (Increase) decrease
               in prepaid expenses    420,071     (178,400)
            (Increase) decrease
               in other assets        (6,296)     (419,424)
            Increase (decrease)
              in accounts payable    894,705      (239,174)
            Increase (decrease) in
              accrued expenses       278,639        435,276
            Increase (decrease) in dealer
              service territory                 
               Accrual             (255,310)            -
            Increase (decrease) in
              customer deposits       (49,926)     (146,942)
            Net deferred taxes        752,912       365,211
            Net liabilities of
             discontinued operations  (138,923)        -
    Net cash Provided by (Used in)
      Operating Activities             500,536    2,220,399
  CASH FLOWS FROM INVESTING ACTIVITIES:
       Construction of molds, plugs
        and other tooling        (869,007)        (879,482)
       Purchase of property plant
        and equipment            (4,035,222)    (1,171,880)
       Proceeds from certificates
        of deposit, net             696,155            -
    Net Cash Provided by (Used in)
      Investing Activities      (4,208,074)     (2,051,362)
  CASH FLOWS FROM FINANCING ACTIVITIES:
       Proceeds from long-term debt  2,875,000    7,500,000
       Repayment of long-term debt  (316,776)   (5,576,605)
       Note payable                    -         (1,416,333)
       Proceeds from issuance of
         common stock                 107,500     1,123,750
    Net Cash Provided by (Used in)
      Financing  Activities       2,665,724       1,630,812
  Net increase (decrease) in cash ( 1,041,814)    1,799,849
  Cash at beginning of year       2,994,503       1,360,619
  Cash at end of period           1,952,689       3,160,468

                                 [Continued]
                                      -8-

<PAGE>

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

                                  For the Six Months Ended
                                          December 31,
                          __________________________________
                                        1997        1996
                                  __________________________
Supplemental Disclosures of Cash Flow information:
  Cash paid during the period for:
     Interest:
      Unrelated parties               $ 272,297    $ 325,760
      Related parties                     8,836            -
                                  __________________________
                                      $ 281,133    $ 325,760
                                  __________________________
     Income taxes                     $ 129,718    $ 469,891
                                  __________________________
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 December 31, 1997 are not necessarily 
indicative of the operating results for the full year.


2.  Accounts Receivable.

 As of December 31, 1997, accounts receivable were $4,123,944 
net of the allowance for bad debts of $31,928.  This represents 
a increase of $2,256,197 from the $1,867,747 in net accounts 
receivable recorded at June 30, 1997.  Of the $4,123,944 
balance at December 31, 1997, $3,224,953 has subsequently 
been collected as of January 31, 1997, and the remaining 
$898,991 is believed to be fully collectible.      



3.  Inventories.

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


                                   December 31,      June 30,
                                       1997            1997    
                                 
Parts and supplies.................$  4,458,029 $     2,985,615
Work-in-process....................   1,571,415         882,323 
Finished goods.....................     202,933         169,819 
Sportswear.........................     121,411           -0- 
Obsolete inventory reserve.........    (100,000)       (100,000)

Total..............................$  6,253,788   $   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 six months ended December 31, 1997, 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       2,057         (129)     31,928 
Allowance for
 warranty claims     500,000      67,987       (67,987)   500,000 
                 
Allowance for
 inventory values    100,000       -0-            -0-     100,000 

                   ----------   ----------  ----------  ---------
          Total      $ 830,000     $70,044   $  (68,116)   $831,928 
                   ==========   ==========  ==========  =========

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 December 31, 1997, 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 
$18,070,000.


                               
                                 -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 December 31, 1997, 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 $221,285 for the second quarter of Fiscal 1998 are included 
in selling expenses in the accompanying statement of operations.


7.  Transactions with Related Parties.

	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.

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

                                          Six Months Ended
                                             December 31,      
                                        1998           1997    

Apartments - rentals                $      1902    $     8,740

R.M. Fountain, Jr.  - aircraft
                       Rental            71,951        161,872
                                     -----------    -----------
                                    $    73,853    $   170,612
                                     ===========    ===========

     At December 31, 1997 the Company had travel advances and other 
receivables from employees in the amount of $125,270, of which 
$101,310 was due from an officer of the Company.  For the six 
months ended December 31, 1997 the Company paid interest expense 
of  $8000 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 second quarter of Fiscal 1998 ending December 31, 1997,
 as the Company has previously used up all of its net operating 
loss carry-forwards,  the Company has provided $720,116 for 
current income taxes.

9.  Stock Options.
At December 31, 1997 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 second quarter of this Fiscal year.

10. Earnings Per Share.
The computation of earnings per share for the second quarter of 
the fiscal year ending December 31, 1997 changes from a calculation 
based on primary and fully diluted earnings per share to a 
computation based on basic and diluted earnings per share.  
The computation of basic earnings per share is based on the 
weighted actual number of shares issued and outstanding whereas 
the computation of diluted earnings per share is based on 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.  For comparison purposes, all prior periods 
have been restated to reflect basic and diluted earnings per 
share computations.       

11.  Discontinued Operations.
Net (liabilities) of discontinued operations at December 31, 1997
 consisted of the following:

Equipment, net             	507,464 
Accounts Payable	        (38,226)
Warranty & returns reserve	(98,645)
Customer deposits	         (4,966)
Estimated loss on disposal	(440,401)	
	                        _________
 				$ (74,774)
	                        _________
	





                                -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.	Subsequent Events.

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 second quarter ended December 31, 1997
 was $2,286,975 or $.48 per share versus $1,785,196 or $.38 per 
share for the corresponding period of the previous year.  Operating
 income as a percent of sales for the second quarter of Fiscal 1998
 was 17.4% versus 15.0% for the same period the previous Fiscal year.
  The net income for the second quarter of Fiscal 1998 was $1,346,251
 or $.28 per share.  This compares to net income amounting 
to $1,012,250, or $.22 per share for the second quarter of 
Fiscal 1997.  For the second quarter of Fiscal 1998, our actual 
net income was better than planned.   

     Net sales were $13,091,803 for the second quarter of 
Fiscal 1998 as compared to $12,257,562 for the second quarter of 
the prior Fiscal year.  Unit sales volume for the second quarter 
of Fiscal 1998 was 117 boats as compared to 120 boats for the 
second quarter of 1997.   A smaller number of larger, higher priced,
 higher margin boats accounted for the overall higher sales 
volume than the second quarter of the previous Fiscal year.  

For the second quarter of Fiscal 1998, the gross margin on sales 
was $3,948,043 (30.2%) as compared to $3,590,332 (29.3%) for 
the second quarter of Fiscal 1997.    

     Selling expenses were $883,669 for the second quarter of 
Fiscal 1998 as compared to $1,201,995 for the second quarter 
of last year.  Most of the decrease for Fiscal 1998 was in 
promotional racing and advertising expense.

     General and administrative expenses were $777,399 for the 
second quarter of Fiscal 1998 as compared to $603,141 for the 
second quarter of last year.  Most of the increase was in 
legal expense.     

     
                             -15-
<PAGE>

	Interest expense for the second quarter of Fiscal 1998 
was $135,161 as compared to $162,000 for the second quarter of 
last year.  Interest expense is down due to restructuring and 
consolidation of several loans into one at a reduced interest 
rate during the second quarter of last year.

Other non-operating (income)/expense for the second quarter of 
Fiscal 1998 was $(23,707) as compared to $(40,862) for the 
second quarter of last Fiscal year.   
    
Financial Condition.

The Company's cash flows for the second three months of 
Fiscal 1998 are summarized as follows:

Net cash used in operating activities.......   $   500,536
    "   " used in investing activities.....     (4,208,074)
    "     "   " provided by financing activities. 2,665,724
                                                       
        Net decrease in cash...................$(1,041,814) 
                                                ===========

This net  decrease compared to a $1,799,849 net increase for 
the second three months of the prior fiscal year.

Cash used in the second three months of Fiscal 1998 to acquire
 additional property, plant, and equipment (investing activity)
 amounted to $4,904,229 of which $869,007 was for plugs, molds,
 and other product tooling.  This was partially offset by the 
proceeds from a certificate of deposit.

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.  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.       

                               -16-

<PAGE>


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 
our first yacht shortly with shipments beginning 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 second 
   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 six months of Fiscal 1998.
    		
(b)  No Current Reports on Form 8-K were filed by the Registrant 
during the first six 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: February 6, 1998        
   	Joseph F. Schemenauer
   	Vice President, Chief Financial
   	Officer, and Designated Principal
   	Accounting Officer 









                               -18-


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