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        SEPTEMBER 30, 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
       
                                                 0-10316       

                 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 OCTOBER 31, 1997
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,
            September 30, 1997 and June 30, 1997.........   4
       
         Consolidated Balance Sheets - Liabilities &
            Shareholders' Equity, September 30, 1997
            and June 30, 1997............................   5

         Consolidated Statements of Income -
            Three Months Ended September 30, 1997
            and September 30, 1996.......................6 -7

         Consolidated Statements of Cash Flows -
            Three Months Ended September 30, 1997
            and September 30, 1996......................8 - 9
   
         Notes to Consolidated Financial Statements....10 - 15
  
         Management's Discussion and Analysis of
            Results of Operations and 
            Financial Condition........................15 - 18
  
               

PART II. OTHER INFORMATION.   


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

         Signature.......................................  19
                              









                                -2-




<PAGE>


       PRITCHETT, SILER & HARDY, P.C.
            430 East 400 South
           Salt Lake City, Utah
             (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 September 30, 1997, and
the  related consolidated statements of operations and cash flows 
for the three 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.










PRITCHETT, SILER & HARDY, P.C.
November 14, 1997



                             -3-

<PAGE>

       FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
                                
                   CONSOLIDATED BALANCE SHEETS
                                
                             ASSETS
                                
          (Unaudited - See Accountants' Review Report)
                                
                                
                                
                                        September 30,   June 30,
                                             1997         1997
                                        ___________   ___________
CURRENT ASSETS:
  Cash and cash equivalents             $1,532,994   $2,994,503
  Certificates of deposit                       -        696,155
  Accounts receivable, net                3,948,585    1,867,747
  Inventories                             5,703,911    3,937,757
  Prepaid expenses                        1,020,302    1,131,703
  Deferred tax asset                        774,007      369,268
                                        ___________   ___________
     Total Current Assets                12,979,799   10,997,133
                                        ___________   ___________
PROPERTY, PLANT AND EQUIPMENT            26,841,681   24,554,322

  Less:  Accumulated depreciation      (12,727,478) (12,335,166)
                                        ___________   ___________
                                         14,114,203   12,219,156
                                        ___________   ___________
OTHER ASSETS                                 500,607      497,607
                                        ___________   ___________
                                         $27,594,609  $23,713,896
                                        ___________   ___________
                                
                                
                                
                                
                                
                                
                                
                          
                                
                                
                                
                                
                                
                                
                           [Continued]


                               -4-
<PAGE>

       FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
                                
                   CONSOLIDATED BALANCE SHEETS
                                
              LIABILITIES AND STOCKHOLDERS' EQUITY
                                
                           [Continued]


                                        September 30,   June 30,
                                             1997         1997
                                        ___________   ___________
CURRENT LIABILITIES:
  Current portion/long-term debt          $ 716,251    $ 595,607
  Accounts payable                        3,780,639    1,987,508
  Accrued expenses                        1,058,101      860,786
  Dealer territory service accrual        1,220,817    1,637,572
  Customer deposits                         211,272      310,042
  Allowance for boat repurchases            200,000      200,000
  Reserve for warranty expense              500,000      500,000
  Net liabilities of discontinued operations 81,996      213,697
                                        ___________   ___________
     Total Current Liabilities            7,769,076    6,305,212
                                        ___________   ___________
LONG-TERM DEBT, LESS CURRENT PORTION      8,377,193    7,677,771
NOTE PAYABLE - RELATED PARTY                415,821            -
DEFERRED TAX LIABILITY                      593,035      369,268
                                        ___________   ___________
     Total Liabilities                   17,155,125   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
  Deficit accumulated                     (122,259)  (1,092,598)
                                        ___________   ___________
                                         10,550,232    9,472,393
  Less: Treasury stock                    (110,748)    (110,748)
                                        ___________   ___________
       Total Stockholders' Equity        10,439,484    9,361,645
                                        ___________   ___________
                                        $27,594,609  $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
                                    September 30,
                   ____________________________________
                                  1997          1996
                            _____________ _____________
NET SALES               $     11,521,434   $ 12,320,373

COST OF SALES                   8,568,073     9,073,259
                            _____________ _____________
  Gross Profit                  2,953,361     3,247,114
                            _____________ _____________
EXPENSES:
  Selling expense               1,033,094       984,044
  General and administrative      720,733       665,980
  General and administrative
      - related parties            72,921        83,832
                            _____________ _____________
      Total expenses            1,826,748     1,733,856
                            _____________ _____________
OPERATING INCOME                1,126,613     1,513,258

NON-OPERATING INCOME (EXPENSE):
  Other income                     16,458        85,864
  Interest expense              (145,972)     (159,053)
                            _____________ _____________
INCOME BEFORE INCOME TAXES        997,099     1,440,069

CURRENT TAX EXPENSE               234,332       104,680

DEFERRED TAX (BENEFIT)          (180,972)             -
                            _____________ _____________
INCOME FROM CONTINUING
       OPERATIONS                 943,739    1,335,389
                            _____________ _____________
DISCONTINUED OPERATIONS:
  Income from Operations of
    Fountain Power, Inc. and
    Mach Performance, Inc.
    (Net of no income tax effect)  26,600             -
  Estimated losses on disposal
    of the operations of Fountain
    Power, Inc. and Mach
    Performance, Inc. (Net of no
    income tax effect)                  -             -
                            _____________ _____________
INCOME FROM DISCONTINUED
         OPERATIONS                26,600             -
                            _____________ _____________
NET INCOME                     $ 970,339     $1,335,389
                            _____________ _____________
                                
                               
                                
                           [Continued]

                                -6-
<PAGE>

               FOUNTAIN POWERBOAT INDUSTRIES, INC.
                                
              CONSOLIDATED STATEMENTS OF OPERATIONS
          (Unaudited - See Accountants' Review Report)
                                
                           [Continued]
                                
                              For the Three Months Ended
                                    September 30,
                   ____________________________________
                                  1997          1996
                            _____________ _____________
PRIMARY EARNINGS PER SHARE:

  Continuing Operations        $     .18     $     .28
  Loss from Operations of
    Discontinued Segments            .01             -
  Estimated Loss on Disposal
    of Discontinued Segments          -              -
                            _____________ _____________
PRIMARY EARNINGS PER SHARE    $     .19     $      .28
                            _____________ _____________
WEIGHTED AVERAGE SHARES
  OUTSTANDING                   5,128,003     4,798,359
                            _____________ _____________

FULLY DILUTED EARNINGS PER SHARE:

  Continuing Operations        $     .18     $      .28
  Loss from Operations of
    Discontinued Segments            .01             -
  Estimated Loss on Disposal
    of Discontinued Segments          -              -
                            _____________ _____________
FULLY DILUTED EARNINGS
        PER SHARE:            $     .19      $    .28
                            _____________ _____________
FULLY DILUTED WEIGHTED AVERAGE
  SHARES OUTSTANDING           5,143,631      4,807,863
                            _____________ _____________










 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)
                                
                                   For the Three Months Ended
                                         September 30,
                          __________________________________
                                        1997        1996
                                  __________________________
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                   $ 970,339    $1,335,389
  Adjustments to reconcile net income
    (loss) to net cash provided by operating activities:
     Depreciation expense               392,312      402,438
     (Increase) decrease in
        accounts receivable         (2,080,838)      390,004
     (Increase) decrease in
        inventory                   (1,766,154)     428,794
     (Increase) decrease in
         prepaid expenses              111,401      (78,358)
     (Increase) decrease in
         other assets                  (3,000)      (2,999)
     Increase (decrease) in
         accounts payable            1,793,131     (333,610)
     Increase (decrease) in
         accrued expenses              197,315       91,476
     Increase (decrease) in 
         dealer service territory
         accrual                     (416,755)            -
     Increase (decrease) in
         customer deposits            (98,770)     (101,328)
     Net deferred taxes              (180,972)            -
     Net liabilities of
         discontinued operations     (131,701)            -
                                  __________________________
      Net Cash Provided by (Used in)
        Operating Activities         $(1,213,692) $2,131,806
                                  __________________________
CASH FLOWS FROM INVESTING ACTIVITIES:
  Construction of molds, plugs,
         and other tooling           (789,878)     (477,506)
  Purchase of property, plant, 
         and equipment               (122,481)     (150,561)
  Proceeds from certificates 
         of deposit, net              696,155            -
                                  __________________________
      Net Cash Provided by(Used in) Investing
        Activities                    $(216,204)   $(628,067)
                                  __________________________
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from long-term debt        $       -    $       -
  Repayment of long-term debt         (139,113)    (185,770)
  Note payable, revolving line of credit      -    (154,306)
  Proceeds from issuance 
      of common stock                  107,500            -
                                  __________________________
      Net Cash Provided by (Used in) Financing
        Activities                    $(31,613)    $(340,076)
                                  __________________________
Net increase (decrease) in cash       $(1,461,509) $1,163,663

Cash at beginning of year             2,994,503    1,360,619
                                  __________________________
Cash at end of period                 $1,532,994   $2,524,282
                                  __________________________
                                
                           [Continued]

                               -8-
<PAGE>

               FOUNTAIN POWERBOAT INDUSTRIES, INC.
                                
              CONSOLIDATED STATEMENTS OF CASH FLOWS
          (unaudited - See Accountants' Review Report)
                                
                           [Continued]
                                
                                
                                   For the Three Months Ended
                                         September 30,
                          __________________________________
                                        1997        1996
                                  __________________________
Supplemental Disclosures of Cash Flow information:
  Cash paid during the period for:
     Interest:
      Unrelated parties               $ 139,619    $ 159,053
      Related parties                         -            -
                                  __________________________
                                      $ 139,619    $ 159,053
                                  __________________________
     Income taxes                     $  55,264    $ 104,680
                                  __________________________

Supplemental Disclosures of Non-cash investing and financing
activities:

  On September 30, 1997 the Company purchased an airplane from
  a related party for $1,375,000 through the issuance of a
  $415,821 note payable to the related party and assuming
  $959,179 underlying indebtness on the plane.
                                
                                
                                
                                
                                
                      
                                
                                
                                
                                
 The accompanying notes are an integral part of these 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 footnote 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 September 30, 1997 are not necessarily
indicative of the operating results for the full year.



2.  ACCOUNTS RECEIVABLE.

    As of September 30, 1997, accounts receivable were $3,948,585
net of the allowance for bad debts of $31,928.  This represents a
increase of $2,080,838 from the $1,867,747 in net accounts
receivable recorded at June 30, 1997.  Of the $3,948,585 balance at
September 30, 1997, $3,226,794 has subsequently been collected as
of October 31, 1997, and the remaining $721,791 is believed to be
fully collectible.      



3.  INVENTORIES.

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


                                   September 30,      June 30,
                                       1997            1997    
                                 
Parts and supplies.................$  3,164,271    $  2,985,615
Work-in-process....................   2,308,191         882,323 
Finished goods.....................     331,449         169,819 
Trailers...........................        -0-          -0- 
Obsolete inventory reserve.........    (100,000)       (100,000)

Total..............................$  5,703,911   $   3,937,757
                                   =============  =============


                              
                              -10-






        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-



5.  ALLOWANCE AND QUALIFYING ACCOUNTS.

    For the three months ended September 30, 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 repur-
        chases     $ 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 September 30, 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
$12,500,000.


                               
                                 -12-
                                   


        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 September 30, 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
$126,000 for the first three months 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 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:

                                        Three Months Ended
                                             September 30,        
 
                                        1997           1996    

Apartments               - rentals  $       970    $     4,370

R.M. Fountain, Jr.       - aircraft
                           rental        71,951         79,462

                                     -----------    -----------
                                    $    72,921    $    83,832
                                     ===========    ===========

    At September 30, 1997 the Company had travel advances and other
receivables from employees in the amount of $121,465, of which
$101,310 was due from an officer of the Company.

                                   
                                 -13-
                                   
8.  INCOME TAXES.

    During the first quarter of Fiscal 1998, the Company will use
up all of its net operating loss carryforwards.  Consequently, for
the three months ended September 30, 1997, the Company provided
$234,332 for current income taxes and a benefit of $180,972 for
deferred income taxes.


9.  STOCK OPTIONS.


  At September 30, 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. 
During the first quarter of this Fiscal year, one of the directors
exercised his stock options of 30,000 shares at $3.583 per share. 


10. EARNINGS PER SHARE.

    The computations of primary and fully 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.       


11.  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 with fractional shares paid in cash on
August 14, 1997.  The split was accomplished during August.  The
effect of the common stock split has been reflected in these
financial statements.

12.  DISCONTINUED OPERATIONS.

Net (liabilities) of discontinued operations at September 30, 1997
consisted of the following:

                                 -14-
                                   

                                        1997  
                                     _________
     Equipment, net                   500,242 
     Accounts Payable                 (38,226)
     Warranty & returns reserve       (98,645)

     Customer deposits                 (4,966)
     Estimated loss on disposal      (440,401)              
                                     _________
              
                                    $ (81,896)
                                     _________


13.  SUBSEQUENT EVENTS.

DISOLUTION 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 first quarter ended September 30,
1997 was $1,126,613 or $.22 per share versus $1,513,258 or $.30 per
share for the corresponding period of the previous year.  Operating
income as a percent of sales for the first quarter of Fiscal 1998
was 9.8% versus 12.3% for the same period the previous Fiscal year. 
The net income for the first quarter of Fiscal 1998 was $970,339 or
$.19 per share.  This compares to net income amounting to
$1,335,389, or $.28 per share (increased from effect of NOL carry-
forward from 1994) for the first quarter of Fiscal 1997.  For the
first quarter of Fiscal 1998, our actual net income was as planned.   

     Net sales were $11,521,434 for the first quarter of Fiscal
1998 as compared to $12,320,373 for the first quarter of the prior
Fiscal year.  Unit sales volume for the first quarter of Fiscal
1998 was 110 boats as compared to 111 boats for the first quarter
of 1997.  The first quarter of fiscal 1998 contained one less
production week than the first quarter of the previous year due to
a planned vacation shutdown.  Overall, sales were as planned for
the first quarter of Fiscal 1998.  

     For the first quarter of Fiscal 1998, the gross margin on
sales was $2,953,361 (26%) as compared to $3,247,114 (26%) for the
first quarter of the prior fiscal year.    

     Selling expenses were $1,033,094 for the first quarter of
Fiscal 1998 as compared to $984,044 for the first quarter of last
year.  Most of the increase for Fiscal 1998 was in promotional
racing and fishing team expense.


                                 -15-
     General and administrative expenses were $793,654 for the
first quarter of Fiscal 1998 as compared to $749,812 for the first
quarter of last year.     

     Interest expense for the first quarter of Fiscal 1998 was
$145,972 as compared to $159,053 for the first 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 for the first quarter was
$16,458 as compared to $85,866 for the first quarter of last year
during which Mr. Fountain earned $65,000 in consulting revenue from
a vendor for the Company.  A new consulting agreement for Fiscal
1998 has not yet been concluded. 

      

FINANCIAL CONDITION.

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


        Net cash used in operating activities.......$(1,213,692)  
         "   "   used in investing activities....... (  216,204)
         "   "   provided by financing activities... (   31,613)
                                                       
        Net decrease in cash........................$(1,461,509) 
                                                     ===========


     This net increase compared to a $1,163,663 net increase for
the first three months of the prior fiscal year.

     Cash used in the first three months of Fiscal 1998 to acquire
additional property, plant, and equipment (investing activity)
amounted to $912,359 of which $789,878 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.  

The Company borrowed another $1,000,000 from GE Capital Services to
fund plant and equipment additions.  An additional $1,500,000 is
available to the Company for further expansion until December 31,
1997.  The Company expects to have borrowed the remaining
$1,500,000 prior to December 31, 1997.  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.


                                 -16-
  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, for completion of its interim
yacht production facility and site improvements to accomodate
testing of the 65' Super Cruiser.  We anticipate finishing our
first yacht during the third quarter of Fiscal 1998. 



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.     
-16-


PART II.  OTHER INFORMATION.


                                 -17-
ITEM 2:   CHANGE IN SECURITIES.


          During the first quarter of Fiscal 1998, the Company 
          announced a three for two forward stock split, The 
          shareholder record date was set at August 1, 1997, with 
          fractional shares to be paid in cash on the payable date,
          August 14, 1997. 


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




                                   



































                                 -18-
                                   
                               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: November 14, 1997  
       Joseph F. Schemenauer
   Vice President, Chief Financial
   Officer, and Designated Principal
   Accounting Officer                                             
                                                  






























                                     


                                 -19-