SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                           FORM 10 - Q


      (Mark One)

 [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 

 [ ] Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934


     For the transition period from            to                  
                                    -----------   ------------


Commission File Number:  1-8101


Exact Name of Registrant as
  Specified in Its Charter:  SMTEK INTERNATIONAL, INC.


State or Other Jurisdiction of                 I.R.S. Employer  
Incorporation or Organization: DELAWARE        Identification No.: 33-0213512
                                        


Address of Principal Executive Offices:        2151 Anchor Court
                                               Thousand Oaks, CA 91320

Registrant's Telephone Number:                 (805) 376-2595



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 [ ] 



The registrant had 34,088,128 shares of Common Stock outstanding as of 
February 10, 1999.



PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


                  SMTEK INTERNATIONAL, INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                       

                             	      December 31,       June 30,
                                       1998              1998
                                      ------            ------
                                    (Unaudited)
        Assets

Current assets:
  Cash and cash equivalents       $  3,720,000     $  4,413,000
  Accounts receivable, net          10,435,000        9,786,000
  Costs and estimated earnings
   in excess of billings on 
   uncompleted contracts             7,763,000        4,785,000
  Inventories, net                   3,348,000        2,446,000
  Prepaid expenses                     279,000          103,000
                                    ----------       ----------

     Total current assets           25,545,000       21,533,000
                                    ----------       ----------
Property, equipment and
 improvements, at cost:
  Buildings and improvements         6,196,000        6,084,000
  Plant equipment                   16,684,000       15,646,000
  Office and other equipment         2,286,000        2,180,000
                                    ----------       ----------

                                    25,166,000       23,910,000
Less: Accumulated depreciation
 and amortization                  (17,591,000)     (17,035,000)
                                    ----------       ----------
Property, equipment and
 improvements, net                   7,575,000        6,875,000
                                    ----------       ----------
Other assets:
  Goodwill, net                      2,537,000        3,171,000
  Deposits and other assets            255,000          251,000
                                    ----------      -----------

                                     2,792,000        3,422,000
                                    ----------      -----------

                                  $ 35,912,000     $ 31,830,000
                                    ==========       ==========



                  SMTEK INTERNATIONAL, INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                                 (Continued)

                                    December 31,       June 30,
                                       1998              1998
                                      ------            ------
                                    (Unaudited)

Liabilities and Stockholders' Equity

Current liabilities:
  Bank lines of credit payable    $  3,882,000     $  4,441,000
  Current portion of 
   long-term debt                    3,248,000        1,214,000
  Accounts payable                  12,341,000        7,795,000
  Accrued payroll and
   employee benefits                   894,000        1,211,000
  Other accrued liabilities          2,476,000        2,427,000
                                    ----------       ----------  

     Total current liabilities      22,841,000       17,088,000
                                    ----------       ----------


Long-term debt                       5,009,000        7,186,000
                                    ----------       ----------

Commitments and contingencies

Stockholders' equity:
  Common stock                         341,000          341,000
  Additional paid-in capital        32,159,000       32,159,000
  Accumulated deficit              (23,854,000)     (24,294,000)
  Accumulated other 
   comprehensive loss                 (584,000)        (650,000)
                                    ----------       ----------

     Total stockholders' equity      8,062,000        7,556,000 
                                    ----------       ----------

                                  $ 35,912,000     $ 31,830,000
                                    ==========       ==========






                   See accompanying Notes to Unaudited
                    Consolidated Financial Statements

                  SMTEK INTERNATIONAL, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (Unaudited)


                                        Three Months Ended   
                                           December 31,       
                                      -----------------------
                                       1998             1997
                                      ------           ------

Revenues                          $ 15,568,000     $ 12,820,000

Cost of goods sold                  13,147,000       10,400,000
                                    ----------       ----------
Gross profit                         2,421,000        2,420,000
                                    ----------       ----------
Operating expenses:
  Administrative and selling         1,754,000        1,446,000
  Goodwill amortization                317,000          317,000
                                    ----------       ----------
                                     2,071,000        1,763,000
                                    ----------       ----------
Operating income                       350,000          657,000
                                    ----------       ----------
Non-operating income (expense):
  Interest income                       49,000           20,000
  Interest expense                    (241,000)        (269,000)
  Other income (expense), net           80,000          (10,000)
                                    ----------       ----------
                                      (112,000)        (259,000)
                                    ----------       ----------

Income before income taxes             238,000          398,000

Provision for income taxes              31,000              -
                                    ----------       ----------
Net income                        $    207,000     $    398,000
                                    ==========       ==========

Basic and diluted earnings 
 per share                             $  0.01          $  0.01
                                          ====             ====
Shares used in computing
 earnings per share:

    Basic                           34,088,128       28,950,102
                                    ==========       ==========
    Diluted                         34,088,128       29,058,891
                                    ==========       ==========


                   


                    See accompanying Notes to Unaudited
                    Consolidated Financial Statements. 

                  SMTEK INTERNATIONAL, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (Unaudited) 


                                         Six Months Ended   
                                           December 31,       
                                      -----------------------
                                       1998             1997
                                      ------           ------

Revenues                          $ 29,633,000     $ 26,233,000

Cost of goods sold                  24,930,000       21,549,000
                                    ----------       ----------
Gross profit                         4,703,000        4,684,000
                                    ----------       ----------
Operating expenses:
  Administrative and selling         3,255,000        2,837,000
  Goodwill amortization                634,000          634,000
                                    ----------       ----------
                                     3,889,000        3,471,000
                                    ----------       ----------
Operating income                       814,000        1,213,000
                                    ----------       ----------
Non-operating income (expense):
  Interest income                       79,000           36,000
  Interest expense                    (483,000)        (533,000)
  Other income (expense), net           82,000          (17,000)
                                    ----------       ----------
                                      (322,000)        (514,000)
                                    ----------       ----------

Income before income taxes             492,000          699,000

Provision for income taxes              53,000              -
                                    ----------       ----------
Net income                        $    439,000     $    699,000
                                    ==========       ==========

Basic and diluted earnings 
 per share                             $  0.01          $  0.02
                                          ====             ====
Shares used in computing
 earnings per share:      
   
    Basic                           34,088,128       28,948,673
                                    ==========       ==========
    Diluted                         34,088,128       29,069,443
                                    ==========       ==========
    






                    See accompanying Notes to Unaudited
                    Consolidated Financial Statements. 

                 SMTEK INTERNATIONAL, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (Unaudited)

                                                  Six Months Ended 
                                                    December 31,      
                                               -----------------------
                                                1998             1997
                                               ------           ------
Cash flows from operating activities:
  Net income                                $  439,000        $  699,000
  Adjustments to reconcile net income
   to net cash provided by (used in)
   operating activities:
    Depreciation expense                       877,000           815,000
    Amortization of goodwill                   634,000           634,000
    Eliminate duplicate period of pooled
     company to conform year-ends                  -            (464,000)
    Net increase in operating
     working capital                        (1,140,000)       (2,600,000)
    Other                                       30,000            75,000   
                                             ---------         ---------
Net cash provided by (used in) operating 
 activities                                    840,000          (841,000)
                                             ---------         ---------

Cash flows from investing activities:
  Capital expenditures                        (452,000)         (333,000)
                                             ---------         ---------

Cash flows from financing activities:
  Proceeds from (repayments of) bank 
   lines of credit                            (584,000)        1,589,000 
  Proceeds from long-term debt                     -           2,000,000
  Payments of long-term debt                  (530,000)       (5,786,000)
  Proceeds from foreign government grants          -             123,000
                                             ---------         ---------
Net cash used in financing activities       (1,114,000)       (2,074,000)
                                             ---------         ---------

Effect of exchange rate changes on cash         33,000            32,000
                                             ---------         ---------
Decrease in cash and cash equivalents         (693,000)       (3,216,000)

Cash and cash equivalents at 
 beginning of period                         4,413,000         5,398,000
                                             ---------         ---------
Cash and cash equivalents at 
 end of period                              $3,720,000        $2,182,000
                                             =========         =========




                     See accompanying Notes to Unaudited
                      Consolidated Financial Statements.

                  SMTEK INTERNATIONAL, INC. AND SUBSIDIARIES 
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 



Note 1 - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements include the 
accounts of SMTEK International, Inc. and its subsidiaries (the "Company").  
Effective October 9, 1998, the Company changed its name to SMTEK 
International, Inc. from DDL Electronics, Inc.  The Company provides 
electronics manufacturing services ("EMS") to original equipment manufacturers 
("OEMs") in the computer, telecommunications, instrumentation, medical, 
industrial and aerospace industries.  The Company also manufactures multilayer 
printed circuit boards ("PCBs") for use primarily in the computer, 
communications and instrumentation industries.  The Company's EMS operations 
are located in Southern California, Florida and Northern Ireland.  The 
Company's PCB facilities are located in Northern Ireland.

The acquisition of Jolt Technology, Inc. ("Jolt") on June 30, 1998 was 
accounted for under the pooling-of-interests method and accordingly, the 
consolidated financial statements prior to the acquisition have been restated 
to include the accounts and results of operations of Jolt for all periods 
presented.  All significant intercompany transactions and accounts have been 
eliminated in consolidation.  In the opinion of the Company's management, the 
accompanying consolidated financial statements reflect all adjustments 
(consisting of normal recurring accruals) necessary to present fairly the 
Company's financial position at December 31, 1998 and its results of 
operations and cash flows for the three and six months ended December 31, 1998 
and 1997. 

The Company uses a 52-53 week fiscal year ending on the Friday closest to June 
30, which for fiscal year 1998 fell on July 3, 1998.  In the accompanying  
consolidated financial statements, the 1998 fiscal year end is shown as June 
30 and the interim period end for both years is shown as December 31 for 
clarity of presentation.  The actual interim periods ended on January 1, 1999 
and January 2, 1998.  The three and six month periods of fiscal 1999 consisted 
of 13 weeks and 26 weeks, respectively, compared to 13 and 27 weeks for the 
same periods of fiscal 1998.

Certain notes and other information are condensed or omitted from the interim 
financial statements presented in this Quarterly Report on Form 10-Q.  
Therefore, these financial statements should be read in conjunction with the 
Company's 1998 Annual Report to Stockholders as filed with the Securities and 
Exchange Commission on August 31, 1998.

Certain reclassifications have been made to the interim fiscal 1998 financial 
statements to conform with the fiscal 1999 financial statement presentation.  
Such reclassifications had no effect on the Company's results of operations or 
stockholders' equity.  


Note 2 - EARNINGS PER SHARE

In 1997, the Financial Accounting Standards Board issued Statement No. 128, 
"Earnings per Share" ("SFAS 128").  SFAS 128 replaced the previously reported 
primary and fully diluted earnings per share with basic and diluted earnings 
per share.  Basic earnings per share represents net income available to common 
shareholders divided by the weighted average number of common shares 
outstanding for the period.  Unlike primary earnings per share, basic earnings 
per share excludes any dilutive effects of options, warrants, and convertible 
securities.  Diluted earnings per share is very similar to the previously 
reported fully diluted earnings per share.  All earnings per share amounts for 
all periods have been presented and, where necessary, restated to conform to 
SFAS 128 requirements.

A reconciliation of the numerator and denominator used in the computation of 
earnings per share follows:

                              Three months ended          Six months ended
                               December 31, 1997          December 31, 1997
                              ------------------          -----------------
   Numerator:
Net income for basic
 and diluted earnings 
 per share                        $  398,000                 $  699,000
                                  ==========                 ==========

   Denominator:
Weighted average number
 of common shares 
 outstanding for basic
 earnings per share               28,950,102                 28,948,673
Assumed exercise of options 
 and warrants net of shares 
 assumed reacquired under 
 treasury stock method               108,789                    120,770
                                  ----------                 ----------
Total shares for diluted
 earnings per share               29,058,891                 29,069,443
                                  ==========                 ==========


Options and warrants to purchase 4,626,480 shares of common stock at prices 
ranging from $0.50 to $3.50 were outstanding during the three and six months 
ended December 31, 1998, but were not included in the computation of diluted 
earnings per share because the option and warrant exercise prices were greater 
than the average market price of the common shares, and would therefore be 
antidilutive.

Convertible subordinated debentures aggregating $1,580,000, due in 2008 and 
convertible at a price of $10.63 per share at any time prior to maturity, were 
outstanding during the three and six months ended December 31, 1998 and 1997, 
but were not included in the computation of diluted earnings per share because 
the effect would be antidilutive.

Convertible subordinated debentures aggregating $323,000, due on May 15, 2001 
and convertible at a price of $2.00 per share at any time prior to maturity, 
were outstanding during the three and six months ended December 31, 1998 and 
1997, but were not included in the computation of diluted earnings per share 
because the effect would be antidilutive.



Note 3 - ACCOUNTS RECEIVABLE

The components of accounts receivable are as follows:


                                      December 31,    June 30,
                                         1998           1998
                                         ----           ----
    Trade receivables                 $9,942,000     $9,890,000
    Other receivables                    635,000         63,000
    Less allowance for doubtful
     accounts                           (142,000)      (167,000)
                                       ---------      ---------
                                     $10,435,000     $9,786,000
                                      ==========      =========

Included in other receivables at December 31, 1998 are grants due from the 
Industrial Development Board for Northern Ireland of $83,000.


Note 4 - COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS ON UNCOMPLETED
          CONTRACTS

The components of costs and estimated earnings in excess of billings on 
uncompleted contracts are as follows:

                                      December 31,    June 30,
                                         1998           1998
                                         ----           ----
  Costs incurred on uncompleted
   contracts                         $43,457,000    $32,324,000
  Estimated earnings                   4,723,000      5,802,000 
                                      ----------     ----------
                                      48,180,000     38,126,000
  Less:  Billings to date            (40,417,000)   (33,341,000)
                                      ----------     ----------
                                     $ 7,763,000    $ 4,785,000  
                                      ==========     ========== 

Costs and estimated earnings in excess of billings on uncompleted contracts 
consists of revenue recognized under electronics assembly contracts which 
amounts were not billable at the balance sheet date.  Essentially all of the 
unbilled receivables are expected to be billed within 90 days of the balance 
sheet date.


Note 5 - INVENTORIES

Inventories consist of the following:

                                      December 31,    June 30,
                                         1998           1998
                                         ----           ----
  Raw materials                       $2,668,000     $2,014,000
  Work in process                        755,000        643,000
  Finished goods                         319,000        278,000
  Less reserves                         (394,000)      (489,000)
                                       ---------      ---------
                                      $3,348,000     $2,446,000
                                       =========      =========


Note 6 - OTHER ACCRUED LIABILITIES

Other accrued liabilities consist of the following:

                                      December 31,    June 30,
                                         1998           1998
                                         ----           ----
  Environmental liabilities           $  506,000     $  528,000
  Accrued interest payable               351,000        237,000
  Other                                1,619,000      1,662,000
                                       ---------      ---------
                                      $2,476,000     $2,427,000
                                       =========      =========


Note 7 - FINANCING ARRANGEMENTS 

Bank Credit Agreements

The Company has an accounts receivable-based working capital bank line of 
credit for its operating unit located in Thousand Oaks, California ("SMTEK 
T.O."), which provides for borrowings of up to $2,750,000 at an interest rate 
of prime (7.75% at December 31, 1998) plus 1.25%.  At December 31, 1998, 
borrowings outstanding under this credit facility amounted to $2,747,000.  
SMTEK T.O.'s line of credit expires September 1, 1999.  The Company also has a 
credit facility agreement with Ulster Bank Markets for its Northern Ireland 
operations.  This agreement includes a working capital line of credit of 
3,000,000 pounds sterling (approximately $4,980,000), and provides for 
interest on borrowings at the bank's base rate (6.14% at December 31, 1998) 
plus 1.50%.  At December 31, 1998, borrowings outstanding under this credit 
facility amounted to $1,135,000.  The credit facility agreement with Ulster 
Bank Markets expires July 31, 1999.

Note payable to related party

The Company has a $2,000,000 note payable to Thomas M. Wheeler, the Company's 
largest stockholder.  The note bears interest at 8%, matures on October 31, 
1999, and is secured by the common stock of the Company's subsidiary, SMTEK 
T.O.  The Company is currently evaluating various alternatives for paying off 
this note at or prior to maturity, as further discussed under "Liquidity and 
Capital Resources" in the accompanying "Management's Discussion and Analysis 
of Financial Condition and Results of Operation".



Note 8 - PRO FORMA INCOME TAX EXPENSE

Effective June 30, 1998, the Company acquired Jolt, which was an S Corporation 
for income tax purposes prior to its acquisition by the Company.  Following 
are pro forma consolidated operating results, which present state income taxes 
(the Company's federal NOLs are assumed to be utilized to shelter Jolt's 
federal taxable income) as a pro forma adjustment as if Jolt had filed C 
Corporation tax returns for the pre-acquisition periods:


                                        Three months ended   Six months ended
                                         December 31, 1997   December 31, 1997
                                         -----------------   -----------------
Net income before pro forma 
  adjustments, per consolidated
  statements of operations                    $ 398,000          $ 699,000
Pro forma provision for income taxes              8,000             26,000
                                               --------           --------
Pro forma net income                          $ 390,000          $ 673,000
                                               ========           ========


Note 9 - COMPREHENSIVE INCOME

The Company has adopted Statement of Financial Accounting Standards No. 130, 
"Reporting Comprehensive Income" ("SFAS 130"), as of the first quarter of 
fiscal 1999.  SFAS 130 establishes standards for reporting and display of 
comprehensive income and its components in a full set of financial statements. 
The Company plans to display comprehensive income and its components in the 
Consolidated Statement of Stockholders' Equity in the year-end 1999 financial 
statements.  Comprehensive income is comprised of the following:
     
 Three months ended      Six months ended
                                        December 31,           December 31,
                                     -------------------    -----------------
                                      1998        1997       1998      1997 
                                     ------      ------     ------    ------
Net income                          $207,000   $398,000    $439,000  $699,000
Other comprehensive income 
 (loss), net of tax: 
   Foreign currency translation 
    adjustments                     (108,000)    83,000      66,000   (19,000)
                                    --------   --------    --------  --------
Comprehensive income                $ 99,000   $481,000    $505,000  $680,000
                                    ========   ========    ========  ========


"Accumulated other comprehensive loss" presented on the accompanying 
consolidated condensed balance sheets consists of the foreign currency 
translation adjustment.



Note 10 - INFORMATION RELATING TO STATEMENTS OF CASH FLOWS

"Net cash used by operating activities" includes cash payments for interest as 
follows: 
                                         Six months ended
                                           December 31,
                                       ---------------------
                                        1998           1997
                                       ------         ------
Interest paid                        $ 335,000      $ 351,000 
                                       =======        =======   


"Net increase in operating working capital" is comprised of the following:

                                          Six months ended
                                            December 31,
                                       ---------------------
                                        1998           1997
                                       ------         ------
(Increase)decrease in 
 accounts receivable               $  (581,000)    $   246,000
Increase in costs and estimated
 earnings in excess of billings
 on uncompleted contracts           (2,978,000)        (96,000)
(Increase) decrease in inventories    (876,000)        737,000
Increase in prepaid expenses          (176,000)       (293,000)
Increase (decrease) in 
 accounts payable                    3,748,000      (2,897,000)
Decrease in accrued payroll 
 and employee benefits                (324,000)       (241,000)
Increase (decrease) in 
 other liabilities                      47,000         (56,000)
                                     ---------       ---------
Net increase in operating
 working capital                   $(1,140,000)    $(2,600,000)
                                     =========       =========


Following is the supplemental schedule of non-cash investing and financing 
activities:
                                          Six months ended
                                            December 31,
                                       ---------------------
                                        1998           1997
                                       ------         ------
Capital expenditures financed by
 lease obligations                  $  327,000      $ 233,000 

Conversion of debt to equity        $      -        $  10,000


Note 11 - COMMITMENTS AND CONTINGENCIES

In September 1998, the Company received tax deficiency notices from the 
Internal Revenue Service in the total amount of $1,312,000 relating to income 
tax refunds received by the Company in 1995.  Of this amount, $1,110,000 was 
recorded as an income tax benefit in fiscal 1996.  Management believes the 
Company had a legitimate basis under Section 172(f) of the Internal Revenue 
Code to apply for and receive the amounts which have now been disallowed, and 
plans to appeal the tax deficiency notices and vigorously contest the 
assessment.  Accordingly, no provision has been made in the financial 
statements for the six months ended December 31, 1998 for any amount which may 
ultimately have to be paid back to the government.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS

Certain statements made below are forward-looking in nature and reflect the 
Company's current expectations and plans.  Such statements involve various 
risks and uncertainties that could cause actual results to differ materially 
from those currently expected by the Company.  Meaningful factors that might 
cause such differences include, but are not limited to, significant historical 
losses, limited capital resources and a continuing need for financing, 
dependence on key personnel, concentration of revenues among major customers, 
historical dependence on government business on the part of the Company's 
Thousand Oaks, California operating unit ("SMTEK T.O.") and its recent shift 
into commercial business, industry conditions, competition, environmental 
matters, dependence on suppliers and other factors, as described in more 
detail in the section titled "Risk Factors" in the Company's Registration 
Statement on Form S-3 (No. 333-62621) on file with the Securities and Exchange 
Commission.


DESCRIPTION OF THE BUSINESS

The Company provides electronics manufacturing services ("EMS") to original 
equipment manufacturers ("OEMs") in the computer, telecommunications, 
instrumentation, medical, industrial and aerospace industries. The Company 
also manufactures multilayer printed circuit boards ("PCBs") for use primarily 
in the computer, communications, and instrumentation industries.  The 
Company's EMS operations are located in Southern California, Florida and 
Northern Ireland.  Its PCB facilities are located in Northern Ireland.


RESULTS OF OPERATIONS

The Company uses a 52-53 week fiscal year ending on the Friday closest to June 
30.  In the accompanying consolidated financial statements, the interim period 
end for both years is shown as December 31 for clarity of presentation.  The 
actual periods ended on January 1, 1999 and January 2, 1998.  The three and 
six month periods of fiscal 1999 consisted of 13 weeks and 26 weeks, 
respectively, compared to 13 and 27 weeks for the same periods of fiscal 1998.

Consolidated sales for the three months ended December 31, 1998 were 
$15,568,000, compared to $12,820,000 for the same period in the previous 
fiscal year.  This increase is attributable to the Company's EMS operations, 
for which sales increased by 32% from the second quarter of last year.  The 
increase in EMS revenues was offset by a 24% decline in PCB sales from the 
same period in the previous fiscal year, which was attributable to softness in 
the European PCB market.  

Consolidated sales increased from $26,233,000 for the six months ended 
December 31, 1997 to $29,633,000 for the latest six months.  Sales for the 
Company's EMS operations increased by 20% for the latest six months compared 
to the six months ended December 31, 1997.  The sales growth of the EMS 
operations is attributable primarily to several new contracts obtained by 
SMTEK T.O.  Sales for the PCB operations for the six months ended December 31, 
1998 decreased by 19% from the same period in the prior year, due to the same 
reason cited above for the three month period.

Consolidated gross profit for the six months ended December 31, 1998 was 
$4,703,000 (15.9% of sales), compared to $4,684,000 (17.9% of sales) for the 
same period of the prior year.  Gross profit of the EMS operations was 
$3,981,000 (15.4% of sales) for the six months ended December 31, 1998, 
compared to $3,577,000 (16.6% of sales) for the prior year, due to the ramp-up 
of several new contracts in the six months ended December 31, 1998, as well as 
a change in the mix of business, with higher direct material costs as a 
percentage of revenues in the latest period.  For the six months ended 
December 31, 1998, gross profit from PCB operations decreased approximately 
35% from gross profit for the comparable period of the prior year, due to the 
decrease in sales and a decrease in higher margin quick-turn orders.

Administrative and selling expenses for the three and six months ended 
December 31, 1998 were $1,754,000 and $3,255,000, respectively, compared to 
$1,446,000 and $2,837,000 for the same periods in the previous year.  The 
increase is attributable principally to administrative and sales staff 
additions.  

In the three and six months ended December 31, 1998, consolidated operating 
income was $350,000 and $814,000, respectively, compared to $657,000 and 
$1,213,000 for the same periods in the previous fiscal year. 

Interest expense decreased from $533,000 in the six months ended December 31, 
1997 to $483,000 in the six months ended December 31, 1998.  The decrease in 
interest expense is partly due to the fact that notes payable of $1,625,000 
that were due from Jolt Technology, Inc. ("Jolt") to a Jolt shareholder were 
converted to Jolt common stock on June 30, 1998 as a condition of and prior to 
the consummation of the Jolt acquisition by the Company.  Jolt's pre-
acquisition interest expense is included in the Company's consolidated 
statement of operations pursuant to the pooling-of-interests accounting 
method.  The additional week of operations included in the six months ended 
December 31, 1997 as a result of the Company's 52-53 week fiscal year also 
contributed to the decrease. 

The provision for income taxes of $53,000 for the six months ended December 
31, 1998 represents federal alternative minimum tax and state income tax.  The 
federal alternative minimum tax is imposed at a 20% rate on the Company's 
alternative minimum taxable income, which is determined by making statutory 
adjustments to the Company's regular taxable income.  Federal net operating 
loss carryforwards offset 90% of the Company's alternative minimum taxable 
income.  The Company does not have a foreign income tax provision or liability 
due to the existence of net operating loss carryforwards for United Kingdom 
income tax purposes.

Net income for the six months ended December 31, 1998 was $439,000 or $.01 per 
share, compared to $699,000 or $.02 per share for the six months ended 
December 31, 1997. 


RECENT ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board issued Statement No. 131, 
"Disclosures about Segments of an Enterprise and Related Information" ("SFAS 
131") in June 1997.  SFAS 131 establishes standards for the way public 
business enterprises are to report information about operating segments in 
annual financial statements and requires enterprises to report selected 
information about operating segments in interim financial reports issued to 
shareholders.  It also establishes standards for related disclosures about 
products and services, geographic areas, and major customers.  It replaces the 
"industry segment" concept of Statement of Financial Accounting Standards No. 
14, "Financial Reporting for Segments of a Business Enterprise", with a 
"management approach"  basis for identifying reportable segments.  SFAS 131 is 
effective for financial statements for fiscal years beginning after December 
15, 1997.  The Company will adopt SFAS 131 in its annual financial statements 
for the fiscal year ending June 30, 1999.  Management believes that the 
adoption of SFAS 131 will not have a material impact on the Company's 
financial position or results of operations.

In June 1998, the FASB issued Statement No. 133, "Accounting for Derivative 
Instruments and Hedging Activities" ("SFAS 133") which will require 
recognition of all derivatives as either assets or liabilities on the balance 
sheet at fair value.  The Company will adopt SFAS 133 in the first quarter of 
its fiscal year ending June 30, 2000.  Management has not completed an 
evaluation of the effects this standard will have on the Company's 
consolidated financial statements.


LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of liquidity are its cash and cash equivalents, 
which amounted to $3,720,000 at December 31, 1998, and its bank lines of 
credit.  During the six months ended December 31, 1998, cash and cash 
equivalents decreased by $693,000.  This decrease consisted of capital 
expenditures of $452,000, repayments of bank lines of credit of $584,000 and 
reductions of long-term debt of $530,000, partially offset by cash provided by 
operating activities of $840,000 and the effect of exchange rate changes on 
cash of $33,000.  

Components of operating working capital increased by $1,140,000 during the 
first six months of fiscal 1998, comprised of a $581,000 increase in accounts 
receivable, a $2,978,000 increase in costs and earnings in excess of billings 
on uncompleted contracts, a $876,000 increase in inventories, a $176,000 
increase in prepaid expenses, and a $324,000 decrease in accrued payroll and 
employee benefits, partially offset by a $3,748,000 increase in accounts 
payable and a $47,000 increase in other liabilities. 

The Company has an accounts receivable-based working capital bank line of 
credit for its subsidiary, SMTEK T.O., which provides for borrowings of up to 
$2,750,000 at an interest rate of prime (7.75% at December 31, 1998) plus 
1.25%.  At December 31, 1998, borrowings outstanding under this credit 
facility amounted to $2,747,000.  SMTEK T.O.'s line of credit expires 
September 1, 1999.  The Company also has a credit facility agreement with 
Ulster Bank Markets for its Northern Ireland operations.  This agreement 
includes a working capital line of credit of 3,000,000 pounds sterling 
(approximately $4,980,000), and provides for interest on borrowings at the 
bank's base rate (6.14% at December 31, 1998) plus 1.50%.  At December 31, 
1998, borrowings outstanding under this credit facility amounted to 
$1,135,000.  The credit facility agreement with Ulster Bank Markets expires 
July 31, 1999.

The Company's EMS and PCB fabrication businesses require continuing investment 
in plant and equipment to remain competitive.  In recent years, however, the 
Company's financial position has severely restricted its ability to make 
capital improvements in its facilities. Capital expenditures during fiscal 
1998, 1997 and 1996 were approximately $1,424,000, $2,372,000, and $1,825,000, 
respectively.  The Company anticipates it will need to increase its capital 
spending in the coming years in order to stay competitive as technology 
evolves.  Capital expenditures for the six months ended December, 1998 were 
$1,526,000.  Management estimates that capital expenditures of as much as $1.5 
million may be required in the second half of fiscal 1999.  Of that amount, 
the substantial majority is expected to be financed by a combination of 
capital leases, secured loans and foreign government grants.

The Company has a $2,000,000 note payable to Thomas M. Wheeler, the Company's 
largest stockholder.  The note bears interest at 8%, matures on October 31, 
1999, and is secured by the common stock of the Company's subsidiary, SMTEK 
T.O.  The Company is currently evaluating various alternatives for paying off 
this note at or prior to maturity.  Those alternatives include the possible 
private placement sale of common stock to raise part or all of the funds 
needed to retire the note.  While no assurance can be given that the Company 
would be able to sell stock on acceptable terms or at all, management believes 
that the Company has the resources to pay off this note by its maturity date.

Management believes that the Company's cash resources, borrowing capacity on 
its working capital lines of credit and its equity raising capability are 
sufficient to fund operations for at least the next 12 months.


"YEAR 2000" ISSUES

Many existing computer programs use only two digits to identify a year in the 
date field.  These programs were designed and developed without considering 
the impact of the upcoming change in the century.  If not corrected, many 
computer applications could fail or create erroneous results by or at the year 
2000.  The global extent of the potential impact of the Year 2000 problem is 
not yet known, and if not timely corrected, it could affect the economy and 
the Company.  The Company uses computer information systems and manufacturing 
equipment which may be affected.  It also relies on suppliers and customers 
who are also dependent on systems and equipment which use date dependent 
software.

The Company's Year 2000 compliance program includes the following phases:  
identifying systems that need to be replaced or fixed; carrying out 
remediation work to modify existing systems or convert to new systems; and 
conducting validation testing of systems and applications to ensure 
compliance.  The Company has essentially completed the first phase of the 
program and is now primarily in the remediation and validation phases.  The 
amount of work required is not expected to be extensive, because the Company 
has replaced certain of its financial and operational systems during the last 
two years to enhance or better meet its functional and operational 
requirements.  The Company believes that such replacements substantially meet 
or address its Year 2000 issues.  In addition to such normal replacement, the 
Company may be required to modify some of the existing software and hardware 
in order for its computer systems to function properly with respect to dates 
in the year 2000 and thereafter.  The Company also has contacted its major 
suppliers to assess their preparations for the year 2000.  These actions are 
intended to help mitigate the possible external impact of Year 2000 issues.  
Even so, it is impossible to fully assess the potential consequences if 
service interruptions occur from suppliers or in such infrastructure areas as 
utilities, communications, transportation, banking and government. 

The Company anticipates that the remediation and validation phases of its Year 
2000 compliance program will be completed by June 30, 1999.  Management 
estimates that the total cost of its Year 2000 program will not exceed 
$200,000.  If the Company is unsuccessful or if the remediation efforts of its 
key suppliers are unsuccessful in dealing with Year 2000 problems, there may 
be a material adverse impact on the Company's consolidated results and 
financial condition.  The Company is unable to quantify any potential adverse 
impact at this time, but will continue to monitor and evaluate the situation.  
The Company plans to create a Year 2000 contingency plan if validation testing 
of the systems is not satisfactorily completed by September 30, 1999. 


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's financial instruments include cash and cash equivalents, short-
term and long-term debt, and foreign currency forward exchange contracts.  At 
December 31, 1998, the carrying amount of long-term debt (including current 
portion thereof) was $8,257,000 and the fair value was $8,079,000.  The 
carrying values of the Company's other financial instruments approximated 
their fair values.  The fair value of the Company's financial instruments is 
estimated based on quoted market prices for the same or similar issues.  

It is the policy of the Company not to enter into derivative financial 
instruments for speculative purposes.  The Company enters into foreign 
currency forward exchange contracts to protect itself from adverse currency 
rate fluctuations on foreign currency commitments entered into in the ordinary 
course of business.  These commitments are generally for terms of less than 
one year.  The foreign currency forward exchange contracts are executed with 
creditworthy banks and are denominated in currencies of major industrial 
countries.  Any gain or loss incurred on foreign currency forward exchange 
contracts is offset by the effects of currency movements on the respective 
underlying hedged transactions.  The face amount of all the Company's 
outstanding foreign currency forward exchange contracts aggregated $740,000 at 
December 31, 1998.

Based on the Company's overall currency rate exposure at December 31, 1998, a 
10 percent change in currency rates would not have had a material effect on 
the financial position, results of operations, or cash flows of the Company.



PART II.  OTHER INFORMATION
Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

a.  Exhibits:
    
     27    Financial Data Schedule (electronic filing only)




                                 SIGNATURE 

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



      February 11, 1999                         /s/ Richard K. Vitelle   
---------------------------------        -----------------------------------
            Date                                Richard K. Vitelle 
                                                Vice President -Finance 
                                                (Principal Financial Officer)
16

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