UNITED STATES
                 SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, D. C.  20549
                              FORM 10-Q

  (Mark One)
   XX  QUARTERLY REPORT PURSUANT TO SECTION 13  OR 15(d) OF THE  SECURITIES
       EXCHANGE ACT OF 1934
       For the quarterly period ended             September 30, 1998
       
                                 or

       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     1-9603  

                     STEVENS INTERNATIONAL, INC.
       (Exact name of registrant as specified in its charter)

                 Delaware                         75-2159407     
       (State or other jurisdiction of          (IRS Employer
         incorporation or organization)       Identification No.)

            5500 Airport Freeway, Fort Worth, Texas 76117
         (Address of principal executive offices) (zip code)

                            817/831-3911

         (Registrant's telephone number, including area code)
             __________________________________________
        (Former name, former address and former fiscal year,
                    if changed since last report)

  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    XX         No  _____

                APPLICABLE ONLY TO CORPORATE ISSUERS:
  Indicate the number of shares outstanding of each of the issuer's classes
  of common stock, as of the latest practicable date.

         Title of Each Class                Outstanding at November 6, 1998
  Series A Stock, $0.10 Par Value                        7,418,174
  Series B Stock, $0.10 Par Value                        2,083,959

<PAGE>

                          TABLE OF CONTENTS

  Part I.   FINANCIAL INFORMATION                              PAGE NUMBER

    Item 1. Financial Statements

             Consolidated Condensed Balance Sheets                   3
             December 31, 1997 and September  30, 1998
             (unaudited)

             Consolidated Condensed Statements of Operations         4
             Three and Nine months ended September  30, 1998 and
             1997  (unaudited)

             Consolidated Condensed Statements of                    5
             Stockholders' Equity December 31, 1997 and
             Nine months ended September  30, 1998  (unaudited)

             Consolidated Condensed Statements of Cash Flows         6
             Nine months ended September  30, 1998 and 1997
             (unaudited)

             Notes to Consolidated Condensed Financial               7
             Statements (unaudited)

    Item 2. Management's Discussion and Analysis of                 11
            Financial Condition and Results of Operations


  Part II.  OTHER INFORMATION

    Item 1. Legal Proceedings                                       16

    Item 6. Exhibits and Reports on Form 8-K                        16

    CAUTIONARY  STATEMENT -  This Form  10-Q may  contain statements  which
    constitute "forward-looking"  information as  that term  is defined  in
    the  Private  Securities  Litigation Reform  Act  of  1995  or  by  the
    Securities and  Exchange Commission ("SEC")  in its rules,  regulations
    and  releases. Stevens  International,  Inc. (the  "Company")  cautions
    investors that any such forward-looking statements made by the  Company
    are not  guarantees of future performance  and that actual results  may
    differ materially  from those in  the forward-looking statements.  Some
    of the  factors that could  cause actual results  to differ  materially
    from estimates  contained in the  Company's forward-looking  statements
    are set forth in the Form 10-K for the year ended December 31, 1997.
<PAGE>
<TABLE>
             STEVENS INTERNATIONAL, INC. AND SUBSIDIARIES
                CONSOLIDATED CONDENSED BALANCE SHEETS
              (Amounts in thousands, except share data)

                                                September 30,  December 31,
                                                    1998          1997
                   ASSETS                              (unaudited)
                                                    ------        ------
    <S>                                            <C>          <C>
    Current assets:
      Cash                                         $    41       $   211 
      Trade accounts receivable, less allowance           
       for losses of $355 and $374 in 1998 and
       1997, respectively                            3,433         3,158 
      Costs and estimated earnings in excess of
       billings on  long-term contracts                246         2,209 
      Inventory  (Note 3)                            5,835         6,610 
      Other current assets                           1,536           759 
      Assets held for sale  (Note 6)                 1,700        14,735 
                                                    ------        ------
              Total current assets                  12,791        27,682
    Property, plant and equipment, net               2,603         2,409 
    Other assets, net                                1,600         1,799 
                                                    ------        ------
                                                   $16,994       $31,890 
                                                    ======        ======
<PAGE>
        LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Trade accounts payable                       $ 3,317       $ 2,691 
      Billings in excess of costs and estimated
       earnings on long-term contracts                 ---           133 
      Other current liabilities                      3,815         6,322 
      Income taxes payable                              75           ---  
      Customer deposits                                799           802 
      Advances from affiliates                         ---           950 
      Current portion of long-term debt(Note 4)      1,154        27,678 
                                                    ------        ------
              Total current liabilities              9,160        38,576 
    Long-term debt                                   5,763            55 
    Accrued pension costs                            2,870         2,870 
    Commitments and contingencies
    Stockholders' equity:
      Preferred stock, $0.10 par value,
       2,000,000 shares  authorized, none issued
       and outstanding                                 ---           --- 
      Series A common stock, $0.10 par value,
       20,000,000  shares authorized, 7,419,000
       and 7,391,000 shares  issued and 
       outstanding at September 30, 1998 and  
       December 31, 1997, respectively                 742           739 
      Series B common stock, $0.10 par value,
       6,000,000 shares authorized, 2,084,000 and
       2,098,000 shares issued and outstanding at
       September 30, 1998 and December 31, 1997,
       respectively                                    208           210 
      Additional paid-in-capital                    39,961        39,941 
      Foreign currency translation adjustment       (1,333)         (769)
      Excess pension liability adjustment           (2,245)       (2,245)
     Retained (deficit)                            (38,132)      (47,487)
                                                    ------        ------
         Total stockholders' equity (deficit)         (799)       (9,611)
                                                    ------        ------
                                                   $16,994       $31,890 
                                                    ======        ======
             See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
                   STEVENS INTERNATIONAL, INC. AND SUBSIDIARIES
                  CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                    (UNAUDITED)
                   (Amounts in thousands, except per share data)


                                     Three months ended    Nine months ended
                                        September 30,        September 30,
                                       1998      1997        1998      1997 
                                      ------    ------      ------    ------
   <S>                               <C>       <C>         <C>       <C>
   Net sales                         $ 2,737   $ 8,157     $17,777   $24,248
   Cost of sales                       2,147     7,154      14,222    22,866 
                                      ------    ------      ------    ------
   Gross profit                          590     1,003       3,555     1,382 

   Selling, general and               
   administrative expenses             1,577     1,959       5,798     6,712
                                      ------    ------      ------    ------
      Operating income (loss)           (987)     (956)     (2,243)   (5,330)

   Other income (expense):
   Interest income                       ---        79         ---        94 
   Interest expense                     (238)     (876)     (1,439)   (2,745)
   Other, net                            (57)     (416)       (308)     (592)
   Gain (loss)on sale of assets         (503)      ---       2,199       --- 
    (Note 6)                           ------    ------      ------    ------
                                        (798)   (1,213)        452    (3,243)
   Income (loss) before income
    taxes and extraordinary item      (1,785)   (2,169)     (1,791)   (8,573)
   Income tax (expense) benefit          ---       213         (75)      213 
                                      ------    ------      ------    ------
   Income (loss) before
    extraordinary item                (1,785)   (1,956)     (1,866)   (8,360)
   Extraordinary item (Note 4):
    Gain on early extinguishment
    of debt, net of tax effect           ---       ---      11,221       --- 
                                      ------    ------      ------    ------
       Net income (loss)             ($1,785)  ($1,956)     $9,355   ($8,360)
                                      ======    ======      ======    ======
<PAGE>
   Earnings (loss) per share -
     basic (Note 8):
    Income (loss) before              ($0.19)   ($0.20)      ($.19)   ($0.88)
     extraordinary item
    Gain on early extinguishment
      of debt                            ---       ---        1.18       ---
                                      ------    ------      ------    ------
    Net income (loss) - basic         ($0.19)   ($0.20)      $0.99    ($0.88)
                                      ======    ======      ======    ======
   Earnings (loss) per share -
     diluted (Note 8):
    Income (loss) before           
     extraordinary item               ($0.19)   ($0.20)     ($0.19)   ($0.88)
    Gain on early extinguishment   
     of debt                             ---       ---        1.16       --- 
                                      ------    ------      ------    ------
    Net income (loss) - diluted       ($0.19)   ($0.20)      $0.97    ($0.88)
                                      ======    ======      ======    ======
   Weighted average number of
    shares of common stock
    outstanding during the periods
    - basic (Note 8)                   9,488     9,451       9,488     9,451 
                                      ======    ======      ======    ======
   Weighted average number of
    shares of common and common stock
    equivalents outstanding during
    the periods - diluted (Note 8)     9,488     9,451       9,682     9,451
                                      ======    ======      ======    ======
           

            See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
                 STEVENS INTERNATIONAL, INC. AND SUBSIDIARIES
           CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
                                  (UNAUDITED)
                            (Amounts in thousands)

                                                      Shares       Amount  
                                                      ------      -------
   <S>                                                <C>        <C>
   Series A Stock
     Balance, December 31, 1997                        7,391     $    739 
     Conversion of Series B stock to Series A             14            2 
      stock
     Exercise of Stock Options                            14            1 
                                                      ------      -------
     Balance, September 30, 1998                       7,419     $    742 

   Series B Stock
     Balance, December 31, 1997                        2,098     $    210 
     Conversion of Series B stock to Series A stock      (14)          (2) 
                                                      ------      -------
     Balance, September 30, 1998                       2,084     $    208 
                                                      ======      =======

   Additional Paid-In Capital
     Balance, December 31, 1997                                  $ 39,941
     Warrants awarded to related party (Note 4)                     1,150 
     Warrants declined by related party (Note 4)                   (1,150)
     Exercise of Stock Options                                         20
                                                                  -------
     Balance, September 30, 1998                                 $ 39,961
                                                                  =======
   Foreign Currency Adjustment
     Balance, December 31, 1997                                     ($769)
     Translation adjustments                                         (564)
                                                                  -------
     Balance, September 30, 1998                                  ($1,333)
                                                                  =======
   Pension Liability Adjustment
     Balance, December 31, 1997                                   ($2,245)
                                                                  -------
     Balance, September 30, 1998                                  ($2,245)
                                                                  =======
   Retained Earnings (Deficit)
     Balance, December 31, 1997                                  ($47,487)
     Net income for nine months ended September 30, 1998            9,355 
                                                                  -------
     Balance, September 30, 1998                                 ($38,132)
                                                                  =======
   Stockholders' Equity (Deficit) at September 30, 1998             ($799)
                                                                  =======

           See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
                 STEVENS INTERNATIONAL, INC. AND SUBSIDIARIES
                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
                            (Amounts in thousands)
                                                      Nine Months Ended
                                                         September 30,     
                                                       1998        1997     
                                                      ------      ------       
   <S>                                               <C>         <C>
   Cash provided by operations:
     Net income (loss)                               $ 9,355     ($8,360)
     Adjustments to reconcile net income to net cash
         provided by (used in) operating activities:
       Depreciation and amortization                     790       2,772 
       Other                                            (564)       (382)
       Changes in operating assets and liabilities:
         Trade accounts receivable                      (275)      5,922 
         Contract costs in excess of billings          1,829          32 
         Inventory                                       775       1,104
         Refundable Income Taxes                         (48)      2,400 
         Other assets                                   (793)      1,318 
         Trade accounts payable                          626      (5,688)
         Other liabilities                            (3,385)     (4,991)
                                                      ------      ------       
Total cash provided by (used in) operating activities  8,310      (5,873)
   Cash provided by (used in) investing activities:
     Additions to property, plant and equipment         (215)        (33)
     Disposal of Zerand division and HMC
       (1998), and Bernal Division (1997)             12,530      14,298 
                                                      ------      ------       
   Total cash provided by (used in)
     investing activities                             12,315      14,265
                                                      ------      ------       
   Cash provided by (used in) financing activities:
   Exercise of stock options                              21         ---
     Net proceeds from (repayments of)
      long - term debt                                 5,708         ---
     (Decrease) in current portion of
      long - term debt                               (26,524)    (11,080)
                                                      ------      ------       
   Total cash provided by (used in)
     financing activities                            (20,795)    (11,080)
                                                      ------      ------       
   Increase (decrease) in cash and                          
     temporary investments                              (170)     (2,688)
   Cash and temporary investments at
     beginning of period                                 211       3,338 
                                                      ------      ------       
   Cash and temporary investments at end of period   $    41     $   650 
                                                      ======      ======
   Supplemental disclosure of cash flow information:
       Cash paid (received) during the period for:
       Interest                                      $   591     $   862 
       Income taxes                                        1      (2,527)

           See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<PAGE>
                 STEVENS INTERNATIONAL, INC. AND SUBSIDIARIES
             Notes to Consolidated Condensed Financial Statements
                                 (Unaudited)

   1.  The  consolidated  condensed balance sheet as of September 30, 1998,
       the consolidated condensed statement of stockholders' equity for the
       nine  months  ended  September  30, 1998, the consolidated condensed
       statements  of  operations  for  the  three  and  nine  months ended
       September   30,  1998  and  1997,  and  the  consolidated  condensed
       statements  of cash flows for the nine month periods then ended have
       been  prepared  by  the  Company  without  audit.  In the opinion of
       management,  all  adjustments  (which  include only normal recurring
       adjustments)  necessary  to present fairly the financial position as
       of  September  30,  1998 and the results of operations for the three
       and nine months ended September 30, 1998 and 1997 and the cash flows
       for  the  nine  months  ended  September 30, 1998 and 1997 have been
       made.  The December 31, 1997 consolidated condensed balance sheet is
       derived from the audited consolidated balance sheet as of that date.
       Complete  financial  statements  for  December  31, 1997 and related
       notes  thereto  are  included in the Company's Annual Report on Form
       10-K for the year ended December 31, 1997 (the "1997 Form 10-K").

       The above financial statements have been prepared in accordance with
       the  instructions  to  Form  10-Q  and  therefore do not include all
       information  included  in  the  1997  Form  10-K.    The  results of
       operations  for  the  three and nine months ended September 30, 1998
       and  1997  are  not  necessarily  indicative  of  the  results to be
       expected for the full year.

   2.  The  Company  designs,  manufactures,  markets  and services web-fed
       packaging  and  printing  systems  and  related  equipment  for  its
       customers  in the packaging industry and in the specialty/commercial
       and  banknote  and  security segments of the printing industry.  The
       Company  also  markets  and manufactures high-speed image processing
       systems  primarily  for  use  in  the banknote and security printing
       industry.   The Company combines various types of  equipment capable
       of  converting  and  printing,  among other items, food and beverage
       containers,  liquid  container  cartons,  banknotes, postage stamps,
       lottery  tickets,  direct mail inserts, personal checks and business
       forms.  The  Company's  technological  and  engineering capabilities
       allow  it  to  combine  any  of the four major printing technologies
       (offset,  flexography,  rotogravure  and  intaglio)  in its systems.
       Complete  press  systems  are capable of multiple color and multiple
       size  printing  and  perform  such  related  functions as numbering,
       punching,  perforating,  slitting,  cutting,  creasing,  folding and
       stacking.    The  presses  can be custom engineered for non-standard
       form size and special auxiliary functions.
<PAGE>
   3.  Inventories consist of the following:
                                                September 30,  December31, 
                                                     1998        1997   
                                                  (Amounts in thousands)
                                                    -----        -----
                  Finished product                 $  885       $1,413
                  Work in progress                  2,620        2,723 
                  Raw materials                     2,330        2,474 
                                                    -----        -----
                                                   $5,835       $6,610 
                                                    =====        =====

   4.  The bank credit facilities have first liens on certain assets of the
       Company,   principally   inventory,  accounts  receivable,  and  the
       Company's  Texas  real  estate.   Paul I. Stevens' loans aggregating
       $4.58  million  at  September  30,  1998 have first liens on certain
       assets  of  the  Company,  principally  certain Ohio assets that are
       being  held  for  sale, a $1 million escrow hold back on the sale of
       Zerand,  the  assets  of  a foreign subsidiary, and certain accounts
       receivable  for  new  equipment  recently  installed  at  a customer
       location. 

       On  June 30, 1998 the Company  refinanced  a  major  portion  of its
       debt structure as  part of  its  plan  to  dramatically  reduce  its
       debt.  Through a combination  of  new  secured  bank  borrowings  of
       approximately  $6  million,  and  loans  from  its Chairman, CEO and
       principal  shareholder,  Paul  I. Stevens, aggregating $4.5 million,
       the  Company    paid  off both its Senior bank lender and its Senior
       Subordinated  notes,  aggregating  approximately $19.5 million.  The
       repayment  of the Company's Senior Subordinated notes resulted in an
       extraordinary  gain on early extinguishment of debt of approximately
       $11.2  million,  or  $1.16  per  share  for  the  nine  months ended
       September  30,  1998  ($1.10 per share for the six months ended June
       30,  1998  due to potential dilution of warrants which were declined
       in the third quarter). 

       On  June 29, 1998 the Board of Directors of the Company approved the
       issuance  to  Paul I. Stevens of warrants to purchase 680,000 shares
       of  Series  A  Common  Stock  of  the  Company at $0.50 per share as
       consideration  for  his  loans  to  the  Company  and  his  personal
       guarantee  of  $4  million  of  the   bank borrowings.  The warrants
       enable  Mr.  Stevens  to  buy  680,000 shares of stock  with certain
       restrictions  over  the  next  5 years at the indicated price.   The
       Company  obtained  a  fairness opinion on the value of the loans and
       guarantees  of  Mr. Stevens.  The Board of Directors determined that
       the  value  of  the  warrants issued to Mr. Stevens is less than the
       fair value of his loans and guarantees.  For accounting purposes, an
       amount  of  $1.15 million was reflected in the June 30, 1998 balance
       sheet  as  a  debt discount and an increase in paid-in capital based
       upon the Black-Scholes formula for valuing warrants and options.  In
       the  third  quarter  of  1998  Mr.  Stevens   declined   to   accept
       this additional consideration  due  to  the  potential  dilution  to
       shareholders.    Accordingly,  the debt discount and the increase in
       paid-in  capital  recorded  at  June  30,  1998  was reversed in the
       quarter ended September 30, 1998.
<PAGE>
       For  a  description  of  the  status  of the  bank  credit  facility
       at September  30,  1998,  see  "Liquidity  and  Capital  Resources".
       Substantially  all  assets  of the Company continue to be pledged as
       collateral on the Company's credit facilities.

   5.  As  a  result  of  the  Company's continuing liquidity problems, the
       Company  has  been  the subject of lawsuits, from time to time, with
       respect  to  the  Company's  inability  to  pay certain vendors on a
       timely  basis.  To date, all of such actions have been settled.  The
       Company  is  subject  to various claims, including product liability
       claims,  which  arise  in  the ordinary course of business, and is a
       party  to various legal proceedings that constitute ordinary routine
       litigation  incidental  to  the  Company's  business.   A successful
       product liability claim brought against the Company in excess of its
       product liability coverage could have a material adverse effect upon
       the Company's business, operating results and financial condition.

       In  management's  opinion,  the  Company has adequate legal defenses
       and/or  insurance coverage in respect to each of these legal actions
       and  does  not  believe  that  they  will   materially  affect   the
       Company's  operations, liquidity, or financial position.  See "Legal
       Proceedings" herein and in the 1997 Form 10-K.

   6.  A description of the Company's divestitures in 1998 and 1997 follow:

       Sale of Hamilton Machining Center in July 1998

       On  July 28, 1998 the Company sold the real and personal property at
       its Hamilton, Ohio machining center ("HMC") and the major portion of
       its  machinery  and  equipment at its assembly facility in Hamilton,
       Ohio  for an aggregate consideration of approximately $4.35 million.
       This  transaction resulted in the recording of a second quarter 1998
       loss  on  sale  of  assets  of  approximately  $0.8  million  and an
       additional  loss  of  $0.5 million in the third quarter of 1998 as a
       result  of  HMC  inventory and other inventory that was abandoned by
       the  Company and included in the sale .  Proceeds of the transaction
       were  used to repay the $4 million secured bridge term loan from the
       Company's  new  bank  lender (the "Bridge Loan") which was loaned to
       the  Company on June 30, 1998, transaction fees and certain real and
       personal  property taxes.  HMC had outside sales of $1.2 million and
       operating losses of $0.35 million in 1997.  The Company has replaced
       certain  of the capabilities of its machining center with a group of
       new and traditional suppliers.
<PAGE>
       Sale of Assets of Zerand Division in April 1998
       
       On  April 27, 1998, the Company sold substantially all the assets of
       its  Zerand  division to Valumaco Incorporated, a new company formed
       for  the asset purchase.  In addition, Valumaco Incorporated assumed
       certain  liabilities  of  the  Zerand  division.    The  assets sold
       included  the  real  property,  platen die cutter systems, and other
       original  Zerand  products  such  as  delivery  equipment,  wide-web
       rotogravure  printing  systems, stack flexographic printing systems,
       unwind  and  butt splicer systems, and related spare parts, accounts
       payable,  and other assumed liabilities.  Excluded from the proposed
       transaction  were  the System 2000 flexographic printing systems and
       the  System 9000 narrow-web rotogravure printing systems produced at
       the  Zerand  division and related accounts receivable, inventory and
       engineering  drawings.    The  sale  price  was  approximately $13.7
       million,  which  consisted of cash proceeds of $10.1 million, a one-
       year  $1  million escrow "hold back", and the purchaser's assumption
       of  approximately  $2.6  million  of  certain liabilities of Zerand,
       including the accounts payable.

       This transaction resulted in an approximate $10 million reduction of
       the  Company's senior secured bank debt. In 1997, Zerand contributed
       sales  of approximately $11.6 million and approximately $1.8 million
       of income before interest, corporate charges and taxes.  The Company
       realized  an  approximate  $3.6  million  gain on the sale of Zerand
       assets.

       Sale of Bernal Division in March 1997

       In  March 1997, the Company sold substantially all the assets of its
       Bernal   division  including  the  product  technology  and  related
       intangibles  to Bernal International, Inc., a new company formed for
       the  asset  purchase.    The  cash  proceeds  were approximately $15
       million,  and in addition, the purchaser assumed certain liabilities
       of  Bernal,  including  the  accounts  payable.    This  transaction
       resulted  in  a  $12  million  permanent  reduction of the Company's
       senior  debt.    In  1996, Bernal contributed sales of approximately
       $17.8 million and approximately $0.7 million income before interest,
       corporate charges and taxes.

   7.  Due to accumulated losses, there are no recoverable income taxes for
       the  nine months ended September 30, 1998 and 1997.  The tax expense
       of $75,000 for the three and nine months ended September 30, 1998 is
       due  to the alternative minimum taxes imposed on the gain on sale of
       assets.
<PAGE>
   8.  In  1997, the Financial Accounting Standards Board ("FASB") issued
       Statement  of  Financial  Accounting  Standards  ("SFAS") No. 128,
       "Earnings  Per  Share" ("EPS") which established new standards for
       computing   and  presenting  EPS.    SFAS  No.  128  replaced  the
       presentation  of  primary  EPS  with  a presentation of basic EPS.
       Basic  EPS  excludes  dilution  and is computed by dividing income
       available to common shareholders by the weighted-average number of
       common  shares  outstanding  for the period.  Diluted EPS reflects
       the  potential  dilution  that  could occur if securities or other
       contracts  to  issue common stock were exercised or converted into
       common  stock.   EPS amounts for 1998 and 1997 have been presented
       and,  where  appropriate,  restated to conform to the SFAS No. 128
       requirements.    Since  the  Series  A  and  Series  B  stock have
       identical  dividend  and  participation  rights  in  the Company's
       earnings,  they  have  been  considered  to  be  comparable in the
       calculation.

   9.  Comprehensive   income,  as  defined  in  Statement  of  Financial
       Accounting   Standards   No.   130,   includes   foreign  currency
       translation adjustments and is calculated below:


                                         Three Months     Nine Months
                                            Ended            Ended
                                        September 30,         September 30,
                                       1998       1997        1998     1997 
                                      ------     ------       -----   ------
      Net income  (loss)             ($1,785)   ($1,956)     $9,355  ($8,360)

      Foreign Currency
      TranslationAdjustments            (249)      (226)       (564)    (550)
                                      ------     ------       -----   ------
      Comprehensive income (loss)    ($2,034)   ($2,182)    ($8,791) ($8,910)
                                      ======     ======      ======   ======


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

   Year 2000 Compliance Disclosure

  The  Company's main computer system and software are not currently year
  2000 compliant.  The Year 2000 issue is the result of computer programs
  being  written  using  two  digits  rather  than  four  to  define  the
  applicable year.  Any of the Company's computer programs that have date
  sensitive  software  may  recognize  a date using "00" as the year 1900
  rather  than  the  year 2000.  This could result in a system failure or
  miscalculations  causing  disruptions of operations, including, but not
  limited to, a temporary inability to process transactions, invoices, or
  other similar normal business activities.
<PAGE>
  Based  on  a recent assessment, the Company has determined that it will
  need  to  modify  a  significant  portion  of  its software so that its
  computer  system  will  properly utilize data beyond December 31, 1999.
  The  Company  is  working  on its Year 2000 modifications, and plans to
  complete  such  modifications  by the end of the second quarter of 1999
  utilizing   certain  software  upgrades  and  consultant  and  internal
  resources  for  all program changes.  As a result, the Company does not
  anticipate  any  material  costs  to  complete  its  Year  2000 program
  modifications.   There can be no assurance that this time frame will be
  achieved  and  actual results could differ materially from these plans.
  Specific  factors  that  might cause such material differences include,
  but  are not limited to, the availability and cost of personnel trained
  in  this  area, the ability to locate and correct all relevant computer
  codes and similar uncertainties. 

   RESULTS OF OPERATIONS

   Comparison of Nine Months Ended September 30, 1998 and 1997

  Sales  The Company's sales for the nine months ended September 30, 1998
  decreased  by  $6.5  million  (or  26.7%) compared to sales in the same
  period  in  1997 due primarily to sales decreases in packaging products
  ($3.7  million)  principally as a result of the sale of Zerand on April
  27,  1998, and decreases in specialty web products sales ($2.2 million)
  and  banknote  and  currency  system  sales  ($0.6 million).  Sales and
  gross  profit in 1997 include $0.7 million in proceeds from the sale of
  certain press system contract rights.  The Company sold these rights in
  lieu of a long repossession and resale process.  Sales in 1998 included
  $4.3  million of Zerand sales which division was sold by the Company in
  April, 1998.

  Gross  Profit    The  Company's  gross profit for the nine months ended
  September  30,  1998 increased by $2.2 million compared to gross profit
  in  the  same  period  in 1997 due primarily to shipment of products at
  near  normal  product  margins.  In addition, the Company evaluated its
  last-in  first  out  ("LIFO")  inventory  reserve following the sale of
  assets,  including  the  inventory, at HMC and other inventory usage in
  1998.    The  financial  impact of the calculated decrement in the LIFO
  inventory  for  the  nine  months  ended  September  30,  1998 was $0.9
  million.    Accordingly,  the  gross  profit  for  the  nine months was
  increased  $0.9  million  ($0.09  per  share)  and the LIFO reserve was
  reduced $0.9 million. Gross profit margin for 1998 increased to 20%  of
  sales  as  compared  to 5.7% of sales for 1997.  This increase in gross
  profit  margin  in  1998  was due primarily to product mix, shipment of
  products  at  near normal margins, decreased warranty expenses, and the
  benefit  of  the reduction of the LIFO reserve.  Sales and gross profit
  in 1997 include $0.7 million in proceeds from the sale of certain press
  system  contract  rights.    The Company sold these rights in lieu of a
  long repossession and resale process.
<PAGE>
  Selling,  General  and  Administrative Expenses  The Company's selling,
  general  and  administrative  expenses  decreased  by  $0.9 million (or
  13.6%)  for  the  nine  months ended September 30, 1998 compared to the
  same  period  in  1997  due  to  cost  reduction  efforts  at corporate
  headquarters  and  at  manufacturing  locations  in connection with the
  reduced  volume  of  sales, as well as the impact of the sale of Bernal
  and  Zerand.  Selling, general and administrative expenses for the nine
  months  ended September 30, 1998 were 32.6% of sales compared to  27.7%
  of  sales for the same period in 1997 due to the very low sales in 1998
  compared  to 1997. The Company's continuing cost reductions in 1998 did
  not  equate to the overall percentage decrease in sales, and especially
  the sales decrease in the third quarter.

  Other  Income  (Expense)    The Company's interest expense decreased by
  $1.2  million  for the nine months ended September 30, 1998 compared to
  the same period in 1997 due to the reduced borrowings in 1998 resulting
  from the application of the Zerand and Bernal sale proceeds to pay down
  bank  indebtedness, and the extinguishment of subordinated indebtedness
  at  June  30,  1998,  offset by an increased cost of borrowing in 1998.
  Interest  income was negligible for the nine months ended September 30,
  1998 and 1997.

   Comparison of Three Months Ended September 30, 1998 and 1997

  Sales    The  Company's  sales for the three months ended September 30,
  1998 decreased by $5.4 million (or 66.4%) compared to sales in the same
  period  in  1997 due primarily to sales decreases in packaging products
  ($2.3 million) resulting from the sale of Zerand on April 27, 1998, and
  specialty web products ($3.1 million). 

  Gross  Profit  (Loss)   The Company's gross profit for the three months
  ended  September  30,  1998 decreased by $0.4 million compared to gross
  profit  in  the same period in 1997 due primarily to the very low sales
  volume  in  1998  for  the Company's products, and the burden of excess
  capacity  and  unabsorbed manufacturing costs. In addition, the Company
  evaluated  its  LIFO  inventory  reserve  following the sale of assets,
  including  the inventory, at HMC and other inventory usage in the third
  quarter  of  1998.  The financial impact of the calculated decrement in
  the  LIFO  inventory  for the three months ended September 30, 1998 was
  $0.9  million.   Accordingly, the gross profit for the three months was
  increased  $0.9  million  ($0.09  per  share)  and the LIFO reserve was
  reduced $0.9 million. Gross profit margin for the third quarter of 1998
  increased  to  21.6%  of  sales  as  compared  to 12.3% for 1997.  This
  increase  in  gross  profit margin in 1998 was due primarily to reduced
  warranty  costs  in  1998  and the benefit of the reduction of the LIFO
  reserve in 1998.

  Selling,  General  and  Administrative Expenses  The Company's selling,
  general  and  administrative  expenses  decreased  by  $0.4 million (or
  19.5%)    for the three months ended September 30, 1998 compared to the
  same  period  in  1997  due  to  continuing  cost  reduction efforts at
  corporate  headquarters  and  manufacturing  locations, and the sale of
  Zerand.    Selling,  general  and administrative expenses for the three
  months  ended  September 30, 1998 were 57.6% of sales compared to 24.0%
  of sales for the same period in 1997 due to the 66.4% decrease in sales
  in  1998  described above without corresponding percentage decreases in
  expenses.
<PAGE>
  Other Income (Expense)   The  Company's  interest  expense decreased by
  $0.5  million for the three months ended September 30, 1998 compared to
  the same period in 1997 due to the reduced borrowings in 1998 resulting
  from the application of the Zerand and Bernal sale proceeds to pay down
  bank  indebtedness  and the extinguishment of subordinated indebtedness
  at  June  30,  1998,  offset by an increased cost of borrowing in 1998.
  Interest income was negligible for the three months ended September 30,
  1998 and 1997.

   TAX MATTERS

  The  Company's  effective state and federal income tax rate ("effective
  tax  rate") was 0% and 2.6% for the three months and over 100% and 0.9%
  for  the  nine  months ended September 30, 1998 and 1997, respectively.
  The  income  taxes  in  1998 result from the alternative minimum tax on
  sale  of  certain assets, primarily Zerand.  Due to accumulated losses,
  there  are  no  recoverable  income  taxes  for  the  nine months ended
  September 30, 1998 and 1997.

   LIQUIDITY AND CAPITAL RESOURCES

   Liquidity and Capital Resources

  The Company's bank credit facilities have first liens on certain assets
  of  the  Company,  principally  inventory, accounts receivable, and the
  Company's  Texas  real  estate  and  machining center in Ohio.  Paul I.
  Stevens'  loans  aggregating  $4.58  million at September 30, 1998 have
  first  liens on certain assets of the Company, principally certain Ohio
  assets  that  are  being held for sale, a $1 million escrow holdback on
  the  sale  of  Zerand,  the assets of a foreign subsidiary, and certain
  accounts  receivable  for  new  equipment being installed at a customer
  location.   The Company was paid $500,000 of the Zerand escrow holdback
  funds  net  of  amounts  owed  to  the  purchaser  on November 6, 1998.
  Because  these  holdback  funds  collateralize  certain  P.  I. Stevens
  advances,  the  $500,000 was paid to him to reduce his secured loans to
  the Company.

  Interest on the new  bank  loans is 1 1/4%  over prime with  a two-year
  maturity  on the revolving credit facility.  The amount borrowed on the
  revolving credit facility was approximately $2.357 million on September
  30,  1998.  The Company paid in full a $4.0 million bank Bridge Loan on
  July  28,  1998  from  the  sale  of  HMC  and the major portion of its
  machinery  and  equipment  at  its assembly facility in Hamilton, Ohio.
  The  secured  loans from Paul I. Stevens are due June 30, 2000 and bear
  interest at rates that vary up to  2% over bank prime.

  On  June 30, 1998 the Company refinanced a major portion of its secured
  indebtedness  ("the  Debt  Restructuring")  as  part  of  its  plan  to
  dramatically  reduce  its  debt.   Through a combination of new secured
  bank  borrowings  of  approximately  $6  million,  and  loans  from its
  Chairman,  CEO  and principal shareholder, Paul I. Stevens, aggregating
  $4.5 million, the Company  paid off both its Senior secured bank lender
  and  its  secured  Senior Subordinated Notes, aggregating approximately
  $19.5  million.    Repayment  of  the secured Senior Subordinated Notes
  resulted  in  an  extraordinary gain on early extinguishment of debt of
  approximately  $11.2  million,  or  $1.16 per share for the nine months
  ended September 30, 1998.
<PAGE>
  As  a result of its sale of Zerand (see Note 6 of Notes to Consolidated
  Condensed Financial Statements), the Company was able to make principal
  payments  on  its  bank credit facility of approximately $10 million on
  April 27, 1998. 

  The  Company requires capital primarily to fund its ongoing operations,
  to  service  its  existing  debt and to pursue its strategic objectives
  including  new  product  development  and  penetration of international
  markets.    The  Company's  working  capital  needs  typically increase
  because  of  a  number  of  factors,  including  the  duration  of  the
  manufacturing process and the relatively large size of most orders. 

  Net  cash  provided  by  (used in) operating activities (before working
  capital  requirements)  was  $9.58    and  ($5.97) million for the nine
  months  ended  September  30,  1998  and  1997,  respectively.  Working
  capital  (used)  provided cash of ($1.27) and $0.1 million for the nine
  months  ended September 30, 1998 and 1997, respectively.  The Company's
  debt  restructuring  in  1998  resulted  in    new  debt facilities, an
  improved  balance sheet and provided additional borrowing capacity  for
  the Company's operations.

  Under  its credit facility at September 30, 1998, the Company's maximum
  borrowings  were  limited  to a borrowing base formula, which could not
  exceed  $7.5  million  in  the form of direct borrowings and letters of
  credit.    As of September 30, 1998 there were $2.357 million in direct
  borrowings  and no standby letters of credit outstanding under the bank
  credit  facility,  with  additional availability for such borrowings of
  $99,000.

  At  September 30, 1998, $2.357 million of the Company's bank borrowings
  were  at  the  lender's prime rate of interest (8.25%) plus 1.25%, or a
  total  of  9.5% interest.  The interest rate for the three months ended
  September  30,  1998  was  9.75%,  with  the rate decreasing to 9.5% on
  September  30,  1998.    The amounts borrowed under the credit facility
  have been used for working capital.  The loans from Paul I. Stevens for
  working capital bear interest at 10%.

  The  borrowings  under  the bank credit facility are subject to various
  restrictive   covenants  related  to   financial  ratios   as  well  as
  limitations  on  capital  expenditures and additional indebtedness. The
  Company is not allowed to pay dividends.

  With  the  above  described Debt Restructuring, and assuming that sales
  return  to  annual  levels  of  $25  to $30 million, and one of several
  strategic,  financial  alternatives, principally the additional sale of
  assets  and  loans  from  Paul I. Stevens, among others presently being
  pursued  by  the  Company is consummated, management believes that cash
  flow  from  operations will be adequate to fund its existing operations
  and repay scheduled indebtedness over the next 12 months. 
<PAGE>
  There  can  be no assurance that future sales of assets, if any, can be
  successfully  accomplished  on  terms acceptable to the Company.  Under
  current  circumstances,  the  Company's  ability to continue as a going
  concern  depends upon the obtaining of new orders, further redeployment
  of  assets,  and  a return to profitable operations.  If the Company is
  unsuccessful  in  its efforts, it may continue to be unable to meet its
  obligations or fulfill the covenants in its revised debt agreements, as
  well  as other obligations, making it necessary to undertake such other
  actions as may be appropriate to preserve asset values.

  In  addition,  the  Company  may  incur,  from time to time, additional
  short-  and  long-term bank indebtedness (under its new credit facility
  or  otherwise)  and  may  issue, in public or private transactions, its
  equity  and  debt  securities to provide additional funds necessary for
  the  continued  pursuit  of  the Company's operational strategies.  The
  availability  and terms of any such sources of financing will depend on
  market  and  other  conditions.    There  can be no assurance that such
  additional  financing  will  be  available or, if available, will be on
  terms and conditions acceptable to the Company. 

  The  Company's  two  defined benefit pension plans have had substantial
  disbursements  during  prior  years  for  lump  sum  distributions upon
  termination of participant employment.  Because of the magnitude of the
  Company's  reductions  of  employees  from  1996 through 1998, the plan
  assets  were  reduced  to  levels  which  required  a special liquidity
  shortfall  contribution  to  the  union  plan as of January 15, 1997 of
  approximately  $600,000  (See  Note  M.  of  Notes  to the Consolidated
  Financial  Statements  in the 1997 Form 10-K).  Although this shortfall
  contribution  payment was not made,  the union plan shortfall condition
  was  remedied  in  1997 due to the curtailment of lump sum payments and
  net  gains  in  asset values.  Salaried plan benefits were frozen as of
  April  30,  1997 to eliminate future benefit accruals for participants.
  Because  of  liquidity  problems  in  the  pension plans, the Company's
  ability  to  pay   additional   participant   lump   sum  pension  plan
  distributions  has  been  severely  limited  to  avoid future shortfall
  conditions.

  In  addition  there  are  funding  deficiencies in each of the plans as
  current  plan  assets  are  less than the projected benefit obligations
  prescribed  by  the  plans.    The  assets  of  the  pension  plans are
  maintained  in  trusts and consist primarily of equity and fixed income
  securities.    It is the Company's general funding policy to contribute
  amounts  deductible  for  federal  income tax purposes.  The Company is
  evaluating  the  steps  necessary to fund the plans on a rational basis
  over a period not to exceed 10 years, however there can be no assurance
  that the Company will be successful in this effort.

  Backlog  and  Orders    The  Company's  backlog  of  unfilled orders at
  September  30,  1998  was  approximately $4.2 million compared to $12.0
  million  at December 31, 1997 (excluding Zerand backlog), a decrease of
  (65%).    The  backlog  decrease consists primarily of decreases in the
  orders for major press systems.  The backlog at September 30 in each of
  the preceding five years has ranged from a low of $19.4 million in 1997
  to a high of $70.3 million in 1994.
<PAGE>
  The  reduction in backlog is the result of a reduced order flow in 1997
  and  1998.    Orders  (excluding  Zerand)  for  the  nine  months ended
  September  30, 1998 were $7.4  million compared to $22.9    million for
  the  comparable  period  in  1997,  a decrease of  $17.2  million while
  shipments decreased $6.4 million.  The Company believes the above noted
  reduced  order flow is the result of the sale of Zerand ($2.7 million),
  fluctuations in the flow of major printing and packaging system orders,
  and  in  part to liquidity problems faced by the Company.  As a result,
  the  Company is continuing to adjust its rate of future production  and
  accompanying costs to match this reduced order flow.

  When  sales  are  recorded  under  the  completed  contract  method  of
  accounting,  the  Company  normally experiences a six to nine month lag
  between  the time new orders are booked and the time they are reflected
  in sales and results of operations.  Larger orders, which are accounted
  for  using  the  percentage  of  completion  method  of accounting, are
  reflected  in sales and results of operations as the project progresses
  through the manufacturing cycle.


   PART II OTHER INFORMATION

   Item 1. Legal Proceedings

  In 1997, the Company filed a suit seeking damages and injunctive relief
  against  Paul  W.  Bergland,  a former vice-president, for, among other
  things,  theft  of trade secrets, fraud, breach of contract, and breach
  of  a  confidential relationship.  On March 3, 1997, Bergland filed his
  original  answer and a counterclaim.  ConverTek, Inc., a corporation in
  which  Bergland  claims an ownership interest, has joined the suit as a
  counter  claimant  against the Company.  This litigation was settled in
  July  1998 with no payment of damages on the part of any of the parties
  to the lawsuit.
<PAGE>
   Item 6. Exhibits and Reports on Form 8-K

      (a)  Exhibits:


           Exhibit        Number Description of Exhibit
             3.1       Second  Amended  and  Restated  Certificate  of
                       Incorporation of the Company. (1)
             3.2       Bylaws of the Company, as amended. (2)
             4.1       Specimen of Series A Common Stock Certificate. (3)
             4.2       Specimen of Series B Common Stock Certificate. (4)
            10.1       Standard  Deposit Receipt and Real Estate Purchase
                       Contract  dated  June  30,  1998 by and between the
                       Company,  J.J.L.  Holdings  Company Ltd. And M.B.A.
                       Holdings Company, Ltd. (5)

           Exhibit        Number Description of Exhibit
            10.21      Standard  Form  Asset Purchase Contract dated June
                       30,   1998  by  and  between  the  Company,  J.J.L.
                       Holdings  Company Ltd. and M.B.A. Holdings Company,
                       Ltd. (5)
            11.1       Computation of Net Income per Common Share. (*)
            27.1       Financial Data Schedule. (*)
                           

     *  Filed herewith. 
   (1)  Previously  filed as an exhibit to the Company's Annual Report on
        Form  10-K  for the year ended December 31, 1990 and incorporated
        herein by reference. 
   (2)  Previously  filed  as  an  exhibit  to the Company's Registration
        Statement  on  Form S-1 (No. 33-15279) and incorporated herein by
        reference. 
   (3)  Previously  filed  as  an  exhibit  to the Company's Registration
        Statement  on  Form S-1 (No. 33-24486) and incorporated herein by
        reference. 
   (4)  Previously filed as an exhibit to the Company's report on Form 8-
        A filed August 19, 1988 and  incorporated herein by reference.
   (5)  Previously filed as an exhibit to the Company's report on Form 8-
        K / A  filed  September  18,  1998  and  incorporated  herein  by
        reference.

      (b)   Reports on Form 8-K

          The Registrant filed a Current Report on Form 8-K and Form 8-K/A
      dated  July  28,  1998  to  report the sale of the real and personal
      property  of  its  Hamilton,  Ohio  Machining  Center  and the major
      portion  of  its machinery and equipment at its assembly facility in
      Hamilton, Ohio, under Item 2. Acquisition or Disposition of Assets.

<PAGE>      

                                 SIGNATURES


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



                                     STEVENS INTERNATIONAL, INC.




   Date: November 12, 1998           By:  /s/  Paul I. Stevens                 
                                     Paul I. Stevens
                                     Chief Executive Officer
                                     and Acting Chief Financial Officer