SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                   FORM 10-QSB

[X]      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the quarterly period ended December 31, 1998

         OR

[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

         For the transition period from               to

         Commission file number 0-9040

                                 METRO TEL CORP.
        (Exact name of small business issuer as specified in its charter)

                   DELAWARE                                 11-2014231
         (State of other jurisdiction of                  (I.R.S. Employer)
         incorporation or organization)                Identification No.)

                    290 N.E. 68 Street, Miami, Florida 33138
                    (Address of principal executive offices)

                                 (305) 754-4551
                           (Issuer's telephone number)

                                 Not Applicable
                 (Former address of principal executive offices)

          Check whether the issuer:  (1) filed all reports  required to be filed
by  Section  13 or 15(d) of the  Exchange  Act during the past 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 [ ]

          State the number of shares outstanding of each of the issuer's classes
of common equity as of the latest  practicable  date:  Common  Stock,  $.025 par
value per share - 6,875,000 shares outstanding as of February 12, 1999.


<PAGE>
<TABLE>
<CAPTION>

METRO TEL CORP.
STATEMENTS of  OPERATIONS
Unaudited, (1)
-----------------------------------------------------------------------------------------------------
                                         For the six months              For the three months
                                         ended December 31,               ended December 31,
                                      1998 (2)             1997         1998 (2)          1997
-----------------------------------------------------------------------------------------------------

<S>                                 <C>             <C>                <C>              <C>       
Sales                                 $8,600,664      $7,582,186         $5,106,250       $4,444,336
Other revenues (3)                       289,533         121,625            237,317           79,989
                                     -----------      ----------         ----------      -----------
   Total revenues                      8,890,197       7,703,811          5,343,567        4,524,325

Cost of goods sold                     6,414,181       5,715,128          3,793,986        3,485,775
                                       ---------       ---------          ---------        ---------
   Gross profit                        2,476,016       1,988,683          1,549,581        1,038,550

Selling, general and
   administrative expenses             1,837,910       1,815,687          1,027,622          968,387
Research and development                  40,906                             40,906         
                                     -----------       ---------         -----------         -------
                                       1,878,816       1,815,687          1,068,528          968,387

   Operating income                      597,200         172,996            481,053           70,163

Other income and expenses
Interest income                           31,477          44,567             17,616           21,601
Other expenses                                           (61,332)                            (61,332)
Interest expense                         (84,105)        (25,200)           (59,854)         (12,245)
                                         --------        --------           --------         --------
                                         (52,628)        (41,965)           (42,238)         (51,976)

Earnings before taxes                    544,572         131,031            438,815           18,187
Provision for income taxes               104,399                            104,399          
                                         -------         --------           -------          -------

   Net earnings                         $440,173        $131,031           $334,416          $18,187
Basic earnings per share (4)                $.08            $.03               $.05             $.00
Diluted earnings per share (4)              $.07            $.03               $.05             $.00

Weighted average number
     of shares outstanding
Basic (5)                              5,438,969       4,720,954          6,156,985        4,720,954
Diluted  (5)                           5,940,892       4,720,954          6,658,908        4,720,954
==========================================================================================================
Pro forma amounts
Earnings before taxes                   $544,572                            $438,815
Executive compensation (6)               259,668                              64,917
                                         -------                             -------
Pro forma earnings before taxes          804,240                             503,732
Provision for income taxes (7)           321,696                             201,493
                                       ---------                           ---------
Proforma net earnings                   $482,544                            $302,239

Pro forma basic earnings per share        $.09                                  $.05
Proforma diluted earnings per share       $.08                                  $.05
Weighted average number of shares
     outstanding
Basic (5)                              5,438,969                           6,156,985
Diluted  (5)                           5,940,892                           6,658,908
</TABLE>

                                       -2-

<PAGE>
<TABLE>
<CAPTION>

METRO TEL CORP

CONSOLIDATED BALANCE SHEETS   Unaudited (1)

                                                  December 31, 1998                 June 30, 1998
                                                  -----------------                 -------------
ASSETS


<S>                                                   <C>                            <C>         
CURRENT ASSETS
Cash and cash equivalents                             $    810,360                   $    828,390
Accounts receivable, net                                 1,792,795                        981,432
Inventories                                              4,281,085                      2,911,158
Current portion of lease receivables                       168,910                        161,007
Prepaid expenses and other                                  89,177                         33,490
                                                      ------------                    -----------
         Total current assets                            7,142,327                      4,915,477

Lease receivables due after one year                       123,684                        148,651

Deferred income tax                                        133,000
Property and equipment, at cost-
     net of accumulated depreciation
     and amortization                                      169,897                        146,461
Other assets                                               191,331                         33,748
                                                           -------                       --------

                                                        $7,760,239                     $5,244,337
                                                        ==========                     ==========

</TABLE>

                                    -3- 

<PAGE>

<TABLE>
<CAPTION>

METRO TEL CORP

CONSOLIDATED BALANCE SHEETS  Unaudited (1)

LIABILITIES AND SHAREHOLDERS'
     EQUITY

                                                 December 31, 1998                  June 30, 1998
                                                 -----------------                  -------------

CURRENT LIABILITIES
<S>                                              <C>                              <C>
Accounts payable and accrued
     expenses                                           $1,426,795                     $1,494,975
Line of credit                                                                          1,000,000
Current portion of bank loan                               480,000                        200,000
Customer deposits                                          344,585                        389,371
Income taxes payable                                        41,008                       ________
                                                       -----------

     Total current liabilities                           2,292,388                      3,084,346
                                                         ---------                      ---------

Long term loan less current portion                      1,880,000                        216,613
Deferred income tax                                          5,000

SHAREHOLDERS' EQUITY
Common stock, $.025 par value per share,
     15,000,000 shares authorized,
      6,901,250 shares issued and
      6,875,000 shares outstanding
     as of  December 31, 1998,
     4,720,954 shares at June 30, 1998 (2)                 172,531                        118,024
Additional paid-in capital                               1,992,664                         51,726
Retained earnings                                        1,486,406                      1,773,628
Less 26,250 shares of treasury
     stock at cost                                         (68,750)                    __________
                                                        -----------

Total shareholders' equity                               3,582,851                      1,943,378
                                                      ------------                  -------------

                                                      $  7,760,239                  $   5,244,337
                                                      ============                  =============
</TABLE>


                                    -4- 

<PAGE>
<TABLE>
<CAPTION>

METRO  TEL CORP.

STATEMENTS OF CASH FLOWS   Unaudited (1)

                                                            Six months ended        Six months ended
                                                                December 31,            December 31,
                                                                    1998  (2)                   1997
                                                                    ---------                   ----


<S>                                                               <C>                     <C>     
Cash flows from operating activities:
   Net income                                                       $440,173                $131,031
   Adjustments to reconcile net income to net cash
     provided by operating activities:
       Bad debt expense                                                4,145                  83,131
       Depreciation and amortization                                  15,624                  15,132
         Net changes in operating assets and liabilities:
           (Increase) decrease in:
              Accounts and lease receivables                        (391,685)               (352,234)
              Inventories                                           252,217                    3,346
              Prepaid expenses and other assets                      (96,487)                 27,197
           Increase (decrease) in:
              Accounts payable and accrued expenses                 (807,661)                (60,838)
              Customer deposits                                      (44,786)               (119,036)
              Income taxes payable                                    41,008                ________
                                                                   ---------
Cash used by operating activities                                   (587,452)               (272,271)

Cash flows from investing activities:
   Capital expenditures                                              (31,459)                (28,426)
   Cash of acquired company                                          384,888                ________
                                                                     -------
Cash flows provided (used) in investing activities                   353,429                 (28,426)

Cash flows from financing activities:
   Payments on line of credit                                     (1,000,000)
   Payments on term loan                                            (416,613)               (100,000)
   Borrowings on line of credit                                                              500,000
   Borrowings under new term loan                                  2,400,000
   Payments under new term loan                                      (40,000)
   Cash distribution to shareholders                                (727,394)               (400,000)
                                                                    ---------               ---------
Cash flows provided from financing activities                        215,993                -

Decrease in cash and cash equivalents                                (18,030)               (300,697)
Cash and cash equivalents at beginning of period                     828,390                 933,028
                                                                    --------                --------

Cash and cash equivalents at end of period                        $  810,360              $  632,331
                                                                  ----------              ----------

Supplemental information:
   Cash paid for interest                                        $    84,105              $   25,200
Non-cash transactions
   Acquisition of net assets                                      $1,541,807
</TABLE>

                                      -5-
<PAGE>




                                 METRO TEL CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note (1) General:  The  accompanying  unaudited  financial  statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information  and the  instructions  to Form 10-QSB related to interim
period  financial  statements.  Accordingly,  these financial  statements do not
include  certain  information  and  footnotes  required  by  generally  accepted
accounting   principles  for  complete  financial   statements.   However,   the
accompanying unaudited financial statements contain all adjustments  (consisting
only of normal  recurring  accruals)  which,  in the opinion of management,  are
necessary in order to make the financial statements not misleading.  The results
of operations for interim periods are not necessarily  indicative of the results
to be  expected  for the  full  year.  For  further  information,  refer  to the
Company's  financial  statements and footnotes thereto included in the Company's
Annual  Report on Form 10-KSB for the year ended June 30,  1998,  the  Company's
Transition  Annual Report on Form 10-KSB for the period  January 1, 1998 to June
30, 1998 and the Company's Proxy Statement dated October 5, 1998.

NOTE (2) Basis of  Presentation:  On  November 1, 1998,  Steiner-Atlantic  Corp.
("Steiner")  was merged (the  "Merger") with and into, and became a wholly-owned
subsidiary of, Metro-Tel Corp.  ("Metro-Tel" and collectively with Steiner,  the
"Company").  As a  result  of  the  Merger,  the  Company  has  added  Steiner's
operations as a supplier of dry cleaning, industrial laundry equipment and steam
boilers to  Metro-Tel's  telecommunications  operations  as a  manufacturer  and
seller of telephone test and customer premise equipment.

All periodic  reports  heretofore  filed by the Company with the  Securities and
Exchange Commission have reflected only the business and financial statements of
Metro-Tel Corp. on a stand-alone basis.

For financial accounting (but not corporate law) purposes, the Merger is treated
as a "reverse  acquisition"  of Metro-Tel by Steiner  utilizing  the  "purchase"
method of  accounting.  As a result,  all  financial  statements  of the Company
included  in this and future  periodic  reports  filed by the  Company  covering
periods  prior to November 1, 1998 will reflect only the results of  operations,
financial  position  and cash  flows of  Steiner  on a  stand-alone  basis.  All
consolidated financial statements of the Company for periods commencing November
1, 1998 will, in addition, include the results of operations, financial position
and cash flows of Metro-Tel  from and after November 1, 1998.  Accordingly,  the
results of  operations  for both  reported  periods of 1997 do not  reflect  the
results of  telecommunications  operations  and the results for both  periods of
1998  presented  include  only two months of  operations  of  telecommunications
operations.

At June 30, 1998, the Steiner shares (339,500) were  recapitalized to 4,720,954.
The attached financial statements give effect to this recapitalization.

NOTE (3) Management fees for all periods  presented have been  reclassified  for
comparative purposes.

NOTE (4) Earnings Per Common Share: In 1997, the FASB issued  Statement No. 128,
"Earnings per share".  Statement No. 128 replaced the calculation of primary and
fully diluted

                                       -6-

<PAGE>



earnings per share.  Unlike primary earnings per share, basic earnings per share
excludes any dilutive  effects of stock options.  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 to conform to the
Statement No. 128 requirements.

NOTE (5) The  change  in the  weighted  average  number  of  shares in basic and
diluted earnings per share is due to the outstanding stock options.

NOTE  (6)  Executive  Compensation  Adjustment:  The  adjustment  for  executive
compensation  excluding the agreed upon executive salaries to be paid to certain
executives after consummation of the merger pursuant to the agreement.

NOTE (7) Income Tax Adjustment: The adjustment to the provision for income taxes
to  reflect  income  taxes had  Steiner-Atlantic  been a C  corporation  for the
periods shown.


                                       -7-

<PAGE>



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

On  November  1,  1998,  Steiner-Atlantic  Corp.  ("Steiner")  was  merged  (the
"Merger")  with and into, and became a  wholly-owned  subsidiary  of,  Metro-Tel
Corp. ("Metro-Tel" and collectively with Steiner, the "Company"). As a result of
the  Merger,  the Company has added  Steiner's  operations  as a supplier of dry
cleaning,   industrial  laundry  equipment  and  steam  boilers  to  Metro-Tel's
telecommunications operations as a manufacturer and seller of telephone test and
customer premise equipment.

All periodic  reports  heretofore  filed by the Company with the  Securities and
Exchange Commission have reflected only the business and financial statements of
Metro-Tel Corp. on a stand-alone basis.

For financial accounting (but not corporate law) purposes, the Merger is treated
as a "reverse  acquisition"  of Metro-Tel by Steiner  utilizing  the  "purchase"
method of  accounting.  As a result,  all  financial  statements  of the Company
included  in this and future  periodic  reports  filed by the  Company  covering
periods  prior to November 1, 1998 will reflect only the results of  operations,
financial  position  and cash  flows of  Steiner  on a  stand-alone  basis.  All
consolidated financial statements of the Company for periods commencing November
1, 1998 will, in addition, include the results of operations, financial position
and cash flows of Metro-Tel  from and after November 1, 1998.  Accordingly,  the
results of  operations  for both  reported  periods of 1997 do not  reflect  the
results of telecommunications operations.

Liquidity and Capital Resources

For the six month period ended  December  31, 1998,  cash  decreased by $18,030.
Operating  activities  used cash of  $587,452 to support an increase in accounts
and lease receivables ($391,685), and an increase in pre-paid expenses and other
assets ($96,487) which offset a decrease in inventories  ($252,217).  Additional
cash was used to decrease  accounts payable and accrued expenses  ($807,661) and
customer  deposits  ($44,786).  These were  offset by  $440,173  provided by the
Company's  net  income   supplemented  by  non-cash   expenses  of  $15,624  for
depreciation  and  amortization  and $4,145 for bad debts.  Cash of $384,888 was
provided by the acquisition  while $31,459 was used to purchase  capital assets.
On November 2, 1998,  Steiner  entered into a Loan and Security  Agreement  with
First Union National Bank.  Under the Loan  Agreement,  the bank has made a term
loan to Steiner of  $2,400,000  and  provided  Steiner  with a revolving  credit
facility  entitling it to borrow up to $2,250,000  until the earlier of November
2, 1999 or the date the bank demands  repayment of revolving  credit loans.  The
term  loan  is  payable  in  monthly  installments  of  $40,000  plus  interest,
commencing  January 1999 with a $960,000  balloon  payment in January 1999.  The
loans,   which  are   guaranteed  by  Metro-Tel,   are  secured  by  pledges  of
substantially all of the present and future assets and property,  excluding real
estate,  of Metro-Tel  and  Steiner.  A portion of the proceeds of the term loan
were used to repay  Steiner's  existing  line of credit  of  $1,000,000  and the
remaining  outstanding balance ($416,613) of Steiner's former term loan, as well
as to fund the remaining  Subchapter S distributions  ($727,394)  payable to the
former  shareholders  of Steiner.  One  installment  payment of $40,000  made in
advance  was also made during the  quarter on the new term loan.  The  foregoing
resulted  in a net  $215,993  being  provided  by  financing  activities.  As at
December 31, 1998,  there were no loans  outstanding  under the revolving credit
facility.  The Company  believes  that its  present  cash and cash it expects to
generate from operations will be sufficient to meet its operational needs.

                                       -8-

<PAGE>



Year 2000 Compliance

The Company believes that its internal management information systems,  billing,
payroll and other information services are Year 2000 compliant.  The Company has
already  upgraded  its software  programs  and carried out certain  tests of its
accounts  receivable  and accounts  payable  files which are date  sensitive and
found all  systems to operate  properly.  The  Company is not linked by computer
with any of its  customers or vendors.  Orders are received and purchase  orders
are sent by telecopy, telephone, in person or by mail. None of these methods are
date sensitive.

Results of Operations

The  results of both the six and three month  periods  ended  December  31, 1998
reflect  the results of dry  cleaning  and laundry  equipment  and steam  boiler
supplier  operations for the full periods along with two months of operations of
the telecommunications division.

Net sales for the six and three month periods ended  December 31, 1998 increased
by $1,018,478  (13.4%) and $661,914 (14.9%),  respectively,  from the comparable
periods of fiscal 1998 mainly due to the increased  sales of laundry  equipment,
steam  boilers and spare parts which offset a reduction in sales of dry cleaning
equipment.  Included in each  reported  period is $523,652 of  telecommunication
equipment  sales.  Other  revenues  increased by $167,908  (138.1%) and $157,328
(196.7%),  respectively, for the six and three month periods of fiscal 1999 when
compared  to the  comparable  periods of fiscal  1998,  mainly due to  increased
management fees.

The Company's gross profit margin, expressed as a percentage of sales, increased
to 27.9% for the six month  period of fiscal 1999 from 25.8% for the same period
of fiscal 1998.  For the three month  period gross margin  increased to 29.0% in
fiscal 1999 from 23.0% in fiscal  1998.  These  increases  are mainly due to the
addition of the  telecommunications  division  whose  products  normally carry a
higher margin and the increase in management fees.

Selling,  general and  administrative  expenses  increased by $22,223 (1.2%) and
$59,235 (6.1%) for the six and three month periods, respectively, in fiscal 1999
from the  comparable  periods in fiscal  1998.  The increase in both periods was
attributed to the inclusion of the  telecommunications  division  which offset a
reduction  in this  category  of  expenses  in Steiner  caused by a decrease  in
executive compensation as a result of the merger.

Research and development expenses relate solely to telecommunications operations
included only for the two months following the merger.

Interest  expense  increased by $58,905 (233.8%) and $47,609 (388.8%) in the six
and three  month  periods of fiscal 1999 over the  comparable  periods in fiscal
1998 due to the higher level of indebtedness.

A provision for income tax is reflected only for the two month period  following
the merger for both the six and three  month  periods of fiscal  1999.  Prior to
those periods  Steiner-Atlantic  Corp.  was a  sub-chapter  S  corporation  and,
accordingly,  its shareholders,  rather than it, were subject to income taxation
of Steiner's earnings. See pro forma amounts.


                                      -9-

<PAGE>



                           PART II - OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Securityholders.

         As previously reported in the Company's Quarterly Report on Form 10-QSB
for the quarter ended  September 30, 1999, at the Company's  1998 Annual Meeting
of Stockholders held on October 29, 1998 (the "Merger"), stockholders:

         (a) Approved and adopted an Agreement  and Plan of Merger,  dated as of
July 1, 1998 (the "Merger Agreement"),  among the Company, Metro-Tel Acquisition
Corp. ("Subsidiary"), Steiner-Atlantic Corp. ("Steiner"), William K. Steiner and
Michael S. Steiner, pursuant to which, subsequent to the Meeting,  Subsidiary, a
newly formed  wholly-owned  subsidiary of the Company,  was merged with and into
Steiner (the "Merger"), as a result of which, among other things, Steiner became
a wholly-owned  subsidiary of the Company,  the  stockholders  of Steiner became
owners of  approximately  69% of the outstanding  shares of the Company's Common
Stock and a majority  of the members of the  Company's  Board of  Directors  now
consists of  designees of Steiner,  by a vote of  1,436,079  shares in favor and
42,848  shares  against,   with  2,248  shares  abstaining  and  460,365  broker
non-votes;

         (b) Approved and adopted a proposal to amend the Company's  Certificate
of  Incorporation  to  increase  the number of shares of Common  Stock which the
Company is authorized to issue from 6,000,000 shares to 15,000,000  shares, by a
vote of 1,434,111  shares in favor and 45,793 shares against,  with 2,860 shares
abstaining and 458,776 broker non-votes;

         (c) Approved and adopted a proposal to amend the  Company's  1991 Stock
Option Plan to increase  the number of shares of Common  Stock which the Company
is authorized to issue  thereunder from 250,000 shares to 850,000  shares,  by a
vote of 1,401,367 shares in favor and 66,820 shares against,  with 12,219 shares
abstaining and 461,134 broker non-votes; and

         (d)  Reelected the  Company's  then existing  Board of Directors by the
following votes:

                                                                Votes
                                                                -----
                                                     For               Withheld
                                                     ---------------------------
                  Michael Epstein                    1,906,379         35,161
                  Lloyd Frank                        1,906,379         35,161
                  Venerando J. Indelicato            1,905,657         35,883
                  Michael Michaelson                 1,906,379         35,161

         Pursuant to the Merger Agreement, in addition to William K. Steiner and
Michael S. Steiner,  Stuart Wagner and David Blyer were designated by Steiner to
serve on the Company's Board of Directors.  Venerando Indelicato and Lloyd Frank
continue to serve as directors of the Company and, in accordance with the Merger
Agreement,  Michael Epstein and Michael Michaelson have resigned as directors of
the Company.

                                      -10-

<PAGE>



Item 7.  Exhibits and Reports on Form 8-K

         (a)      Exhibits

                  27.  Financial Data Schedule

         (b)      Reports on Form 8-K

         The only  Current  Report on Form 8-K filed by the  Company  during the
period  covered  by this  report  was a Report  dated  (date of  earliest  event
reported)  October  29,  1998,  reporting  under  Item 1,  Changes in Control of
Registrant,  Item 2, Acquisition or Disposition of Assets, Item 5, Other Events,
Item 7, Financial  Statements,  Pro Forma Financial Information and Exhibits and
Item 8, Change in Fiscal Year.  The following  financial  statements  were filed
with that report through incorporation by reference to such financial statements
contained  in the  Company's  Proxy  Statement  dated  October  5,1998 (File No.
0-9040):

         The  following  historical  financial  statements  of  Steiner-Atlantic
Corp.:

                  Report of Independent Certified Public Accountants

                  Balance  Sheets  at  December  31, 1997 (audited) and June 30,
                  1998 (unaudited)

                  Statements of Income for the years ended December 31, 1996 and
                  1997  (audited) and for the six months ended June 30, 1997 and
                  1998 (unaudited)

                  Statements of Shareholders Equity for the years ended December
                  31, 1996 and 1997  (audited) and for the six months ended June
                  30, 1998 (unaudited)

                  Statements of Cash Flows for the years ended December 31, 1996
                  and 1997  (audited) and for the six months ended June 30, 1997
                  and 1998 (unaudited)

                  Notes to Financial Statements

         The   following  unaudited  Pro  Forma  Combined   Condensed  Financial
Statements:

                  Introductory Statement

                  Unaudited  Pro Forma  Combined  Condensed Balance Sheet of the
                  Company and Steiner-Atlantic Corp. at June 30, 1998.

                  Unaudited   Pro  Forma   Combined   Condensed   Statements  of
                  Operations  for the year ended  December  31, 1997 and the six
                  months ended June 30, 1998.

                  Notes  to  Unaudited  Pro  Forma Combined  Condensed Financial
Statement.

          Subsequently,  the  Company  filed a Current  Report on Form 8-K dated
(date of  earliest  event  reported)  January 4, 1999,  reporting  under Item 4:
Changes in Registrant's Certifying

                                      -12-

<PAGE>



Accountant,  Item 5: Other Events, and Item 7: Financial  Statements,  Pro Forma
Financial  Information and Exhibits. No financial statements were filed with the
Report.


                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                                    METRO-TEL CORP.


Date:    February 12, 1999                   By:    /s/ Venerando J. Indelicato
                                                    ----------------------------
                                                        Venerando J. Indelicato
                                                    Treasurer and
                                                    Chief Financial Officer


                                      -13-

<PAGE>



                                  EXHIBIT INDEX
                                  -------------

Exhibit Number                              Description
--------------                              -----------


         27                                 Financial Data Schedule