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 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 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)

                    250 S. Milpitas Blvd., Milpitas, CA 95035
                 (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 November 12, 1998.

<PAGE>



Metro Tel Corp.
Statement of Operations
(Unaudited, Notes A and C)
<TABLE>
<CAPTION>

                                                                       For the three months
                                                                       ended September 30,
                                                                       ---------------------
                                                                       1998             1997
                                                                       ----             ----

<S>                                                                  <C>            <C>       
Net sales                                                               $963,683       $1,046,628

Cost of goods sold                                                       612,265          633,406
                                                                      ----------       ----------

     Gross profit                                                        351,418          413,222

Selling, general and
  administrative expenses                                                274,034          311,323
Research and development                                                  57,660           56,129
Interest and other income                                                 (2,259)          (2,785)
                                                                      ----------        ---------
                                                                         329,435          364,667

Earnings before provision
  for income taxes                                                        21,983           48,555

Provision for income taxes                                                 8,794           19,400
                                                                      ----------        ---------

        Net earnings                                                  $   13,189        $  29,155
                                                                      ==========        =========

Basic and diluted
     earnings per share (Note B)                                      $      .01        $     .01
                                                                      ==========        =========

Weighted average number
     of shares outstanding,
     basic and diluted (Note B)                                        2,054,046        2,054,046
                                                                       =========        =========
</TABLE>


                                       -2-

<PAGE>



Balance Sheets
(Unaudited, Notes A and C)

<TABLE>
<CAPTION>

ASSETS
                                                                   September 30,             June 30,
                                                                       1998                    1998  
                                                                   ------------            ------------
Current Assets

<S>                                                           <C>                      <C>         
Cash and cash equivalents                                       $     473,661            $    475,508
Accounts receivable, net                                              418,056                 486,144
Inventories                                                         1,580,702               1,434,147
Prepaid expenses and other                                            102,500                  78,766
                                                                 ------------             -----------
     Total current assets                                           2,574,919               2,474,565

Deferred Income Taxes                                                 133,000                 133,000

Property and equipment - at cost
     Machinery and equipment                                          571,947                 566,732
     Furniture and fixtures                                            76,927                  76,927
     Leasehold improvements                                             8,765                   8,765
                                                                 ------------             -----------
                                                                      657,639                 652,424
     Less accumulated depreciation                                    514,433                 501,078
                                                                 ------------             -----------
                                                                      143,206                 151,346

Other assets
     Goodwill, net of accumulated
        amortization of $436,525
        on September 30, 1998 and
        $429,071 on June 30, 1998                                     756,174                 763,628
     Other, net                                                         9,676                   9,676
                                                                 ------------             -----------
                                                                      765,850                 773,304
                                                                 ------------             -----------

                                                                  $ 3,616,975              $3,532,215
                                                                  ===========              ==========
</TABLE>

                                       -3-

<PAGE>



Metro Tel Corp.
Balance Sheets
     (Unaudited, Notes A and C)
<TABLE>
<CAPTION>


LIABILITIES AND
STOCKHOLDERS' EQUITY
                                                                September 30,                June 30,
                                                                    1998                       1998  
                                                                ------------               ----------

<S>                                                          <C>                       <C>         
Current Liabilities
     Accounts payable                                          $    249,229              $    196,694
     Accrued liabilities                                            535,602                   516,566
                                                                -----------               -----------
        Total current liabilities                                   784,831                   713,260

Deferred Income Taxes                                                 5,000                     5,000

Stockholders' Equity
     Preferred stock, $1 par value,
        200,000 shares authorized,
        none issued or outstanding                                    -                         -
     Common stock, $.025 par value,
        6,000,000 shares authorized,
        2,080,296 shares issued,
        2,054,046 shares outstanding                                 52,007                    52,007
     Additional paid-in capital                                   2,152,423                 2,152,423
     Retained earnings                                              691,464                   678,275
                                                                -----------               -----------

                                                                  2,895,894                 2,882,705
Less 26,250 shares of treasury
     stock - at cost                                                (68,750)                  (68,750)
                                                               ------------               -----------

                                                                  2,827,144                 2,813,955
                                                                -----------                ----------

                                                                 $3,616,975                $3,532,215
                                                                 ==========                ==========

</TABLE>

                                       -4-

<PAGE>

     Metro Tel Corp.
     Statements of Cash Flows
     (Unaudited, Note A and C)
<TABLE>
<CAPTION>

                                                                         For the three months
                                                                          ended September 30,
                                                                        ------------------------
                                                                        1998                1997
                                                                        ----                ----

<S>                                                               <C>                <C>       
Cash flows from operating activities:
     Net earnings                                                   $   13,189         $   29,155
     Adjustments to reconcile net earnings
        to cash provided by operating activities:
        Depreciation and amortization                                   20,809             17,781
        (Increase) decrease in operating assets:
           Accounts receivable                                          68,088            (71,601)
           Inventories                                                (146,555)           (90,8l8)
           Prepaid expenses and other                                  (23,734)            (9,080)
        Increase (decrease) in operating liabilities:
           Accounts payable                                             52,535            (51,688)
           Accrued liabilities                                          19,036             75,164
                                                                    ----------         ----------

           Net cash (used) provided
           by operating activities                                       3,368           (101,087)

Cash flows from investing activities:
     Capital expenditures                                               (5,215)           (13,598)
                                                                   -----------        -----------

           Net (decrease) in cash
           and cash equivalents                                         (1,847)          (114,685)

Cash and cash equivalents at beginning of year                         475,508            498,615
                                                                    ----------         ----------

Cash and cash equivalents at end of period                           $ 473,661          $ 383,930
                                                                     =========          =========

Supplement disclosures of cash flow information:

     Cash paid during the period for
       Income taxes                                                    -                  -

</TABLE>

                                       -5-

<PAGE>



                                 METRO TEL CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note A - 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.

Note B - 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  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  C  -  Subsequent  Event:  On  November  1,  1998,  Steiner-Atlantic  Corp.
("Steiner")  was merged with and into a  wholly-owned  subsidiary of the Company
(the "Merger"); Steiner thereby became a wholly-owned subsidiary of the Company;
and William K. Steiner and Michael S. Steiner, the sole stockholders of Steiner,
were issued an  aggregate  of  4,720,954  shares of Common  Stock of the Company
(representing approximately 69% of the outstanding shares of Common Stock of the
Company  following  the Merger).  In addition,  100,000  shares of the Company's
Common  Stock are being  issued  to  Slusser  Associates,  Inc.,  the  Company's
financial advisor in connection with the Merger. In addition,  upon consummation
of the Merger, the Company granted options under the Company's 1991 Stock Option
Plan, as amended, to purchase an aggregate of 500,000 shares of its Common Stock
to employees of Steiner,  other than William K. Steiner and Michael S.  Steiner,
at an exercise  price equal to 100% of the fair  market  value of the  Company's
Common Stock at the time of grant.  The 2,054,046 shares of the Company's Common
Stock outstanding at the time of the Merger remain outstanding and represent, in
the aggregate, approximately 30% of the Company's Common Stock outstanding after
the Merger.

         Founded  in 1960,  Steiner  is a supplier  of dry  cleaning  equipment,
industrial  laundry  equipment  and  steam  boilers,  offering  over 30 lines of
commercial systems to customers in South Florida,  the Caribbean and Central and
South American markets.  Steiner's services include:  (1) designing and planning
"turn-key"  laundry and/or dry cleaning  systems to meet the layout,  volume and
budget needs of a variety of institutional and retail  customers,  (2) supplying
replacement

                                       -6-

<PAGE>



equipment  and parts to its  customers,  (3) providing  warranty and  preventive
maintenance  through  factory-trained  technicians  and  service  managers,  (4)
selling its own line of dry cleaning  systems to customers in the United States,
the  Caribbean  and Latin  America,  and (5) selling  process  steam systems and
boilers.

         A discussion of the Merger and of Term Loan and  Revolving  Credit Loan
facility  obtained by Steiner  following the Merger,  which is guaranteed by the
Company  and secured by pledges of  substantially  all of the present and future
assets and  property,  excluding  real estate,  of the Company and  Steiner,  is
contained in the  Company's  Current  Report on Form 8-K dated (date of earliest
event reported) October 29, 1998.  Certain  historical  financial  statements of
Steiner and pro forma financial  information  concerning the Company and Steiner
are contained in the Company's Proxy Statement dated October 5, 1998.

         For financial accounting  purposes,  this transaction will be accounted
for as a reverse acquisition of the Company by Steiner from the November 1, 1998
effective date of the Merger,  commencing with the Company's Quarterly Report on
Form 10-Q for the quarter  ending  December 31,  1998.  Since the Merger had not
been  consummated  at September  30, 1998,  the financial  statements  contained
herein  reflect  only the  results  of  operations  and  financial  position  of
Metro-Tel  Corp. and do not include results of operations or balance sheet items
of Steiner.


                                       -7-

<PAGE>



                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operation

Liquidity and Capital Resources

         During the three month period ended  September 30, 1998, cash decreased
by $1,847.  Cash of $3,368 was generated by operating  activities,  with $13,189
derived  from  net  income  and  $20,809  derived  from  non-cash  expenses  for
depreciation  and  amortization.  Additional cash from operating  activities was
provided by a reduction in accounts  receivable  ($68,088),  plus an increase in
accounts payable ($52,535) and accrued  liabilities  ($19,036).  These increases
were largely offset by increases in inventory  ($146,555) and pre-paid  expenses
($23,734).  Cash of $5,215 was used to purchase capital assets.  The Company has
no commitments for capital expenditures, although it intends to purchase capital
assets in the ordinary course of business. The Company believes that its present
cash and cash it expects to generate from  operations will be sufficient to meet
its  operational  needs.  In addition,  Steiner-Atlantic  Corp.,  which became a
wholly  owned  subsidiary  of the  Company  on  November  1,  1998,  obtained  a
$2,250,000  revolving  line of credit and  $2,400,000  term loan on  November 2,
1998.  Both the  revolving  line of credit and term loan are  guaranteed  by the
Company and secured by pledges of substantially all of the assets of the Company
and Steiner-Atlantic Corp.

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 at a cost of less than $2,000
and  has  carried  out  certain  tests  of its  accounts  payable  and  accounts
receivable  files  which are date  sensitive  and found all  systems  to operate
properly.  The Company has reviewed its transmission product line and found that
none of its products are date sensitive.  Steiner-Atlantic's internal accounting
systems have been certified as being year 2000  compliant.  Internal  testing to
verify the certification will started in November 1998.

Results of Operations

         Net sales  decreased by $82,945  (7.9%) in the first  quarter of fiscal
1999 from the same period in fiscal 1998. The Company believes that the decrease
in sales  during the first  quarter was  primarily  due to the  cyclical  buying
habits of telephone  companies which are budget  sensitive this time of year and
during the second quarter.  Prices remained constant during the period. Sales of
telephone test equipment  decreased by $188,319  (19.1%) in the first quarter of
fiscal 1999 from the same period in fiscal  1998.  Decreases in sales of outside
plant  test sets  (4.1%)  and  installer's  test  sets  (41.7%)  were  offset by
increases in sales of  transmission  test equipment  (78.5%).  Sales of customer
premise  equipment  increased by $109,454 (552.5%) during the first three months
of fiscal 1999 when compared to the same period of fiscal 1998,  mainly due to a
one time contract

                                       -8-

<PAGE>



for  CSU/DSU  devices.  Sales  of  miscellaneous  products,  parts  and  repairs
decreased by $4,080 (9.5%).

         The Company's gross profit margin,  expressed as a percentage of sales,
decreased to 36.5% for the first  quarter of fiscal 1999 from 39.4% for the same
period of fiscal 1998.  The decrease  was mainly due to the  decreased  level of
sales  which  adversely  impacted  the  Company's  ability  to absorb  its fixed
expenses as well as an increase in payroll and payroll expenses.

         Selling,  general  and  administrative  expenses  decreased  by $37,289
(12.0%)  and as a  percentage  of sales to 34.2%  from  34.8%  during  the first
quarter of fiscal  1999.  The  decrease  consisted of a reduction in general and
administrative expenses (11.1%) and sales expenses (13.0%)

         Research and  development  expenses  increased by $1,531  (2.7%) in the
first  quarter of fiscal 1999  compared to the same period of fiscal 1998 mainly
due to higher payroll, payroll expenses and supplies.


                                       -9-

<PAGE>



                           PART II - OTHER INFORMATION

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

         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)  July 6,  1998,  reporting  under Item 5,  Other  Events,  and Item 7,
Financial Statements, Pro Forma Financial Information and Exhibits.
No financial statements were filed with that report.

         Subsequently,  the  Company  filed a  Current  Report on Form 8-K 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


                                      -11-

<PAGE>



      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.


                                   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:    November 12, 1998             By:    /s/  Venerando J. Indelicato
                                              ---------------------------------
                                              Venerando J. Indelicato
                                              Treasurer and
                                              Chief Financial Officer

                                      -12-

<PAGE>



                                  EXHIBIT INDEX

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

         27                                 Financial Data Schedule


                                      -13-