SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC 20549

                            FORM 10-Q

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

For Quarter Ended                  Commission File No. 0-13829
June 30, 1999

                    PRECISION STANDARD, INC.

     (Exact Name of Registrant as Specified in its Charter)

        Colorado                         84-0985295
(State of Incorporation)    (I.R.S. Employer Identification No.)

                     12000 East 47th Avenue
                            Suite 400
                     Denver, Colorado 80239
            (Address of Principal Executive Offices)
                        (303) 371-6525
      (Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.

                    Yes [X]                  No [ ]

The number of shares outstanding of each of the issuer's classes of
common shares, as of the close of the period covered by this
report:

Class of Securities              Outstanding Securities
$.0001 Par Value                 3,978,137 shares
Common Shares                    Outstanding at June 30, 1999









PART I.   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

              PRECISION STANDARD, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS


                               ASSETS
                           (In Thousands)

                                          June 30,       December 31,
                                            1999            1998
                                        (Unaudited)

Current assets:
  Cash and cash equivalents               $ 1,473           $    193
  Accounts receivable, net                 22,055             17,434
  Inventories                              21,434             15,286
  Prepaid expenses and other                1,404                995

        Total current assets               46,366             33,908

Property, plant and equipment,
   at cost:
  Leasehold improvements                   11,732             11,242
  Machinery and equipment                  19,346             18,656
                                           31,078             29,898

Less accumulated depreciation             (20,172)           (19,252)

        Net property, plant and
          equipment                        10,906             10,646

Other non-current assets:
  Prepaid pension costs                     2,279              2,888
  Intangible assets, net                      354                483
  Related party receivable                    270                270
  Deposits and other                        1,349              1,274
                                            4,252              4,915

        Total assets                      $61,524           $ 49,469





           The accompanying notes are an integral part of
              these consolidated financial statements.




              PRECISION STANDARD, INC. AND SUBSIDIARIES
               CONSOLIDATED BALANCE SHEETS (CONTINUED)

                LIABILITIES AND STOCKHOLDERS' EQUITY
                           (In Thousands)

                                          June 30,       December 31,
                                            1999            1998
                                        (Unaudited)

Current liabilities:
  Current portion of debt                 $    237          $  1,454
  Accounts payable and accrued
   expenses                                 34,440            29,168

          Total current liabilities         34,677            30,622

Long-term debt                              25,086            21,824
Other long-term liabilities                  3,022             3,063
          Total liabilities                 62,785            55,509

Stockholders' equity:
  Common stock, $.0001 par value,
  300,000,000 shares authorized,
  3,978,137 and 3,977,721 shares
  issued and outstanding at
  June 30, 1999 and December 31,
  1998, respectively                             1                 1

  Additional paid-in capital                 4,768             4,768
  Accumulated deficit                       (6,030)          (10,809)
  Total stockholders' deficit               (1,261)           (6,040)

         Total liabilities and
         stockholders' deficit             $61,524          $ 49,469












           The accompanying notes are an integral part of
              these consolidated financial statements.




              PRECISION STANDARD, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS
                           (In Thousands)

                                           Three           Three
                                        Months Ended    Months Ended
                                          June 30,        June 30,
                                            1999            1998
                                        (Unaudited)     (Unaudited)

Net sales                                $39,718          $39,219
Cost of sales                             32,557           30,703
     Gross profit                          7,161            8,516

Selling, general and
  administrative expenses                  3,459            4,941
Bad debt expense (recovery)                    0             (250)
Research and development expense               0                0
     Income from operations                3,702            3,825

Other (income) expense:
  Interest expense                           660              637
  Other, net                                 118              381
     Income before income
     taxes                                 2,924            2,807

Provision for income taxes                    95               25

     Net income                          $ 2,829          $ 2,782

Net income per common share:
  Basic                                  $  0.71          $  0.74
  Diluted                                $  0.70          $  0.71














           The accompanying notes are an integral part of
              these consolidated financial statements.



              PRECISION STANDARD, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS
                           (In Thousands)

                                            Six            Six
                                        Months Ended   Months Ended
                                          June 30,       June 30,
                                            1999           1998
                                        (Unaudited)    (Unaudited)

Net sales                                $79,603         $73,673
Cost of sales                             63,104          58,517
     Gross profit                         16,499          15,156

Selling, general and
  administrative expenses                  9,376           9,464
Bad debt expense (recovery)                    0            (250)
Research and development expense               0             125
     Income from operations                7,123           5,817

Other (income) expense:
  Interest expense                         1,622           1,304
  Other, net                                 542          (2,857)
     Income before income
     taxes                                 4,959           7,370

Provision for income taxes                   180              50

   Net income                            $ 4,779         $ 7,320

Net Income per common share
  Basic                                     1.20         $  1.97
  Diluted                                   1.18         $  1.87














           The accompanying notes are an integral part of
              these consolidated financial statements.



                    EFFECTED FOR CLIENT RECLASSES
              PRECISION STANDARD, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENT OF CASH FLOWS
                           (In Thousands)

                                            Six               Six
                                        Months Ended      Months Ended
                                        June 30, 1999     June 30, 1998
                                         (Unaudited)       (Unaudited)
Cash flows from operating
  activities:
 Net income                               $ 4,779           $ 7,320
 Adjustments to reconcile net
     income to net cash used in
     operating activities:
Depreciation and amortization                 920               977
Pension cost in excess of
   funding                                    609                 0
Loss (gain) on sale of equipment                0            (3,124)
Changes in assets and liabilities:
  Accounts receivable, trade               (4,621)           (4,695)
  Inventories                              (6,148)           (2,132)
  Prepaid expenses and other                 (409)            1,021
  Deposits and other                          (75)               (3)
  Accounts payable and accrued
    expenses                                4,014              (234)

Total adjustments                          (5,710)           (8,190)

Net cash provided by (used in)
 operating activities                        (931)             (870)
Cash flows from investing
 activities:
Proceeds from sale of division                  0             4,790
Capital expenditures                       (1,051)             (218)

     Net cash provided by
      (used in) investing
      activities                           (1,051)            4,572

Cash flows from financing
 activities:
   Net borrowings (repayments)
    under revolving credit
    facility                                3,262            (3,679)

      Net cash provided by
       (used in) financing
       activities                           3,262            (3,679)



      Net increase in cash
       and cash equivalent                  1,280                23
Cash and cash equivalents,
 beginning of period                          193               369
Cash and cash equivalents,
 end of period                              1,473               392

Supplemental disclosure of
cash flow information:
  Cash paid during the year
  for:
    Interest                              $1,622            $ 1,261
    Income taxes                          $  180            $    50






           The accompanying notes are an integral part of
              these consolidated financial statements.







            PRECISION STANDARD, INC. AND SUBSIDIARIES
                  NOTES TO FINANCIAL STATEMENTS

1.   CONSOLIDATED FINANCIAL STATEMENTS

     The consolidated interim financial statements have been
     prepared by the Company without audit.  In the opinion of
     management, all adjustments necessary for a fair presentation
     are reflected in the interim financial statements.  Such
     adjustments are of a normal and recurring nature.  The results
     of operations for the period ended June 30, 1999 are not
     necessarily indicative of the operating results expected for
     the full year.  The interim financial statements should be
     read in conjunction with the audited financial statements and
     notes thereto included in the Company's 1998 Form 10-K.

2.   PENDING ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial Accounting standards Board
     ("FASB") issued Statement of Financial Accounting Standards
     ("SFAS") No. 133, Accounting for Derivative Instruments and
     Hedging Activities.  This Statement establishes accounting and
     reporting standards for derivative instruments embedded in
     other contracts (collectively referred to as derivatives) and
     for hedging activities.  It requires that an entity recognize
     all derivatives as either assets or liabilities in the
     statement of financial position and measure those instruments
     at fair value.  This Statement is effective as of the
     beginning of fiscal years ending after June 15, 1999.
     Management does not believe that the Statement will have a
     significant impact on the presentation of the Company's
     financial condition or results of operation.

     In June 1999, the FASB issued SFAS No. 137, Accounting for
     Derivative Instruments and Hedging Activities - Deferral of
     the Effective Date of FASB Statement No. 133 from fiscal
     quarters of all fiscal years beginning after June 15, 1999,
     with earlier application encouraged to fiscal quarters of all
     fiscal years beginning after June 15, 2000.

3.   INVENTORIES

     Inventories consist of the following:

                                      June 30,       December 31,
                                       1999             1998
                                   ($ thousands)    ($ thousands)
                                    (Unaudited)

      Work in-process                 $31,978          $30,185
      Finished goods                    3,404            3,324
      Raw materials and supplies        4,845            2,967
      Total                           $40,227          $36,476

      Less progress payments
        and customer deposits         (18,366)         (20,708)
      Less allowance for
        estimated losses on
        work in process                  (427)            (482)
                                      $21,434          $15,286

4.   NET INCOME PER SHARE

     Basic EPS was computed by dividing net income by the weighted
     average number of shares of common stock outstanding during
     the periods.  Dilution was computed by dividing net income by
     the weighted average number of shares of common stock and the
     dilutive effects of the shares awarded under the Stock Option
     plan and stock warrants, based on the treasury stock method
     using an average fair market value of the stock during the
     respective periods.

     The following table represents the net income per share
     calculations for the three months and six months ended June
     30, 1999 and 1998:

     For the three and six months ended June 30:
     (All numbers in thousands except Income Per Share)

                                       Three Months     Six Months
                                           Ended           Ended
                                          June 30         June 30
     1999
     Net Income                           $2,829         $ 4,779
     Weighted Average Shares               3,978           3,978
     Basic Net Income Per Share              .71            1.20
     Dilutive securities:
        Options                               58              72
        Warrants                               0               0
     Diluted Weighted Average Shares       4,036           4,050
     Diluted Net Income Per Share            .70            1.18

     1998
     Net income                            2,782         $ 7,320
     Weighted Average Shares               3,748           3,707
     Basic Net Income Per Share              .74            1.97
     Dilutive Securities:
          Options                              2               2
          Warrants                           171             208
     Diluted Weighted Average shares       3,921           3,918
     Diluted Net Income Per Share            .71            1.87




5.   NOTES PAYABLE
                                         June 30,     December,31,
                                          1999           1998
                                     ($ Thousands)   ($ Thousands)
                                       (Unaudited)

     Revolving credit facility          $17,874         $15,548

     Senior Subordinated Loan
     interest at 13.5%                    6,150           6,150

     Other obligations:  interest
     from 6 to 18%, collateralized
     by security interests in
     certain equipment                    1,299           1,580

     Total debt                         $25,323         $23,278

     Less portion reflected
      as current                            237           1,454

     Long term debt, net of
      current portion                   $25,086         $21,824

     On August 8, 1997, the Company entered into a three-year
     revolving credit facility with a lender.  The amount of funds
     available to borrow under the $20 million revolving credit
     facility is tied to percentages of accounts receivables and
     inventory and, as a result of certain subordination
     provisions, may not exceed $17 million.  Therefore, available
     funds fluctuate on a daily basis.  Interest on the revolving
     credit facility accrues at prime rate plus 1.5% with
     provisions for both reductions in the interest rate based on
     specific operating performance targets and increases related
     to certain events of default. Interest is accrued and charged
     to the loan balance on a monthly basis.

     From time to time the lender has allowed the Company to exceed
     the $17 million cap due to the Company having funds in excess
     of the cap in its lockbox which had not been drawn down and
     applied to the revolving credit facility by the lender.  The
     lender is not required to permit the Company to exceed the cap
     at any time in the future.

     All scheduled principal amortization for the Senior
     Subordinated loan has been deferred for the three-year term of
     the revolving credit facility.  The Senior Subordinated loan
     will be repaid over five installments commencing on August 31,
     2000, due each subsequent quarter through June 30, 2001.

     The above loans are collateralized by substantially all of the
     assets of the Company and have various covenants which limit
     or prohibit the Company from incurring additional
     indebtedness, disposing of assets, merging with other
     entities, declaring dividends, or making capital expenditures
     in excess of certain amounts in any fiscal year.
     Additionally, the Company is required to maintain various
     financial ratios and minimum net worth amounts.

     In the second quarter of 1999 the Company used cash in
     operations primarily due to delays in progress payments for
     amounts billed to the U.S. Government and increased workloads
     under government contracts resulting in an increase in both
     accounts receivable and work in process.  Most of the delays
     in progress payments were corrected in the third quarter.

6.   CONTINGENCIES

     United States Government Contracts - The Company, as a U.S.
     Government contractor, is subject to audits, reviews, and
     investigations by the government related to its negotiation
     and performance of government contracts and its accounting for
     such contracts.  Failure to comply with applicable U.S.
     Government standards by a contractor may result in suspension
     from eligibility for award of any new government contract and
     a guilty plea or conviction may result in debarment from
     eligibility for awards.  The government may, in certain cases,
     also terminate existing contracts, recover damages, and impose
     other sanctions and penalties.  The Company believes, based on
     all available information, that the outcome of the U.S.
     Government's audits, reviews, and investigations will not have
     a materially adverse effect on the Company's consolidated
     results of operations, financial position, or cash flows.

     Litigation - The purported class action brought against the
     Company and its Pemco Aeroplex subsidiary on behalf of those
     persons hired as replacement workers during the strike by
     Pemco's United Auto Worker ("UAW") union employees who were
     terminated upon settlement of such strike was dismissed in the
     third quarter.  However, a new action was filed by
     approximately 28 individuals shortly thereafter.  The Company
     continues to believe the plaintiffs' claims have no factual
     basis and will vigorously defend the case.

     The Company's Pemco Aeroplex subsidiary, successor to Hayes
     International, is a defendant in several suits seeking damages
     and indemnity for claims arising from an Airworthiness
     Directive issued by the FAA.  That Directive restricts the
     cargo capacity of Boeing 747 aircraft converted pursuant to an
     STC for such conversions.  Hayes International had performed
     engineering for the development of the STC.  Certain of the
     suits also allege fraud, misrepresentation and violations of
     the Racketeer Influenced and Corrupt Organization Act.
     Management believes that Pemco has no liability under the
     claims.

     In May 1998, the Company's Pemco Aeroplex subsidiary was
     served with a complaint filed by National Union Fire Insurance
     Company, the Company's current insurer, seeking a declaration
     that the policies issued by such insurer between 1987 and 1996
     are not required to provide defense costs or indemnity
     payments with respect to the litigation arising out of the
     STCs for Boeing 747 cargo conversions owned by GATX and
     others.  The complaint filed in U.S. District Court of the
     Northern District of California, also names American
     International Airways, Inc., a plaintiff in one of the
     underlying cases, as a defendant.  Pemco Aeroplex has filed a
     motion to stay the action pending resolution of the underlying
     cases.

     On November 3, 1997, a Jefferson County, Alabama jury returned
     a verdict against the Company's Pemco Aeroplex subsidiary in
     the amount of $1 million compensatory and $3 million punitive
     damages.  Various post-trial motions resulted in the trial
     court reducing the verdict to $1 million in compensatory
     damages.  Pemco has appealed this decision.  The Company
     believes the decision will be reversed upon appeal.
     Nevertheless, an accrual was established in the fourth quarter
     of 1997 for the compensatory damage award pending outcome of
     the appeal.

     On October 9, 1998, the Company was served with a complaint
     filed by Sterling Airways A/S in bankruptcy ("Sterling") in
     the District Court for the City and County of Denver, Colorado
     alleging breach of contract.  The complaint seeks payment for
     parts and materials supplied to the Company's Danish
     subsidiary Pemco World Air Services A/S, which was placed in
     involuntary bankruptcy in November 1997.  The complaint
     alleges that the Company guaranteed certain obligations to
     Sterling and seeks damages of approximately $1.4 million.  On
     November 2, 1998, the Company filed a motion to dismiss the
     complaint which was denied by the court on January 13, 1999.

     In November 1997, the Company's Danish subsidiary, Pemco World
     Air Services A/S, was placed in involuntary bankruptcy in
     Denmark.  On September 30, 1998, the Company received notice
     from the bankruptcy estate that the trustees would assert a
     claim in the amount of approximately $2 million against the
     Company for the alleged negative equity of the Danish
     subsidiary.  Based on preliminary information provided to the
     Company in October 1998, additional claims have been filed by
     creditors against the bankruptcy estate.  Based on the
     information currently available, the Company believes that
     such claims may or may not be assertive against the Company.
     The Company has not made any additional reserves related to
     these claims.

     In addition to the above, the Company is involved in various
     legal proceedings arising in the normal course of business.
     Management does not believe the ultimate outcome of all such
     litigation will have a material adverse effect on the
     consolidated financial position or results of operations.

     Year 2000 Compliance

     Background

     Some computers, software and other equipment include
     programming code which abbreviates calendar year data using
     only two digits.  As a result, some equipment could fail to
     operate or fail to produce correct results if "00" is
     interpreted to mean 1900, rather than 2000.  These problems
     are widely expected to increase in frequency and severity as
     the year 2000 approaches and are commonly referred to as the
     "Millennium Bug" or "Year 2000 Problem."

     Assessment

     The Year 2000 Problem could affect computers, software and
     other equipment used by the Company.  Accordingly, the Company
     is reviewing its internal computer programs and systems to
     ensure that such programs and systems will be Year 2000
     compliant.  The Company presently believes that its computer
     systems will be Year 2000 compliant in a timely manner.

     Internal Infrastructure

     The Company's assessment of its existing computer systems
     revealed that a portion of its software programs and hardware
     were not Year 2000 compliant.  The Company believes that it
     has identified most of the major computers, software
     applications and related equipment used in connection with its
     internal operations that must be modified, upgraded or
     replaced to minimize the possibility of a material disruption
     to its business.

     Based on information gathered to date, the Company has taken
     steps to address the potential impacts of year 2000 compliance
     on its financial accounting, manufacturing, and production
     systems.  For most operating units the primary focus in
     achieving year 2000 compliance will be relatively minor
     upgrades to existing systems.

     The Company has determined that one of its operating units
     will require a major system replacement.  Implementation was
     begun during the first quarter of 1999 and is currently
     scheduled for completion at the end of the fourth quarter,
     with cut over to the new system during the last two weeks of
     the quarter.  The new system is Oracle based and runs on a
     Hewlett Packard server.

     In addition to addressing the Y2K issue, the new system
     substantially improves the Maintenance Repair & Overhaul (MRO)
     process and the Company anticipates improved efficiencies.

     The Company does not presently exchange data electronically
     with outside entities and its production capability does not
     rely on systems such as Just In Time Inventory.  The Company
     has determined that its production and manufacturing
     operations could continue through the use of a combination of
     automated and manual systems, if necessary, and therefore, the
     impact, if any, of Year 2000 failures by outside entities
     should not be material to the Company's operations or
     financial condition.

     Systems Other Than Information Technology Systems ("Non-IT
     Systems")

     In addition to computers and related systems, the operation of
     the Company's office and facilities equipment, such as fax
     machines, photocopiers, telephone switches, security systems,
     elevators and other common devices, may be affected by the
     Year 2000 Problem.  The Company has been assessing the
     potential effect of the Year 2000 Problem on its office and
     facilities equipment.  The Company has relatively few date-
     sensitive systems in place, and most major non-IT systems are
     the responsibility of landlords and other service providers.
     It is currently estimated that any requirements for
     replacement or modification to non-IT systems will not have a
     material effect on the Company's business, financial condition
     or results of operations.

     Customers and Suppliers

     The Company does not foresee any serious Year 2000 Problems
     occurring with its vendors and customers.  Although the
     Company has not yet received written assurances of compliance,
     it has requested statements of Year 2000 compliance from its
     vendors.  While it is not possible to predict all issues which
     could arise relating to a supplier, the Company believes that
     it has multiple sources for most of the materials and supplies
     it presently procures from vendors or third party contractors.
     Unless a national or global problem occurs, the Company
     believes it will be able to continue production while it seeks
     to rectify any supplier issues that may arise.  Because the
     Company's primary customers include the U.S. Government and
     large corporations with substantial financial resources, the
     Company believes that these customers are taking appropriate
     steps to protect themselves and, indirectly, the Company from
     business losses resulting from Year 2000 issues.  Although it
     is not possible to quantify the effects Year 2000 compliance
     will have on the Company's customers or suppliers, the Company
     does not anticipate related material adverse effects on its
     financial condition, liquidity or results of operations.

     Most Likely Consequences of Year 2000 Problems

     The Company expects to identify and resolve all Year 2000
     Problems that could materially adversely affect its business,
     financial condition or results of operations.  However, the
     Company believes that it is not possible to determine with
     complete certainty that all Year 2000 Problems affecting the
     Company have been identified or corrected.  The number of
     devices that could be affected, directly or indirectly, and
     the interactions among these devices are simply too numerous
     to ensure 100% compliance.  Accordingly, the Company cannot
     accurately predict how many failures related to the Year 2000
     Problem will ultimately occur or the severity, duration or
     financial consequences of such failures.  As a result, the
     Company expects that there is some risk of the following
     consequences:

          -    A significant number of operational inconveniences
     and inefficiencies for the Company and its customers that may
     divert management's time and attention and financial and human
     resources from its ordinary course of business activities; and

          -    A number of serious system failures that may require
     significant efforts by the Company or its customers to prevent
     or alleviate material business disruptions.

     Contingency Plans

     The Company is currently developing contingency plans to be
     implemented as part of its efforts to identify and correct
     Year 2000 Problems affecting its internal systems.  Depending
     on the systems affected, these plans could include (1)
     accelerated replacement of affected equipment or software, (2)
     short-to-medium-term use of backup equipment and software, (3)
     increased work hours for Company personnel or the use of
     contract personnel to correct any Year 2000 Problems which may
     arise, (4) manual backup systems to forestall any interruption
     of operations resulting from the failure of automated systems,
     (5) and other similar approaches.  If the Company is required
     to implement any of these contingency plans, such plans could
     have a material adverse effect on the Company's business,
     financial condition or results of operations.

     As noted above, however, the Company does not presently
     believe that the Year 2000 Problem will have a material
     adverse effect on the Company's business, financial condition
     or results of operations.

     Total hardware, software, networking, and implementation costs
     for the Company's year 2000 compliance efforts are estimated
     at approximately $4.5 million which will be incurred over a
     one year period.  The costs are expected to be financed by
     various vendors over periods of 36 to 42 months.

     During July, two of the Company's operating units achieved
     Year 2000 compliance with their main production software and
     hardware servers.  One of the operating units is 100%
     compliant with the other needing only to order and install a
     relatively small number of personal computers to finalize its
     compliance project.

     While there is no guarantee that the Company will reach Year
     2000 compliance by such deadline, the Company believes that it
     is applying the resources and effort sufficient to do so.

7.   COMPREHENSIVE INCOME

     The Company adopted Statement of Financial Accounting
     Standards ("SFAS") No. 130 on January 1, 1998, which
     establishes standards for reporting and display of
     comprehensive income and its components.  Comprehensive income
     is a measure of all nonowner changes in equity of an
     enterprise that result from transactions and other economic
     events of the period.  The Company did not have any material
     differences in net income and comprehensive income for the
     quarters ended June 30, 1999 or 1998.

8.   SEGMENT AND RELATED INFORMATION

     The Company adopted SFAS No. 131, Disclosures about Segments
     of an Enterprise and Related Information, at December 31, 1998
     which changes the way the Company reports information about
     its operating segments.  The Company has provided this segment
     information for the period ended June 30, 1999; however, the
     Company has not provided such information for the prior year
     as it is not practical to capture the relevant information for
     the prior year.

     The Company has three reportable segments: Government Services
     Group, Commercial Services Group, and Manufacturing and
     Overhaul Group.  The Government Services Group, located
     primarily in Birmingham, Alabama, provides aircraft
     maintenance and modification services for the government and
     military customers.  The Commercial Services Group, located in
     Dothan, Alabama, and Victorville, California provides
     commercial aircraft maintenance and modification services on
     a contract basis to the owners and operators of large
     commercial aircraft.  The Manufacturing and Overhaul Group,
     located in California and Florida, designs and manufactures a
     wide array of proprietary aerospace products including various
     space systems, such as guidance control systems and launching
     vehicles; aircraft cargo-handling systems; and precision parts
     and components for aircraft.  For reporting purposes, segments
     other than government, commercial and manufacturing and
     overhead are combined as another segment.  These additional
     segments perform engineering and support services for the
     three main business segments.

     The accounting policies of the segments are the same as those
     described in the summary of significant accounting policies.
     The Company evaluates performance based on total (external and
     intersegment) revenues, gross profits and operating income.
     The Company accounts for intersegment sales and transfers as
     if the sales or transfers were to third parties, that is at
     current market prices.  The Company does not allocate income
     taxes, interest income and interest expense to segments. The
     amount of intercompany profit is not material.

     The Company's reportable segments are strategic business units
     that offer different products and services.  They are managed
     separately because each business requires different operating
     and marketing strategies.  However, the Commercial and
     Manufacturing and Overhaul segments may generate sales to
     Governmental entities and the Government segment may generate
     sales to commercial entities.










     The following tables present information about segment profit or loss:

                              Second Quarter 1999
                               (In $ Thousands)
                                              Mfg. and             Consoli-
                    Government   Commercial   Overhaul    Other    dated

    Revenues from
     external,
     domestic
     customers      $18,861      $11,610      $ 6,085     $   18   $ 36,575
    Revenues from
     external
     foreign
     customers            0        3,144            0          0      3,144
    Intersegment
     revenues            20            0           95          0        115
    Total
     Segment
     Revenues       $18,881      $14,754      $ 6,180     $   18   $ 39,833
    Elimination                                                        (115)
    Total Revenues                                                 $ 39,718

    Gross Profit      2,486        3,237        1,746       (308)     7,161
    Segment Op
     Inc.             2,240          801            5       (244)     2,802
    Interest
     Expense                                                            660
    Other                                                              (782)
    Benefit
     for Income
     Taxes                                                               95
     Net Income                                                    $  2,829

    Assets          $30,113      $16,265     $ 14,537     $  609   $ 61,524
    Deprec/Amort         71          163          140          0        374
    Cap. Additions      248          141          357          0        746








                        Six Months Ending June 30, 1999
                               (In $ Thousands)

                                              Mfg. and             Consoli-
                    Government   Commercial   Overhaul    Other    dated

    Revenues from
     external,
     domestic
     customers      $41,283      $18,878      $13,258     $  200   $ 73,619
    Revenues from
     external
     foreign
     customers            0        5,984            0          0      5,984
    Intersegment
     revenues            35            0          125          0        160
    Total
     Segment
     Revenues       $41,318      $24,862      $13,383     $  200   $ 79,763
    Elimination                                                        (160)
    Total Revenues                                                 $ 79,603


    Gross Profit      9,956        4,171        2,673       (301)    16,499
    Segment Op
     Inc.             5,931        1,126          405       (339)     7,123
    Interest
     Expense                                                          1,622
    Other                                                               542
    Benefit
     for Income
     Taxes                                                              180
     Net Income                                                    $  4,779

    Assets          $30,113      $16,265     $ 14,537     $  609   $ 61,524
    Deprec/Amort        437          258          224          1        920
    Cap. Additions      426          232          393          0      1,051















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

INTRODUCTION

The following discussion should be read in conjunction with the
Company's consolidated financial statements and notes thereto
included herein.

During the second quarter of 1999, the Company continued its return
to profitability.  The Company reported operating income of $3.7
million for the three months ended June 30, 1999 and a combined
operating income of $7.1 million for the first six months of 1999.
Total income before taxes for the first and second quarters of 1999
was $2.1 million and $2.9 million, respectively, for a combined
total income before taxes of $5.0 million.  This includes non-
recurring income of $.2 million resulting from the return of 12
acres of property to the Birmingham Airport Authority.

RESULTS OF OPERATIONS

Three months ended June 30, 1999
versus three months ended June 30, 1998

Revenues from operations for the second quarter of 1999 grew from
the second quarter of 1998, increasing 1.3% from $39.2 million in
1998 to $39.7 million in 1999.  Government sales increased
approximately 28% from $18.2 million in 1998 to $23.4 million in
1999.  Commercial sales decreased 22% from $21 million in 1998 to
$16.3 million in 1999.  The Company's mix of business between
government and commercial customers moved from 54% commercial and
46% government in 1998 to 41% commercial and 59% government in 1999
during the same period.

Government sales in the second quarter of 1999 increased
approximately $5.2 million due primarily to increases in sales of
$3.9 million under the Birmingham facility's KC-135 contract and
$1.3 million under contracts at the Space Vector facility.

Commercial sales decreased $4.1 million under aircraft
maintenance/modification contracts at the Dothan and Victorville
facilities, and $.6 million in other commercial operations.

This decrease in commercial sales was anticipated by the Company as
the second quarter of 1998 contained an unusually large volume of
commercial sales.  Approximately 63% of the year to date sales for
Dothan and Victorville were made in the second quarter of 1998.

Cost of sales increased from $30.7 million in 1998 to $32.6 million
in the second quarter of 1999.  The ratio of cost of sales to net
sales increased from 78.3% in the second quarter of 1998 to 82.0%
in 1999.

There were two strike related KC-135 aircraft delivered during the
quarter which contributed to this increase in cost of goods sold.
As of June 30, 1999, one additional aircraft remains in work in
process from the time of the strike which occurred between 1996 and
1997 at the Company's Birmingham facility.

Selling, general and administrative expenses decreased from $4.9
million in the second quarter of 1998 to $3.5 million in 1999.

Interest expense was relatively constant at $0.6 million in the
second quarters of 1998 and 1999.

Six months ended June 30, 1999
versus six months ended June 30, 1998

Revenues from operations for the first six months of 1999 grew from
the same period of 1998, increasing 8.1% from $73.7 million in 1998
to $79.6 million in 1999.  Government sales increased approximately
26% from $37.9 million in 1998 to $47.9 million in 1999.
Commercial sales decreased 11% from $35.7 million in 1998 to $31.7
million in 1999.  The Company's mix of business between government
and commercial customers moved from 49% commercial and 51%
government in 1998 to 40% commercial and 60% government in 1999
during the same period.

Government sales in the first half of 1999 increased approximately
$10.0 million due primarily to increases in sales of $8.0 million
under the Birmingham facility's KC-135 contract and $2.0 million
under contracts at the Space Vector facility.

Commercial sales decreased $2.2 million under aircraft
maintenance/modification contracts at the Dothan and Victorville
facilities, and by $1.8 million in other commercial operations,
primarily at the Pemco Nacelles operating unit.

Cost of sales increased from $58.5 million in 1998 to $63.1 million
in the first half of 1999.  The ratio of cost of sales to net sales
decreased slightly from 79.4% in the first half of 1998 to 79.3% in
1999.

Selling, general and administrative expenses decreased from $9.5
million in the first half of 1998 to $9.4 million in 1999.

Interest expense was $1.6 million in first half 1999 versus $1.3
million in 1998.





LIQUIDITY AND CAPITAL RESOURCES

In the first half of 1999 the Company used cash in operations
primarily due to increases in the amounts billed to the U.S.
Government, additional workloads under government contracts, and in
a lengthened collection period of several large commercial invoices
at the Company's Dothan facility.  This resulted in an increase in
both accounts receivable and work in process.  Most of the delays
in commercial payments were corrected early in the third quarter.

The following is a discussion of the significant items in the
Company's Consolidated Statement of Cash Flows for the six months
ending June 30, 1999 and 1998.

The Company's pension expense as determined by its actuary for the
year 1999 is $1.1 million as compared to $1.2 million in 1998.  In
the second quarter of 1999, the Company made no contributions to
the pension plan and expensed approximately $.3 million.  In the
second quarter of 1998, the Company made no contributions to the
pension plan and expensed approximately $0.08 million.

Accounts payable and accrued expenses increased from $29.2 million
at December 31, 1998 to $34.4 million at June 30, 1999.  Accrued
interest payments at June 30, 1999 were $0.2 million representing
no increase over that due at December 31, 1998.

Accounts receivable increased $4.6 million in the first half of
1999 due to an increase in billings on the KC-135 contract and a
delay of payments from several commercial customers which was
corrected in the third quarter.

Net inventories increased $6.1 million in the first half of 1999
primarily due to an increase in the total work in process.

During the first half of 1998, the Company's operating activities
used $0.9 million in cash.  In the first half of 1999, a similar
amount of cash was used for operating activities.

During the second quarter of 1999, the Company allowed its
agreement with Houlihan, Lokey, Howard & Zukin to expire.
Notwithstanding the termination of that arrangement, the Company
continues to explore various strategic alternatives to enhance
shareholder value.

During 1997, 1998 and 1999, inflation and changing prices have had
no significant impact on the Company's net sales or revenues or on
income from continuing operations.

BACKLOG

The following table presents the Company's backlog (in thousands of
dollars) at June 30, 1999 and 1998:

                                   1999              1998

     U.S. Government             $161,499          $137,067
     Commercial                    24,028            20,346
                                 $185,527          $157,413

As of June 30, 1999, 87% of the Company's backlog related to work
for the U.S. Government.  This percentage was identical for the
period ending June 30, 1998.  The Company's Government backlog
increased $24.4 million primarily related to additional aircraft
input under the Company's KC-135 contract, a contract for the
painting of C-130 aircraft awarded to the Birmingham facility, and
an increase in NASA subcontract related work at the Company's Space
Vector operating unit.

                                      1999              1998

     Firm, unfunded Backlog      $12.4 million     $45.1 million

     Additional estimated
     sales to be derived
     from backlog contracts      $190.7 million    $181.0 million

CONTINGENCIES

See Note 6 to the Consolidated Financial Statements.

FORWARD LOOKING STATEMENTS

With the exception of historical facts, statements contained in
Management's Discussion and Analysis are forward looking
statements.  Statements contained herein concerning anticipated
results of operations, award of contracts, the outcome of pending
and future litigation, the outcome of audits, reviews and
investigations by the U.S. Government, the outcome of claims filed
with the U.S. Government, estimates of backlog, the outcome of
claims related to the Danish subsidiary, the Company's intent to
take certain action in the future, the impact of Year 2000 issues
on the Company's operations, and the Company's ability to achieve
Year 2000 compliance are forward looking statements, the accuracy
of which cannot be guaranteed by the Company.  These forward
looking statements are subject to a variety of business risks and
other uncertainties, including but not limited to the effect of
economic conditions, the impact of competitive products and
pricing, new product development, the actual performance of work
under contract, customer contract awards, estimates of time and
money to assess and address Year 2000 issues, the continuing
availability of experienced personnel to deal with Year 2000
issues, the timely availability of software patches from existing
suppliers of software, the ability of third parties to complete
their own remediations of Year 2000 issues on a timely basis, the
ability to identify and implement contingency plans to deal with
Year 2000 issues, unanticipated problems identified in the
Company's ongoing Year 2000 compliance review, and actions with
respect to utilization and renewal of contracts.











                     PRECISION STANDARD,INC.
                        OTHER INFORMATION

PART II.

Item 1    Legal Proceedings

          See Note 5 to Part I, Financial Statements

Item 2    Changes in Securities

          None

Item 3    Defaults Upon Senior Securities

          None

Item 4    Submission of Matters to a Vote of Security Holders

          The Company's Annual meeting of shareholders was held on
June 1, 1999, after being adjourned from May 17, 1999.  At the
meeting Matthew L. Gold, Donald C. Hannah, Admiral George E.R.
Kinnear II and General Thomas C. Richards were elected as
directors.  The shareholders also ratified the appointment of
Arthur Andersen LLP as the Company's independent public accountants
for the year ending December 31, 1999 and approved amendments to
the Company's Nonqualified Stock Option Plan which included an
increase in the number of shares reserved under the Plan.

          The number of votes cast for or withheld for each
director nominee was as follows:

Nominee                             For        Withheld

Matthew L. Gold                  2,575,042     137,676
Donald C. Hannah                 2,577,917     134,801
Admiral George E.R. Kinnear II   2,578,067     134,651
General Thomas C. Richards       2,578,067     134,651

          The number of votes cast for, against and abstentions for
ratification of auditors was as follows:

              For         Against        Abstain

           2,704,799       2,294          5,625

          The number of votes cast for, against and abstentions for
approval of the amendments to the Company's Nonqualified Plan was
as follows:



              For         Against         Abstain

           2,481,759      219,667          11,292

          The courier service utilized by the Company's stock
transfer agent delivered the proxy materials of certain brokers to
a wrong address.  This error by the courier service was not
discovered for approximately one week at which time the materials
were sent to the appropriate brokers.  The error resulted in a
lower than normal vote of proxy shares at the time of the
shareholders May 17, 1999 meeting.  The shareholders meeting, which
did have a quorum, adjourned to June 1, 1999 to allow for the
possible receipt of additional proxy ballots.  The Company did not
receive an appreciable increase in the proxy vote during the two
week adjournment.  Accordingly, the election of directors,
ratification of auditors and approval of the amendments to the
Nonqualified Plan were considered nonroutine under applicable stock
exchange rules.  Of the 1,730,132 proxy shares held in the names of
brokers as nominees which were not voted at the meeting by the
shareholders, only 548,472 were voted by the brokers at their
discretion.

Item 5    Other Information

          None

Item 6    Exhibits and Reports on Form 8-K

          None
















                         SIGNATURES



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




                              PRECISION STANDARD, INC.



Date:       8/16/99           By:   /s/ Matthew L. Gold
                                   Matthew L. Gold
                                   Chairman, President and
                                   Chief Executive Officer
                                   and Director
                                   (Principal Executive Officer)

Date:       8/16/99            By:  /s/ Richard G. Godin
                                    Vice President Finance
                                    (Principal Financial and
                                    Accounting Officer)