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
September 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 latest practicable date:

Class of Securities              Outstanding Securities
$.0001 Par Value                 3,978,137 shares
Common Shares                    Outstanding at November 11, 1999










PART I.   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

              PRECISION STANDARD, INC. AND SUBSIDIARIES
             CONSOLIDATED  AND CONDENSED BALANCE SHEETS


                               ASSETS
                           (In Thousands)

                                        September 30,    December 31,
                                            1999            1998
                                        (Unaudited)

Current assets:
  Cash and cash equivalents               $ 1,753           $    193
  Accounts receivable, net                 19,554             17,434
  Inventories                              20,182             15,286
  Prepaid expenses and other                1,197                995

        Total current assets               42,686             33,908

Property, plant and equipment,
   at cost:
  Leasehold improvements                   11,937             11,242
  Machinery and equipment                  20,184             18,656
                                           32,121             29,898

Less accumulated depreciation             (20,975)           (19,252)

        Net property, plant and
          equipment                        11,146             10,646

Other non-current assets:
  Prepaid pension costs                     1,975              2,888
  Intangible assets, net                      289                483
  Related party receivable                    270                270
  Deposits and other                        1,392              1,274
                                            3,926              4,915

        Total assets                      $57,758           $ 49,469







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


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

                LIABILITIES AND STOCKHOLDERS' EQUITY
                           (In Thousands)

                                        September 30,    December 31,
                                            1999            1998
                                        (Unaudited)

Current liabilities:
  Current portion of debt                 $    360          $  1,454
  Accounts payable and accrued
   expenses                                 33,742            29,168

          Total current liabilities         34,102            30,622

Long-term debt                              20,109            21,824
Other long-term liabilities                  3,021             3,063
          Total liabilities                 57,232            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
  September 30, 1999 and December 31,
  1998, respectively                             1                 1

  Additional paid-in capital                 4,768             4,768
  Accumulated deficit                       (4,243)          (10,809)
  Total stockholders' equity                   526            (6,040)

         Total liabilities and
         stockholders' deficit             $57,758          $ 49,469






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


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

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

Net sales                                $45,891         $ 32,091
Cost of sales                             36,944           26,003
     Gross profit                          8,947            6,088

Selling, general and
  administrative expenses                  5,484            3,925
Bad debt recovery (expense)                    0             (100)
Research and development expense               0                0
     Income from operations                3,463            2,263

Other (income) expense:
  Interest expense                           825              991
  Other, net                                 801             (216)
     Income before income taxes            1,837            1,488

Provision for income taxes                    50              (31)
     Net income                          $ 1,787          $ 1,519

Net income per common share:
  Basic                                  $  0.45          $  0.39
  Diluted                                $  0.43          $  0.38


















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


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

                                           Nine           Nine
                                        Months Ended   Months Ended
                                        September 30,  September 30,
                                            1999           1998
                                        (Unaudited)    (Unaudited)

Net sales                               $125,494        $105,765
Cost of sales                            100,048          84,520
     Gross profit                         25,446          21,245

Selling, general and
  administrative expenses                 14,860          13,390
Bad debt expense (recovery)                    0            (350)
Research and development expense               0             125
     Income from operations               10,586           8,080

Other (income) expense:
  Interest expense                         2,447           2,295
  Other, net                               1 343          (3,073)
     Income before income taxes            6,796           8,858

Provision for income taxes                   230              20

   Net income                            $ 6,566         $ 8,838

Net Income per common share
  Basic                                  $  1.65         $  2.35
  Diluted                                $  1.61         $  2.24

















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


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

                                            Nine              Nine
                                        Months Ended      Months Ended
                                        September 30,     September 30,
                                            1999              1998
                                         (Unaudited)       (Unaudited)
Cash flows from operating
  activities:
 Net income                               $ 6,566           $ 8,838
 Adjustments to reconcile net
     income to net cash used in
     operating activities:
Depreciation and amortization               1,917             1,625
Loss (gain) on sale of equipment                0            (3,137)
Changes in assets and liabilities:
  Accounts receivable, trade               (2,120)           (8,505)
  Inventories                              (4,896)           (1,938)
  Prepaid expenses and other                 (202)              485
  Deposits and other                         (118)               (3)
  Prepaid pension cost                        913               914
  Accounts payable and accrued
    expenses                                4,532            (1,358)

Total adjustments                              26           (11,917)

Net cash provided by (used in)
 operating activities                       6,592            (3,079)
Cash flows from investing
 activities:
Proceeds from sale of division                  0             4,790
Capital expenditures                       (2,223)             (872)

     Net cash provided by
      (used in) investing
      activities                           (2,223)            3,918

Cash flows from financing
 activities:
   Net borrowings (repayments)
    under revolving credit
    facility                               (1,715)                0

   Net repayments under
    short-term obligations                 (1,094)             (912)

   Net cash provided by
    (used in) financing
    activities                             (2,809)             (912)

   Net increase in cash
    and cash equivalent                     1,560               (73)
Cash and cash equivalents,
 beginning of period                          193               369
Cash and cash equivalents,
 end of period                            $ 1,753            $  296

Supplemental disclosure of
cash flow information:
  Cash paid during the year
  for:
    Interest                              $2,447            $ 1,818
    Income taxes                          $  230            $    20




































           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 September 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:

                                   September 30,     December 31,
                                       1999             1998
                                   ($ thousands)    ($ thousands)


      Work in-process                 $31,094          $30,185
      Finished goods                    3,395            3,324
      Raw materials and supplies        5,142            2,967
      Total                           $39,631          $36,476

      Less progress payments
        and customer deposits         (19,449)         (20,708)
      Less allowance for
        estimated losses on
        work in process                     0             (482)
                                      $20,182          $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 nine months ended
     September 30, 1999 and 1998:

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

                                       Three Months    Nine Months
                                           Ended          Ended
                                       September 30    September 30
     1999
     Net Income                           $1,787         $ 6,566
     Weighted Average Shares               3,978           3,978
     Basic Net Income Per Share           $ 0.45         $  1.65
     Dilutive securities:
        Options                              174             110
     Diluted Weighted Average Shares       4,152           4,088
     Diluted Net Income Per Share         $ 0.43         $  1.61

     1998
     Net income                           $1,519         $ 8,838
     Weighted Average Shares               3,853           3,764
     Basic Net Income Per Share           $ 0.39         $  2.35
     Dilutive Securities:
          Options                             13               6
          Warrants                           101             172
     Diluted Weighted Average shares       3,967           3,943
     Diluted Net Income Per Share         $ 0.38         $  2.24




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

     Revolving credit facility          $13,212         $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                    1,107           1,580

     Total debt                         $20,469         $23,278

     Less portion reflected
      as current                            360           1,454

     Long term debt, net of
      current portion                   $20,109         $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 third quarter of 1999 the Company generated $6,592 in
     cash from operations.

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.

     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.  The Company has been informed by trustees of the
     bankruptcy estate that 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.

     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.

     On October 13, 1998, the Company filed a complaint in the U.S.
     District Court, Northern District of Alabama seeking to compel
     the United States Air Force to reopen for competition a KC-135
     PDM contract awarded to the McDonnell Douglas subsidiary of
     Boeing and to enforce the General Accounting Office (GAO)
     decision in favor of the Company which stated that the manner
     in which the contract was put up for bids violated the
     Competition in Contracting Act by unduly restricting
     competition.  On October 5, 1999, the Court issued a summary
     judgement in favor of McDonnell Douglas.  The Company
     continues to believe that the GAO correctly decided the issue,
     and plans to pursue its appeal rights.

     On September 17, 1999 the Alabama Supreme Court unanimously
     reversed and rendered the November 3, 1997 verdict of a
     Jefferson County Alabama jury against the Company's Pemco
     Aeroplex subsidiary.  The November 3, 1997 verdict was in the
     amount of $1 million compensatory and $3 million punitive
     damages, but was subsequently reduced by post-trial motions to
     $1 million in compensatory damages.  The plaintiff has filed
     a petition for a re-hearing.  In light of the unanimous
     decision by the Supreme Court, the Company believes that a re-
     hearing of the case is unlikely.

     In September 1999, the Company's Pemco Aeroplex subsidiary was
     served with a complaint filed by Sun Country Airlines in the
     Superior Court of the State of California for the County of
     San Bernardino, alleging various claims including breach of
     contract and negligence relating to maintenance services
     performed by the Company's Victorville operation on one of Sun
     Country's aircraft.  The complaint seeks damages in excess of
     $800,000.  Based on information currently available, the
     Company believes the plaintiff's claims have no factual basis
     and will vigorously defend this case.

     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 any such
     litigation will have a material adverse effect on the
     Company's consolidated financial position or results of
     operations.

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 September 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 September 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:

                    Three months ending September 30, 1999
                               (In $ Thousands)
                                              Mfg. and             Consoli-
                    Government   Commercial   Overhaul    Other    dated

    Revenues from
     external,
     domestic
     customers      $23,379      $12,543      $ 6,624     $   23   $ 42,569
    Revenues from
     external
     foreign
     customers            0        3,322            0          0      3,322
    Intersegment
     revenues            16            0          175                   191
    Total
     Segment
     Revenues       $23,395      $15,865      $ 6,799     $   23   $ 46,082
    Elimination                                                        (191)
    Total Revenues                                                 $ 45,891

    Gross Profit      5,287        2,762        1,329       (431)     8,947
    Segment Op
     Inc.             2,771          845          245       (398)     3,463
    Interest
     Expense                                                            825
    Other                                                               801
    Benefit
     for Income
     Taxes                                                               50
     Net Income                                                    $  1,787

    Assets          $27,964      $14,509     $ 14,874     $  411   $ 57,758
    Deprec/Amort        273          187          161        376        997
    Cap. Additions      781          109          153          0      1,043















                     Nine Months Ending September 30, 1999
                               (In $ Thousands)

                                              Mfg. and             Consoli-
                    Government   Commercial   Overhaul    Other    dated

    Revenues from
     external,
     domestic
     customers      $64,662      $31,421      $19,882     $  224   $116,189
    Revenues from
     external
     foreign
     customers            0        9,305            0          0      9,305
    Intersegment
     revenues            51            0          299                   350
    Total
     Segment
     Revenues       $64,713      $40,726      $20,181     $  224   $125,844
    Elimination                                                        (350)
    Total Revenues                                                 $125,494


    Gross Profit     15,243        6,932        4,002       (731)    25,446
    Segment Op
     Inc.             8,691        1,999          654       (758)    10,586
    Interest
     Expense                                                          2,447
    Other                                                             1,343
    Benefit
     for Income
     Taxes                                                              230
     Net Income                                                    $  6,566

    Assets          $27,964      $14,509     $ 14,874     $  411   $ 57,758
    Deprec/Amort        742          460          397        318      1,917
    Cap. Additions    1,259          369          594          0      2,223















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 third quarter of 1999, the Company continued its return
to profitability.  The Company reported operating income of $3.5
million for the three months ended September 30, 1999 and a
combined operating income of $10.6 million for the first nine
months of 1999.  Total income before taxes for these periods was
$1.8 million and $6.8 million, respectively.

RESULTS OF OPERATIONS

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

Revenues from operations for the third quarter of 1999 grew from
the third quarter of 1998, increasing 43.0% from $32.1 million in
1998 to $45.9 million in 1999.  Government sales increased
approximately 50% from $18.8 million in 1998 to $28.1 million in
1999.  Commercial sales increased 34% from $13.3 million in 1998 to
$17.8 million in 1999.  The Company's mix of business between
government and commercial customers moved from 41% commercial and
59% government in 1998 to 39% commercial and 61% government in 1999
during the same period.

Government sales in the third quarter of 1999 increased
approximately $9.3 million due primarily to increases in sales of
$6.7 million under the Birmingham facility's KC-135 & C-130
contracts, $1.9 million under the H-3 Helicopter contract at the
Dothan facility, and $0.7 million under contracts at the Space
Vector facility.

Commercial sales increased $4.3 million under aircraft
maintenance/modification contracts at the Dothan facility, and $0.2
million in other commercial operations.

Cost of sales increased from $26.0 million in 1998 to $36.9 million
in the third quarter of 1999.  The ratio of cost of sales to net
sales decreased from 81.0% in the third quarter of 1998 to 80.5% in
1999.

Selling, general and administrative expenses increased from $3.9
million in the third quarter of 1998 to $5.5 million in 1999.
However, SG&A as a percentage of sales decreased from 12.2% in 1998
to 12.0% in 1999.

Interest expense decreased from $1.0 million in the third quarter
of 1998 to $0.8 million in the third quarter of 1999.

Nine months ended September 30, 1999
versus nine months ended September 30, 1998

Revenues from operations for the first nine months of 1999 grew
from the same period of 1998, increasing 18.7% from $105.8 million
in 1998 to $125.5 million in 1999.  Government sales increased
approximately 29.3% from $59.5 million in 1998 to $76.9 million in
1999.  Commercial sales increased by 5% from $46.3 million in 1998
to $48.6 million in 1999.  The Company's mix of business between
government and commercial customers moved from 44% commercial and
56% government in 1998 to 39% commercial and 61% government in 1999
during the same period.

Government sales on a year to date basis at the end of the third
quarter of 1999 increased $17.4 million due primarily to increases
in sales of $14.5 million under the Birmingham facility's KC-135
and C-130 contracts, $2.7 million under contracts at Space Vector,
and $0.2 million under contracts at the Dothan facility.

Commercial sales increased $3.8 million under aircraft
maintenance/modification contracts at the Dothan and Victorville
facilities, and decreased by $1.5 million in other commercial
operations.

Cost of sales increased from $84.5 million in 1998 to $100.0
million in 1999.  The ratio of cost of sales to net sales decreased
slightly from 79.9% in 1998 to 79.7% in 1999.

Selling, general and administrative expenses increased from $13.4
million in 1998 to $14.9 million in 1999.  As a percentage of sales
SG&A decreased from 12.7% in 1998 to 11.8% in 1999.

Interest expense was $2.4 million in the nine months ending
September 30, 1999 versus $2.3 million in 1998.

LIQUIDITY AND CAPITAL RESOURCES

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

During the nine months ending September 30, 1999, the Company
generated $6.6 million in cash from operating activities.  In 1998,
$3.1 million was used for operating activities.

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 third quarter of 1999, the Company made no contributions to the
pension plan and expensed approximately $0.3 million.  In the third
quarter of 1998, the Company made no contributions to the pension
plan and expensed approximately $0.3 million.

Accounts payable and accrued expenses increased from $29.2 million
at December 31, 1998 to $33.7 million at September 30, 1999.
Accrued interest payments at September 30, 1999 were $0.2 million
representing no increase over that due at December 31, 1998.

Accounts receivable increased from $17.4 million at December 31,
1998, to $19.6 million at the end of the third quarter of 1999.

Net inventories increased $4.9 million during 1999 primarily due to
an increase in the total work in process related to the KC-135
contract.

In October 1999 the government exercised its 5th and 6th option
years on the Company's KC-135 contract, extending the contract
through fiscal year 2001, with an estimated revenue value of $100
million.

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 September 30, 1999 and 1998:

                                   1999              1998

     U.S. Government             $168,604          $144,012
     Commercial                    17,668            22,070
                                 $186,272          $166,082

As of September 30, 1999, 91% of the Company's backlog related to
work for the U.S. Government vs. 87% for the period ending
September 30, 1998.  The Company's Government backlog increased
$24.6 million primarily related to additional aircraft input under
the Company's KC-135 contract and a contract for the painting of C-
130 aircraft awarded to the Birmingham facility.

                                      1999              1998

     Firm, unfunded Backlog      $39.5 million     $45.1 million

     Additional estimated
     sales to be derived
     from backlog contracts      $260.1 million    $264.0 million



CONTINGENCIES

See Note 6 to the Consolidated Financial Statements.

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 Company's "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 has
reviewed 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 by year end.

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 all 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.

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 complete 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 Year 2000 issue, the new system is
expected to substantially improve the Maintenance Repair & Overhaul
(MRO) process resulting in greater efficiencies in MRO operations.

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 requiring direct computer
interface with customers or suppliers.  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

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 has outlined contingency plans to be implemented as
part of its efforts in correcting Year 2000 Problems affecting its
internal systems.  Depending on the systems affected, these plans
include (1) short-to-medium-term use of backup software, (2)
increased work hours for Company personnel or the use of contract
personnel to correct any Year 2000 Problems which may arise, (3)
manual backup systems to forestall any interruption of operations
resulting from the failure of automated systems, and (4) 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.  The Company has obtained a $1.5
million Letter of Credit which may, under certain specified
circumstances, be utilized for Year 2000 expenses that are not
otherwise financed.

FORWARD LOOKING STATEMENTS

With the exception of historical facts, statements contained in
this Form 10-Q are forward looking statements.  Statements
contained herein concerning, among other things, 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.  These risks and
uncertainties could cause actual results to differ materially from
those forecast or anticipated in such forward looking statements.

ITEM 3.
            QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                           MARKET RISK

The Company is exposed to market risk from changes in interest
rates as part of its normal operations.  The Company maintains
various debt instruments to finance its business operations.  The
debt consists of fixed and variable rate debt.  The variable rate
debt is related to the Company's revolving line of credit as noted
in Note 5 to the Consolidated Financial Statements and bears
interest at prime plus 3.5% (11.75% at September 30, 1999).  If the
prime rate increased 100 basis points, the effect on net income
would approximate a $46,000 reduction in net income in the quarter
ending September 30, 1999 and an approximate $131,000 reduction in
net income for the nine month period ending September 30, 1999.













PART II.  OTHER INFORMATION

Item 1    Legal Proceedings

          See Note 6 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

          None

Item 5    Other Information

          None

Item 6    Exhibits and Reports on Form 8-K

          (a)  Exhibits

               27.1  Financial Data Schedule

          (b)  Reports on Form 8-K

               A report on Form 8-K dated September 7, 1999 under
               Item 1 was filed with the Commission on September
               8, 1999.

























                         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:      11/15/99           By:   /s/ Matthew L. Gold
                                   Matthew L. Gold
                                   President
                                   and Chief Executive Officer
                                   and Director
                                   (Principal Executive Officer)

Date:      11/15/99            By:  /s/ Richard G. Godin
                                    Vice President Finance
                                    (Principal Financial and
                                    Accounting Officer)