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, 1997

                    PRECISION STANDARD, INC.

     (Exact Name of Registrant as Specified in its Charter)

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

                        1225 17th Street
                           Suite 1800
                            Denver, Colorado 80202
            (Address of Principal Executive Offices)
                        (205) 591-3009                    
      (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                 12,587,872 shares
Common Shares                    Outstanding at June 30, 1997









PART I.   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

               PRECISION STANDARD, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS

                                                

                                ASSETS

                                          June 30,       December 31,
                                            1997            1996
                                        (Unaudited)                 

Current assets:
  Cash and cash equivalents            $         0       $ 1,183,200
  Accounts receivable, net              10,732,710         9,435,612
  Inventories                           25,601,539        23,183,608
  Prepaid expenses and other             1,547,136           894,128
  Deferred taxes                         4,347,098         4,347,098

        Total current assets            42,228,483        39,043,646

Property, plant and equipment,
   at cost:
  Leasehold improvements                10,529,455        10,508,585
  Machinery and equipment               18,488,158        18,306,506
                                        29,017,613        28,815,091

Less accumulated depreciation           16,944,290        15,730,794

        Net property and equipment      12,073,323        13,084,297

Other assets:
  Intangible assets, net of
     accumulated amortization            3,722,444         3,731,714
  Related party receivable                 269,824           269,824
  Deposits and other                       426,137         1,627,252
  Deferred taxes                         1,517,349         1,517,349
                                         5,935,754         7,146,139

        Total assets                   $60,237,560       $59,274,082


            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

                                          June 30,       December 31,
                                            1997            1996
                                        (Unaudited)                  

Current liabilities:
  Current maturities of long-term
   debt                                   7,426,260      $ 2,339,692
  Accounts payable and accrued
   expenses                              34,841,152       26,577,336
  Accrued warranty expenses                 658,453          858,856
  Estimated losses on contracts
   in progress                               87,766           87,766
 
          Total current liabilities      43,013,631       29,863,650

Long-term debt, net of current
  maturities                              5,706,589       11,104,410
Long-term portion of self-insured
  workers' compensation reserve           3,631,734        3,697,901
Unfunded accumulated benefit
  obligation                              1,480,237        1,480,237
          Total liabilities              53,832,191       46,146,198

Stockholders' equity:
  Common stock, $.0001 par value,
  300,000,000 shares authorized,
  12,587,872 and 12,522,646
  issued and outstanding at
  June 30, 1997 and December 31,
  1996, respectively.                         1,257            1,252

  Common stock purchase warrant           4,200,000        4,200,000
  Additional paid-in capital                399,328          399,333
  Retained earnings                       4,770,279       12,287,278
  Translation adjustments                   229,494          160,013
  Minimum pension liability adjustment   (3,194,989)      (3,919,992)
  Total stockholder's equity              6,405,369       13,127,884
               
           Total liabilities and stock-
           holders' equity              $60,237,560      $59,274,082

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



               PRECISION STANDARD, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF OPERATIONS
                                                              

                                           Three           Three
                                        Months Ended    Months Ended
                                          June 30,        June 30,
                                            1997            1996   
                                        (Unaudited)     (Unaudited)
                                                
Net sales                               $35,715,685     $35,808,708
Cost of sales                            34,443,050      31,822,496
     Gross profit                         1,272,635       3,986,212

Selling, general and
  administrative expenses                (5,388,449)     (4,474,576)
Bad debts recovery (expense)                    (62)         54,385
Research and development expense           (248,285)        (75,949)
     Income (loss) from operations       (4,364,161)       (509,928)

Other expense:
  Interest expense                         (324,697)       (808,536)
  Other, net                               (255,758)         42,276
     Income (loss) before income taxes   (4,944,616)     (1,276,188)

Income tax expense                          (45,000)       (662,151)

     Net loss                           $(4,989,616)    $(1,938,339)


Loss per common share:
 Primary:
  Before extraordinary item             $      (.39)    $      (.16)
  Extraordinary item                                               

    Total                               $      (.39)    $      (.16)

Fully diluted:
  Before extraordinary item             $      (.39)    $      (.16)
  Extraordinary item                                               

    Total                               $      (.39)    $      (.16)

Weighted average number of common
shares outstanding                       12,781,922      12,471,080




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


               PRECISION STANDARD, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                       

                                            Six            Six
                                        Months Ended   Months Ended
                                          June 30,       June 30,
                                            1997           1996     
                                        (Unaudited)    (Unaudited)

Net sales                               $70,733,415    $62,356,113
Cost of sales                            66,244,958     55,946,973
   Gross profit                           4,488,457      6,409,140

Selling, general and
  administrative expenses               (10,424,239)    (7,944,677)
Bad debts recovery (expense)                    (62)        54,385
Research and development expense           (493,729)      (228,479)
   Income (loss) from operations         (6,429,573)    (1,709,631)

Other expense:
  Interest expense                         (650,091)    (1,679,039)
  Other, net                               (326,334)       117,348 
   Income (loss) before income taxes     (7,405,998)    (3,271,322)

Income tax expense                         (111,000)      (708,885)

   Net loss                             $(7,516,998)   $(3,980,207)

Loss per common share:
 Primary:
   Before extraordinary item            $      (.59)   $      (.32)
   Extraordinary item                            -              - 

    Total                               $      (.59)   $      (.32)

Fully diluted:
   Before extraordinary item            $      (.59)   $      (.32)
   Extraordinary item                            -              - 

    Total                               $      (.59)   $      (.32)

Weighted average number of common
shares outstanding                       12,695,497     12,467,629




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




               PRECISION STANDARD, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF CASH FLOWS
                                                   
                                            Six               Six
                                        Months Ended      Months Ended
                                        June 30, 1997     June 30, 1996
                                         (Unaudited)       (Unaudited)
Cash flows from operating activities:
  Net loss                              $(7,516,998)      $(3,980,208)
  Adjustments to reconcile
     net loss to net cash
     provided (used) from operating
     activities:
  Depreciation and amortization           1,239,771         1,463,705
  Pension cost in excess of 
     funding                                725,003           194,768
  Provision for losses on 
     receivables                                  0           249,118
  Provision for deferred taxes                    0           615,000
  (Gain) loss on disposition
     of equipment                                 0            63,343

  Changes in assets and liabilities:
          Accounts receivable             (1,155,705)       1,845,118
          Inventories                     (2,593,280)      (2,182,939)
          Prepaid expenses and
           other assets                     (722,461)        (491,241)
          Intangible assets                        0         (125,490)
          U.S. Government request for
           equitable adjustment, net        (238,743)       2,448,522
          Deposits and other               1,201,115         (496,884)
          Accounts payable and
            accrued expenses               8,731,977           48,878
          Accrued warranty expense          (200,403)        (125,159)
          Estimated losses on
            contracts in progress                  0         (103,922)
          Self-insured workers'
            compensation reserve             (66,167)               0 
          Total adjustments                6,921,107        3,402,817
     Net cash provided (used) by
     operating activities                   (595,891)        (577,391)

Cash flows from investing activities:
     Capital expenditures                   (238,310)        (929,617)
     Insurance proceeds receivable                 0
     Proceeds from sale of equipment               0          393,395
     Net cash used in
     investing activities                $  (238,310)       $(536,222)

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



               PRECISION STANDARD, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

                                                   

                                            Six              Six
                                        Months Ended     Months Ended
                                          June 30,         June 30,
                                            1997             1996
                                        (Unaudited)      (Unaudited)
Cash flows from financing activities:
  Proceeds from issuance of
     common stock                       $          0     $     1,735

  Borrowings under revolving
     credit facility                               0       1,500,000

  Repayments under revolving
     credit facility                               0      (1,500,000)

  Principal payments under
     long-term obligations                  (311,255)       (265,297)

     Net cash used in
     financing activities                   (311,255)       (263,562)

     Effect of exchange rate changes
     on cash and cash equivalents            (37,744)        (34,754)

Net decrease in cash
  and cash equivalents                    (1,183,200)     (1,411,929)
  
Cash and cash equivalents
  beginning of period                      1,183,200       1,411,929

Cash and cash equivalents
  end of period                         $          0      $        0

Supplemental disclosure of cash
  flow information:
  Cash paid during the period for:
     Interest                           $    557,236      $  407,151
     Income taxes                            159,000          50,000

Supplemental disclosure of
  non-cash investing activities:
  Capital lease obligations incurred
  for new equipment                     $     28,674      $   62,903

  Capitalization of accrued
    interest                            $          0      $2,207,799

            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 included in this
     report 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, 1997 are not necessarily indicative of the operating
     results 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 1996
     Form 10-K.

2.   SIGNIFICANT ACCOUNTING POLICIES

     Translation of Non-U.S. Currency Amounts - Assets and
     liabilities of non-U.S. subsidiaries that operate in a local
     currency environment are translated to U.S. dollars at the
     exchange rate for the end of the accounting period.  Income
     and expenses are translated at average rates of exchange. 
     Translation adjustments are accumulated in a separate
     component of stockholders' equity.

3.   INVENTORIES

     Inventories consist of the following:

                                      June 30,      December 31,
                                       1997            1996
                                   (Unaudited)                 

      Work in-process              $37,032,914      $43,555,521
      Finished goods                 3,169,470        3,524,575
      Raw materials and supplies     6,193,031        5,307,562
      Total                        $46,395,415      $52,387,658

      Less progress payments
        and customer deposits      (20,791,997)     (27,917,381)
      Less allowance for
        estimated losses on
        contracts in progress           (1,879)      (1,286,669)
                                   $25,601,539      $23,183,608







4.   EARNINGS PER COMMON SHARE

     The computation of loss per common share in 1996 and 1997 is
     based on the weighted average number of outstanding common
     shares.  The inclusion of stock options and stock warrants
     would be antidilutive.

     In February 1997, the Financial Accounting Standards Board
     ("FASB") issued Statement of Financial Accounting Standards,
     ("SFAS") No. 128 (the "Statement"), Earnings per Share.  This
     Statement establishes standards for computing and presenting
     earnings per share ("EPS").  This Statement will simplify the
     standards for computing earnings per share previously found in
     APB Opinion No. 15, Earnings per Share, and will make them
     comparable to international EPS standards.

     This Statement is effective for financial statements issued
     for periods ending after December 15, 1997, including interim
     periods and requires restatement of all prior-period EPS data
     presented.  The Company will adopt the Statement at December
     31, 1997.  Because all contingent shares of common stock (i.e.
     options and warrants) are anti-dilutive at June 30, 1997 and
     1996, there would be no effect on the reported earnings per
     share under SFAS No. 128 for these periods.

5.   NOTES PAYABLE
                                         June 30,   December,31,
                                          1997         1996    
                                       (Unaudited)
     Short-term debt consists of
     the following:

     Term Credit facility             $ 5,007,799   $   607,799
     Senior Subordinated Loan           1,800,000       900,000

     Note due to individual, bears        307,173       377,173
     interest at 10% collateralized
     by a security interest in
     certain equipment


     Other obligations                    311,288       454,720
     collateralized by security
     interests in certain
     equipment                                                 
                                      $ 7,426,260   $ 2,339,692






     Long term debt consists of
     the following:

     Term Credit facility                     -0-     4,400,000
     Senior Subordinated Loan           5,400,000     6,300,000

     Other obligations,                   306,589       404,410
     collateralized by security
     interests in certain
     equipment                                                 
                                      $ 5,706,589   $11,104,410

     Total debt                       $13,132,849   $13,444,102

     The Company and its primary lender renegotiated terms and
     conditions of its debt and warrant and executed new agreements
     in March 1997.  During 1996, the Company made principal
     payments of $2.8 million for the Senior Subordinated loan,
     $4.2 million of the Term Credit facility and $8.0 million in
     full payment for the Revolving Credit facility. In accordance
     with these new agreements, interest accrued through March 1996
     in the amount of $2,207,799 was capitalized into the principal
     balance of the debt.  The new agreements also provided for the
     forgiveness of approximately $1.3 million of accrued but
     unpaid interest for the period from May through September of
     1996.  On August 8, 1997, the Company executed an agreement
     with a new primary lender for a revolving credit facility
     which is expected to provide the Company with greater
     flexibility. As part of this transaction, the Company repaid
     its Term Credit facility and a portion of its Senior
     Subordinated loan.  The above loans are collateralized by
     substantially all of the assets of the Company and have
     various financial covenants.

     The Company's cash resources continued to be strained in 1997
     primarily due to excessive program and procurement costs
     incurred, increased costs associated with the work stoppage of
     the Company's United Auto Worker (UAW) employees which ended
     March 31, 1997, and losses incurred on various commercial
     aircraft maintenance contracts performed.

6.   CONTINGENCIES

     The Company is preparing a Request for Equitable Adjustment
     (REA) related to its H-3 helicopter contract with the U.S.
     Government.  The primary grounds for this REA are delays in
     government furnished material (GFM), increased cost of pilot
     services, and late delivery of technical data.  The Company's
     independent management consultant has determined a preliminary
     rough order of magnitude of the cost impact under the H-3
     contract.  Based on this assessment, the Company has recorded
     a receivable of $238,000 net of reserves in the first quarter
     of 1997.  The Company believes that the evidence in support of
     the proposed REA is objective, verifiable and reasonable in
     view of the work performed and the increased costs are not the
     result of any deficiencies in the Company's performance. 
     However, should the Company's REA ultimately be disallowed by
     the U.S. Government, which event the Company deems unlikely,
     the Company would realize a pre-tax reduction of revenue of
     $238,000.



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.

RESULTS OF OPERATIONS

Three months ended June 30, 1997
versus three months ended June 30, 1996

Revenues for the second quarter of 1997 were essentially unchanged
from $35.8 million in 1996 to $35.7 million in 1997.  Government
sales decreased 20% in 1997, from $22.8 million in 1996 to $18.2
million in 1997.  Commercial sales increased 34% in 1997, from
$13.0 million in 1996 to $17.5 million in 1997.  The Company's mix
of business between government and commercial customers shifted
from  36% commercial and 64% government in 1996 to 49% commercial
and 51% government in 1997.

As a result of the amendment of certain contract provisions in the
KC-135 contract during the last quarter of 1996, the Company is
allowed to bill the government for over-and-above costs under such
contract as incurred, which accelerates the receipt of payments. 
Such accelerated payments received in the second quarter of 1997
offset the impact of the $4.9 million in revenue recognized during
the second quarter of 1996 in anticipation of the negotiation and
settlement with the U.S. Government of the Company's outstanding
Requests for Equitable Adjustment (REAs).  Thus, primarily due to
this contract change, Government sales for the second quarter of
1997 showed a net decrease of approximately $0.5 million under the
Company's KC-135 contract.  KC-135 contract revenues also decreased
during the first six months of 1997 due to a decrease in the number
of KC-135 Programmed Depot Maintenance (PDM) aircraft redeliveries. 
Eight such aircraft were redelivered in the second quarter of 1997
versus nine in the second quarter of 1996.

Government sales decreased an additional $0.8 million due to a
decrease in the number of redeliveries under the Company's C-130
contract.  The Company redelivered one C-130 PDM aircraft in the
second quarter of 1997 versus two PDM aircraft in the second
quarter of 1996.

Also reducing government sales were decreases in government sales
volume at the Company's Targets division of approximately $1.0
million and the Company's Dothan facility under the Navy H-3
contract of approximately $1.4 million.

The Company's commercial sales increased primarily due to an
increase in sales of approximately $3.9 million under aircraft
maintenance contracts at the Dothan facility.  Adding to this
increase in sales was an increase in sales volume of approximately
$0.8 million at the Company's Clearwater facility.  Partially
offsetting the increase was a decrease in commercial sales of
approximately $0.3 million at the Company's Copenhagen, Denmark
facility.

The ratio of cost of sales ($34.4 million in 1997; $31.8 million in
1996) to net sales ($35.7 million in 1997; $35.8 million in 1996)
increased from 89% in the second quarter of 1996 to 96% in 1997. 
The resultant decrease in gross profit was due primarily to $1.4
million of increased costs recognized during the second quarter of
1997 from the Company's Birmingham facility due to the UAW work
stoppage.

The Company incurred more than $6.6 million in incremental strike
related costs during the UAW work stoppage.  While the majority of
those costs were incurred in 1996, approximately $4.9 million will
be accounted for throughout 1997 as aircraft incurring those costs
are redelivered and booked into revenue.  These amounts are
primarily attributable to the high cost of contract labor,
training, housing and transportation costs for replacement workers,
as well as increased security costs during the strike period.

Selling, general and administrative expense (SG&A) increased from
$4.5 million in the second quarter of 1996 to $5.4 million in 1997
and increased as a percent of sales from 12% in 1996 to 15% in
1997.  SG&A increased primarily due to an increase in outside
legal/consultant fees associated with debt refinancing and labor
negotiations as well as the amount of commercial work in process.
Under Generally Accepted Accounting Principles, SG&A incurred for
commercial contracts must be accrued and recognized in the current
period, whereas SG&A related to government contracts are
inventoried until redelivery of the aircraft or shipment of the
product.

Interest expense decreased from $0.8 million in the second quarter
of 1996 to $0.3 million in 1997, primarily due to reductions of
notes payable.  From June of 1996 to June of 1997, the Company re-
paid its $8.0 million Revolving Credit facility, $4.2 million of
its Term Credit facility and $2.8 million of its Senior
Subordinated Loan.  The effective average interest rate in the
second quarter of 1997 on the Term Credit facility was 10% versus
10.05% in the second quarter of 1996.

Six months ended June 30, 1997
Versus six months ended June 30, 1996

Revenues for the first six months of 1997 increased 13% from $62.4
million in 1996 to $70.7 million in 1997.  Government sales
decreased 0.5% from $38.6 million in 1996 to $38.4 million in 1997. 
Commercial sales increased 36% from $23.7 million in 1996 to $32.3
million in 1997.  The Company's mix of business between government
and commercial customers shifted from 42% commercial and 58%
government in 1996 to 46% commercial and 54% government in 1997.

As a result of the amendment of certain contract provisions in the
KC-135 contract during the last quarter of 1996, the Company is
allowed to bill the government for over-and-above costs under such
contract as incurred, which accelerates the receipt of payments. 
Such accelerated payments received in 1997 offset the impact of the
$5.7 million in revenue recognized during the first six months of
1996 in anticipation of the negotiation and settlement with the
U.S. Government of the Company's outstanding Requests for Equitable
Adjustment (REAs).  Thus, primarily due to this contract change,
Government sales for the first six months of 1997 showed a net
increase of approximately $1.9 million under the Company's KC-135
contract.  KC-135 contract revenues also increased during the first
six months of 1997 due to an increase in the number of KC-135
Programmed Depot Maintenance (PDM) aircraft redeliveries. 
Seventeen such aircraft were redelivered in 1997 versus sixteen in
the first six months of 1996.

Government sales increased an additional $0.4 million due to an
increase in the number of redeliveries under the Company's C-130
contract.  The Company redelivered three C-130 PDM aircraft and
four drop-ins in 1997 versus three PDM aircraft and no drop-in
aircraft in the first six months of 1996.

Offsetting these increases in government sales were decreases in
government sales volume at the Company's Targets division of
approximately $1.3 million and at the Company's Dothan facility
under the Navy H-3 contract of approximately $1.0 million.

The increase in the Company's commercial sales is primarily due to
an increase of approximately $7.3 million in revenues from
redeliveries under aircraft maintenance contracts at the Dothan
facility.  Adding to this increase in sales was an increase in
volume of approximately $1.2 million at the Company's Clearwater
location.

The ratio of cost of sales ($66.2 million in 1997; $55.9 million in
1996) to net sales ($70.7 million in 1997; $62.4 million in 1996)
increased from 90% in 1996 to 94% in 1997.  The resultant decrease
in gross profit was due primarily to $3.6 million of increased
costs recognized during the first six months of 1997 due to the UAW
work stoppage at the Company's Birmingham facility.

The Company incurred more that $6.6 million in incremental strike
related costs during the UAW work stoppage.  While the majority of
those costs were incurred in 1996, approximately $4.9 million will
be accounted for throughout 1997 as aircraft incurring those costs
are redelivered and booked into revenue.  These amounts are
primarily attributable to the high cost of contract labor,
training, housing and transportation costs for replacement workers,
as well as increased security costs during the strike period.

Selling, general and administrative expense (SG&A) increased from
$7.9 million in the first six months of 1996 to $10.4 million in
1997 and increased as a percentage of sales from 13% in 1996 to 15%
in 1997.  SG&A increased primarily due to outside legal/consultant
fees associated with refinancing of debt, labor negotiations and
other matters.

Interest expense decreased from $1.7 million in the first six
months of 1996 to $0.7 million in 1997, primarily due to reductions
of notes payable.  From June of 1996 to June of 1997, the Company
repaid its $8.0 million Revolving Credit facility, $4.2 million of
its Term Credit facility and $2.8 million of its Senior
Subordinated Loan.  The effective average interest rate in the
first six months of 1997 on the Term Credit facility was 10% versus
11.2% in the first six months of 1996.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash resources continued to be strained in 1997
primarily due to additional costs incurred in connection with the
work stoppage of the Company's United Auto Worker (UAW) employees
at the Birmingham facility which ended on March 31, 1997, excessive
costs on its KC-135 program, delayed redelivery of KC-135 aircraft,
and losses incurred on various commercial aircraft maintenance
contracts performed at the Company's Dothan, Alabama and
Copenhagen, Denmark facilities.

In October of 1996, the Company paid $15.0 million of principal to
its primary lender from the proceeds of the settlement with the
U.S. Government, with $2.8 million applied to the Senior
Subordinated loan, $4.2 million to the Term Credit facility and
$8.0 million to fully repay the Revolving Credit facility.  In
March of 1997, the Company and its primary lender executed a Second
Amended and Restated Credit Agreement (the "Credit Agreement"), a
Second Amended and Restated Senior Subordinated Agreement (the
"Subordinated Agreement") and an Amended and Restated Warrant
Agreement (the "Warrant Agreement").  On August 8, 1997, the
Company executed an agreement with a new primary lender for a
revolving credit facility which is expected to provide the Company
with greater flexibility.  As part of this transaction, the Company
repaid its Term Credit facility and a portion of its Senior
Subordinated loan.  The above loans are collateralized by
substantially all of the assets of the Company and have various
financial covenants.

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, 1997 and 1996.

Cash available at January 1, 1997 was used to fund $0.6 million for
the Company's operations, $0.3 million for capital improvements,
and $0.2 million for payments on various capital leases in the
first six months of 1997.  Additionally, the Company paid $0.6
million in interest and $0.2 million in taxes.  In the first six
months of 1996, the Company used $0.6 million of cash for operating
activities, $0.5 million for capital improvements, and $0.3 million
for payments on various capital leases.

The Company's accounts receivable increased in the first six months
of 1997 primarily due to the greater volume of commercial sector
aircraft redeliveries and the timing of the billing of those
redeliveries.

Net inventories increased $2.5 million in the first six months of
1997 primarily due to the utilization of the reserve for estimated
losses recorded in 1996 on contracts in progress of $1.3 million
and an increase in raw materials inventory due to the Company's
increased workload.

Accounts payable and accrued expenses increased in the first six
months of 1997 due to continued cash constraints and the increase
in workload at the Company's various facilities.  Accrued interest
at June 30, 1997 was $1.0 million, representing a $0.4 million
increase over that due at June 30, 1996.  The increase is due to
timing of payments.

Deposits decreased approximately $1.2 million during the first six
months of 1997.  The decrease was partially due to a reduction of
the Company's Workers Compensation deposit requirement.  The
Company also reclaimed a deposit made pursuant to a contract under
which temporary labor services were provided to the Company during
the UAW strike period. 

During 1995, 1996 and 1997, 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, 1997 and 1996:


                                 1997        1996

          U.S. Government     $123,379     $87,065
          Commercial            26,588      12,721      
                              $149,967     $99,786

As of June 30, 1997, 83% of the Company's backlog related to work
for the U.S. Government versus 87% for the period ending June 30,
1996.  The Company's Government backlog increased $35 million
primarily related to a contract for sounding rocket launches
awarded to its Space Vector subsidiary and increased government
orders at the Company's Dothan facility.

The Company's commercial backlog at June 30, 1997 increased $13
million from the prior year primarily due to increased orders at
the Company's Dothan, Copenhagen, and Clearwater facilities.

Approximately $40.1 million of the 1997 backlog and $15.6 million
of the 1996 backlog reported above is firm but unfunded. 
Additionally, the Company has an estimated $211 million of backlog
associated with the option periods for the KC-135 contract which is
not reflected above.  The Company also currently estimates it will
receive orders for approximately $15.4 million for additional work
related to existing contracts; this amount is not included in the
numbers above.

CONTINGENCIES

The Company, as a U.S. Government contractor, is routinely subject
to audits, reviews and investigations by the government related to
its negotiation and performance of government contracts and its
accounting for such contracts.  Under certain circumstances, a
contractor can be suspended or debarred from eligibility for
government contract 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 operation,
financial position or cash flows.

FORWARD LOOKING STATEMENTS

With the exception of historical facts, statements contained in
Management's Discussion and Analysis of Financial Conditions and
Results of Operations are forward looking statements.  Statements
contained herein concerning anticipated results of operations, the
outcome of pending and future litigation, the outcome of audits,
reviews and investigations by the U.S. Government, the outcome of
REAs filed with the U.S. Government, and the Company's intent to
take certain actions in the future 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 and actions with
respect to utilization and renewal of contracts.

                     PRECISION STANDARD,INC.

                        OTHER INFORMATION

PART II.

Item 1    Legal Proceedings

          On June 27, 1997, the Company's Pemco Aeroplex subsidiary
          was served with a civil complaint filed by the United
          States of America in U.S. District Court for the Middle
          District of Alabama, Northern Division.  The complaint
          alleges violation of the False Claims Act ("FCA") and
          contract claims based on mistake of fact and unjust
          enrichment with respect to the 1991 sale of certain C-130
          aircraft wings by the Government to Pemco, and seeks $1.5
          million as the alleged value of the wings and treble
          damages under the FCA.  On July 25, 1997, Pemco filed a
          motion to dismiss the complaint based on failure to
          allege facts which establish a cause of action, and other
          grounds.  The Company believes that these claims are
          without merit and that it has substantial defenses.  It
          will vigorously defend this action.

          A purported class action was 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 union employees and who were
          terminated upon settlement of such strike.  On June 3,
          1997, Pemco was served with the complaint in Bradley v.
          Pemco Aeroplex, Inc. filed in the Circuit Court of
          Jefferson County, Alabama.  On July 9, 1997, the
          plaintiff filed an amended complaint alleging fraud,
          breach of contract, and civil conspiracy seeking damages
          and equitable relief against Pemco and adding the Company
          as a defendant.  The Company was served with the amended
          compliant on July 16, 1997.  Pemco has filed its answer
          denying all allegations.  The Company believes the
          plaintiffs' claims are unfounded and will vigorously
          defend the case.

          In GATX/Airlog Company, et al. v. Pemco Aeroplex, Inc.,
          the owners of a Supplementary Type Certificate ("STC")
          for Boeing 747 cargo conversion sued the Company's Pemco
          Aeroplex subsidiary, successor to Hayes International
          which had performed engineering for the STC development
          and the FAA application for GATX/Airlog, seeking damages
          and indemnity for claims arising from an Airworthiness
          Directive issued by the FAA in January 1996 restricting
          the amounts of cargo aircraft converted pursuant to the
          STC could carry.  The complaint, which was filed in U.S.
          District Court for the Northern District of California
          and served on July 14, 1997, alleges fraudulent and
          negligent misrepresentation, professional negligence,
          breach of contract, implied indemnity, equitable
          indemnity and contribution by Pemco Aeroplex with respect
          to GATX/Airlog's alleged liability to owners of converted
          aircraft.  The Company believes it has no liability to
          the plaintiffs and will ultimately prevail.

          On August 8, 1997, the Company's Pemco Aeroplex
          subsidiary was served as a defendant in Tower Air, Inc.
          v. GATX Capital Corporation, et al.  The action, which
          was brought by the owner of a Boeing 747 aircraft
          converted under a STC for 747 cargo conversion, owned by
          GATX and others, sued a number of defendants seeking
          damages.  As a result of an Airworthiness Directive
          issued by the FAA in January 1996, aircraft which had
          been so converted were restricted to carrying reduced
          amounts of cargo.  The Company's Pemco Aeroplex
          subsidiary has been named as a defendant in the case
          because of engineering work performed in the late 1980's
          by its predecessor, Hayes International, and because the
          aircraft was allegedly converted under the STC by Pemco. 
          The complaint, which was filed in the Supreme Court of
          the State of New York, County of New York, alleges fraud
          and deceit, negligent misrepresentation, and negligence
          against Pemco and seeks payment of damages.  The Company
          believes Pemco has substantial defenses to the claims and
          will vigorously defend.

          In June 1997, the Alabama Department of Environmental
          Management, on behalf of the Environmental Protection
          Agency, conducted an inspection of electrical equipment
          located at the Company's Pemco Aeroplex Birmingham
          facility for possible releases of PCB-containing material
          from such equipment.  Test results show that additional
          clean up is required at certain sites.  The cost of such
          clean up is estimated to be $25,000 or less.

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
          May 12, 1997.  At the meeting, Matthew L. Gold, Donald C.
          Hannah, Admiral George E.R. Kinnear II, General Thomas C.
          Richards and J. Ben Shapiro, Jr. were elected as
          directors.  Also ratified at the meeting was the
          selection of Arthur Andersen LLP as the independent
          public accountants for the Company for the calendar years
          ending December 31, 1996 and 1997.  In addition, the
          shareholders approved the amendments to the Company's
          Nonqualified and Incentive Stock Option Plans to conform
          to recent amendments to SEC Rule 16b-3.

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

               Nominee                     For        Withheld

          Matthew L. Gold               11,870,978     166,375
          Donald C. Hannah              11,873,478     163,875
          Adm. George E.R. Kinnear II   11,997,478      39,875
          Gen. Thomas C. Richards       11,997,478      39,875
          J. Ben Shapiro, Jr.           11,998,478      38,875

          The number of votes cast for, against and abstentions for
          ratification of the selection of Arthur Andersen LLP as
          the Company's independent auditors for the calendar years
          ending December 31, 1996 and 1997 was as follows:

                 For             Against        Abstain

             12,003,378           24,100          9,875

          The number of votes cast for, against, abstentions and
          broker nonvotes for approval of the amendments to the
          Nonqualified Stock Option Plan was as follows:
                                                       Broker
             For        Against         Abstain       Nonvotes

          11,300,867    495,204         17,775         223,507

          The number of votes cast for, against, abstentions and
          broker nonvotes for approval of the amendments to the
          Incentive Stock Option Plan was as follows:
                                                       Broker 
             For        Against         Abstain       Nonvotes

          11,284,667    512,204         16,975         223,507

          Because the election of directors, ratification of
          auditors and the proposals to amend the Nonqualified
          Stock Option Plan and the Incentive Stock Option Plan
          were considered routine under applicable stock exchange
          rules, all proxy shares held in the names of brokers as
          nominees which were not voted at the meeting by the
          beneficial holders thereof were voted by the brokers at
          their discretion.

Item 5    Other Information

          None
               

Item 6    Exhibits and Reports on Form 8-K

          a)   Exhibits

               4.1  First Amendment to Second Amended and Restated
                    Senior Subordinated Loan Agreement between    
                    Precision Standard, Inc. and Bank of America
                    National Trust and Savings Association entered
                    into as of August 8, 1997.

               4.2  Accounts Receivable Management and Security 
                    Agreement between Precision Standard, Inc. and
                    BNY of the Americas entered into as of August
                    8, 1997.

               27   Financial Data Schedule

          b)   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:         8/13/97              By:  /s/ Matthew L. Gold     
                                         Matthew L. Gold
                                         Chairman, President and
                                         Chief Executive Officer
                                          



Date:         8/13/97              By:  /s/ Richard J. Hendricks
                                         Richard J. Hendricks
                                         Vice President-Finance
                                         (Principal Financial
                                         and Accounting Officer)