LAW\45828\267772.01
                    SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.
                                     
                                FORM 10-Q/A
                                     
                       AMENDMENT NO. 2 TO 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
March 31, 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)
                                     
                              (303) 292-6565
                            -------------------
           (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                   12,575,536 shares
Common Shares                      Outstanding at May 7, 1997



     The undersigned Registrant hereby amends the following items,
financial statements, exhibits or other portions of its Form 10-Q for the
period ended March 31, 1997 as set forth below:

PART I.  FINANCIAL INFORMATION

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 March 31, 1997
versus three months ended March 31, 1996

Revenues for the first quarter of 1997 increased 32% from $26.5 million in
1996 to $35.0 million in 1997.  Government sales increased 28% in 1997,
from $15.8 million in 1996 to $20.2 million in 1997.  Commercial sales
increased 38% in 1997, from $10.7 million in 1996 to $14.8 million in
1997.  The Company's mix of business between government and commercial
customers shifted from 40% commercial and 60% government in 1996 to 42%
commercial and 58% government in 1997.

The increase in government sales in the first quarter of 1997 was due
primarily to an increase in the number of KC-135 Programmed Depot
Maintenance (PDM) aircraft redeliveries and an adjustment to the timing of
contract billings under the KC-135 program.  Nine aircraft were
redelivered in 1997 versus eight aircraft in 1996.  As a result of the re-
negotiation of certain contract provisions with the Government during
1996, the Company is allowed to bill for over-and-above costs as incurred,
which accelerates the receipt of payments under the KC-135 contract.

Government sales also increased due to an increase in the number of
redeliveries under the Company's C-130 contract.  The Company redelivered
two PDM aircraft and four drop-ins in 1997 versus one PDM aircraft and no
drop-in aircraft in 1996.

The Company's commercial sales increased primarily due to an increase in
the number of 727 cargo conversion redeliveries (four in 1997 versus one
in 1996) and increases in redeliveries under aircraft maintenance
contracts.  Adding to this increase in sales was an increase in volume of
approximately $.7 million at the Company's Pemco World Air Services
facility in Copenhagen, Denmark.

The ratio of cost of sales ($31.8 million in 1997; $24.1 million in 1996)
to net sales ($35.0 million in 1997; $26.5 million in 1996) remained
constant at 91% in the first quarter of 1996 and at 91% in 1997.  However,
the resultant increase in gross profit was offset by increased costs
incurred under the Company's KC-135 PDM program 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 $5.5 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.

Revenues at the Copenhagen aircraft facility increased approximately 24%
in the first quarter of 1997 as compared to 1996.  Operating losses were
slightly greater (7%) at the facility due to the utilization of contract
labor necessary to meet the demands caused by the substantial increase in
workload.

Selling, general and administrative expense (SG&A) increased from $3.5
million in the first quarter of 1996 to $5.0 million in 1997 and increased
as a percent of sales from 13% in 1996 to 14% in 1997.  SG&A increased
primarily due to an increase in 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 was $0.3 million in the first quarter of 1997 versus $0.9
million in 1996.  From March of 1996 to March of 1997, the Company paid
$4.2 million in principal against its Term Credit facility.  The effective
average interest rate in the first quarter of 1997 on the Term Credit
facility was 10% versus 12.40% in the first quarter 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 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.

   
The Company initially borrowed funds from its primary lender, Bank of
America National Trust and Saving Association ("Bank of America"),
beginning in 1988 pursuant to a Credit Agreement that provides for a term
credit facility and a revolving credit facility (the "Credit Agreement"),
and a Senior Subordinated Loan Agreement (the "Subordinated Agreement").
In connection with these agreements, the Company issued to Bank of America
a warrant to purchase shares of the Company's Common Stock (the
"Warrant").  On August 8, 1997, the Company executed an agreement with a
new primary lender for a revolving credit facility under the Credit
Agreement that is expected to provide the Company with greater
flexibility.  As part of this transaction, the Company repaid the term
credit facility and a portion of the Subordinated Agreement.  The
Subordinated Agreement was amended on August  8, 1997 to provide that all
scheduled principal amortization for the portion of the Subordinated Loan
that remains in place has been deferred for the three -year term of the
new revolving credit facility.  The Subordinated Loan will be repaid over
five installments commencing on August  31, 2000, due each subsequent
quarter through June 30, 2001.

In October of 1996, the Company paid $15.0 million of principal to Bank of
America from the proceeds of the settlement with the U.S. Government, with
$2.8 million applied to the Subordinated Agreement, $4.2 million to the
term credit facility and $8.0 million to fully repay the revolving credit
facility.  In March of 1997, the Credit Agreement, the Subordinated
Agreement and the Warrant were each amended, effective as of December 31,
1996.  At the time of such amendments, no funds were outstanding under the
revolving credit facility and $5.0 million of principal was outstanding
under the term loan facility.  As amended, the Credit Agreement provided
for 6 installments of $100,000 to be paid against the principal amount
during 1997 with the $4.4 million balance due January 31, 1998.  The rates
of interest on the Credit Agreement were variable, depending upon the
general level of interest rates and the timing and nature of elections
which the Company is entitled to make in respect to renewals of
outstanding debts or increments of additional debt.  For the years ended
December 31, 1996 and 1995, the effective interest rates for the term
credit facility were 10.52% and 9.88%, respectively.  The Subordinated
Agreement, as amended, provided that the $7.2 million principal balance be
repaid in sixteen equal quarterly installments commencing September  30,
1997 and ending on June 30, 2001.  The Credit Agreement and the
Subordinated Agreement also provided for the forgiveness of approximately
$1.3 million of accrued but unpaid interest in 1996.  The Company
recognized approximately $0.6 million of the forgiven interest in 1996 and
anticipates recognizing the remaining $0.7 million over the years 1997
through 2001.  During 1997, the Company will recognize $.3 million
allocated equally to each quarter.  The balance of the $.4 million will be
taken pro-rata over the period 1998 through 2001.

The Warrant, as amended, permits Bank of America to purchase from the
Company 4,215,753 shares of the Company's Common Stock at an aggregate
purchase price of $0.237205492 per share, subject to certain adjustments
for changes in the Company's Common Stock and for dilutive issuances
dating back to 1988, any time before September 9, 2000.  The Company
believes that no events that would trigger a material adjustment in the
number of shares issuable upon exercise of the Warrant have occurred.

The Company is required to repurchase the Warrant over a period of six
quarters beginning August  31, 1997 with cash or by the issuance of Common
Stock with a value equal to the redemption price.  The redemption price
for three-eighths of the total Shares which was due on August 31, 1997 and
all future installments is the higher of (i) $1.1135 per Share, such
amount being equal to the difference between the average market price of
the Common Stock for the 30 trading days following the date which was 15
trading days prior to the date the Company filed its financial results for
the third quarter of 1996 and the exercise price, or (ii) the difference
between the average market price of the Common Stock for the 25 trading
days preceding the date which is five trading days prior to the date on
which the redemption is actually paid.  In addition, interest accrues on
the unpaid installments in the form of cash and shares of Common Stock.
The amount of interest is equal to the sum of (i) $75,000 in cash (or the
number of shares which is the result of dividing $75,000 by the average
market price of the Common Stock for the 25 trading days immediately
preceding the date which is five trading days prior to August 31, 1997, or
$1.4537 per share), payable immediately, plus (ii) .0004 of a share of
Common Stock per unredeemed Warrant share per day from the respective
installment date until the redemption is made.  Such interest is paid
quarterly 10 days after the last day of each calendar quarter.  Such
interest may be paid in the form of Common Stock only if such stock is
then registered and freely tradable; otherwise, the cash equivalent must
be paid, calculated as the market value of the stock as of the last day of
the calendar quarter.  The Company may exercise its right to repurchase
the Warrant with shares of Common Stock, only if the Shares when issued
are the subject of an effective registration statement and immediately
publicly tradeable.  While the Company presently intends to exercise its
right to repurchase the warrant with shares of common stock, it may elect
to repurchase all or a portion of the Warrant with cash.  The first
installment of the repurchase due August 31, 1997 has not yet been paid.

Matthew L. Gold has been Chairman of the Board, President and Chief
Executive Officer of the Company since January 1987.  In connection with
the Warrant, Mr. Gold agreed that he would not sell any Shares or other
securities of the Company held by him or any affiliate during any of the
periods beginning 35 trading days prior to each installment date and
ending on each installment date unless such transaction does not exceed
1,000 Shares or an equivalent number of other securities of the Company on
each trading day.

The Company intends to replace its outdated, multi-type financial
information systems with enterprise-wide systems from Oracle.  The
hardware, software and implementation costs will be approximately $2.5
million to be incurred over a two year period.  The costs of the system
are being financed by various vendors over periods of three to five years.
The Company does not anticipate making any other capital expenditures in
the foreseeable future.
    

The following is a discussion of the significant items in the Company's
Consolidated Statement of Cash Flows for the quarters ending March 31,
1997 and 1996.

The Company's pension expense as determined by its actuary for the year
1997 is $1.45 million, as compared to $1.0 million in 1996.  In the first
quarter of 1997, the Company made no contributions to the pension plan and
expensed approximately $0.36 million.  In the first quarter of 1996, the
Company funded approximately $0.3 million and expensed approximately $0.25
million.

Accounts payable and accrued expenses increased in the first quarter of
1997 due to continued cash constraints and the increase in workload at the
Company's various facilities.  Accrued interest payments at March 31, 1997
were $0.3 million, representing a $0.6 million reduction over that due at
March 31, 1996.  This reduction in interest was primarily due to the debt
principal paid during 1996 and a reduction in the overall average interest
rate in 1997.

The Company did not record a provision for losses on work in process for
the first quarter of 1997.  However, in the first quarter 1997, the
Company recognized $1.3 million of reserves for losses attributable to
work in process in 1996.  In the first quarter of 1996, the Company
recorded a $1.3 million provision for losses on certain of its commercial
and government contracts which were performed at the Dothan facility.

Net inventories increased $1.1 million in the first quarter of 1997
primarily due to a recognition of reserves for estimated losses on
contracts in progress of $1.3 million and a reduction in net work in
process caused by a reduction in progress payment balances. (See Note 3 to
Financial Statements).

Cash provided from the Company's operating activities funded $.5 million
used in the Company's operations, $0.1 million for capital improvements,
and $0.2 million for payments on various capital leases in the first
quarter of 1997.  Additionally, the Company paid $0.4 million in interest
and $0.1 million in taxes.  In the first quarter of 1996, the Company used
$0.6 million of cash for operating activities, $0.3 million for capital
improvements, and $0.1 million for payments on various capital leases.

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 March 31, 1997 and 1996:

                                 1997           1996
                               --------       --------

          U.S. Government      $135,618       $100,498
          Commercial             33,992         18,342
                               --------       --------
                               $169,610       $118,840

As of March 31, 1997, 80% of the Company's backlog related to work for the
U.S. Government versus 85% for the period ending March 31, 1996.  The
Company's Government backlog increased $35 million primarily related to a
contract for sounding rocket launches awarded to its Space Vector
subsidiary.

The Company's commercial backlog at March 31, 1997 increased $15 million
from the prior year primarily due to increased orders at the Company's
Dothan, Copenhagen, and Nacelles facilities.

Approximately $49.1 million of the 1997 backlog and $44.2 million of the
1996 backlog reported above is firm but unfunded.  Additionally, the
Company has an estimated $261 million of backlog associated with the
option periods for the KC-135 contract and the HERA program which are 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

Statements contained herein concerning anticipated results of operations,
the outcome of pending and future litigation, the completion of
refinancing, 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, litigation risks, the actual performance of work
under contract, customer contract awards and actions with respect to
utilization and renewal of contracts, and the results of financing
efforts.

                             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 US
District Court for the Middle District of Alabama, Northern Division.  The
complaint alleged 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 U.S. Government to Pemco,
and sought $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 case was dismissed on September 3, 1997
for failure to state a claim under the FCA and lack of jurisdiction.  The
Government has filed a notice of appeal.  If the appeal is in fact
prosecuted, the Company intends to vigorously defend the district court's
judgment.

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 suck 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 complaint on July 16, 1997.  Pemco and the Company
filed their answers denying all allegations.  The Company believes the
plaintiffs' claims have no factual basis 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 US 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 that it 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.  On September  29, 1997, Pemco failed a motion
to dismiss the case based on lack of jurisdiction  and forum non
conveniens.  Pemco also filed in U.S. District Court for the Northern
District of California a declaratory relief action seeking a declaration
that Pemco has no liability to Tower Air.

     In AMERICAN INTERNATIONAL AIRWAY, INC. v. GATX CAPITAL CORPORATION,
et al., U.S.D.C., N.D. Cal., the owner of two aircraft converted under an
STC for 747 cargo conversions owned by GATX and others, sued GATX and
various other 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 payloads.  The Company's
Pemco Aeroplex subsidiary has been named as one of seven defendants in the
case because of allegedly improper engineering work performed in the
1980's by its predecessor, Hayes International.  The complaint, which was
served on Pemco on February  5, 1997, alleges violations of the Racketeer
Influenced and Corrupt Organization Act (RICO), conspiracy, and negligence
against Pemco.  Pemco has filed a motion to dismiss the complaint which
was denied in part and granted in part by the U.S. District Court,
Northern District of California on October 15, 1997.  The Court granted
the motion with respect to the claim for civil conspiracy, but granted the
plaintiff leave to amend the complaint.  Pemco believes the allegations
made against have no factual basis and intends to vigorously defend this
claim.

In  BIRMINGHAM AIRPORT AUTHORITY V. PEMCO AEROPLEX, INC., filed October 7,
1997  in  Circuit Court, Jefferson County, Alabama, the Birmingham Airport
Authority  ("BAA") is seeking a declaratory judgment.  (In its  complaint,
BAA seeks a declaratory judgment that no agreement regarding the extension
of the lease has been reached by the parties.)  Pemco operates an aircraft
service facility at the Birmingham Airport on land leased from BAA.  It is
the  Company's  position  that Pemco and BAA  have  negotiated  a  20-year
extension of the lease which otherwise would expire on September 30,  2000
and  agreed to by both parties.  The Company believes that the  lease  has
been extended and will vigorously defend the case.

On October 28, 1997, the Company was served with a complaint filed by the
Birmingham Airport Authority in the Probate Court of Jefferson County,
Alabama seeking condemnation of a portion of the Pemco Aeroplex leasehold
in Birmingham, Alabama.  The property involved in such condemnation
proceeding is approximately 4 acres.  The Airport Authority has
commissioned an appraisal of the property at issue.  Prior to actual
inspection of the property, the Airport Authority offered Pemco
approximately $20,000 in compensation for the impacts due to condemnation.
Pemco estimates that the impact to its operation resulting from
condemnation of such property would be substantially in excess of $20,000
and is in the process of determining the cost to Pemco.

On November 3, 1997, the jury in Stevenson v. Pemco Aeroplex, Inc. and
Rick Windsor returned a verdict against the Company's Pemco Aeroplex
subsidiary in the amount of $1 million compensatory and $3 million
punitive damages.  The case was filed in the Circuit Court of Jefferson
County, Alabama by an employee who alleged a supervisor had engaged in
tortious conduct under Alabama law by making sexual advances against her.
Pemco was sued under the theory of respondeat superior which holds an
employer liable for the actions of its employees undertaken in the course
of employment and theories of negligent supervision and training.
However, the jury found in favor of the supervisor and discharged him from
any liability.  It is the Company's position that Pemco's liability is
derivative of the supervisor's and thus if he is not liable to the
plaintiff, Pemco likewise has no liability.  Post-trial motions seeking to
vacate the verdict or, alternatively, to obtain a new trial will be filed.

On November 11, 1997, a supplier filed a request for bankruptcy against
Pemco World Air Services A/S (PWAS), the Company's Danish subsidiary.  The
Maritime and Commercial Court in Copenhagen, Denmark heard the request on
November 20, 1997 and the petition was granted.  Trustees have been
appointed to operate the facility.  The Company has guaranteed certain
obligations of PWAS.

Various other claims alleging employment discrimination, including race,
sex, age and disability, have been made against the Company and its
subsidiary, Pemco Aeroplex, Inc., by current and former employees at its
Birmingham and Dothan, Alabama facilities in proceedings before the Equal
Employment Opportunity Commission and before state and federal courts in
Alabama.  Workers' compensation claims brought by employees of Pemco
Aeroplex, Inc. are also pending in Alabama state court.  The Company
believes that no one of these claims is material to the Company as a whole
and that such claims are more reflective of the general increase in
employment-related litigation in the U.S. and Alabama than of any actual
discriminatory employment practices by the Company or any subsidiary.
Except for workers' compensation benefits as provided by statute, the
Company believes these claims have no factual basis and intends to
vigorously defend itself in all litigation arising therefrom.
    


                                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: November 24, 1997          By:/s/Matthew L. Gold
                                 Matthew L. Gold,
                                    Chairman, President and
                                    Chief Executive Officer


Date: November 24, 1997          By:/s/Richard J. Hendricks
                                 Richard J. Hendricks
                                    Vice President-Finance
                                    (Principal Financial
                                    and Accounting Officer)