SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                    FORM 10-Q
(Mark One)

_X_       QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15(D) OF THE  SECURITIES
          EXCHANGE ACT OF 1934


For the quarterly period ended  December 31, 1998
                                -----------------

                                       OR

___       TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(D) OF THE  SECURITIES
          EXCHANGE ACT OF 1934


For the transition period from ________________ to _____________________      


                        Commission file number 000-17259
                                               ---------

                             GC INTERNATIONAL , INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          CALIFORNIA                                              94-2278595   
--------------------------------------------------------------------------------
(State or other jurisdiction of                               (I.R.S. employer
 incorporation or organization)                              Identification no.)

156 BURNS AVENUE, ATHERTON CALIFORNIA                                 94027
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                            (Zip Code)


Registrant's Telephone Number, including Area Code (650) 322-8449       
                                                   --------------

                                       N/A
--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report


     Indicate by check mark  whether the  registrant  (1) has filled 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 ___ No _X_


                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:


     Indicate by check mark whether the  registrant  has filed all documents and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.    Yes ___  No ___


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date 5,548,401.



<PAGE>
                             GC INTERNATIONAL, INC.
                                      INDEX

PART I.   FINANCIAL INFORMATION:

     Item 1.  Financial Statements

                 Unaudited Condensed Balance Sheets
                   December 31, 1998 and June 30, 1998........................1


                 Unaudited Condensed Statements of Operations
                 Three and six months ended December 31, 1998
                   and December 31, 1997......................................2

                 Unaudited Statements of Cash Flows for the three months
                   Ended December 31, 1998 and December 31, 1997..............3

                       Notes to Unaudited Condensed Financial Statements
                         Ended December 31, 1998 and December 31, 1997........4



    Item 2.  Management's Discussion and Analysis of
                      Financial Condition & Results of Operation..............4



PART II.   OTHER INFORMATION:

    Item 1.      Legal Proceedings............................................6


    Item 2.      Changes in Securities........................................6

    Item 3.      Defaults Upon Senior Securities..............................6


    Item 4.      Submission of Matters to a Vote
                       of Security Holders....................................6

    Item 5.      Other Information............................................6


    Item 6.      Exhibits & Reports on Form 8-K...............................6


                 Signatures ................................................. 6




<PAGE>
                             GC INTERNATIONAL, INC.
<TABLE>
<CAPTION>
                                 BALANCE SHEETS

                                                 December 31, 1998 June 30, 1998
                                                     Unaudited     
                                                     ---------     -------------
<S>                                                <C>              <C>        
ASSETS
Current Assets
  Cash .......................................     $   329,776      $   323,920
  Accounts receivable, net of
    Allowance for doubtful accounts
    of $6,464 at December 31 and
     $6,464 at June 30, 1998 .................         650,341          639,886
  Inventories ................................         531,408          479,773
Prepaid expenses .............................          31,285            8,496
Deferred tax benefit .........................          26,044           26,044
                                                   -----------      -----------

    Total current assets .....................       1,568,854        1,478,119

  Property and equipment, net ................         620,235          545,250
  Deposits & deferred expenses ...............          42,992           35,760
  Deferred tax benefit .......................         268,128          281,164
                                                   -----------      -----------

    Total assets .............................     $ 2,513,245      $ 2,340,293
                                                   ===========      ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable ...........................     $   201,486      $   130,858
  Accrued expenses ...........................         668,457          696,904
  Income taxes payable .......................           7,455             --
  Notes payable ..............................         268,128          266,713
                                                   -----------      -----------

    Total current liabilities ................       1,145,526        1,094,474

Other Liabilities:
  Notes payable, net of current portion ......         209,612          172,726
  Other long term debt .......................         320,000          320,000
                                                   -----------      -----------
    Total other liabilities ..................         529,612          492,726
                                                   -----------      -----------

         Total liabilities ...................       1,657,138        1,587,200
                                                   -----------      -----------

Stockholders' equity:
  Common stock, without par value ............       1,791,590        1,791,590
  Accumulated deficit ........................        (953,483)      (1,038,497)
                                                   -----------      -----------

    Net stockholders' equity .................         838,107          753,093

    Total Liabilities and
      Stock Holders Equity ...................     $ 2,513,245      $ 2,340,293
                                                   ===========      ===========
</TABLE>

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

                                        1
<PAGE>
                             GC INTERNATIONAL, INC.
<TABLE>
<CAPTION>
                            STATEMENTS OF OPERATIONS


                                             3 Months Ended                6 Months Ended     
                                      --------------------------     -------------------------
                                         12/31/98       12/31/97       12/31/98      12/31/97
                                              (Unaudited)                   (Unaudited)      
                                              -----------                   -----------      
<S>                                   <C>            <C>            <C>            <C>        
Net sales .........................   $ 1,340,383    $ 1,427,334    $ 2,796,596    $ 2,810,049
Cost of sales .....................       885,789        905,915      1,812,890      1,819,789
                                      -----------    -----------    -----------    -----------

Gross profit ......................       454,594        521,419        983,706        990,260

Operating expenses:
  Selling .........................        73,875         57,626        142,525        106,131
  General & Administrative ........       308,394        265,703        670,321        548,379
                                      -----------    -----------    -----------    -----------

Income from operations ............        72,324        198,090        170,860        335,750


Other income (expense)
  Interest, net ...................          (584)           336         (4,624)        (3,956)
  Other ...........................       (49,821)       (39,797)       (63,002)       (42,432)
                                      -----------    -----------    -----------    -----------

Income before income taxes ........        21,919        158,629        103,234        289,362


Provision for income taxes ........         9,210         68,497         18,220        120,539
                                      -----------    -----------    -----------    -----------

Net income ........................   $    12,709    $    90,132    $    85,014    $   168,823
                                      ===========    ===========    ===========    ===========


Earnings per common share
  Primary and Fully diluted .......   $      0.00    $      0.02    $      0.01    $      0.03

Weighted average shares outstanding
  Primary .........................     5,798,721      5,798,721      5,798,721      5,798,721
  Fully diluted ...................     5,798,721      5,798,721      5,798,721      5,798,721
</TABLE>

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

                                        2
<PAGE>
                             GC INTERNATIONAL, INC.
<TABLE>
<CAPTION>
                            STATEMENTS OF CASH FLOWS
                                                        6 Months Ended  
                                             -----------------------------------
                                             December 31, 1998  December 31,1997
                                                   (Unaudited)  (Unaudited)
                                                   -----------  -----------
<S>                                                <C>          <C>      
Cash flows from operating activities:
Net income .....................................   $  85,014    $ 168,823
Adjustments to reconcile net income to net
  cash provided by operating activities:
    Depreciation and amortization ..............      55,423       54,885
    Gain on sale of property, plant & equipment       (1,850)      (1,500)

Adjustments to cash from operations:
    Accounts Receivables ....... (incr)decr ...      (10,455)      24,998
    Inventory .................. (incr)decr ...      (51,635)       8,668
    Accrued payable ............  incr(decr)...       70,629       10,209
    Accrued liabilities ........  incr(decr)...      (28,447)     (25,843)
    Income taxes payable .......  incr(decr)...        7,455      (31,905)
    Reserve liability ..........  incr(decr)...         --          5,817
    Deferred tax ............... (incr)decr ...         --        101,443
    Prepaid expenses ........... (incr)decr ...      (22,789)     (34,626)
    Other assets & deposits .... (incr)decr ...       (7,232)     (13,848)
                                                   ---------    ---------

      Net cash provided by operating activities       96,112      267,121

Cash flows from investing activities:
      Purchase of property, plant & equipment ..    (130,408)     (95,929)
      Proceeds from sale of property, plant
        & equipment ............................       1,850       15,000
                                                   ---------    ---------

      Net cash provided (used) by
           investing activities ................    (128,558)      94,429

Cash flows from financing activities:
      Payments on short term borrowings ........       1,415      (52,493)
      Net cash used by financing activities ....      36,886      (26,464)
      New long term borrowings .................        --           --
                                                   ---------    ---------
       Net cash provided by financing activities      38,302      (78,957)
                                                   ---------    ---------

Increase in cash and cash equivalents ..........       5,856       93,735
Cash at beginning of period ....................     323,920      278,791
                                                   ---------    ---------
Cash at end of period ..........................   $ 329,776    $ 372,526
                                                   =========    =========
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                        3

<PAGE>
                             GC INTERNATIONAL, INC.
                     Notes to Condensed Financial Statements
Note 1
------
The financial statements included herein have been prepared by GC International,
Inc.,  ("GCI")  without  audit,  and include all  adjustments  which are, in the
opinion  of  management,  necessary  for a fair  presentation  of the  Company's
financial  position as of December  31, 1998,  and  December  31, 1997,  and the
results of it's  operation for the three and six months ended  December 31, 1998
and  1997.  Certain  information  and  note  disclosures  normally  included  in
financial  statements have been condensed or omitted  pursuant to such rules and
regulations  of the  Securities  and Exchange  commission,  although the Company
believes that it's  disclosure in such financial  statements is adequate to make
the information presented not misleading.

These  financial  statements  should be read in  conjunction  with the Company's
financial  statements  and notes  thereto  included in the  Company's  Form 10-K
Annual Report filed with the Securities and Exchange Commission.  The results of
operations  for the  three  and six  months  ended  December  31,  1998  are not
necessarily indicative of the results of the full year.

Note 2
------
Inventories  are  stated at the lower of cost  (first-in,  first-out  method) or
market and consist of the following:
<TABLE>
<CAPTION>
                                        December 31            December 31
                                           1998                   1997
                                           ----                   ----

<S>                                      <C>                    <C>     
               Raw materials             $ 58,036               $ 51,587
               Work in process            473,372                419,618
                                          -------                -------

                      Total              $531,408               $471,205
                                          =======                =======
</TABLE>
Inventories  increased  at the end of December  1998 due to work in process that
could not be shipped or was not  scheduled to be shipped at the end of December.
Inventories are expected to decrease during the next quarter.

                                       4
<PAGE>
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations

Liquidity and Capital Resources
-------------------------------
As of December 31, 1998,  the  Company's  cash position was $329,776 and working
capital  was  $423,327,  compared to cash of  $372,526  and  working  capital of
$383,645 in the prior period. The cash position decreased during the period as a
result of the purchase of new plant and  equipment  and an increase in inventory
of the  Company.  Management  believes  that  these  funds  and cash  flow  from
operations  are  adequate  to fund  ongoing  operations.  However,  there  is no
assurance  that  these  funds will prove  adequate  if the  Company is unable to
maintain positive cash flow operations in the future.

Capital Equipment Requirements and Equipment Leases
---------------------------------------------------
The Company,  from time to time, has satisfied  certain of its capital equipment
requirements  by entering into  equipment  leases with third parties or purchase
arrangements with the equipment manufacturers. During 1999, the Company has been
able to arrange satisfactory equipment and automobile purchase contracts. During
the six months ending December 31, 1998, the company  purchased for cash a metal
spectrographic  analysis  machine for  approximately  $30,000 and a new computer
controlled milling machine which is leased.

The Company  anticipates that additional  capital equipment will be required for
the Company's  operating  divisions  during 1999.  The Company will use its best
efforts to satisfy  its  capital  needs by using  internally  generated  cash in
excess of debt repayments and by entering into other  arrangements as available.
There can be no assurances that cash resources will be adequate.

Factors Affecting Future Results
--------------------------------
The Company  must make  payments to certain  creditors  in  accordance  with the
Company's 1991 Plan of  Reorganization.  The total of the  non-interest  bearing
notes,  at December 31, 1998 was  $186,399  compared to $412,953 at December 31,
1997.

The Company settled an interim claim with the EPA for $100,000 plus interest for
a Superfund Site cleanup in connection  with waste  generated in the 1970's by a
former  division.  The Company made the third payment of $20,000 in August 1998,
with the last payment due August 2000. Based on the settlement  reached with the
EPA in 1996 for the interim  claim,  the Company  believes  that its reserve for
future  liability  in the  amount of  $120,000  is  adequate  to cover any final
settlement.

The Company has reviewed its internal  computer systems for year 2000 compliance
and is satisfied  that all of its internal  computer  systems are either already
year-2000  compliant or can be made year-2000 compliant through simple upgrades.
The Company does not expect the costs of achieving full year-2000  compliance to
be material for the internal  systems.  However,  there can be no assurance that
coding  errors  or  other  defects  will not be  discovered  in the  future.  In
addition,  since the Company is very small in relation to many of its  customers
and suppliers,  the Company has been unable to ascertain if any of its suppliers
and  customers are year-2000  compliant.  Therefore,  there can be no assurances
that  the  Company's  cash  flow  and  materials  from  suppliers  will  not  be
interrupted   which  could  result  in  severe   disruptions  in  the  Company's
operations.

                                       5
<PAGE>
Results of Operations
---------------------
Comparison  of three and six months ended  December  31, 1998,  and December 31,
1997.

The  Company's  sales for the six months  ending  December 31,  1998,  decreased
slightly by $13,453 or 0.5% over the comparable period of the prior year.

There has been a noticeable decrease in the Company's markets, the backlog which
was approximately $1,852,052 at June 30, 1998, decreased at December 31, 1998 to
$1,773,751.  Significantly,  a substantial  part of the backlog is stretched out
over the next year.  Despite  continued sales and marketing efforts and expense,
tooling  sales of the ALJ Division  have  decreased.  This means that as current
production  orders are filled,  production  will decrease  causing a potentially
significant decrease in profits. The company is increasing the marketing efforts
by adding  mailings to the schedule  and is changing  sales  representatives  in
under performing territories.  As a result of this slowdown ALJ recently has cut
back the work force by 10-15%.

The Apollo  Division  has  improved  production  yields and although the October
through December quarter is traditionally a slow sales period,  division profits
exceeded the prior year.  Apollo  shipments are expected to increase  during the
next six months and are  therefore  expected to provide  increasing  profits and
cash flow.  However,  Apollo increases are not expected to offset ALJ decreases.
Therefore,  it is likely that the company's profits,  cash position and earnings
per share will decrease as compared to 1998.

The cost of  sales  remained  constant  at 64.8%  for  both  periods.  Operating
expenses  increased  $158,336 as compared to the prior six month period of which
approximately  $36,000  represents  additional  selling  expenses.  The  Company
expects  to  continue  heavy  selling  activities  during the next six months to
obtain new tooling and orders.  Administrative expense increased due to increase
in overhead and expenses  associated  with marketing,  web site  development and
other expenses.  As a result, the net income decreased in the quarter to $12,709
(1%) as compared to $90,132 in the prior period.

                                        6
<PAGE>
PART II



Item 1   Legal Proceedings:  None

Item 2   Changes in Securities:  Not Applicable

Item 3   Defaults upon Senior Securities:  Not Applicable

Item 4   Submission of Matters to a Vote of Securities Holders:  Not Applicable.

Item 5   Other Information:  None

Item 6   Exhibits and Reports on Form 8K:  None

------------------------


                             GC INTERNATIONAL, INC.
                                   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.


                             GC International, Inc.
                                  (Registrant)


  February 10, 1999                  F. Willard Griffith II       
-------------------                  -----------------------------
     Date                            F. Willard Griffith II
                                     Chairman, Chief Executive Officer and
                                     Chief Financial Officer


                                        7