SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C.  20549

                                     FORM 10-K

             [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
                    For the fiscal year ended December 31, 1997
                                        OR
           [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from ______________________ to ______________________

Commission file number                      1-7190
                       --------------------------------------------------------

                              IMPERIAL INDUSTRIES, INC.
              ------------------------------------------------------
              (Exact name of registrant as specified in its charter)

                 Delaware                               59-0967727
    --------------------------------                -------------------
    (State or other jurisdiction of                  (I.R.S. Employer
    incorporation or organization)                  Identification No.)

              3009 Northwest 75th Avenue,  Miami, Florida        33122
             ----------------------------------------------    ----------
              (Address of principal executive offices)         (Zip Code)

     Registrant's telephone number, including area code:   (305) 477-7000
                                                        ---------------------

     Securities registered pursuant to Section 12(b) of the Act:
     Title of each class             Name of each exchange on which registered
            None                                            None

     Securities registered pursuant to Section 12(g) of the Act:
                           Common Stock, $.10 par value
                          ------------------------------
                                 (Title of class)
                   $1.10 Cumulative Convertible Preferred Stock
                   --------------------------------------------
                                 (Title of class)

      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 ____

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (S229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.  [ ]



                                                                   Page 1 of 52
<PAGE>
      The aggregate market value of the voting stock of the Registrant held by
non-affiliates computed by reference to the average bid and asked price of the
registrant's Common Stock ($.10 par value) and $1.10 Cumulative Convertible
Preferred Stock on March 2, 1998 is:  $3,184,648

      Number of shares of Imperial Industries, Inc. Common Stock ($.10 par
value) outstanding on March 2, 1998:  6,483,961

      Total number of pages contained in this document: 52

















































                                                                   Page 2 of 52
<PAGE>
                                       PART I

Item 1.   Business

               Imperial Industries, Inc. (hereinafter referred to as "the
          Company") is a Delaware corporation organized in 1968.  The Company's
          executive offices are located at 3009 Northwest 75th Avenue, Miami,
          Florida 33122, and the telephone number at such offices is (305) 477-
          7000.

               The Company is engaged in the manufacture of building materials
          for sale to building materials dealers and others located primarily in
          Florida and Georgia, and to a lesser extent, other states in the
          Southeastern part of the United States as well as foreign countries.
          In addition, the Company has three distribution outlets through which
          it markets certain of its products directly to end users. The
          Company's products are used in the construction industry by
          developers, builders, contractors, and sub-contractors.

               The Company's business is directly related to the level of
          activity in the new and renovation construction market in Florida, and
          to a lesser extent other states in the Southeastern part of the United
          States.  The Company's products are used by developers, general
          contractors and subcontractors in the construction or renovation of
          residential, multi-family and commercial buildings and swimming pools.
          In Florida, demand for new construction is related to, among other
          things, population growth.  Population growth, in turn, is principally
          a function of migration of new residents to the state.  When economic
          conditions reduce migration, demand for new construction decreases.
          Construction activity is also affected by the size of the inventory of
          available housing units, mortgage interest rates, availability of
          funds and local government growth management policies.  The Company's
          operations are directly related to the general economic conditions
          existing in the Southeastern part of the United States.

               The Company's manufacturing and sales operations are conducted by
          its wholly owned subsidiaries, Premix-Marbletite Manufacturing Co.
          ("Premix") and Acrocrete, Inc.  ("Acrocrete").  The Company primarily
          manufactures stucco, roof tile mortar and plaster products.

               Stucco products are applied as a finishing coat to exterior
          surfaces and to swimming pools.  Roof tile mortar is used to adhere
          cement roof tiles to the roof.  Plaster customarily is used to finish
          interiors of structures.

          Premix

               Premix, together with its predecessors, has been in business for
          approximately 40 years.  The names "Premix" and "Premix-Marbletite"
          are among the registered trademarks of Premix.  The Company believes
          the trade names of its manufactured products represent a substantial
          benefit to the Company because of industry recognition and brand
          preference.  Premix manufactures stucco, roof tile mortar, plaster and
          swimming pool finishes. The products manufactured by Premix basically
          are a combination of portland (or masonry) cement, sand, lime,  marble
          and a plasticizing agent and other chemicals, including color-
          impregnating materials.

                                                                   Page 3 of 52
<PAGE>
Item 1.     Business (continued)

          Premix (continued)

               Premix accounted for approximately 49%, 49% and 59% of the
          Company's consolidated annual revenues in the fiscal years ended
          December 31, 1997, 1996 and 1995, respectively.

               In August 1994, the Company entered into a five year licensing
          agreement with an unaffiliated company to exclusively manufacture and
          sell a new roof tile mortar product throughout the State of Florida
          and foreign countries. The Company has the option to renew the
          agreement for two additional five year periods.  Premix has also
          entered into agreements to manufacture this product on behalf of
          selected wholesalers who distribute this product under the wholesalers
          names through their existing established dealer networks to service
          the roofing contractor industry.  To date, a majority of all roof tile
          mortar sales have been derived from South Florida.  Until 1996, the
          Company's licensed roof tile mortar product was the only mortar
          product approved by Dade County, Florida, building authorities for use
          to adhere all types of cement roof tiles to roofs. In 1997, the
          Company's roof tile mortar was approved by the Broward and Palm Beach
          County building authorities along with other competitive products.
          Other adhesive products used for similar purposes are  also used by
          the industry. The manufacturing of this new product did not require
          any significant change to the current manufacturing facility. The
          Company has expanded its marketing efforts for  this product to other
          areas of Florida based on product performance rather than only as
          required by building code requirements.


          Acrocrete

               Acrocrete manufactures synthetic acrylic stucco products.  The
          Company's trade name "Acrocrete" and certain of its manufactured
          products are described by trade names protected by registered
          trademarks.  Acrocrete's products, used principally for exterior wall
          coatings, broaden and complement the range of products produced and
          sold by Premix.  Management believes acrylic stucco products have
          certain advantages over traditional cementitious stucco products for
          certain types of construction applications because synthetic acrylic
          products provide a hard durable finish with stronger color retention
          properties.  Further, acrylic stucco products have improved
          flexibility characteristics, which minimizes the problems  of cracking
          of cement coating. Acrocrete's product system provides for energy
          efficiency for both residential and commercial buildings.

               For the fiscal years ended December 31, 1997, 1996 and 1995,
          Acrocrete's sales accounted for approximately 51%, 51% and 41%,
          respectively, of the Company's consolidated annual revenues.

          Suppliers

               Premix's raw materials and products are purchased from
          approximately 26 suppliers.  While five suppliers account for



                                                                   Page 4 of 52
<PAGE>
Item 1.     Business (continued)

            Suppliers (continued)

          approximately 64% of Premix's purchases, Premix is not dependent on
          any one supplier for its requirements.  Equivalent materials are
          readily available from other sources at similar prices.

               Acrocrete's raw materials are purchased from approximately 20
          suppliers, of which five account  for approximately 84% of Acrocrete's
          raw material purchases.  However, equivalent materials are available
          from several other sources at similar prices and Acrocrete is not
          dependent on any one supplier for its requirements.

          Marketing and Sales

               The Company's marketing and sales strategy is to create a profit
          center for the products it manufactures, as well as enlarging its
          product offering by selling certain complementary products
          manufactured by other companies that are part of wall system
          applications.  The complementary items are purchased by the Company
          and held in inventory, together with manufactured products, for sale
          to customers.  Generally, sales orders are filled out of existing
          inventory within several days of receipt of the order.  The total
          package sales approach to the new and renovation construction markets
          is targeted at both the end user of the Company's products, being
          primarily the contractor or subcontractor, and the distributor,
          principally building materials dealers who purchase products from the
          Company and sell to the end user, and in some instances, to retail
          customers.  A majority of the Company's sales are made directly by the
          Company to approximately 250 distributors.

             While the Company's sales are typically to distributors, the
          Company focuses marketing efforts on the contractor/subcontractor end
          user to create a brand preference for the Company's products.  One
          distributor accounted for approximately 11% of total sales in 1995 but
          only 5% and 3% of total sales in 1996 and 1997, respectively.   The
          loss of that distributor would not cause a material loss in sales
          because the brand preference contractors and subcontractors have
          developed for the Company's products generally cause the user to seek
          a distributor who carries the Company's products.  Sales by other
          distributors as well as direct sales to end users contributed to the
          percentage decline in sales to the one distributor. The Company
          primarily markets its products to distributors through Company
          salesmen, who promote both Premix and Acrocrete products, located in
          the Southeastern United States.

               In April 1994,  the Company started a  pilot program in Savannah,
          Georgia to sell its Acrocrete products directly to the end user.  The
          Company's products and certain complementary products manufactured by
          other companies are inventoried and sold from a leased warehouse
          distribution facility.  In January 1995, the Company opened a second
          distribution facility in Jacksonville, Florida.  In May 1995, the
          Company opened a third distribution facility in Norcross, Georgia.




                                                                   Page 5 of 52
<PAGE>
Item 1.     Business (continued)

          Marketing and Sales (continued)

          Each leased facility contains between approximately 7,500 to 8,500
          square feet.  The distribution facilities are designed to promote
          product brand preference to the contractor and sub-contractor, and
          also to improve service capabilities, increase market share, and to
          increase profit margins from the sale of the Company's products.  The
          Company sells Acrocrete and complementary products of other
          manufacturers at such distribution facilities.  The Company closed
          the Savannah Facility at the end of the first quarter of 1997.

               Effective February 1, 1998, the Company acquired a facility in
          Tampa, Florida that was engaged primarily in the distribution of
          landscape stone products.  The Company intends to utilize this
          distribution facility to gain market share for the sale of its
          products on the West Coast of Florida.  The Company presently does not
          have any plans to open other warehouse distribution facilities.

          Seasonality

               The sale of Premix's and Acrocrete's products in the construction
          market for the Southeastern United States is somewhat seasonal, with a
          slightly lower rate of sales historically occurring in the period
          December through February compared to the rest of the year.

          Competition

               The Company's business is highly competitive.  Premix and
          Acrocrete encounter significant competition from local, regional and
          national manufacturers of acrylic, cement and plaster products, most
          of whom manufacture products similar to those of Premix and Acrocrete.
          Many of these competitors are larger, more established and better
          financed than the Company.  The Company believes it can compete with
          the other companies based upon product quality, customer service and
          maintaining lower overhead costs than larger national companies.

          Environmental Matters

               In 1992, the Company removed its fuel pumps and underground tanks
          at its facilities in Miami and Casselberry, Florida, rather than
          upgrade the storage tank systems to comply with more stringent
          environmental standards which went in effect December 31, 1992.  Upon
          removal of the tanks, test results showed evidence of soil and ground
          water contamination  at each site.  The  contaminated soil was removed
          from the properties and the regulatory authorities required the
          Company to test the groundwater and provide engineering reports to
          determine what remedial actions, if any, were necessary. In December
          1994 and June 1995, the environmental authorities released the Company
          from having to undertake any additional remedial action to its
          Casselberry and Miami, Florida facilities, respectively.

               Premix is eligible for  reimbursement of certain allowable  costs




                                                                   Page 6 of 52
<PAGE>
Item 1.     Business (continued)

          Environmental Matters (continued)

          associated with the removal of the contamination and engineering
          studies that were required in connection with the assessment of
          contamination through an insurance program established by the State of
          Florida environmental authorities.  Because of the uncertainty
          surrounding these reimbursements, the Company has elected to account
          for the insurance proceeds, if any, to be derived from this matter on
          a cash basis.


          Employees

               The Company and its subsidiaries had 75 employees as of December
          31, 1997.  The Company considers its employee relations to be
          satisfactory.  The Company's employees are not subject to any
          collective bargaining agreement.

Item 2.     Properties

               The Company and its subsidiaries maintain a total of 6 facilities
          in Florida and Georgia.  The location and size of the Company's
          facilities and the nature of the operations in which such facilities
          are used, are as follows:


                             Approximate    Owned/
            Location         Sq. Footage    Leased       Company Products
            --------------  ------------   --------  --------------------------
            Miami, Fl.          30,000      Owned     Premix (Manufacturing)
            Casselberry, Fl.    20,000      Owned     Premix (Manufacturing)
            Atlanta, Ga.        14,750      Leased    Acrocrete (Manufacturing)

            Tampa, Fl.           8,470      Owned     Acrocrete (Distribution)
            Jacksonville, Fl.    7,500      Leased    Acrocrete (Distribution)
            Norcross, Ga.        7,600      Leased    Acrocrete (Distribution)

               The lease on the Atlanta facility expires April 30, 2000, and
          provides for rental payments of $3,340 per month.  The Company has the
          option to terminate the lease on April 30, 1998, or anytime thereafter
          with 90 days notice.

               The facilities located in Norcross, Georgia and Jacksonville,
          Florida are utilized for the distribution of Acrocrete's products
          directly to the end-user (contractor/subcontractor). The lease on the
          Jacksonville facility expires December 31, 1998, and provides for
          rental payments of $2,656 per month.  Acrocrete leases the Norcross
          facility at $2,920 per month, through the lease expiration date of
          April 30, 1998.  The Company plans to renew the leases for the
          Jacksonville and Norcross facilities. Comparable properties at
          equivalent rentals are available for replacement of these facilities
          if such leases are not extended.




                                                                   Page 7 of 52
<PAGE>
Item 2.     Properties (continued)

               The Miami and Casselberry facilities are encumbered by first
          mortgage liens with outstanding principal balances at December 31,
          1997, of $485,000 and $310,000, respectively.  See "Notes to
          Consolidated Financial Statements".  The Tampa facility, acquired
          effective February 1, 1998, is encumbered by a first mortgage lien in
          the amount of $215,000.

               Management believes that the Company's facilities and equipment
          are well-maintained, in good operating condition and sufficient for
          its present operating needs.  The Company is presently evaluating
          certain projects aimed at consolidating, upgrading and expanding its
          manufacturing operations which involves relocating certain operations
          to new facilities.  See  "Management's Discussion and Analysis of
          Financial Condition and Results of Operations - Liquidity and Capital
          Resources".

Item 3.     Legal Proceedings

               In April 1996, the Company and Premix were dismissed as a
          defendant, to which it had been a party with other unaffiliated
          companies, in the remaining 27 asbestos lawsuits pending in various
          circuit courts in Alabama and Florida.  Such lawsuits sought
          unspecified damages alleging injuries to persons exposed to products
          containing asbestos.  As of March 2, 1998, the Company is not a
          defendant in any lawsuits which allege injuries due to asbestos
          exposure.

               The Company and Premix are parties to an Interim Agreement for
          Defense and Indemnity of Asbestos Bodily Injury Cases (the
          "Agreement") with certain of its insurance carriers under which each
          party agreed to pay a negotiated percentage share of defense costs and
          indemnification expenditures, subject to policy limits, for the
          pending and future asbestos claims.  The Agreement has been extended
          until May 15, 1999, and is subject to cancellation upon sixty days
          notice by any party.

               The insurance carriers have agreed to pay, in the aggregate,
          approximately 93% of the damages, costs and expenditures related to
          the litigation.  Premix is responsible for the remaining 7%.

               The Company believes, based upon the Agreement with its insurance
          carriers, and its experience in these claims to date, it has adequate
          insurance coverage for any future similar type of claims.  To date, no
          case went to trial with Premix as a defendant.  Premix has either
          settled for a nominal amount of money or been voluntarily dismissed
          without payment from approximately 193 cases.  Based upon historical
          results, the Company does not believe any potential future claims
          would be material.  However, there can be no assurance that insurance
          will ultimately cover the aggregate liability for damages to which
          Premix may be exposed.  Premix is unable, at this time, to determine
          the exact extent of its exposure or outcome of the litigation of any
          other similar cases that may arise in the future.




                                                                   Page 8 of 52
<PAGE>
Item 3.     Legal Proceedings (continued)

               Acrocrete was a co-defendant in a lawsuit captioned "Stephen P.
          Zabow, II and Karen I. Zabow, et al. vs. M/I Schottenstein Homes,
          Inc., Heiner Construction Company and Acrocrete, Inc.", filed October
          2, 1996 in Wake County, North Carolina.  The lawsuit involved claims
          by owners of eight homes in Cary, North Carolina, against the general
          contractor, a subcontractor, and Acrocrete.  The claims related to the
          use of synthetic stucco in the construction of such homes which was
          allegedly manufactured by Acrocrete.  The lawsuit alleged negligent
          misrepresentation, breach of warranty, unfair and deceptive trade
          practices, fraud and negligence due to defective material, and
          requests punitive damages.  The plaintiffs alleged that Acrocrete knew
          of inherent defects prevalent in synthetic stucco wall systems that
          permitted water intrusion to cause moisture damage to the interior and
          wood framing of the houses.  In October 1997, the Plaintiffs
          voluntarily dismissed Acrocrete with prejudice as a result of the
          Plaintiffs settlement with the general contractor defendant.

               On October 17, 1997, Acrocrete was named a co-defendant in a
          lawsuit captioned "M/I Schottenstein Homes, Inc. vs. Acrocrete, Inc.,
          et al filed in Wake County, North Carolina.  The lawsuit involves
          claims by owners of 52 homes constructed by M/I Schottenstein Homes,
          Inc., the general contractor, that the use of synthetic stucco in the
          system of construction of the exterior finish of their homes,
          allegedly manufactured by Acrocrete, caused moisture intrusion
          damages.  Eight of the homeowners were the parties to the previously
          described lawsuit filed against Acrocrete.  As part of its settlement
          with the homeowner, M/I Homes received an assignment of any claims
          which the homeowners may have against any other contractors,
          subcontractors, material men, or suppliers which might be responsible
          for any damages pertaining to the alleged defects.  The lawsuit
          against Acrocrete and the other parties alleges negligent
          misrepresentation, breach of warranty, fraud, unfair and deceptive
          trade practices and requests punitive damages.

               Acrocrete believes it has meritorious defenses against the claim
          as well as a counter claim against the general contractor and
          installer of the product. The Company's insurance carrier  has
          accepted coverage and is providing defense under a reservation of
          rights.  Acrocrete is unable, at this time, to determine the exact
          extent of its exposure or outcome of the litigation of this lawsuit.


               In addition, Acrocrete has been named in seven similar lawsuits
          filed against Acrocrete and other parties, (contractors and
          subcontractors), by homeowners, or their insurance companies, claiming
          moisture intrusion damages on single family residences.


               Acrocrete is vigorously defending all of these cases and believes
          it has meritorious defenses, counter-claims and claims against third
          parties. The Company's insurance carriers to have accepted coverage
          for five of the above claims and are providing defense under a
          reservation of rights.  The Company expects its insurance carriers to
          accept coverage for the other two remaining claims. Acrocrete is
          unable to determine the exact extent of its exposure or outcome of
          litigation of these lawsuits.
                                                                   Page 9 of 52
<PAGE>
Item 3.     Legal Proceedings (continued)

               In the fourth quarter of 1993, the Company incurred a $100,000
          charge to settle a product liability lawsuit for which the Company was
          not insured.  The Company entered into an agreement to settle this
          lawsuit for $100,000, payable in equal monthly installments of $2,083
          over a four year period with an annual interest rate of 7-1/2%.  In
          accordance with the terms of the agreement, in the event of the
          Company's bankruptcy, the plaintiff will be permitted to file a claim
          for $160,000, less any amounts previously paid.  See "Notes to
          Consolidated Financial Statements".

               Premix and Acrocrete are engaged in other legal actions and
          claims arising in the ordinary course of its business, none of which
          are believed to be material to the Company.


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

                 Not applicable.






































                                                                  Page 10 of 52
<PAGE>
                                     PART II


Item 5.      Market for the Registrant's Common Equity and Related
             Stockholder Matters

                The Company's Common Stock is traded in the over-the-counter
           market.  The following table sets forth the high and low bid
           quotations of the Common Stock for the quarters indicated, as
           reported by the National Quotation Bureau, Inc.  Such quotations
           represent prices between dealers and do not include retail mark-up,
           mark-down, or commission, and may not necessarily represent actual
           transactions.

                            Fiscal, 1996       High          Low
                            -------------     ------       -------

                            First Quarter      $.06          $.03
                            Second Quarter      .10           .06
                            Third Quarter       .14           .07
                            Fourth Quarter      .14           .08

                            Fiscal, 1997       High          Low
                            -------------     ------        -----
                            First Quarter      $.20          $.08
                            Second Quarter      .28           .20
                            Third Quarter       .45           .20
                            Fourth Quarter      .44           .29


                The Company has not paid any cash dividends on its Common Stock
           since 1980.  The Company is prohibited from paying any dividends on
           the Common Stock until all accrued and unpaid dividends on the
           Company's $1.10 Cumulative Redeemable Convertible Preferred Stock are
           paid in full.  The Company has omitted cash dividends on its
           Preferred Stock since the fourth quarter of 1985 aggregating
           $4,044,000 at December 31, 1997.  See "Notes  to Consolidated
           Financial Statements".

                On March 2, 1998, the Common Stock was held by 2,113
           stockholders of record.

              As of March 2, 1998, the closing bid and asked prices of the
         Common Stock was  $.30 and $.40, respectively.














                                                                  Page 11 of 52
<PAGE>
Item 6.  Selected Financial Data

          The following is a summary of selected financial data (in thousands
     except as to per share amounts) for the five years ended December 31, 1997:
<TABLE>


  Statements of Operations Data                       Year Ended December 31,
<S>                                      <C>        <C>        <C>        <C>      <C>
                                           1997       1996       1995      1994     1993

Net sales                                $15,774    $13,742    $11,615    $7,996   $7,714
Cost of sales                             10,867      9,881      8,239     5,726    5,637
Selling, general and administrative
 expenses                                  3,740      3,313      2,979     2,104    2,068
Interest expense                            (329)      (317)      (282)     (204)    (168)
Miscellaneous income                          54         43          7        23       17
Income tax benefit, net                      753         -          -         -        -
Net income (loss)                          1,645        274        122       (15)    (142)
Less:  dividends on redeemable
  preferred stock                           (330)      (330)      (330)     (330)    (330)
Net income (loss) applicable to
  common stockholders                    $ 1,315   $    (56)   $  (208)   $ (345)  $ (472)
Net income (loss) per share
  applicable to common stockholders      $   .22    $  (.01)   $  (.04)   $ (.06)  $ (.09)
Number of shares used in computation
 of income (loss) per share                6,009      5,471      5,382     5,317    5,217


Balance Sheets Data
                                                As of December 31,
                                          1997        1996       1995      1994      1993

Working capital                          $1,995      $  872     $  733    $  334    $  417

Total assets                             $5,128      $4,116     $3,747    $3,067    $2,668

Long-term debt,
 less current maturities                 $  819      $  895     $1,000    $  576    $  678

Redeemable preferred stock               $3,001      $3,001     $3,001    $3,001    $3,001

Preferred dividends in arrears (1)       $4,044      $3,714     $3,384    $3,054    $2,723

Common stock and other
  stockholders' deficit                 $(4,441)    $(5,879)   $(5,846)  $(5,641)  $(5,301)






     (1)    No cash dividends have been paid on the cumulative redeemable preferred stock
            since 1985.

</TABLE>


                                                                  Page 12 of 52
<PAGE>
Item 7.     Management's Discussion and Analysis of Results of Operations and
            Financial Condition

            General

                 The Company's business is related primarily to the level of
            construction activity in Florida and Georgia.  The majority of the
            Company's products are sold to building materials dealers located
            principally in Florida and Georgia who provide materials to
            contractors and subcontractors engaged in the construction of
            residential, commercial and industrial buildings and swimming
            pools.  One indicator of the level and trend of construction
            activity is the amount of construction permits issued for the
            construction of buildings.  The level of construction activity is
            subject to population growth, inventory of available housing units,
            government growth policies and construction funding, among other
            things.

            Results of Operations

            Year Ended December 31, 1997 Compared to 1996

                 Net sales for 1997 increased $2,032,000, or approximately 15%,
            compared to 1996. Approximately $1,184,000 of the increase in sales
            for 1997 was derived from the sale of Acrocrete products, together
            with certain complementary products manufactured by other companies
            which were sold through the Company's wholesale distribution
            facilities.  Premix products, principally a roof tile mortar
            product, accounted for the balance of the increase in sales.

                 Gross profit as a percentage of net sales for 1997, was
            approximately 31%, compared to 28% in 1996.  The increase in gross
            profit margins was due to savings realized from raw material
            purchases, modifications made to the Company's manufacturing
            process to gain greater production efficiency, and cost reduction
            programs implemented in 1996 which continue to focus on
            manufacturing processes for opportunities to reduce cost.

                 Selling, general and administrative expenses as a percentage
            of net sales for 1997 was approximately 24%, the same as 1996.
            Selling, general and administrative expenses increased $427,000, or
            approximately 13% compared to 1996. The increase in expenses was
            primarily due to expenses associated with the expanded operations
            and additional sales and delivery expenses associated with
            servicing the increased volume of business.

                 In fiscal year ended December 31, 1997, the Company recognized
            an $800,000 tax credit as a result of a reevaluation of a portion
            of the valuation allowance of the Company's net operating losses.

                 As a result of  the above  factors and after  giving effect to
            accrued unpaid dividends on the redeemable preferred stock, the
            Company derived net income applicable to common stockholders of
            $1,315,000, or $.22 per share in 1997, compared to a net loss   of
            $(56,000), or $(.01) per share, in 1996.  Net income applicable to
            common stockholders includes charges of $330,000 in 1997 and 1996
            for unpaid cumulative dividends on preferred stock.

                                                                  Page 13 of 52
<PAGE>
Item 7.     Management's Discussion and Analysis of Results of Operations and
            Financial Condition

            Results of Operations

            Year Ended December 31, 1996 Compared to 1995

                 Net sales in 1996 increased $2,127,000, or approximately 18%,
            compared to 1995.  The increase in sales was derived primarily from
            increased sales of Acrocrete products, together with certain
            complementary products manufactured by other companies, sold
            through the Company's distribution outlets.

                 Gross profit as a percentage of net sales for 1996 was
            approximately 28%, compared to 29% in 1995.  The decrease in gross
            profit margins was principally due to higher manufacturing expenses
            and a greater proportion of sales of lower gross profit margin
            products, including certain complementary products manufactured by
            other companies.  The Company has been reviewing all raw material
            purchases to ensure it realizes the lowest cost possible and is in
            the process of streamlining and updating its manufacturing
            processes by acquiring and modifying certain equipment to gain
            greater production efficiency.  As a result, the Company expects to
            achieve higher gross profit margins in 1997 compared to 1996.

                 Selling, general and administrative expenses as a percentage
            of net sales for 1996 was approximately 24% compared to 26% in
            1995.  In 1995, selling, general and administrative expenses
            included start-up costs associated with the opening of two of the
            Company's three distribution outlets.  However, selling, general
            and administrative expenses increased $334,000 or approximately 11%
            in 1996, compared to 1995.  The increase in expenses was primarily
            due to expenses associated with the expanded operations,
            particularly additional sales expenses related to the Company's
            distribution outlets.  Selling, general and administrative expenses
            as a percentage of net sales decreased in 1996 compared to 1995
            because of spreading expenses over greater revenues without the
            corresponding increase of overhead.  Interest expense was greater
            in 1996 compared to 1995, primarily because of increased borrowings
            under its line of credit with its commercial lender to fund working
            capital requirements resulting from increased sales.

                 Due to the above factors and after giving effect to preferred
            stock dividends accrued but not paid, the Company incurred a net
            loss applicable to common stockholders of $56,000, or $.01  per
            share in 1996, compared to a net loss of $208,000 or $.04 per share
            in 1995. Net loss to common stockholders includes charges of
            $330,000 in 1996 and 1995 for unpaid cumulative dividends on
            preferred stock.

             Liquidity and Capital Resources

                At December 31, 1997,  the Company had   working capital of
           approximately $1,995,000  compared to working capital of $872,000 at
           December 31, 1996. As of December 31, 1997 the Company had cash and
           cash equivalents of $552,000.


                                                                  Page 14 of 52
<PAGE>
Item 7.    Management's Discussion and Analysis of Results of Operations and
           Financial Condition  (continued)

            Liquidity and Capital Resources (continued)

                The Company's principal source of short-term liquidity is
           existing cash on hand and the utilization of a $2,000,000 line  of
           credit with a commercial lender scheduled to expire on June 19,
           1999.  The line of credit is automatically extended for an
           additional one year term unless either party gives the other notice
           of nonextension 60 days prior to the expiration date. Premix and
           Acrocrete, the Company's subsidiaries, borrow on the line of credit,
           based upon and collateralized by, its eligible accounts receivable
           and inventory.  Generally, accounts not collected within 120 days
           are not eligible accounts receivable under the Company's borrowing
           agreement with its commercial lender.  At December 31, 1997,
           $778,000 had been borrowed against $1,580,000 in available lines of
           credit limits.

                Trade accounts receivable represent amounts due from building
           materials dealers located principally in Florida and Georgia who
           have purchased products on an unsecured open account basis and sales
           directly to the end-user (contractors and subcontractors), through
           Company owned warehouse distribution outlets. The Company presently
           owns and operates three warehouse distribution outlets.

                 The Company's common stockholders' deficit   of $4,441,000, at
            December 31, 1997,   resulted primarily from losses incurred in
            1987 and prior years, and unpaid cumulative dividends required by
            the Company's issued and outstanding preferred stock.  The Company
            has attempted to generate net income and adequate cash to support
            operations by various methods, including the commencement of
            manufacturing acrylic stucco products, opening warehouse
            distribution outlets to sell its products directly to the end user,
            the development and sale of new products, and reductions in raw
            material costs and changes to manufacturing processes to gain
            greater production efficiency. In 1997, these actions enabled the
            Company to derive income before taxes and the application of unpaid
            dividends on the redeemable preferred stock in 1997 of $892,000,
            compared to income of $274,000 in 1986.

                 The Company has omitted payment of cash dividends on its
            preferred stock since the fourth quarter of 1985, and has accrued
            $4,044,000 of dividends in arrears on the preferred stock as of
            December 31, 1997. The Company is continuing its efforts to develop
            a plan to satisfy the preferred stock dividend arrearage and
            mandatory sinking fund requirements which would be acceptable to
            its stockholders.

                 Effective February 1, 1998, the Company acquired the land,
            buildings, equipment and inventory of a distribution facility in
            Tampa, Florida for approximately $400,000.  A portion of the
            purchase price was financed through the issuance of a $215,000
            mortgage note payable monthly over four  years.




                                                                  Page 15 of 52
<PAGE>
Item 7.    Management's Discussion and Analysis of Results of Operations and
           Financial Condition  (continued)

            Liquidity and Capital Resources (continued)

                 The Company  expects other  capital expenditures in  1998 for
          improvements to its equipment and manufacturing facilities to require
          aggregate cash expenditures of approximately $275,000.  In the first
          quarter of 1998, the Company added approximately 6,000 square feet of
          warehouse space to its Casselberry, Florida manufacturing facility to
          consolidate Florida manufacturing operations to more closely mirror
          market geographic demands. Other projects planned in 1998 are aimed at
          relocating and expanding the Company's manufacturing facility in
          Atlanta, Georgia, and the proposed sale and relocation of the
          Company's manufacturing /distribution facility in Miami to a leased
          location in Broward County.  The Company expects to complete the above
          cost reduction projects in 1998 and will continue to focus on the
          efficient utilization of its resources in its efforts to accomplish
          further cost reductions.

                 The Company believes its cash on hand and the maintenance of
            its borrowing arrangement with its commercial lender will provide
            sufficient cash to supplement any cash shortfalls from operations
            and provide adequate liquidity for the next twelve months to
            support the cash requirements of its capital expenditure programs.

                 The ability of the Company to maintain and improve its long
            term liquidity is dependent upon the Company's ability to
            successfully (i) achieve long-term profitable operations;  (ii) pay
            or otherwise satisfy omitted preferred stock dividends and
            preferred stock redemption requirements; and (iii) resolve current
            litigation on terms favorable to the Company.

  Item 8.    Financial Statement and Supplementary Data

                 See Item 14.  Exhibits, Financial Statement Schedules and
           Reports on Form 8-K for the Index to Financial Statements contained
           herein.




















                                                                  Page 16 of 52
<PAGE>



               Report of Independent Certified Public Accountants




To the Board of Directors and Shareholders of
Imperial Industries, Inc.


In our opinion, the consolidated financial statements listed in the index

appearing under Item 14(a)(1) and (2) on page 44 present fairly, in all

material respects, the financial position of Imperial Industries, Inc. and its

subsidiaries at December 31, 1997 and 1996, and the results of their operations

and their cash flows for each of the three years in the period ended December

31, 1997, in conformity with generally accepted accounting principles.  These

financial statements are the responsibility of the Company's management; our

responsibility is to express an opinion on these financial statements based on

our audits.  We conducted our audits of these statements in accordance with

generally accepted auditing standards which require that we plan and perform

the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement.  An audit includes examining, on a test

basis, evidence supporting the amounts and disclosures in the financial

statements, assessing the accounting principles used and significant estimates

made by management, and evaluating the overall financial statement

presentation.  We believe that our audits provide a reasonable basis for the

opinion expressed above.



PRICE WATERHOUSE LLP
Miami, Florida
March 27, 1998







                                                                  Page 17 of 52
<PAGE>
                   IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets

                                                December 31,        December 31,
   Assets                                           1997               1996
Current assets:
  Cash and cash equivalents                     $  552,000          $  455,000
  Trade accounts receivable (less
   allowance for doubtful accounts of
   $176,000 in 1997 and $145,000 in 1996)        1,534,000           1,508,000
  Inventories                                    1,204,000           1,272,000
  Deferred taxes                                   350,000                -
  Other current assets                              60,000              22,000
                                                -----------         -----------
     Total current assets                        3,700,000           3,257,000
                                                -----------         -----------

Property, plant and equipment, at cost           2,974,000           2,789,000
 Less accumulated depreciation                  (2,100,000)         (2,020,000)
                                                -----------         -----------
     Net property, plant and equipment             874,000             769,000
                                                -----------         -----------

Deferred taxes                                     450,000                -

Other assets                                       104,000              90,000
                                                -----------         -----------
                                                $5,128,000          $4,116,000
                                                ===========         ===========





























                                                                  Page 18 of 52
<PAGE>
                   IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets

                                                December 31,        December 31,
                                                    1997               1996

   Liabilities and Common Stock and other Stockholders' Deficit
Current liabilities:
  Notes payable                                 $  778,000          $1,424,000
  Current portion of long-term debt                130,000             161,000
  Accounts payable                                 580,000             660,000
  Accrued expenses and other liabilities           217,000             140,000
                                                -----------         -----------
     Total current liabilities                   1,705,000           2,385,000
                                                -----------         -----------

Long-term debt, less current maturities            819,000             895,000

Preferred dividends in arrears                   4,044,000           3,714,000

Redeemable preferred stock, $1.00 par
 value, $1.10 cumulative convertible
 series; 300,121 shares outstanding; at
 $10 per share redemption value                  3,001,000           3,001,000

Commitments and contingencies                         -                   -

Common stock and other stockholders' deficit:
 Common stock, $.10 par value, authorized
  20,000,000 shares; 6,483,961 and
  5,562,461 issued, respectively                   663,000             571,000
 Additional paid-in-capital                      7,260,000           7,229,000
 Accumulated deficit                           (12,036,000)        (13,351,000)
                                               ------------        ------------
                                                (4,113,000)         (5,551,000)
 Less cost of shares in treasury (147,863
  shares in 1997 and 1996)                        (328,000)           (328,000)
                                               ------------        ------------
     Total common stock and other
       stockholders' deficit                    (4,441,000)         (5,879,000)
                                               ------------        ------------
                                                $5,128,000          $4,116,000
                                               ============        ============














          See accompanying notes to consolidated financial statements.
                                                                  Page 19 of 52
<PAGE>
                      IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES

                        Consolidated Statements of Operations


                                                  Year Ended December 31,

                                            1997           1996           1995

Net sales                            $15,774,000    $13,742,000    $11,615,000

Cost of sales                         10,867,000      9,881,000      8,239,000
                                    -------------  -------------  -------------

     Gross profit                      4,907,000      3,861,000      3,376,000

Selling, general and
 administrative expenses               3,740,000      3,313,000      2,979,000
                                    -------------  -------------  -------------

     Operating income                  1,167,000        548,000        397,000

Other income (expense):
   Interest expense                     (329,000)      (317,000)      (282,000)
   Miscellaneous income                   54,000         43,000          7,000
                                    -------------  -------------  -------------
                                        (275,000)      (274,000)      (275,000)
                                    -------------  -------------  -------------
    Income before income taxes           892,000        274,000        122,000

Income tax benefit (expense):
   Current                               (47,000)          -              -
   Deferred                              800,000           -              -
                                    -------------  -------------  -------------
                                         753,000           -              -
                                    -------------  -------------  -------------
Net income                             1,645,000        274,000        122,000

Less: Dividends on redeemable
        preferred stock                 (330,000)      (330,000)      (330,000)
                                    -------------  -------------  -------------
    Net income (loss) applicable to
       common stockholders           $ 1,315,000    $   (56,000)    $ (208,000)
                                    =============  =============  =============



Basic earnings (loss) per
  common share                              $.22          $(.01)         $(.04)
                                    =============  =============  =============

Diluted earnings (loss) per
  common share                              $.21          $(.01)         $(.04)
                                    =============  =============  =============



                See accompanying notes to consolidated financial statements.
                                                                  Page 20 of 52
<PAGE>
                              IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES

                   Consolidated Statement of Changes in Common Stock and Other
                                         Stockholders' Deficit

                               Years ended December 31, 1997, 1996 and 1995

<TABLE>


                                                  Additional
                                        Common      paid-in       Accumulated      Treasury
                                        Stock       capital         deficit         stock          Total

<S>                                   <C>         <C>           <C>                <C>           <C>
Balance at December 31, 1994           556,000     7,384,000     (13,087,000)       (494,000)     (5,641,000)

Issuance of 50,000 shares of
  common stock                            -         (108,000)           -            111,000           3,000

Accrued dividends in arrears
  on preferred stock                      -             -           (330,000)           -           (330,000)

Net income                                -             -            122,000            -            122,000
                                      ---------   -----------   -------------      ----------    ------------

Balance at December 31, 1995           556,000     7,276,000     (13,295,000)       (383,000)     (5,846,000)

Issuance of 175,000 shares of
  common stock                          15,000       (47,000)                         55,000          23,000

Accrued dividends in arrears
  on preferred stock                                                (330,000)                       (330,000)

Net income                                                           274,000                         274,000
                                      ---------   -----------   -------------      ----------    ------------

Balance at December 31, 1996           571,000     7,229,000     (13,351,000)       (328,000)     (5,879,000)

Issuance of 921,500 shares of
  common stock                          92,000        31,000                                         123,000

Accrued dividends in arrears
  on preferred stock                                                (330,000)                       (330,000)

Net income                                                         1,645,000                       1,645,000
                                      ---------   -----------   -------------      ----------    ------------

Balance at December 31, 1997          $663,000    $7,260,000    $(12,036,000)      $(328,000)    $(4,441,000)
                                      =========   ===========   =============      ==========    ============


</TABLE>


              See accompanying notes to consolidated financial statements.


                                                                  Page 21 of 52
<PAGE>
                        IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES
                          Consolidated Statements of Cash Flows
                                                    Year Ended December 31,
                                                 1997       1996        1995
Cash flows from operating activities:

    Net income                                $1,645,000   $274,000    $122,000
    Adjustments to reconcile net income
    to net cash (used in) provided by:
      Depreciation                               149,000    133,000     119,000
      Amortization                                19,000     16,000      13,000
      Provision for doubtful accounts            126,000     99,000     137,000
      Deferred taxes, net                       (800,000)      -           -
      Loss (gain) on disposal of fixed assets      1,000      4,000      (3,000)
      Compensation expense - issuance of stock    41,000     23,000       3,000
      (Increase) decrease in:
        Accounts receivable                     (152,000)  (236,000)   (421,000)
        Inventories                               68,000      8,000    (243,000)
        Prepaid expenses and other assets        (38,000)      -        (48,000)
      (Decrease) increase in:
        Accounts payable                         (80,000)   (48,000)    286,000
        Accrued expenses and other liabilities    77,000     40,000     (65,000)
                                               ----------  ---------  ----------
        Net cash provided by (used in)
         operating activities                  1,056,000    313,000    (100,000)
                                               ----------  ---------  ----------
Cash flows from investing activities
    Proceeds received from sale of property
     and equipment                                 9,000     11,000       3,000
    Purchases of property, plant
     and equipment                              (263,000)  (201,000)   (224,000)
                                               ----------  ---------  ----------
    Net cash used in investing activities       (254,000)  (190,000)   (221,000)
                                               ----------  ---------  ----------
Cash flows from financing activities
    (Decrease) increase in notes payable
     banks - net                                (646,000)   179,000     201,000
    Proceeds from issuance of long-term debt      60,000     66,000     703,000
    Repayment of long-term debt                 (167,000)  (165,000)   (569,000)
    Proceeds received from the exercise
     of stock options                             48,000       -           -
                                               ----------  ---------  ----------
     Net cash (used in) provided by
      financing activities                     (705,000)     80,000     335,000
                                               ----------  ---------  ----------
Net increase in cash and cash
 equivalents                                      97,000    203,000      14,000
Cash and cash equivalents,
 beginning of year                               455,000    252,000     238,000
                                               ----------  ---------  ----------
Cash and cash equivalents, end of year         $ 552,000   $455,000    $252,000
                                               ==========  =========  ==========
Supplemental disclosure
  of cash flow information:

Cash paid during the year for interest         $ 329,000    $314,000   $284,000
                                               ==========  =========  ==========
              See accompanying notes to consolidated financial statements.
                                                                  Page 22 of 52
<PAGE>
                    IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES

                    Notes to Consolidated Financial Statements

                         December 31, 1997, 1996 and 1995


(1)   Nature of the Business and Summary of Significant Accounting Policies

               Imperial Industries, Inc. (the "Company") and its subsidiaries
          are primarily involved in the manufacturing and sale of exterior and
          interior finishing wall coating and mortar products for the
          construction industry.  The Company also manufactures and sells
          finishing coat products for swimming pools.

               The consolidated financial statements contain the accounts of
          the Company and its wholly owned subsidiaries, Acrocrete, Inc.
          ("Acrocrete") and Premix-Marbletite Manufacturing Company ("Premix"),
          as well as other subsidiaries which did not have significant
          operations during 1995 through 1997.

               A summary of the significant accounting policies followed in the
          preparation of the accompanying consolidated financial statements is
          presented below.

    (a)   Basis of presentation

               The consolidated financial statements of the Company and its
          subsidiaries have been prepared in accordance with generally accepted
          accounting principles which assume that assets will be realized and
          liabilities will be satisfied  in the normal course of business.

    (b)   Significant customers:

               During 1995, one distributor accounted for approximately 11% of
          total sales.  During 1997 and 1996, no single customer accounted for
          more than 10% of the Company's sales.

    (c)   Principles of consolidation

               The consolidated financial statements include the accounts of
          the Company and its wholly-owned subsidiaries.  All material
          intercompany accounts and transactions have been eliminated in
          consolidation.

    (d)   Inventories

               Inventories are stated at the lower of cost or market (net
          realizable value), on a first-in, first-out basis.  Finished goods
          include the cost of raw materials, freight in, direct labor and
          overhead.







                                                                  Page 23 of 52
<PAGE>
                   IMPERIAL INDUSTRIES, INC.  AND SUBSIDIARIES

                    Notes to Consolidated Financial Statements

                                   -continued-

(1)   Nature of the Business and Summary of Significant Accounting Policies
      (continued)

      (e)   Property, plant and equipment

               Property, plant and equipment is stated at cost, less
          accumulated depreciation.  Depreciation is computed on the straight-
          line basis over the estimated useful lives of the depreciable assets.
          Expenditures for maintenance and repairs are charged to expense as
          incurred, while expenditures which extend the useful life of assets
          are capitalized.

      (f)   Income taxes

               The Company records income taxes using the liability method.
          Under this method, deferred tax liabilities are recognized for
          temporary differences that will result in taxable amounts in future
          years.  Deferred tax assets are recognized for temporary differences
          that will result in deductible amounts in future years.  These
          temporary differences are primarily the result of net operating loss
          carryforwards.  Valuation allowances are recognized if it is more
          likely than not that some or all of the deferred tax assets will not
          be realized (See note 7).

      (g)   Earnings (loss) per share of common stock

               The Company has adopted Statement of Financial Accounting
          Standards No. 128, Earnings Per Share ("FAS 128) which requires that
          dual presentation of basic and diluted earnings per share for the
          years ending after December 15, 1997.  Basic earnings (loss) per
          common share is computed by dividing net income, after deducting
          preferred stock dividends accumulated during the year ("net income
          applicable to common stockholders"), by the weighted average number
          of shares of common stock outstanding each year.  Diluted earnings
          (loss) per common share is computed by dividing net income applicable
          to common stockholders by the weighted-average number of shares of
          common stock and common stock equivalents outstanding during each
          year.  In accordance with the provision of FAS 128, the Company has
          retroactively restated earnings (loss) per common share.  (See Note
          (10) - Earnings (Loss) Per Common Share).

      (h)   Cash and cash equivalents

               The Company has defined cash and cash equivalents as those
          highly liquid investments with a maturity of three months or less,
          when purchased. Included in cash and cash equivalents at December 31,
          1997 and 1996 are short term time deposits of $259,000 and $153,000,
          respectively.




                                                                  Page 24 of 52
<PAGE>
                    IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES

                    Notes to Consolidated Financial Statements
                                    -continued-
(1)   Nature of the Business and Summary of Significant Accounting Policies
      (continued)


      (i)   Revenue recognition policy

               Revenue from sales transactions is recorded upon shipment and
          delivery of inventory to the customer, net of discounts and
          allowances.

      (j)   Stock based compensation

               In October 1995, the Financial Accounting Standards Board (FASB)
          issued Statement of Financial Accounting Standards No. 123,
          Accounting For Stock Based Compensation (SFAS 123).  SFAS 123, the
          disclosure provisions of which must be implemented for fiscal years
          beginning subsequent to December 15, 1995, establishes a fair value
          based method of accounting for stock based compensation plans, the
          effect of which can either be disclosed or recorded.  The Company has
          adopted the disclosure requirement provisions of SFAS 123 in 1996.
          However, the Company has retained the intrinsic value method of
          accounting for stock based compensation, based on APB Opinion No.
          25. Had the fair value based accounting provisions of SFAS 123 been
          adopted, the effect would not be significant.

      (k)   Accounting estimates

               The preparation of financial statements in conformity with
          generally accepted accounting principals requires management to make
          estimates and assumptions that affect the reported amounts of assets
          and liabilities and disclosure of contingent assets and liabilities
          at the date of the financial statements and the reported amounts of
          revenues and expenses during the reporting period.  Actual results
          could differ from those estimates.

      (l)   Financial instruments

               The carrying amounts of financial instruments including cash and
          cash equivalents, accounts receivable and accounts payable
          approximated fair value as of December 31, 1997 and 1996 because of
          the relatively short maturity of these instruments.


(2)   Inventories

          At  December 31, 1997 and 1996, inventories consist of:

                                            1997              1996
            Raw materials               $  364,000        $  376,000
            Finished goods                 614,000           710,000
            Packaging materials            226,000           186,000
                                        ----------        ----------
                                        $1,204,000        $1,272,000
                                        ==========        ==========
                                                                  Page 25 of 52
<PAGE>
                    IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES

                    Notes to Consolidated Financial Statements

                                   -continued-


(3)   Property, Plant and Equipment

            A summary of the cost of property, plant and equipment at December
      31, 1997 and 1996 is as follows:
                                                                 Estimated
                                                                useful life
                              1997               1996             (years)
                           ----------         -----------      ------------
      Land                 $   74,000         $   74,000           - - -
      Buildings and
       improvements           834,000            823,000          10 - 40
      Machinery and
       equipment            1,296,000          1,129,000           3 - 10
      Vehicles                574,000            570,000           2 -  8
      Furniture and
       fixtures               196,000            193,000           3 - 12
                           -----------        -----------
                           $2,974,000         $2,789,000
                           ===========        ===========

            The net book value of property, plant and equipment pledged as
      collateral under notes payable and various long-term debt agreements
      aggregated $480,000 and  $509,000 at December 31, 1997 and 1996,
      respectively.  See "Note 6."


(4)   Notes Payable

          Included in notes payable at December 31, 1997 and 1996 is $778,000
    and $1,424,000, respectively, which represents the amounts outstanding
    under a $2 million line of credit from a commercial lender to Premix and
    Acrocrete.  The line  of credit is  collateralized by Premix and
    Acrocrete's accounts receivable and inventory, bears interest at prime rate
    plus 4% (12 1/2% at December 31, 1997) and expires June 19, 1998, subject
    to annual renewal.  Effective January 1, 1998, the Company amended its line
    of credit to bear interest at prime rate plus 2% and extended the maturity
    date to June 19, 1999, subject to annual renewal. The weighted average
    effective interest rate on the line of credit was 17.04%, 15.06%, and
    14.86% during the years ended December 31, 1997, 1996 and 1995,
    respectively.

         The line  of credit is  automatically extended for an additional one
    year term on each June 19th unless either party gives the other notice of
    nonextension 60 days prior to the preceding June 19th.  At December 31,
    1997, the line  of credit limit  available for borrowing aggregated
    $1,580,000, of which $778,000 had been borrowed.  The average month end
    amounts outstanding during 1997 and 1996 were $1,316,000, and $1,308,000,
    respectively.  The maximum amounts outstanding at any month end during 1997
    and 1996 were $1,585,000 and $1,424,000, respectively.


                                                                  Page 26 of 52
<PAGE>
                    IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES

                    Notes to Consolidated Financial Statements

                                   -continued-

(5)   Accrued Expenses and Other Liabilities

            Accrued expenses and other liabilities at December 31, 1997 and 1996
      are summarized as follows:
                                                       1997               1996
      Employee compensation
       related items                                 $ 72 000           $ 46,000
      Taxes, other than income taxes                   38,000             32,000
      Income taxes                                     30,000               -
      Interest                                          7,000              8,000
      Legal fees                                         -                 1,000
      Other                                            70,000             53,000
                                                     ---------          --------
                                                     $217,000           $140,000
                                                     =========          ========
(6)   Long-term Debt

      Long-term debt of the Company is as follows:
                                                           1997           1996
      Adjustable rate mortgage note payable, interest
       at 10.5% at December 31, 1997, principal in
       the amount of $3,111 together with interest is
       payable monthly, with a balloon payment of
       approximately $376,000 due December 5, 2000      $ 485,000      $523,000

      Adjustable rate mortgage note payable,
       interest at 12% at December 31, 1997,
       principal and interest payable monthly in
       the amount of approximately $3,600, with a
       balloon payment of approximately $292,000
       due September 1, 2000                              310,000       316,000

      Litigation settlement agreement, interest at
       7.5% due monthly, principal payable in 48
       equal 48 monthly periods in the amount of
       approximately $2,083 through August 1998            19,000        43,000

      Equipment notes payable, interest at various
       rates ranging from 8.75% to 15.39%, per annum,
       principal and interest payable monthly             135,000       174,000
                                                        ----------    ---------
                                                          949,000     1,056,000
      Less current maturities                            (130,000)     (161,000)
                                                        ----------    ----------
                                                        $ 819,000     $ 895,000
                                                        ==========    ==========






                                                                  Page 27 of 52
<PAGE>
                    IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES

                    Notes to Consolidated Financial Statements

                                   -continued-

(6)   Long-term Debt (continued)
      As of December 31, 1997, long-term debt matures as follows:

                      Year ended
                      December 31,           Amount
                        1999                $ 71,000
                        2000                 727,000
                        2001                  15,000
                        2002                   6,000
                                            --------
                                            $819,000
                                            ========

         In the fourth quarter of 1993, the Company incurred a $100,000 charge
    to settle a product liability lawsuit for which the Company had no
    insurance.  The Company entered into an agreement to settle this lawsuit
    for $100,000, payable monthly over a four-year period with interest at the
    rate of 7-1/2% per annum.  In accordance with the terms of the agreement,
    in the event of the Company's bankruptcy, the plaintiff will be permitted
    to file a claim for $160,000, less any amounts previously paid.

(7)   Income Taxes

         At December 31, 1997, the deferred tax asset of $800,000 primarily
    consists of the tax effect of net operating loss carryforwards of
    $11,300,000 less a valuation allowance of $3,300,000.  Net operating losses
    expire in varying amounts through 2009.

         During 1997 the Company recognized $800,000 of deferred tax assets as
    a result of releasing a portion of the valuation allowance previously
    established due to the uncertainty of realizing net operating losses.  The
    remaining deferred tax assets are fully reserved at December 31, 1997.  The
    ultimate realization of the remaining deferred tax assets is largely
    dependent on the Company's ability to generate sufficient future taxable
    income.  Management believes that the valuation allowance at December 31,
    1997 is appropriate, given the cyclical nature of the construction industry
    and other factors including but not limited to the uncertainty of future
    taxable income expectations beyond the Company's strategic planning horizon.

         The current income tax expense represents state taxes and alternative
    minimum taxes payable for the year ended December 31, 1997.

         At December 31, 1997, the Company had outstanding 6,483,961 shares of
    Common Stock (5,562,461 shares in 1996  with a $.10 par value per share
    ("Common Stock").  The holders of Common Stock are entitled to one vote per
    share on all matters, voting together with the holders of Preferred Stock.
    In the event of liquidation, holders of Common Stock are entitled to share
    ratably in all the remaining assets of the Company, if any, after
    satisfaction of the liabilities of the Company and the preferential rights
    of the holders of outstanding preferred stock, if any.


                                                                  Page 28 of 52
<PAGE>
                    IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES

                    Notes to Consolidated Financial Statements

                                   -continued-

(8)  Capital Stock

      (a)  Common Stock

         On February 7, 1995, the Company issued 50,000 shares of Common Stock
    from Treasury to the former President of Premix and Acrocrete as part of
    his employment compensation.

       On May 23, 1996, the Company issued from treasury 25,000 shares of
    Common Stock to an employee of the Company as part of his employment
    compensation. On July 12, 1996, the Company issued an aggregate of 150,000
    shares of Common Stock to the Directors and Executive vice President of the
    Company as part of their compensation for services rendered.

         On February 4, 1997,  the Company issued 33,333 shares of authorized,
    but unissued Common Stock to the President of Premix and Acrocrete as part
    of his employment compensation.

         On May 1, 1997, 25,400 shares of Common Stock were issued upon the
    exercise of stock options previously granted under the Company's stock
    option plans.

         On May 29, 1997, the Company issued an aggregate of 144,000 shares of
    Common Stock to its Directors and certain employees of the Company as part
    of their compensation for services rendered.

         In July 1997, the Company's Board of Directors adopted a Restricted
    Stock Plan (the "Plan") for the benefit of certain key employees.  An
    aggregate of 241,667 shares of Common Stock were reserved for issuance
    under the Plan.  The Plan is administered by the Company's Compensation
    Committee.  On July 31, 1997, an aggregate of 241,667 restricted shares
    were issued to two employees, subject to certain vesting requirements over
    a three year period.  An aggregate of 175,000 shares will vest over a three
    year period based on certain performance goals set forth in the Plan.  An
    aggregate of 66,667 shares will vest over a two year period based on
    continued employment with the Company by the holder.  If the vesting
    requirements are not met, the restricted shares theretofore issued will be
    forfeited and thereafter be subject to reallocation under the plan.  Prior
    to vesting, the holders will receive all of the benefits of ownership of
    the restricted shares, including voting rights, but will not have the right
    to transfer such unvested shares.  Effective January 21, 1998, an aggregate
    of 58,333 had met the Plan vesting requirements and were released and re-
    issued to two employees.

         On July 15, 1997, the Company issued 25,000 shares of Common Stock to
    an employee of the Company as part of his employment compensation.  In July
    1997, an aggregate of 452,100 shares of Common Stock were issued to the
    Company's Directors and the Executive Vice President of the Company upon
    the exercise of Stock Options previously granted under the Company's stock
    option plans.  The Company received aggregate cash proceeds of $45,210.


                                                                  Page 29 of 52
<PAGE>
                    IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES

                    Notes to Consolidated Financial Statements
                                    -continued-

(8)  Capital Stock (continued)

      (b)  Redeemable Preferred Stock - $1.10 Cumulative Convertible Series

         The authorized preferred stock of the Company consists of 5,000,000
    shares, $1.00 par value per share.  The preferred stock is issuable in
    series, each of which may vary, as determined by the Board of Directors, as
    to the designation and number of shares in such series, the voting power of
    the holders thereof, the dividend rate, redemption terms and prices, the
    voluntary and involuntary liquidation preferences, and the conversion
    rights and sinking fund requirements, if any, of such series.

         At December 31, 1997 and 1996, the Company had issued and outstanding
    300,121 shares of $1.10 cumulative convertible redeemable preferred stock
    ("Preferred Stock").  The holders of Preferred Stock are entitled to one
    vote  per share  on all  matters without regard to class, except that the
    holders of Preferred Stock are entitled to vote as a separate class with
    regard to the issuance of any equity securities which ranks senior or on
    parity with the Preferred Stock, or to change or repeal any of the express
    terms of the Preferred Stock in a manner substantially prejudicial to the
    holders thereof.  Each share of the Preferred Stock is entitled to
    cumulative quarterly dividends at the rate of $1.10 per annum and is
    convertible into 1.149 shares of common stock.  The liquidation preference
    of the Preferred Stock is $10.00 per share, plus accrued but unpaid
    dividends.  The Preferred Stock is callable, in whole or in part, by the
    Company at its option at any time upon 30 days prior notice, at $11.00 per
    share, plus accrued and unpaid dividends.

         The Company has omitted dividends on its Preferred Stock since the
    fourth quarter of 1985 aggregating $4,044,000 through December 31, 1997
    ($3,714,000 through December 31, 1996). The omission of Preferred Stock
    dividends is a reduction of net income applicable to Common Stockholders
    and is recorded as a non-current liability in the accompanying consolidated
    balance sheets.

         The Preferred Stock is subject to redemption through a mandatory
    sinking fund at a redemption price of $10.00 per share, at the rate of
    approximately 66,000 preferred shares a year, starting in 1986, less any
    preferred shares converted into common stock.  Through December 31, 1997,
    an aggregate of 359,879 shares of Preferred Stock were converted into
    1,199,557 shares of Common Stock.  As a result of these conversions, the
    Company was required to redeem 36,121 shares in 1991 and 66,000 shares for
    each year thereafter through 1995,  at which time the Preferred Stock was
    intended to be fully retired.  The Preferred Stock has not been included in
    common stock and other stockholders' deficit because of its mandatory
    redemption feature.

          The Company did not redeem any shares of the Preferred Stock as
    required on April 1, 1991, or any year thereafter.  Under the provisions of
    the sinking fund requirements, if an annual sinking fund requirement is not
    met, it is added to the requirements for the next year.

          The Company is prohibited from paying any cash dividends on Common
                                                                  Page 30 of 52
<PAGE>
                    IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES

                    Notes to Consolidated Financial Statements

                                   -continued-

(8)  Capital Stock (continued)

      (b)  Redeemable Preferred Stock - $1.10 Cumulative Convertible Series
           (continued)

    Stock and from purchasing or otherwise acquiring for value, any shares of
    either preferred or common stock, at any time that the Company is in
    default in the payment of any dividends on the Preferred Stock or if the
    sinking fund requirements are in arrears.

      (c)  Warrants

         At December 31, 1997, the Company had the following outstanding series
    of warrants:

    (i)  1,316,999 warrants issued in the Company's public offering in 1983.
    Each warrant entitles the holder to purchase one share of Common Stock at
    $4.80 per share.  During February, 1997, the Company's Board of Directors
    authorized an extension of the expiration date of these warrants from March
    31, 1997 to March 31, 1998.  In March 1998, the Board of Directors extended
    the expiration date of the warrants to April 30, 1998. The warrants are not
    registered nor are they exercisable until a registration statement covering
    the underlying Common Stock is declared effective by the Securities and
    Exchange Commission.

    (ii)  200,000 warrants issued in connection with financing arrangements in
    1988.  Each warrant entitles the holder to purchase one share of Common
    Stock at $.10 per share. The expiration date was extended to June 29, 2000
    from June 28, 1997 on June 20, 1997. Two directors acquired 150,000 and
    50,000 warrants, respectively, in connection with a $400,000 financing in
    1988.  The loan has since been repaid by the Company.


           (d)  Stock Options

         The Company's 1979 Non-Qualified Stock Option Plan (the "1979 Plan")
    expired in 1989 and no additional options may be granted thereunder.  At
    December 31, 1997, 2,500 shares of common stock were reserved for issuance
    upon exercise of outstanding stock options originally granted under the
    1979 Plan.

          The Company's 1984 Stock Option Plan (the "1984 Plan") expired in
    1994 and no additional options may be granted thereunder.  At December 31,
    1997, options for 21,500  shares of common stock were outstanding under the
    1984 Plan.







                                                                  Page 31 of 52
<PAGE>
                    IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES

                    Notes to Consolidated Financial Statements

                                   -continued-

(8)  Capital Stock (continued)

      (d)  Stock Options (continued)

            Option activity under these plans is summarized as follows:

<TABLE>                                                            Fair market value
                                                                   At date of grant
                              Number     Price per                 Per
                             of shares     share       Total       Share      Total
<S>                          <C>         <C>          <C>        <C>          <C>
Outstanding and exercisable
 at December 31, 1994         505,500      $  .10     $50,000    $.02-.20     $50,000

Granted during 1995              -            -          -           -           -
Exercised during 1995            -            -          -           -           -
Terminated during 1995           -            -          -           -           -
                              --------                --------                --------

Outstanding and exercisable
 at December 31, 1995         505,500      $  .10     $50,000    $.02-.20     $50,000

Granted during 1996              -             -         -           -           -
Exercised during 1996            -             -         -           -           -
Terminated during 1996           -             -         -           -           -
                              --------                --------                --------

Outstanding and exercisable
 at December 31, 1996         505,500      $  .10     $50,000    $.02-.20     $50,000
                              --------                --------                --------
Granted during 1997              -            -          -           -           -
Exercised during 1997        (477,500)     $  .10     $48,000        -        $48,000
Terminated during 1997         (4,000)        .10        -           -           -
                              --------                --------                --------
Outstanding and exercisable
 at December 31, 1997          24,000      $  .10     $ 2,000    $.02-.20     $ 2,000
                              ========                ========                ========

</TABLE>
 The following options to purchase the Company's common stock, all of which are
 vested, were outstanding under the Plans on December 31, 1997:

            Year of        Number of        Exercise        Expiration
             Grant           Shares           Price            Date
             1989             5,000            .10 *         7/29/99**
             1994            19,000            .10           3/27/99
                            --------
                             24,000

    *   In 1993, the exercise price per share was reduced from $.20 per share to
        $.10.
    **  In 1994, the expiration date was extended from 7/29/94 to 7/29/99.
                                                                  Page 32 of 52
<PAGE>
                    IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES

                    Notes to Consolidated Financial Statements

                                    -continued-

 (9)  Other Income (Expense)

            A summary of miscellaneous income (expense) for the years ended
      December 31, 1997, 1996 and 1995 is as follows:

                                                 1997      1996       1995
      Interest income                          $10,000   $ 5,000    $ 4,000
      (Loss) gain on disposal of property,
       plant and equipment                      (1,000)   (4,000)     3,000
      Other, net                                45,000    42,000       -
                                               --------  --------   --------
                                               $54,000   $43,000    $ 7,000
                                               ========  ========   ========

(10)  Earnings (Loss) Per Common Share

          Below is a reconciliation between basic and diluted earnings (loss)
    per common share under FAS 128 for the years ended December 31, 1997, 1996
    and 1995 (in thousands except per share amounts):
<TABLE>
                                      1997                           1996                       1995
                                                 Per                         Per                         Per
                           Income     Shares    Share     Income    Shares  Share     Income   Shares   Share
    <S>                    <C>        <C>       <C>       <C>       <C>     <C>       <C>      <C>      <C>
    Net income             $1,645                          $ 274                       $ 122
     Less dividends on
     redeemable
     preferred stock         (330)                          (330)                       (330)
                           -------                        -------                      ------
    Basic earnings
     (loss) per
     common share          $1,315      6,009     $.22      $ (56)    5,471  $(0.01)    $(208)   5,382   $(0.04)
                           =======    ======    ======    =======    =====  =======    ======   =====   =======
    Effect of dilutive
     securities:
     Stock options                        24
     Warrants                            200
                           -------    -------             -------                      ------
    Diluted earnings
     (loss) per
     common share           $1,315     6,267     $.21     $  (56)    5,471  $(0.01)    $(208)   5,382   $(0.04)
                           =======    ======    ======    =======    =====  =======    ======   =====   =======

</TABLE>
(11)  Related Party Transactions

          The Company and its subsidiaries paid legal fees of approximately
    $37,000, $29,000 and $35,000  in 1997, 1996 and 1995, respectively, to law
    firms with which the Chairman of the Board was affiliated.



                                                                  Page 33 of 52
<PAGE>
                    IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES

                    Notes to Consolidated Financial Statements

                                    -continued-
(12)  Commitments and Contingencies

    (a)   In April 1996, the Company and Premix were dismissed as a defendant,
    to which it had been a party with other unaffiliated companies, in the
    remaining 27 asbestos lawsuits pending in various circuit courts in Alabama
    and Florida.  Such lawsuits sought unspecified damages alleging injuries to
    persons exposed to products containing asbestos.  As of March 2, 1998, the
    Company is not a defendant in any lawsuits which allege injuries due to
    asbestos exposure.

          The Company and Premix are parties to an Interim Agreement for Defense
    and Indemnity of Asbestos Bodily Injury Cases (the "Agreement") with certain
    of its insurance carriers under which each party agreed to pay a negotiated
    percentage share of defense costs a nd indemnification expenditures, subject
    to policy limits, for the pending and future asbestos claims.  The Agreement
    has been extended until May 15, 1999, and is subject to cancellation upon
    sixty days notice by any party.

          The insurance carriers have agreed to pay, in the aggregate,
    approximately 93% of the damages, costs and expenditures related to the
    litigation.  Premix is responsible for the remaining 7%.

         The Company believes, based upon the Agreement with its insurance
    carriers, and its experience in these claims to date, it has adequate
    insurance coverage for any future similar type of claims.  To date, no case
    went to trial with Premix as a defendant.  Premix has either settled for a
    nominal amount of money or been voluntarily dismissed without payment from
    approximately 193 cases.  Based upon historical results, the Company does
    not believe any potential future claims would be material.  However, there
    can be no assurance that insurance will ultimately cover the aggregate
    liability for damages to which Premix may be exposed.  Premix is unable, at
    this time, to determine the exact extent of its exposure or outcome of the
    litigation of any other similar cases that may arise in the future.

         Acrocrete was a co-defendant in a lawsuit captioned "Stephen P. Zabow,
    II and Karen I. Zabow, et al. vs. M/I Schottenstein Homes, Inc., Heiner
    Construction Company and Acrocrete, Inc.", filed October 2, 1996 in Wake
    County, North Carolina.  The lawsuit involved claims by owners of eight
    homes in Cary, North Carolina, against the general contractor, a
    subcontractor, and Acrocrete.  The claims related to the use of synthetic
    stucco in the construction of such homes which was allegedly manufactured by
    Acrocrete.  The lawsuit alleged negligent misrepresentation, breach of
    warranty, unfair and deceptive trade practices, fraud and negligence due to
    defective material, and requests punitive damages.  The plaintiffs alleged
    that Acrocrete knew of inherent defects prevalent in synthetic stucco wall
    systems that permitted water intrusion to cause moisture damage to the
    interior and wood framing of the houses.  In October 1997, the Plaintiffs
    voluntarily dismissed Acrocrete with prejudice as a result of the Plaintiff
    settlement with the general contractor defendant.

         On October 17, 1997, Acrocrete was named a co-defendant in a lawsuit


                                                                  Page 34 of 52
<PAGE>
                    IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES

                    Notes to Consolidated Financial Statements

                                    -continued-

(12)  Commitments and Contingencies (continued)

    captioned "M/I Schottenstein Homes, Inc. vs. Acrocrete, Inc., et al filed in
    Wake County, North Carolina.  The lawsuit involves claims by owners of 52
    homes constructed by M/I Schottenstein Homes, Inc., the general contractor,
    that the use of synthetic stucco in the system of construction of the
    exterior finish of their homes, allegedly manufactured by Acrocrete, caused
    moisture intrusion damages.  Eight of the homeowners were the parties to the
    previously described lawsuit filed against Acrocrete.  As part of its
    settlement with the homeowner, M/I Homes received an assignment of any
    claims which the homeowners may have against any other contractors,
    subcontractors, material men, or suppliers which might be responsible for
    any damages pertaining to the alleged defects.  The lawsuit against
    Acrocrete and the other parties alleges negligent misrepresentation, breach
    of warranty, fraud, unfair and deceptive trade practices and requests
    punitive damages.

          Acrocrete believes it has meritorious defenses against the claim as
    well as a counter claim against the general contractor and installer of the
    product. The Company's insurance carriers has accepted coverage and is
    providing defense under a reservation of rights.  Acrocrete is unable, at
    this time, to determine the exact extent of its exposure or outcome of the
    litigation of this lawsuit.

          In addition, Acrocrete has been named in seven similar lawsuits filed
    against Acrocrete and other parties, (contractors and subcontractors), by
    homeowners, or their insurance companies, claiming moisture intrusion
    damages on single family residences.

          Acrocrete is vigorously defending all of these cases and believes it
    has meritorious defenses, counter-claims and claims against third parties.
    The Company's insurance carriers have accepted coverage for five of the
    above claims and are providing defense under a reservation of rights. The
    Company expects its insurance carriers to accept coverage for the other two
    remaining claims. Acrocrete is unable to determine the exact extent of its
    exposure or outcome of litigation of these lawsuits.

          Premix and Acrocrete are engaged in other legal actions and claims
    arising in the ordinary course of its business, none of which are believed
    to be material to the Company.

    (b)  The Company pays aggregate monthly rent of approximately $9,300  for
    three of its operating facilities.  The leases expire at various dates
    ranging from April 30, 1998 to April 30, 2000. Comparable properties at
    equivalent rentals are available for replacement of these facilities if such
    leases are not extended.

         In addition, the Company leases one automobile under an agreement which
    provides for a minimum monthly payment of $600 through June, 1998.  The
    Company is subject to an operating lease agreement for certain computer
    equipment which provides for monthly rental payments of $1,000 through

                                                                  Page 35 of 52
<PAGE>
                    IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES

                    Notes to Consolidated Financial Statements

                                    -continued-

(12)  Commitments and Contingencies (continued)

      February, 1998.

          Rental expenses incurred for operating leases were approximately
    $128,000, $129,000 and $122,000, for the years ended December 31, 1997, 1996
    and 1995, respectively.


    (c)  Howard L. Ehler, Jr., ("the Executive"), is employed by the Company
    pursuant to a one year renewable agreement  (the "Employment Agreement").
    Mr. Ehler serves as Executive Vice President, Principal Executive Officer
    and Chief Financial Officer of the Company at a current annual base salary
    of $120,000.  The Employment Agreement provides for automatic renewal for
    additional one year periods as of July 1, of each year, unless the Company
    or the Executive notifies the other party of an intent not to renew at least
    90 days prior to expiration of the existing term.  The executive receives a
    car allowance, as well as certain other benefits, such as health and
    disability insurance.  The Executive is also entitled to receive incentive
    compensation based upon targets formulated by the Company's Compensation
    Committee.

         Prior to a change in control, the Company has the right to terminate
    the Employment Agreement without cause at any time upon thirty days written
    notice, provided the Company pays to the Executive a severance payment
    equivalent to 50% of his then current annual base salary.  As part of the
    Employment Agreement, the Executive has agreed not to disclose confidential
    information and not to compete with the Company during his term of
    employment and, in certain cases, for a two (2) year period following his
    termination.

         In the event of a "Change in Control" (as defined in the Employment
    Agreement), the Employment Agreement is automatically extended to a three
    year period.  Thereafter, the Executive will be entitle to terminate his
    employment with the Company for any reason at any time.  In the event the
    Executive terminates his employment after a Change of Control, the Executive
    will be entitled to receive the lesser of (i) a lump sum amount equal to the
    base salary payments and all other compensation and benefits the Executive
    would have received had the Employment Agreement continued for the full
    term; or (ii) three times Executive's base salary then in effect on the
    effective date of termination.  The Executive would also be entitled to such
    severance in the event the Company terminates the Executive without cause
    after a Change of Control.

         In addition, Mr. Ehler was issued 75,000 shares of Common Stock of the
    Company on July 31, 1997 pursuant to the terms of the Company's Restricted
    Stock Plan.  See "Note (8)(a) Common Stock".

    (d)  During the third quarter of 1996, the Company entered into an
    employment arrangement with Fred H. Hansen to serve as President of the
    Company's subsidiaries, Premix and Acrocrete. Mr. Hansen presently receives

                                                                  Page 36 of 52
<PAGE>
                    IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES

                    Notes to Consolidated Financial Statements

                                    -continued-

(12)  Commitments and Contingencies (continued)

    an annual base salary of $150,000 and a bonus based upon earnings
    performance of the Subsidiaries.  Under this arrangement, Mr. Hansen
    received 33,333 shares of Common Stock in February 1997.  In addition, Mr.
    Hansen was issued 166,667 shares of Common Stock on July 31, 1997 pursuant
    to the terms of the Company's Restricted Stock Plan.  See "Note (8)(a)
    Common Stock".  Also Mr. Hansen received a moving allowance of $15,000 and
    is entitled to the use of a Company auto, or car allowance of $650 per month
    during his employment, as well as certain other benefits, such as health and
    disability insurance.


(13)  Concentration of Credit Risk

         Concentrations of credit risk with respect to trade accounts receivable
    are limited due to the number of entities comprising the Company's customer
    base.  However, trade accounts receivable represent amounts due from
    building materials dealers located principally in Florida and Georgia who
    have purchased products on an unsecured open account basis.  At December 31,
    1997, accounts aggregating $53,000, or approximately 3%  of total gross
    trade accounts receivable were deemed to be ineligible for borrowing
    purposes under the Company's borrowing agreement with its commercial lender.
    The allowance for doubtful accounts at December 31, 1997 of $176,000 is
    considered sufficient to absorb any losses which may arise from
    uncollectible accounts receivable.

         The Company places its cash with high quality commercial banks,
    however, at December 31, 1997, the Company has cash balances with banks in
    excess of Federal Deposit Insurance Corporation insured limits.  Management
    believes the credit risk related to these deposits is minimal.


(14)  Subsequent Event

         Effective as of February 1, 1998, Acrocrete, Inc. acquired the
    property, plant, equipment and inventory of a wholesale distribution
    facility, engaged in the sale of landscape stone and building materials.
    The closing for this transaction occurred on March 2, 1998 for a total
    purchase price of approximately $400,000.

        On March 6, 1998, the Company entered into an agreement with an
    investment banker to provide advisory services to the Company in connection
    with the development of a plan to satisfy the Company's Redeemable
    Preferred Stock dividend arrearage and mandatory sinking fund requirements.
    The investment banker received cash consideration of $25,000 and is
    entitled to receive additional consideration based upon the success of the
    plan




                                                                  Page 37 of 52
<PAGE>
                                      PART III

Item  9.    Changes in and Disagreements with Accountants on Accounting
            and Financial Disclosure

            None

Item 10.    Directors and Executive Officers of the Registrant

               The following table sets forth certain information with respect
          to the directors and executive officers of the Company:

            Name                   Age     Position With Company

            S. Daniel Ponce         49     Chairman of the Board - Class III
            Lisa M. Brock           39     Director - Class III
            Leonard C. Ferri        83     Director - Class II
            Morton L. Weinberger    68     Director - Class II
            Fred H. Hansen          51     President, Premix and Acrocrete
            Howard L. Ehler, Jr.    54     Principal Executive Officer/Executive
                                            Vice President and Secretary
            Betty J. Murchison      58     Principal Accounting Officer/
                                           Assistant Vice President

               The Company's Board of Directors is divided into three classes.
          In accordance with the Company's Certificate of Incorporation, the
          members of each Class are designated to serve for three (3) year
          staggered terms.  Class I directors were to serve until the 1994
          annual meeting or until their successors were elected, Class II
          directors were to serve until the 1995 annual meeting or until their
          successors were elected, and Class III directors were to serve until
          the 1996 annual meeting or until their successors were elected.  The
          Company did not have an annual meeting in 1994, 1995 and 1996.  Class
          I, Class II and Class III directors will serve until the next annual
          meeting to be held by the Company.  The Company has no Class I
          directors.

               Subject to certain contractual rights, each officer serves at the
          discretion of the board of directors.

          S. Daniel Ponce.   Mr. Ponce has been Chairman of the Board of the
             Company since 1988.  Mr.  Ponce has been engaged in the practice of
             law for over twenty   years and is currently a name partner in the
             law firm of Hanzman, Criden, Korge, Chaykin, Ponce & Heise, P.A.
             Mr.  Ponce is a member of the Board of Directors of the University
             of Florida Foundation, Inc. and serves as Chairman of its audit
             committee.  He is also a non-practicing certified public
             accountant.

          Lisa M. Brock.   Mrs. Brock has been a director of the Company since
             1988.  Mrs. Brock  was employed by the Company and its
             subsidiaries, Premix and Acrocrete, as Vice President for over 5
             years until December, 1994 when she retired.  Mrs. Brock continues
             to serve as a consultant to the Company. Mrs.  Brock is the niece
             of Leonard C.  Ferri.



                                                                  Page 38 of 52
<PAGE>
Item 10.    Directors and Executive Officers of the Registrant  (continued)

          Leonard C. Ferri.   Mr. Ferri has been a director of the Company since
             1976.  Mr.  Ferri has been an independent management consultant
             since 1975.  In 1975 Mr. Ferri retired as Managing Director of
             Xerox de Mexico, S.A.  From 1965 to 1970 he served as Managing
             Director of Xerox de Peru, S.A.  For the 19 years prior thereto, he
             was employed by Radio Corporation of America (RCA), the last six
             years as Regional Director - Latin America in RCA's international
             division.  Mr. Ferri is the uncle of Lisa M. Brock.

          Morton L. Weinberger, CPA.   Mr. Weinberger has been a director of the
             Company since 1988.  Mr.  Weinberger, a certified public
             accountant, has been an independent consultant to various
             professional organizations for the past eight years.  He provides
             consulting services  for the Company.  For the previous twenty-five
             years, he was engaged in the practice of public accounting.  During
             such period, he was a partner with Peat Marwick Mitchell & Co., now
             known as KPMG Peat Marwick, and thereafter BDO Seidman, both public
             accounting firms.  In 1985, he served as Executive Vice President
             for Eagle National Bank.  Mr. Weinberger filed a personal petition
             for reorganization under Chapter 11 of the Federal Bankruptcy Act
             in February 1991 and was reorganized and discharged from bankruptcy
             in April 1992.

          Fred H. Hansen.  Mr. Hansen has been President of Premix and Acrocrete
             since September 1996.  Prior thereto, from 1986 to 1996, he was
             employed by Dryvit Systems Canada Ltd., the last six years acting
             as Vice President and General Manager.  From 1982 to 1986, Mr.
             Hansen was the National Sales Manager for W.R. Grace & Co. of
             Canada Ltd., a manufacturer and distributor of building materials.

          Howard L. Ehler, Jr.   Mr. Ehler has been Principal Executive Officer
             of the Company since March 1990 and Executive Vice President, Chief
             Financial Officer and Secretary of the Company since April 1988.
             Prior thereto he was Vice President, Chief Financial Officer and
             Assistant Secretary of the Company for over five years.

          Betty J. Murchison.  Ms. Murchison has been the Principal Accounting
             Officer since June 1995.  Prior thereto, from October, 1991 to June
             1995, she was Principal Accounting Officer of Royce Laboratories,
             Inc., a manufacturer of generic pharmaceutical products.  For over
             25 years prior thereto, she was employed by the Company, the last
             three years acting as the Company's Principal Accounting Officer.

          Board of Directors Meetings and Attendance

               The Board of Directors met five (5) times in fiscal 1997.  Each
          director attended all  of the Board of Directors meetings in 1997.

          Compensation and Stock Option Committee

               Messrs. Ponce, Ferri, Weinberger and Ms. Brock serve on the
          Compensation and Stock Option Committee, with Mr. Ponce serving as
          Chairman.  The Compensation and Stock Option Committee met three (3)
          times in fiscal 1997.  Each member  attended all  of the meetings.


                                                                  Page 39 of 52
<PAGE>
Item 10.    Directors and Executive Officers of the Registrant  (continued)


          Reports Pursuant to Section 16(a) of the Securities and Exchange
          Act of 1934

               The Company's officers and directors are required to file Forms
          3, 4 and 5 with the Securities and Exchange Commission in accordance
          with Section 16(a) of the Securities Exchange Act of 1934, as amended,
          and the rules and regulations promulgated thereunder.  Based solely on
          a review of such reports furnished to the Company as required by Rule
          16a-3(e), in 1997 no officer or director failed to file any such
          report on a timely basis except Mr. Hansen.  Fred H. Hansen filed one
          late Form 4 report relating to one purchase transaction.

Item 11.    Management Remuneration and Transactions

            SUMMARY COMPENSATION TABLE

               The following table summarizes the compensation paid or accrued
          for each of the three fiscal years in the period ended December 31,
          1997 for the Company's chief executive officer and each  other
          executive officer whose total annual salary and bonus exceeded
          $100,000 for any fiscal year, (the "Named Executive Officers").

                                          Annual Compensation
                                                               Long-Term
                                                           Other   Compensation
                                                          Annual    Restricted
                 Name and                                 Compen-      Stock
            Principal Position    Year  Salary  Bonus(1)  sation(2)   Awards(3)
            Howard L. Ehler Jr.   1997 $100,000  $40,000     -        $18,750
             Principal Executive  1996 $ 98,555   32,000     -          3,500
             Officer, Executive   1995 $ 95,685   15,000     -            -
             Vice President and
             Secretary

            Fred H. Hansen        1997 $117,601  $85,000     -        $41,667
             President, Premix    1996   37,000   10,000  $15,000        -
             and Acrocrete        1995     -        -        -           -


    (1)   Bonuses shown were earned in the year indicated even though actually
    paid in a subsequent year.

    (2)   Except as indicated, none of the named individuals above have received
    personal benefits or perquisites that exceed the lesser of $50,000 or 10% of
    the total annual salary and bonus reported for the named executive officer
    in the above table.  Mr. Hansen's Other Annual Compensation in 1996 included
    $15,000 in moving and relocation expenses.  Mr. Hansen's employment began
    September 2, 1996 at an annual salary of $117,601.







                                                                  Page 40 of 52
<PAGE>
Item 11.    Management Remuneration and Transactions  (continued)

          SUMMARY COMPENSATION TABLE  (continued)

    (3)   The restricted stock included in the table in 1997 represents the
    market value of the entire stock award on the date of grant pursuant to the
    terms of the Company's Restricted Stock Plan, even though no shares were
    vested as of such date. As of December 31, 1997, based on the average of the
    bid and asked market price of the Company's Common Stock on that date of
    $.42, Mr.  Ehler held 75,000 shares of restricted stock valued at $31,500,
    and Mr.  Hansen held 166,667 shares of restricted stock valued at $70,000.
    The values indicated are not necessarily indicative of the actual values
    which may be realized by the Named Executive Officers.  Mr. Ehler's
    restricted stock is schedule to vest at the rate of 25,000 shares per year
    over a three year period ending December 31, 1999.  Mr. Hansen's restricted
    stock is scheduled to  vest as follows:  33,333 shares in 1997, 66,667
    shares in 1998, 33,333 shares in 1999, and 33,334 shares in 2000.  The
    restricted stock becomes vested when and if Plan vesting requirements are
    attained.  Dividends are paid on the restricted stock at he same time and
    same rate as paid to all Common Stockholders and such shares may be voted.


          Compensation Agreements

          The Company is party to  a one year renewable employment agreement,
    (the "Employment Agreement") with Howard L.  Ehler, Jr.  (the "Executive").
    Mr.  Ehler serves as Executive Vice President, Principal Executive Officer
    and Chief Financial Officer of the Company at a current base salary of
    $120,000.  The Employment Agreement provides for automatic renewal for
    additional one year periods on July 1st of each year, unless the Company or
    Executive notifies the other party of such party's intent not to renew at
    least 90 days prior to each June 30 of the initial term and any extended
    term thereafter.  The Executive receives a car allowance, as well as certain
    other benefits, such as health and disability insurance.  The Executive is
    also entitled to receive incentive compensation based upon targets
    formulated by the Compensation Committee.

          Prior to a Change in Control (as defined in the Employment
    Agreements), the Company has the right to terminate the Employment
    Agreement, without cause, at any time upon thirty days written notice,
    provided the Company pays to the Executive a severance payment equivalent to
    50% of his then current annual base salary.  As part of the  Employment
    Agreement, the Executive has agreed not to disclose information and not to
    compete with the Company during his term of employment and, in certain
    cases, for a two (2) year period following his termination.

          In the event of a Change in Control, the  Employment Agreement is
    automatically extended to a three year period.  Thereafter, the Executive
    will be entitled to terminate his employment with the Company for any reason
    at  any time.   In  the event  the Executive  so terminates  employment, the








                                                                  Page 41 of 52
<PAGE>
Item 11.    Management Remuneration and Transactions (continued)

            Compensation Agreements (continued)

    Executive will be entitled to receive the lesser of (i) a lump sum equal to
    the base salary payments and all other compensation and benefits the
    Executive would have received had the Employment Agreement continued for the
    full term; or (ii) three times the Executive's base salary then in effect on
    the effective date of termination.  The Executive would also be entitled to
    such severance in the event the Company terminates the Executive without
    cause after a Change of Control.

          In addition, Mr. Ehler was issued 75,000 shares of Common Stock of the
    Company on July 30, 1997 pursuant to the terms of the Company's Restricted
    Stock Plan.  See "Note (8)(a) Common Stock.

          During the third quarter of 1996, the Company entered into an
    employment arrangement with Fred H. Hansen to serve as President of the
    Company's subsidiaries, Premix and Acrocrete.  Mr. Hansen presently receives
    an annual base salary of $150,000 and a bonus based upon earnings
    performance of the subsidiaries.  Under this arrangement, Mr. Hansen
    received 33,333 shares of Common Stock of the Company in February 1997.  In
    addition, Mr. Hansen was issued 166,667 shares of Common Stock on July 31,
    1997 pursuant to the terms of the Company's Restricted Stock Plan.  See
    "Note(8)(a) Common Stock". Also, Mr.  Hansen received a moving allowance of
    $15,000 in 1996 and is entitled, at his election, to the use of a Company
    auto, or car allowance of $650 per month during his employment, as well as
    certain other benefits, such as health and disability insurance.


            Aggregated Option Exercises in Year Ended December 31, 1997

          The following table sets forth certain aggregated option information
    for each of the Named Executive Officers in the Summary Compensation Table
    for the fiscal year ended December 31, 1997.

                                   Number of Shares                 Value
          Name                   Acquired on Exercise             Realized (1)

          Howard L. Ehler, Jr.           83,500                     $12,525
          Fred H. Hansen                   -                           -

      (1)   Represents the difference between the option exercise price and the
            closing market price of the Company's Common Stock on the date of
            exercise.

            Director Compensation

            During the year ended December 31, 1997, each director received an
      annual retainer of $6,000, payable in quarterly installments.  Effective
      June 1, 1994 and January 1, 1995, the Company entered into separate
      consulting agreements with Messrs.  Ferri and Weinberger, and Ms. Brock,
      respectively, to provide various management consulting services to the
      Company.  Each Agreement provides for monthly fees of $833 and may be
      terminated upon 60 days notice by either party.



                                                                  Page 42 of 52
<PAGE>
Item 11.    Management Remuneration and Transactions (continued)

            Director Compensation (continued)


          In May 29, 1997, each director received 35,000 shares of the Company's
    common stock.  The average of the bid and asked market price on said date
    was $.25 per share.  Commencing September 1994 Mr.  Ponce was provided the
    use of a Company car at a cost of approximately $600 per month.


            Compensation Committee Interlocks and Insider Participation

          During the year ended December 31, 1997, the Compensation and Stock
    Option Committee consisted of Messrs. Ponce, Ferri, Weinberger and Ms.
    Brock. None of these directors has been an officer or employee of the
    Company or its subsidiaries during the last ten years, except Ms. Brock, who
    was formerly Vice President of Premix and Acrocrete until December 31, 1994.
    In 1997, the Company paid legal fees to a law firm  in which Mr. Ponce is
    affiliated.  See Item 13 "Certain Relationships and Related Transactions."
    There are no other relationships required to be disclosed pursuant to
    applicable Securities and Exchange Commission rules and regulations.

Item 12.    Security Ownership of Certain Beneficial Owners and Management

          The following table sets forth certain information as of March 2, 1998
    with respect to the beneficial ownership of the Company's equity securities
    by (i) each director or nominee for director of the Company, (ii) each Named
    Executive Officer,  (iii) each person known to the Company to own more than
    5% of such shares, and (iv) all executive officers and directors as a group.
    (Except as otherwise provided herein, the information below is supplied by
    the holder):

                                     Title of        Shares (1)      Percent
                                       Class   Beneficially Owned  of Class (2)
                                    ---------  ------------------  ------------
         Maureen P. Ferri             Common        656,981           10.1%
           7335 Old Elm Drive
           Hialeah, Fl 33015

         Jimmy V. Brabham (3)         Common        332,000            5.1
           412 Rory Street
           Lake Charles, La 70601

         Estate of M.G. Woodward(4)   Preferred      27,000            9.0
           147 Maison Place N.W.
           Atlanta, Ga 30327

         Estate of Latham G. Kays(5)  Preferred      15,275            5.1
           8 Paris Court
           Lake St. Louis, Mo 63367

         Derco Ltd.(6)                Preferred      23,863            8.0
           P.O. Box 1790
           Georgetown Grand Cayman
           Cayman Islands


                                                                  Page 43 of 52
<PAGE>
Item 12.    Security Ownership of Certain Beneficial Owners and Management
            (continued)


                                     Title of        Shares (1)      Percent
                                       Class   Beneficially Owned  of Class (2)
                                    ---------  ------------------  ------------
         Lisa M. Brock                Common        271,506(7)         4.2

         Howard L. Ehler, Jr.         Common        253,245(8)         3.9
                                      Preferred       2,000             .3

         Leonard C. Ferri             Common        213,200            3.3

         Fred H. Hansen               Common        220,000(9)         3.4

         S. Daniel Ponce              Common        476,966(10)        7.2

         Morton L. Weinberger         Common        174,210            2.7

         All directors and officers
           as a group (7 persons)     Common      1,612,745(11)       24.1
                                      Preferred       2,000             .3




   (1)   Except as set forth herein, all securities are directly owned and the
         sole investment and voting power are held by the person named.  Unless
         otherwise indicated, the address for each beneficial owner is the same
         as the Company.

   (2)   The percent of class for preferred stockholders is based on 300,121
         shares of preferred stock outstanding.  The percent of class for
         common stockholders is based upon 6,483,961 shares of common stock
         outstanding and such shares of common stock such individual has the
         right to acquire within 60 days upon exercise of options or warrants
         that are held by such person (but not those held by any other person).

   (3)   Based on the Company's stockholder list at March 2, 1998.  To the
         Company's knowledge, no Schedule 13D has been filed with the
         Securities and Exchange Commission.

   (4)   Based upon oral representations made by the son of such deceased
         stockholder.  To the Company's knowledge, no Schedule 13D has been
         filed with the Securities and Exchange Commission.

   (5)   On August 31, 1992, Latham G. Kays filed a Schedule 13D with the
         Securities and Exchange Commission, indicating he beneficially owns
         15,275 shares of Preferred Stock, or 5.1% of the  outstanding
         Preferred Stock.  In 1995 the Company was advised Mr. Kays had died.







                                                                  Page 44 of 52
<PAGE>
Item 12.    Security Ownership of Certain Beneficial Owners and Management
            (continued)

   (6)   On November 30, 1993, Derco Ltd. submitted a proxy at the Annual
         Meeting of Stockholders, indicating that Derco Ltd. beneficially owned
         an aggregate of 23,863 shares of preferred stock, or 8.0% of the
         outstanding preferred stock.  To the Company's knowledge, no Schedule
         13D has been filed with the Securities and Exchange Commission.

   (7)   Includes  50,000 shares of common stock issuable upon exercise of
         warrants.

   (8)   Includes  50,000 shares of restricted common stock subject to vesting
         requirements.

   (9)   Includes 133,334 shares of restricted common stock subject to vesting
         requirements.

  (10)   Includes 150,000 shares of common stock issuable upon exercise of
         warrants.

  (11)   Includes 200,000 shares of common stock issuable upon the exercise of
         warrants.


Item 13.    Certain Relationships and Related Transactions

               The law firm of Hanzman, Criden, Korge, Chaykin, Ponce & Heise,
          P.A.  in which Mr.  Ponce, the Company's Chairman of the Board, is a
          named partner, currently serves as general counsel to the Company.  In
          addition, the law firm represents the Company in certain asbestos
          litigation.  Approximately 93% of the fees incurred in the asbestos
          litigation are paid directly by the insurance companies.

























                                                                  Page 45 of 52
<PAGE>
                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form_8-K

          (a)  The following documents are filed as part of this report:

          1.  Financial Statements:                                      Page

              Imperial Industries, Inc. and Subsidiaries:

               Report of Independent Certified Public Accountant           17

               Consolidated Balance Sheets - December 31, 1997 and 1996    18

               Consolidated Statements of Operations - Years Ended
                December 31, 1997, 1996 and 1995.                          20

               Consolidated Statement of Changes of Common Stock and
                Other Stockholders' Deficit -  Three Years Ended
                December 31, 1997.                                         21

               Consolidated Statements of Cash Flows -
                Years ended December 31, 1997, 1996 and 1995               22

               Notes to Consolidated Financial Statements                  23

          2.  Financial Statement Schedules:

              II - Valuation and Qualifying Accounts and Reserves          50

          3.  Exhibits

              Incorporated by reference to the Exhibit Index at the
              end of this Report.                                          51

          (b) Reports on Form 8-K:
              No Form 8-K Reports were filed during the last quarter
              of the period covered by this Report.




















                                                                  Page 46 of 52
<PAGE>
                                  EXHIBIT INDEX

   Certain of the following exhibits, designated with an asterisk (*), are filed
herewith.  The exhibits not so designated have been filed previously with the
Commission, and pursuant to 17 C.F.R. Sec. 201.24 and Sec. 230.411, are
incorporated herein by reference to the documents indicated in parentheses
following the descriptions of such exhibits.

Exhibit No.                         Description

   3.1      Restated Certificate of Incorporation of the Company, filed August
             8, 1979 (Registration Statement No.  1-2-65385, Exhibit 3 (a).

   3.2      Certificate of Amendment of Restated Certificate of Incorporation of
             the Company, filed June 16, 1980. (Form 10-Q, quarter ended June
             30, 1980, File No.  1-7190 (unnumbered exhibit)).

   3.3      By-Laws of the Company, as amended (Form 10-K, year ended December
             31, 1980, File No. 1-7190, Exhibit 3).

   3.4      Certificate of Amendment  of Restated Certificate of Incorporation
             of the Company, filed June 20, 1983 (Form 10-Q, quarter ended June
             30, 1983, File No.  1-7190, Exhibit 28).

   4.1      Certificate of Designation, filed February 22, 1983, with respect to
             the Preferred Stock, $1.10 Cumulative Convertible Series (Form 10-K
             for the fiscal year ended December 31, 1982, File No. 1-7190,
             Exhibit 3.4).

   4.2      Warrant Agreement, dated as of February 15, 1983, between the
             Company and Southeast Bank N.A., as Warrant Agent.  (Form 10-K for
             the fiscal year ended December 31, 1982, File No. 1-7190, Exhibit
             4.1).

   4.11     Financing Agreements, dated as of June 20, 1988 between Premix and
             Congress.  (Form 8-K dated June 29, 1988, File No. 1-7190, Exhibit
             10.2)

   4.12     Warrant Agreements as of June 22, 1988 between the Company and two
             of its directors, S. Daniel Ponce and Lisa M.  Brock, formerly Lisa
             M.  Thompson. (Form 8-K dated June 29, 1988, File No.  1-7190,
             Exhibit 10.3)

   10.4     1979 Non-Qualified Stock Option Plan (Registrant Statement No.  2-
             69479, Exhibit 1.D).

   10.5     1984 Stock Option Plan (Form 10-K, year ended December 31, 1984,
             File No. 1-7190, Exhibit 10.5)










                                                                  Page 47 of 52
<PAGE>
                                 EXHIBIT INDEX

Exhibit No.                       Description


   10.8     Agreement dated as of May 16, 1989, between the Company and four
             insurance companies, relating to the defense and indemnity of
             asbestos related personal injury claims against Premix.  (Form 10-
             Q, quarter ended September 30, 1989, File No. 1-7190, Exhibit 10)


   10.12    Employment Agreement dated July 26, 1993 between Howard L.  Ehler,
             Jr. and the Company. (Form 8-K dated July 26, 1993)


  *11       Statement recomputation of earnings per share.

  *21       Subsidiaries of the Company








































                                                                  Page 48 of 52
<PAGE>
                                    SIGNATURES

    Pursuant to the requirements of Section 13 or 15 (d) 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.

                                            IMPERIAL INDUSTRIES, INC.



March 27, 1998              By: S/S Howard L. Ehler, Jr.
                                -----------------------------------------------
                                Howard L. Ehler, Jr., Executive Vice President/
                                       Principal Executive Officer


   Pursuant to the requirements of the Securities and Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.



S/S S. Daniel Ponce         Chairman of the Board of      March 27, 1998
--------------------
S. Daniel Ponce                   Directors


S/S Lisa M. Brock                 Director                March 27, 1998
--------------------
Lisa M. Brock


S/S Leonard C. Ferri              Director                March 27, 1998
--------------------
Leonard C. Ferri



S/S Morton L. Weinberger         Director                 March 27, 1998
--------------------------
Morton L. Weinberger


S/S Fred H. Hansen           President, Premix            March 27, 1998
--------------------
Fred H. Hansen                  and Acrocrete


S/S Howard L. Ehler, Jr.   Executive Vice President,      March 27, 1998
-------------------------
Howard L. Ehler, Jr.          Secretary, Principal
                              Executive Officer and
                             Chief Financial Officer

S/S Betty J. Murchison       Assistant Vice President     March 27, 1998
-------------------------
Betty J. Murchison           and Principal Accounting
                                  Officer
                                                                  Page 49 of 52
<PAGE>

                                IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES
                              Valuation and Qualifying Accounts and Reserves
                              Years ended December 31, 1997, 1996 and 1995

<TABLE>

                                                        Charged     Charged
                                             Balance    to cost    to other                  Balance at
                                           beginning      and      accounts-    Deductions-    end of
       Description                         of period    expenses   describe      describe      period


<S>                                        <C>          <C>        <C>         <C>           <C>
Year ended December 31, 1997:

  Reserves and allowances deducted
   from asset accounts:
  Allowance for doubtful accounts:
   Trade                                    $145,000    $126,000   $   -       $ 95,000(A)   $176,000

Year ended December 31, 1996:

  Reserves and allowances deducted
   from asset accounts:
  Allowance for doubtful accounts:
   Trade                                    $139,000    $ 99,000   $   -       $ 93,000(A)   $145,000

Year ended December 31, 1995:

  Reserves and allowances deducted
   from asset accounts:
  Allowance for doubtful accounts:
   Trade                                    $116,000    $137,000   $   -       $114,000(A)   $139,000

</TABLE>










(A)  Uncollectible accounts written off, net of recoveries.











                                                                  Page 50 of 52
<PAGE>
                                                                   Exhibit 11


                   IMPERIAL INDUSTRIES, INC. AND SUBSIDIARIES

                  Statement Recomputation of Per Share Earnings



   Calculation of (loss) income per share for the years ended December 31, 1997,
1996 and 1995 are as follows:

                                          1997           1996           1995

Income before income taxes             $  892,000    $ 274,000       $ 122,000

Income tax benefit (expense):
  Current                                 (47,000)        -               -
  Deferred                                800,000         -               -
                                       -----------   -----------     -----------
                                          753,000         -               -
                                       -----------   -----------     -----------

Net income                              1,645,000      274,000         122,000

Less:  dividends on redeemable
 preferred stock, $1.10 cumulative
 convertible series                     *(330,000)   *(330,000)      *(330,000)
                                       -----------   ----------      ----------

     Net income (loss) applicable
       to common stockholders          $1,315,000     $(56,000)      $(208,000)
                                       ===========   ==========      ==========


Basic earnings (loss) per
 common share                                $.22        $(.01)          $(.04)
                                       ===========   ==========      ==========

Diluted earnings (loss) per
 common share                                $.21        $(.01)          $(.04)
                                       ===========   ==========      ==========




 * Includes $330,000, of cumulative dividends not declared for each of the years
   ended December 31,  1997, 1996 and 1995.










                                                                  Page 51 of 52
<PAGE>



                                                               Exhibit 21



                             IMPERIAL INDUSTRIES, INC.

                          Subsidiaries of the Registrant

                                 December 31, 1997




                                                          Incorporated
                                                          under laws of

             Acrocrete, Inc.                                  Florida

             Just-Rite Lumber Company, Inc                    Florida

             Premix-Marbletite Manufacturing Co.              Florida

             Triple I Leasing, Inc.                           Florida































                                                                  Page 52 of 52