FORM 10-Q

                   SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C.  20549


(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

           For the quarterly period ended      March 31, 1997
                                          -------------------------

                                   OR
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from ______________ to ______________


                     Commission File Number 0-13817


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


        Delaware                                 84-8963939              
----------------------------         ------------------------------------
(State or other jurisdiction         (I.R.S. Employer Identification No.)
of incorporation or organization)


129 N. Main Street      Yale, Michigan                           48097   
----------------------------------------                       ----------
(Address of principal executive offices)                       (Zip Code)


   (Registrant's telephone number, including area code) (810) 387-4300
                                                        --------------

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

As of March 31, 1997, the Company had 4,573,637 shares of its $.005 Par
Value Common Stock outstanding.

<PAGE>

                        MARGATE INDUSTRIES, INC.

                                FORM 10-Q


                                  INDEX
                                  -----


PART I:     Financial Statements                                   Page(s)
-------     --------------------                                   -------


Item 1.     Financial Information


                 Consolidated Balance Sheets . . . . . . . . . . . . .3-4


                 Consolidated Income Statement . . . . . . . . . . . . .5


                 Consolidated Statements of Changes in
                   Stockholders' Equity. . . . . . . . . . . . . . . . .6


                 Consolidated Statements of Cash Flows . . . . . . . . .7


                 Notes to Consolidated Financial
                   Statements. . . . . . . . . . . . . . . . . . . . 8-11



Item 2.          Management's Discussion and Analysis of Financial
                   Condition and Results of Operations . . . . . . . . 12



PART II:         Other Information . . . . . . . . . . . . . . . . . . 13
-------          -----------------



<PAGE>


                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS
                -----------------------------------------


                                                   March 31     December 31
                                                    1997           1996
                                                  ----------     ----------
                                                  (Unaudited)
ASSETS
------


CURRENT ASSETS

   Cash and cash equivalents                     $    8,890     $    2,086 

   Accounts receivable:

      Trade                                         782,578        595,603 
      Related party                               1,160,022        990,970 


   Notes receivable - related party                  22,250         22,250 

   Inventories - parts and supplies                 122,964         32,464 

   Prepaid expenses and other                       124,545         84,133 

   Prepaid Federal income tax                       168,300        264,300 

   Deferred tax asset                                14,300         14,300 
                                                 ----------     ---------- 

         Total Current Assets                     2,403,849      2,006,106 

Investment in New Haven Foundry                           0              0 

Other                                                46,235         59,135 

Notes receivable - related party                     13,350         17,800 


PROPERTY, PLANT AND EQUIPMENT
   At cost net of accumulated depreciation
   and amortization of $1,063,705 and
   $981,705 at March 31, 1997 and
   December 31, 1996, respectively                4,171,522      4,112,295 
                                                 ----------     ---------- 

         Total Assets                            $6,634,956     $6,195,336 
                                                 ==========     ========== 





See Notes to Consolidated Financial Statements.

                                   -3-

<PAGE>

                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED BALANCE SHEETS (Continued)
                -----------------------------------------


                                                   March 31     December 31
                                                    1997           1996
                                                  ----------     ----------
                                                  (Unaudited)

LIABILITIES & STOCKHOLDER'S EQUITY
----------------------------------


CURRENT LIABILITIES

   Notes payable                                 $  861,000     $  582,000 
   Current portion of long-term debt                202,916        462,914 
   Accounts payable                                 537,302        513,071 
   Accrued salaries and wages                        47,935         42,000 
   Accrued workers' compensation                      6,860          6,654 
   Accrued single business tax                            0              0 
   Other accrued liabilities                          2,054          2,841 
                                                 ----------     ---------- 

         Total Current Liabilities                1,658,067      1,609,480 

DEFERRED TAX LIABILITY                              207,200        207,200 

OTHER POSTRETIREMENT BENEFITS                       371,957        371,957 

NOTES PAYABLE                                       549,917        344,231 

STOCKHOLDERS' EQUITY

   Common stock, $.005 par value per
      share; 25,000,000 shares authorized,
      4,573,637 and 4,573,637 shares issued
      and outstanding at March 31, 1997 and
      December 31, 1996, respectively                22,868         22,868 
   Paid in for common stock in excess
      of par value                                7,410,725      7,410,725 
   Accumulated deficit                           (3,585,778)    (3,771,125)
                                                 ----------     ---------- 

         Total Stockholders' Equity               3,847,815      3,662,468 

         Total Liabilities and
           Stockholders' Equity                  $6,634,956     $6,195,336 
                                                 ==========     ========== 









See Notes to Consolidated Financial Statements

                                   -4-

<PAGE>

                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                     CONSOLIDATED INCOME STATEMENTS
                -----------------------------------------
                               (Unaudited)
                                                     Three Months Ended
                                                          March 31,
                                                     1997           1996
                                                  ----------     ----------

NET SALES (including related party
   sales and commissions of 
   $2,155,408, and $1,950,044 
   during the three months ended 
   March 31, 1997 and 1996, respectively)        $3,136,841     $2,454,700 

COST OF SALES                                     2,570,858      2,065,155 
                                                 ----------     ---------- 

   Gross profit                                     565,983        389,545 

SELLING, GENERAL AND ADMINISTRATIVE
   EXPENSES                                         256,132        210,156 

RELATED PARTY SERVICES AND 
   SALES COMMISSIONS                                      0          1,471 
                                                 ----------     ---------- 

   Income from operations                           309,851        177,918 

INTEREST AND DIVIDEND INCOME                            876         11,149 

INTEREST EXPENSE                                     29,380         13,607 
                                                 ----------     ---------- 

   Net income before income taxes
      and equity in income of
      investee companies                            281,347        175,460 

PROVISION FOR FEDERAL INCOME TAXES                   96,000         59,000 
                                                 ----------     ---------- 

   Income before equity in income
      (loss) of investee companies                  185,347        116,460 

EQUITY IN INCOME (LOSS) OF 
   INVESTEE COMPANIES                                     0        (64,000)
                                                 ----------     ---------- 

   Net income                                    $  185,347     $   52,460 
                                                 ==========     ========== 

EARNINGS PER COMMON SHARE:

   Primary                                       $    0.041     $    0.011 
   Fully diluted                                 $    0.040     $    0.011 







See Notes to Consolidated Financial Statements.

                                   -5-

<PAGE>

                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
       CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
       ----------------------------------------------------------
                               (Unaudited)

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED MARCH 31, 1997

                                COMMON STOCK       PAID IN FOR
                                ------------       COMMON STOCK
                             NUMBER                IN EXCESS OF  ACCUMULATED    STOCKHOLDERS'
                            OF SHARES   AMOUNT      PAR VALUE      DEFICIT         EQUITY  
                            ---------   ------      ---------     ---------      -----------

<S>                         <C>        <C>          <C>          <C>            <C>
Balance - January 1, 1997   4,573,637  $   22,868   $7,410,725   $(3,771,125)   $3,662,468 

Net income                         --          --           --       185,347       185,347 
                           ----------  ----------   ----------    ----------    ---------- 

Balance - March 31, 1997    4,573,637  $   22,868   $7,410,725   $(3,585,778)   $3,847,815 
                           ==========  ==========   ==========    ==========    ========== 
</TABLE>




<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED MARCH 31, 1996

                                COMMON STOCK       PAID IN FOR
                                ------------       COMMON STOCK
                             NUMBER                IN EXCESS OF  ACCUMULATED    STOCKHOLDERS'
                            OF SHARES    AMOUNT     PAR VALUE      DEFICIT         EQUITY  
                            ---------    ------     ---------     ---------      -----------

<S>                         <C>        <C>          <C>          <C>            <C>
Balance - January 1, 1996   4,653,637  $   23,268   $7,499,980   $(3,056,324)   $4,466,924 

Repurchase of common stock    (50,000)       (250)     (52,402)           --       (52,652)

Net income                         --          --           --        52,460        52,460 
                           ----------  ----------   ----------    ----------    ---------- 

Balance - March 31, 1996    4,603,637  $   23,018   $7,447,578   $(3,003,864)   $4,466,732 
                           ==========  ==========   ==========    ==========    ========== 
</TABLE>










See Notes to Consolidated Financial Statements.

                                   -6-

<PAGE>

                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                -----------------------------------------
                               (Unaudited)

                                                     Three Months Ended
                                                          March 31,
                                                     1997           1996
                                                  ----------     ----------

INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS

OPERATING ACTIVITIES                             $  (81,107)    $  129,539 

INVESTING ACTIVITIES:

   Proceeds from sale of securities                      --         12,500 
   Purchase of plant and equipment                 (141,227)      (481,912)
                                                 ----------     ---------- 

Net cash used in investing activities              (141,227)      (469,412)

FINANCING ACTIVITIES:

   Net proceeds from short-term loan                279,000             -- 
   Purchase of common stock                              --        (52,652)
   Proceeds from issuance of common stock                --             -- 
   Principal payments under long-term
    obligations                                     (54,312)       (88,483)
   Proceeds from long-term obligations                   --        400,000 
   Proceeds from notes receivable                     4,450             -- 
                                                 ----------     ---------- 

Net cash provided by (used in)
 financing activities                               229,138        258,865 
                                                 ----------     ---------- 

NET INCREASE (DECREASE) IN CASH AND
   CASH EQUIVALENTS                                   6,804        (81,008)

CASH AND CASH EQUIVALENTS - Beginning                 2,086        513,700 
                                                 ----------     ---------- 

CASH AND CASH EQUIVALENTS - Ending               $    8,890     $  432,692 
                                                 ==========     ========== 
















See Notes to Consolidated Financial Statements.

                                   -7-

<PAGE>

                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               ------------------------------------------

NOTE 1 -  SIGNIFICANT ACCOUNTING POLICIES
          The consolidated Balance Sheet as of March 31, 1997 and the
          related Consolidated Statements of Operations, Changes in
          Stockholders' Equity, and Cash Flows for the three months ended
          March 31, 1997 and 1996 are unaudited.  In the opinion of
          management, all adjustments necessary for a fair presentation of
          such financial statements have been included.  The results of
          operations for the three months ended March 31, 1997 and 1996 are
          not necessarily indicative of the results to be expected for the
          whole year.

          The notes to the financial statements are presented as permitted
          by Form 10-Q and do not contain certain information included in
          the Company's annual financial statements.

NOTE 2 -  INVESTMENT IN UNCONSOLIDATED COMPANY
          The Company accounts for its 45% investment in New Haven Foundry
          ("NHF") using the equity method.  Summarized financial
          information of NHF is as follows: (No recognition of Income to
          Margate will be recorded until NHF achieves positive
          Stockholders' Equity.)
                                                           NHF
                                                           ---
                                                  March 31,    December 31,
                                                    1997           1996
                                                 ----------     ----------

Assets

   Current assets                               $15,525,209    $14,085,521 
   Property, plant and equipment, net
      of accumulated depreciation                12,133,736     12,282,716 
   Other assets                                     392,000        392,000 
                                                 ----------     ---------- 

Total Assets                                    $28,050,945    $26,760,237 
                                                 ==========     ========== 

Liabilities and Stockholders' Equity

   Current liabilities                          $19,934,995    $17,407,355 
   Non-current liabilities                        8,805,005     10,325,990 
   Stockholders' equity                            (689,055)      (973,108)
                                                 ----------     ---------- 

Total Liabilities and
 Stockholders' Equity                           $28,050,945    $26,760,237 
                                                 ==========     ========== 


                                                            NHF
                                                            ---
                                                     Three Months Ended
                                                         March 31,
                                                    1997           1996
                                                 ----------     ----------
Net Sales                                       $15,589,000    $16,711,000 
Operating expenses                               15,100,000     16,713,000 
                                                 ----------     ---------- 
   Income (loss)
      before income taxes                           489,000         (2,000)
Income taxes                                        205,000        140,000 
                                                 ----------     ---------- 

   Net income (loss)                             $  284,000     $ (142,000)
                                                 ==========     ========== 

Net income (loss) per
   share of common stock                         $     4.31     $    (2.15)
                                                 ==========      ========= 

                                   -8-

<PAGE>


NOTE 3 -  DIVIDENDS
          The Company paid dividends for the first two quarters of 1995,
          but suspended dividends thereafter.

NOTE 4 -  STATEMENTS OF CASH FLOWS
          A reconciliation of net income to net cash flows provided by
          operating activities is as follows:

                                                    Three Months Ended
                                                         March 31,
                                                        (unaudited)
                                                    1997           1996
                                                 ----------     ----------

Net income                                       $  185,347     $   52,460 
Adjustments to reconcile net income to
   net cash from operating activities:
      Equity in (income) loss
         of investee company                             --         64,000 

      Depreciation and amortization                  82,000         56,400 

      Changes in assets and liabilities:
         Accounts receivable
           - Trade                                 (186,975)       148,277 
           - Related parties                       (169,052)      (242,007)
         Inventories                                (90,500)       (19,315)
         Prepaid expenses                           (40,412)        (7,817)
         Prepaid Federal tax                         96,000         59,000 
         Other assets                                12,900             -- 
         Accounts payable                            24,231        128,540 
         Accrued workers' compensation                  206       (107,095)
         Accrued single business tax                     --         (1,500)
         Accrued salaries and wages                   5,935         15,708 
         Other liabilities                             (787)       (17,112)
                                                 ----------     ---------- 


           Net cash used by
            operating activities                 $  (81,107)    $  129,539 
                                                 ==========     ========== 


NOTE 5 -  EARNINGS PER SHARE
          The weighted average number of shares used to compute the net
          income per shares was 4,583,637 and 4,673,307 fully diluted for
          the three month periods ended March 31, 1997 and March 31, 1996,
          respectively.

NOTE 6 -  CONTINGENT LIABILITY
          NHF has received authorization from the Internal Revenue Service
          to defer funding requirements for its hourly pension plans for
          the years 1981 through 1984 and 1986.  The deferred obligations
          are being funded over a 15 year period.  The Pension Benefit
          Guaranty Corporation had required that the Company guarantee the
          deferred obligations and has second and third liens on all
          Company assets as collateral for the funding waivers. 
          Accordingly, the Company is contingently liable for the following
          contributions, including interest, to be made by NHF in future
          years against the deferred portion of the pension obligation.

                                   -9-

<PAGE>

                         Years                 Annual Contribution
                         -----                 -------------------
                         1997                             191,878
                         1998                             126,209
                     1999 and 2000                         60,422

NOTE 7 -  ENVIRONMENTAL MATTERS
          NHF, the Company's 45%-owned equity investee, is party to an
          action brought by PIRGIM and the United States of America
          ("U.S.") which alleges that NHF discharged potentially
          contaminated water into a stream which flows to settling ponds
          they maintain, in violation of the Federal Clean Water Act.  NHF
          estimates that a civil penalty approximating $500,000 will be
          incurred by NHF to settle the litigation and the Company has
          provided reserves for this amount.

          NHF is party to an action brought by the U.S. and is also
          currently negotiating with the Michigan Department of
          Environmental Quality ("MDEQ") regarding alleged violations of
          environmental laws pertaining to air and waste issues, including
          used foundry sand on its property.  NHF is negotiating a consent
          decree with these agencies which encompasses most of these
          alleged violations and is also working with the MDEQ to resolve
          any remaining alleged violations.

          NHF has identified several options to remediate the sand
          including on-site treatment or capping in place.  Costs
          associated with these alternatives are currently estimated to
          range from $2,100,000 to $2,500,000, and NHF has recorded a
          reserve of $2,500,000, of which $1,800,000 was provided in the
          current year.  The low estimate of the range assumes that no
          additional portions of the sand pile will contain heavy metals
          exceeding environmental standards.  Although the ultimate outcome
          of this matter is not known at this time, on the basis of
          investigations performed to date by the Company and its
          environmental consultants, NHF does not believe that future costs
          associated with remedial action in excess of reserves provided
          with ultimately have a materially adverse impact on the Company's
          financial position or future results of operations.

NOTE 8 -  NOTES PAYABLE
          Notes payable consist of the following at March 31, 1997:

          Note payable bank, due in monthly
          principle installments of $7,583,
          plus interest at prime in payment
          of loan guarantee for investment
          in CEDS, uncollateralized, maturing
          December 31, 1998.                             $166,833

          Note payable Ft. Atkinson, due in
          monthly installments of $3,992,
          including interest at 4% through
          July 2003.                                      270,656

          Note payable bank, due in monthly
          installments of $8,300, including
          interest at 9% maturing January 2000.
          The note is collateralized by the
          general assets of the Company.                  315,344
                                                         --------
                                                          752,833

          Less current portion                            202,916
                                                         --------
                                                          549,917
                                                         ========




                                  -10-

<PAGE>

          Maturities of notes payable obligations are as follows:

          Year ended March 31:
            1998:                    $202,916
            1999:                     196,251
            2000:                     129,635
            2001:                     112,900
            Thereafter                111,131
                                     --------
                                     $752,833
                                     ========

          The Company maintains a bank line of credit of $1,000,000 for
          working capital requirements.  The applicable interest rate is at
          the prime lending rate, currently 8.5% at March 31, 1997.  The
          line of credit is secured by all accounts receivable, inventories
          and equipment of the Company.  Additionally, certain required
          financial ratios must be maintained.  The Company is in
          compliance with all covenant requirements as of March 31, 1997. 
          The Company has borrowings against the line of $861,000 and $0 at
          March 31, 1997 and 1996, respectively.

NOTE 9 -  OTHER MATTERS
          In February and March 1996, the Company repurchased 30,000 and
          20,000 shares, respectively, of its common stock in the open
          market.  The shares have been returned to treasury.









                                  -11-

<PAGE>

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          ---------------------------------------------------------------
          RESULTS OF OPERATIONS
          ---------------------

     The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial condition
and results of operation during the periods included in the accompanying
consolidated financial statements for the three (3) months ended March 31,
1997.

LIQUIDITY & CAPITAL RESOURCES
-----------------------------

     The Company has prepaid Federal Income Taxes of $168,300 as of March
31, 1997.

     The Company has a consolidated line of credit of $1,000,000 with
monthly interest payments at the prime rate with the National Bank of
Detroit.  The line is collateralized by substantially all assets. 
Borrowings as of March 31, 1997 was $861,000.

RESULTS OF OPERATIONS
---------------------

     The Company is reporting year-to-date pre-tax profit on operations of
$281,647 for the three months ended March 31, 1997 as compared to a
$175,460 for the same period in 1996.  Net sales, year-to-date, as of March
31, 1997 were approximately $3,136,841; which represents an increase of
27.8% from 1996 sales through March 31, 1996 of $2,454,700.  The Company
has recognized equity in the loss of its investee company, NHF of $0 for
the three months ended March 31, 1997 compared to a loss of $64,000 for the
same period in 1996.

     The cost of sales for the three months ended March 31, 1997 as a
percentage of sales was 82.0% as compared to 84.1% for the same period in
1996.

     Selling, General and Administrative for the three months ended March
31, 1997 as a percentage of sales was 8.2% as compared to 8.6% for the same
period in 1996.

     Management anticipates comparable results for the next three (3)
months of the year.









                                  -12-

<PAGE>

                                 PART II

Item 1.   Legal Proceedings
          -----------------

               None

Item 2.   Changes in Securities
          ---------------------

               None

Item 3.   Defaults Upon Senior Securities
          -------------------------------

               None

Item 4.   Submission of Matters to a Vote of Securities Holders
          -----------------------------------------------------

               An Annual Meeting of Shareholders is scheduled for June 30,
               1997 for the election of Directors.

Item 5.   Other Information
          -----------------

               None

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

               None









                                  -13-

<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.

MARGATE INDUSTRIES, INC.



By: /s/ William H. Hopton
   ---------------------------
     William H Hopton

Date:     May 1, 1997









                                  -14-