SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549
                                     
                                 FORM 10-Q
                                     
                                     
              (Mark One)

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


              For the quarterly period ending April 3, 1999

                                    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 1-3834
                                     
                    CONTINENTAL MATERIALS CORPORATION
         (Exact name of registrant as specified in its charter)

                 Delaware                        36-2274391
      (State or other jurisdiction of  (I.R.S. Employer Identification No.)
       incorporation or organization)


        225 West Wacker Drive, Suite 1800, Chicago, Illinois  60606
                  (Address of principal executive office)
                                (Zip Code)
                                     
                                     
                              (312) 541-7200
           (Registrant's telephone number, including area code)


                  (Former name, former address and former
                    year, if changed since last report)
                                     
                                     
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
                                     
Number of common shares outstanding at April 11, 1999    1,043,963

                                     
              THE EXHIBIT FILED WITH THIS REPORT IS ON PAGE 8
                                     
                                     
                      PART I - FINANCIAL INFORMATION
                                     
Item 1.   Financial Statements

                     CONTINENTAL MATERIALS CORPORATION
                   CONDENSED CONSOLIDATED BALANCE SHEETS
                     APRIL 3, 1999 and JANUARY 2, 1999
                                (Unaudited)
                     (000's omitted except share data)
                                     
<TABLE>
<CAPTION>                                     
                                                  APRIL 3,      JANUARY 2,
                                                  1999          1999
<S>                                               <C>           <C>
ASSETS                                                          
Current assets:                                                   
 Cash and cash equivalents                        $      --     $   7,120
 Receivables, net                                    16,361        16,821
 Inventories:                                          
  Finished goods                                      8,761         6,761
  Work in process                                     1,430         1,176
  Raw materials and supplies                          6,254         4,113
 Prepaid expenses                                     2,945         2,695
   Total current assets                              35,751        38,686
                                                       
Property, plant and equipment, net                   22,694        22,105
Other assets:                                          
 Investment in mining partnership                       100           100
 Other                                                2,760         2,726
                                                  $  61,305     $  63,617
                                                       
LIABILITIES                                  
Current liabilities:                                   
 Current portion of long-term debt                $   2,554     $   2,526
 Accounts payable and accrued expenses               14,904        16,695
 Income taxes                                           878         1,271
   Total current liabilities                         18,336        20,492
                                                       
Long-term debt                                        4,307         4,284
Deferred income taxes                                 1,670         1,670
Other long-term liabilities                             982           933
                                                                         
SHAREHOLDERS' EQUITY                                          
Common shares, $0.50 par value; authorized                              
 3,000,000; issued 1,326,588                            663           663
Capital in excess of par value                        3,484         3,484
Retained earnings                                    36,635        35,901
Treasury shares, 278,125 and 254,217, at cost        (4,772)       (3,810)
                                                     36,010        36,238
                                                       
                                                  $  61,305     $  63,617
                                     
</TABLE>
                                     
                                     
                          See accompanying notes
                                     2
                                     
                                     
                                     
                     CONTINENTAL MATERIALS CORPORATION
        CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
        FOR THE THREE MONTHS ENDED APRIL 3, 1999 AND APRIL 4, 1998
                                (Unaudited)
                 (000's omitted except per share amounts)


<TABLE>
<CAPTION>                                                            
                                            APRIL 3,    APRIL 4,
                                            1999        1998
                                                        
<S>                                         <C>         <C>              
Net sales                                   $ 24,332    $ 22,806
                                                               
Costs and expenses:                                            
 Cost of sales (exclusive of depreciation,                     
  depletion and amortization)                 18,375      17,278
 Depreciation, depletion and amortization      1,087       1,020
 Selling and administrative                    3,778       3,510
                                              23,240      21,808
                                                               
Operating income                               1,092         998
                                                               
Interest                                         (67)       (172)
Equity loss from mining partnership               --         (19)
Other income, net                                105          84
                                                               
Income before income taxes                     1,130         891
                                                                
Provision for income taxes                       396         312
                                                               
 Net income                                      734         579
                                                               
Retained earnings, beginning of period        35,901      31,283
                                                               
Retained earnings, end of period            $ 36,635    $ 31,862
                                                        
Basic earnings per share                    $    .69    $    .54
                                                        
     Average shares outstanding                1,061       1,077
                                                        
Diluted earnings per share                  $    .68    $    .53
                                                        
     Average shares outstanding                1,086       1,099
                                                        


</TABLE>


                          See accompanying notes
                                     3
                                     
                                     
                                     
                    CONSOLIDATED MATERIALS CORPORATION
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
        FOR THE THREE MONTHS ENDED APRIL 3, 1999 AND APRIL 4, 1998
                                (Unaudited)
                              (000's omitted)

<TABLE>
<CAPTION>
                                                 APRIL 3,    APRIL 4,
                                                 1999        1998
                                                             
<S>                                              <C>         <C>        
Net cash used by operating activities            $(4,572)    $(1,673)
                                                             
Investing activities:                                        
 Capital expenditures                             (1,636)       (637)
 Proceeds from exercise of stock options              78          --
 Proceeds from sale of property and equipment         --          32
 Investment in mining partnership                     --         (19)
Net cash used in investing activities             (1,558)       (624)
                                                             
Financing activities:                                        
 Borrowings under revolving credit facility           --       1,000
 Capital lease obligation                            101          --
 Repayment of long term debt                         (50)         --
 Payment to acquire treasury stock                (1,041)       (142)
Net cash (used) provided by financing activities    (990)        858
                                                             
Net decrease in cash and cash equivalents         (7,120)     (1,439)
Cash and cash equivalents:                                   
 Beginning of period                               7,120       1,524
                                                             
 End of period                                   $    --     $    85
                                                                   
                                                                   
Supplemental disclosures of cash flow items:                       
Cash paid during the three months for:                             
 Interest                                        $   240     $   175
 Income taxes                                        774          93


</TABLE>








                          See accompanying notes
                                     4



                     CONTINENTAL MATERIALS CORPORATION
               SECURITIES AND EXCHANGE COMMISSION FORM 10-Q
         NOTES TO THE QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS
                        QUARTER ENDED APRIL 3, 1999
                                (Unaudited)
                                     
                                     
                                     
1.The unaudited interim consolidated financial statements included herein
  are prepared pursuant to the rules and regulations for reporting on Form
  10-Q.  Accordingly, certain information and footnote disclosures
  normally accompanying the annual financial statements have been omitted.
  The interim financial statements and notes should be read in conjunction
  with the consolidated financial statements and notes thereto included in
  the Company's latest annual report on Form 10-K.  In the opinion of
  management, the consolidated financial statements include all
  adjustments (none of which were other than normal recurring adjustments)
  necessary for a fair statement of the results for the interim periods.

2.The provision for income taxes is based upon the estimated effective tax
  rate for the year.

3.Operating results for the first three months of 1999 are not
  necessarily indicative of performance for the entire year.  Historically,
  sales of construction materials are higher in the second and third
  quarters.  Overall, sales of heating and air conditioning products have not
  shown strong seasonal fluctuations in recent years although product mix has
  historically yielded higher gross profit margins in the fourth quarter.
  (See Note 12 of Notes to Consolidated Financial Statements in the Company's
  1998 Annual Report.)

4.The following is a reconciliation of the calculation of basic and
  diluted earnings per share (EPS) for the three months ended April 3, 1999
  and April 4, 1998.

<TABLE>
<CAPTION> 
                                                              Per-share
                                         Income               earnings
                                         (loss)     Shares    (loss)
        <S>                              <C>        <C>       <C>
        April 3, 1999                                       
        Basic EPS                        $  734     1,061     $   .69
        Effect of dilutive options           --        25            
        Diluted EPS                      $  734     1,086     $   .68
                                                                     
        April 4, 1998                                       
        Basic EPS                        $  579     1,077     $   .54
        Effect of dilutive options           --        22            
        Diluted EPS                      $  579     1,099     $   .53

</TABLE>

5.The following table presents information about reported segments for
  the three months ended April 3, 1999 and April 4, 1998 along with the items
  necessary to reconcile the segment information to the totals reported in
  the financial statements.




                                     5
<TABLE>
<CAPTION>
                     Heating                                          
                     and Air       Construction  All    Unallocated 
                     Conditioning  Materials     Other  Corporate    Total
<S>                  <C>           <C>           <C>    <C>          <C>    
1999                                                                       
Revenues from                                                              
external customers   $10,132       $14,162       $  36  $     2      $24,332
Segment operating                                                            
income                   354         1,444          11     (717)       1,092
Segment assets        28,416        31,035         173    1,681       61,305
                                                                              
1998                                                                         
Revenues from                                                              
external customers   $10,332       $12,438       $  36  $     -      $22,806
Segment operating                                                         
income                   488         1,151          10     (651)         998
Segment assets        27,094        27,616         731    1,567       57,008

</TABLE>

There are no differences in the basis of segmentation or in the basis of
measurement of segment profit or loss from the last annual report.

6.On April 14,1999, the Company's Board of Directors approved a 1-for-50
  reverse stock split to be immediately followed by a 100-for-1 forward stock
  split.  The splits are subject to shareholder approval.  If approved, the
  stock splits would occur following the market close on June 7, 1999, or as
  soon thereafter as practicable.


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


   Financial Condition (See pages 2 and 4)

   Operations for the first three months of 1999 used $4,572,000 in cash
   compared to $1,673,000 in 1998.  The increase in cash used is mainly
   attributed to changes in accounts receivable, inventories and accrued
   expense and payables balances.  The decrease in the accounts receivable
   and increase in liability balances is largely due to the timing of
   receipts and payments, while the increase in inventories reflects the
   build up of inventory levels in the heating and air conditioning
   segment related to abnormally low levels of furnaces at 1998 year end.
   
   The Company estimates that its short-term line of credit (of which none
   was outstanding at April 3, 1999) will be adequate to meet its cash
   requirements for the foreseeable future.  Historically, the Company's
   borrowings against the short-term line peak during the second quarter
   and decline over the remainder of the year.


   Operations - Comparison of Quarter Ended April 3, 1999 to Quarter Ended
   April 4, 1998 (See page 3)

   Consolidated net sales increased $1,526,000 (6.7%).  The construction
   materials segment accounted for the entire increase, $1,724,000
   (13.9%), which can be attributed to mild weather and the continuing
   high level of construction activity along the Front Range in southern
   Colorado.  A small decrease in the sales of the heating and air
   conditioning segment, $200,000 (2.0%), dampened the overall growth.
   
   
                                     6
   
   
   
   Consolidated cost of sales (exclusive of depreciation and depletion) as
   a percentage of sales decreased slightly from 75.8% to 75.5%.  The
   decrease was due to the improved sales in the construction materials
   segment.

   Selling and administrative expenses increased $268,000 (7.6%) and as a
   percentage of sales from 15.4% to 15.5%. The slight increase in
   percentage is related to the introduction of a new combination cooling
   and heating product.

   Although, historically, the Company has experienced operating losses
   during the first quarter, this pattern has changed in recent years
   mainly due to the strong performance of the construction materials
   segment which has benefited from the continuing strong economy and mild
   weather along the Front Range of southern Colorado.  Additionally, the
   fan coil product line, of the heating and air conditioning segment,
   continues to grow and shows little seasonality.
   
   
   YEAR 2000 COMPLIANCE
   
   The year 2000 issue relates to the way computer hardware and software
   define calendar dates; many use only two digits to represent the year
   which could cause failures or miscalculations.  In addition, many
   systems and equipment that are not typically thought of as "computer-
   related" (referred to as "non-IT") contain imbedded hardware or
   software that may include a time element.  The Year 2000 issue can
   arise at any point in the Company's supply, manufacturing, processing,
   distribution and financial chains.  As a result, the Company is at risk
   of disruptions to its business operations from possible miscalculations
   or system failures occurring not only in its own equipment and
   software, but those occurring in any business or governmental entity
   that the Company relies on for goods or services.

   The Company has completed a study, with the assistance of external
   consultants, to evaluate the Company's current internal information and
   financial systems.  The Company concluded that the majority of the
   existing systems were not Year 2000 compliant.  We have therefore
   undertaken to implement a Year 2000 compliant enterprise resource
   planning (ERP) system to replace all non-compliant systems as well as
   to modernize and integrate all of the Company's systems.  The majority
   of the hardware utilized by the Company, including all that may be Year
   2000 non-compliant, has been replaced.  Work on the project began in
   the second quarter of 1998 and is expected to be completed during the
   third quarter of 1999.  The cost of the entire project is currently
   estimated at $3,300,000 including hardware, software, consulting fees
   and other out-of-pocket expenses.  Approximately $2,800,000 has been
   incurred to date.  Funding will be furnished by a lease of
   approximately $1,500,000 with the balance provided by operating cash
   flow.  The cost of the project is not expected to have a significant
   negative impact on the Company's future financial results.
   
   A review has been undertaken to assess and correct Year 2000 issues
   affecting both our products and non-IT systems and equipment used in
   our businesses.  At the present time, the Company has not identified
   any products that would not be Year 2000 compliant.
   
   We rely on third party suppliers for raw materials, water, utilities,
   transportation and other key services.  Interruption to any of their
   operations due to Year 2000 issues could affect the operations of our
   Company.  We have initiated efforts to ascertain the level of
   preparedness of this group.  We have found some of these entities less
   willing to provide information concerning their state of readiness.
   Alternative sources of raw materials and certain other services have
   been identified, where possible, to help mitigate any impact
   
                                     7
   
   
   
   due to disruptions at any of our key suppliers.  While we believe that
   the steps we have taken should reduce the adverse effect on our Company
   of any such disruptions, the interdependent nature of the Company and
   its suppliers, service providers, utilities and governmental agencies
   is such that a disruption at one or more suppliers could have material
   adverse consequences.
   
   We are also dependent upon our customers for sales and cash flow.  Year
   2000 interruptions in our customers' operations could result in reduced
   sales, increased inventory or receivable levels and cash flow
   reductions.  While these events are possible, we believe our customer
   base is broad enough to minimize the affects to our Company of system
   disruptions at some customers' operations.  We are, however, taking
   steps to contact and monitor the status of our larger customers as a
   means of determining risks and alternatives.
   
   At this time, we have not learned of any potential exposures from
   external, non-compliant third party suppliers or customers.



PART II - Other Information

Item 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits:

          Exhibit 27:  Financial data schedule

          (b)  Registrant filed no reports on Form 8-K during the quarter
               ended April 3, 1999.




                                 SIGNATURE
                                     
                                     
                                     
Pursuant to the requirement 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.


                                 CONTINENTAL MATERIALS CORPORATION




Date:     May 13, 1999      By:   /S/ Joseph J. Sum
                                  Joseph J. Sum, Vice President
                                  and Chief Financial Officer

                                     8