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 4,1998
                                
                               OR
                                
        [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
          15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
                                
           For the transition period from          to

                  Commission File number 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
incorporation or organization)          Identification No.)

                                
   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 21, 1998......1,075,149
                                
                                
         THE EXHIBIT FILED WITH THIS REPORT IS ON PAGE 8
                                
<PAGE>                                
                 PART I - FINANCIAL INFORMATION
                                
Item 1.   Financial Statements

                CONTINENTAL MATERIALS CORPORATION
              CONDENSED CONSOLIDATED BALANCE SHEETS
                APRIL 4, 1998 and JANUARY 3, 1998
                           (Unaudited)
                (000's omitted except share data)
                                
<TABLE>
<CAPTION>                                
                                         APRIL 4,       JANUARY 3,
                                           1998            1998
<S>                                      <C>            <C>         
ASSETS                                                                
Current assets:                                                       
 Cash and cash equivalents               $     85       $  1,524
 Receivables, net                          16,992         13,882
 Inventories:                                                    
  Finished goods                            9,179          8,562
  Work in process                           1,527          1,471
  Raw materials and supplies                4,573          4,260
 Prepaid expenses                           2,612          2,343
   Total current assets                    34,968         32,042
                                                                 
Property, plant and equipment, net         19,224         19,581
Other assets:                                                  
 Investment in mining partnership             600            600
 Other                                      2,216          2,132
                                         $ 57,008       $ 54,355
                                                                 
          LIABILITIES                                            
Current liabilities:                                           
 Bank loan payable                       $  1,000       $     --
 Current portion of long-term debt          1,900          1,900
 Accounts payable and accrued expenses     12,393         11,327
 Income taxes                                 441            222
   Total current liabilities               15,734         13,449
                                                               
Long-term debt                              6,400          6,400
Deferred income taxes                       1,722          1,722
Other long-term liabilities                   857            926
                                                                  
          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                          31,862         31,283
Treasury shares, 251,439, at cost          (3,714)        (3,572)
                                           32,295         31,858
                                                               
                                         $ 57,008       $ 54,355
</TABLE>
                             
                                
                                
                     See accompanying notes
                                2
<PAGE>                                
                                
                CONTINENTAL MATERIALS CORPORATION
   CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
   FOR THE THREE MONTHS ENDED APRIL 4, 1998 AND MARCH 29, 1997
                           (Unaudited)
            (000's omitted except per share amounts)


<TABLE>
<CAPTION>
                                                             
                                               APRIL 4,     MARCH 29,
                                                 1998         1997
                                                                    
<S>                                            <C>          <C>       
Net sales                                      $ 22,806     $ 20,905
                                                                    
Costs and expenses:                                                 
 Cost of sales(exclusive of depreciation,                           
  depletion and amortization)                    17,278       16,450
 Depreciation, depletion and amortization         1,020          879
 Selling and administrative                       3,510        3,621
                                                 21,808       20,950
                                                                      
                                                                     
Operating income (loss)                             998          (45)
                                                                      
Interest                                           (172)        (180)
Equity loss from mining partnership                 (19)         (28)
Other income, net                                    84          185
                                                                      
Income (loss) before income taxes                   891          (68)
                                                                      
Provision (credit) for income taxes                 312          (26)
                                                                      
 Net income (loss)                                  579          (42)
                                                                     
Retained earnings, beginning of period           31,283       28,173
                                                                     
Retained earnings, end of period               $ 31,862     $ 28,131
                                                                       
Basic earnings (loss) per share                $    .54     $   (.04)
                                                                      
Average shares outstanding                        1,077        1,103
                                                                    
Diluted earnings (loss) per share              $    .53     $   (.04)
                                                                    
Average shares outstanding                        1,098        1,121

</TABLE>

                     See accompanying notes
                                3
<PAGE>
                                
               CONSOLIDATED MATERIALS CORPORATION
              CONSOLIDATED STATEMENTS OF CASH FLOWS
   FOR THE THREE MONTHS ENDED APRIL 4, 1998 AND MARCH 29, 1997
                           (Unaudited)
                         (000's omitted)



<TABLE>
<CAPTION>
                                               APRIL 4,     MARCH 29,
                                                 1998          1997
                                                                      
<S>                                            <C>          <C>        
Net cash used by operating activities          $ (1,673)    $ (5,814)
                                                                    
Investing activities:                                               
 Capital expenditures                              (637)        (645)
 Proceeds from sale of property and equipment        32            8
 Investment in mining partnership                   (19)         (28)
Net cash used in investing activities              (624)        (665)
                                                                    
Financing activities:                                               
 Borrowings under revolving credit facility       1,000        6,100
 Payment to acquire treasury stock                 (142)          --
Net cash provided by financing activities           858        6,100
                                                                    
Net decrease in cash and cash equivalents        (1,439)        (379)
Cash and cash equivalents:                                          
 Beginning of period                              1,524          379
                                                                    
 End of period                                 $     85     $     --
                                                                    
                                                                    
                                                                    
Supplemental disclosures of cash flow items:                        
Cash paid during the three months for:                              
 Interest                                       $   175     $    199
 Income taxes                                        93          180



</TABLE>






                     See accompanying notes
                                4
<PAGE>

                CONTINENTAL MATERIALS CORPORATION
          SECURITIES AND EXCHANGE COMMISSION FORM 10-Q
    NOTES TO THE QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS
                   QUARTER ENDED APRIL 4, 1998
                           (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 1998 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 1997 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 4, 1998 and March 29, 1997.

<TABLE>
<CAPTION>
                                                                  Per-share
                                  Income (loss)     Shares     earnings (loss)
    <S>                             <C>              <C>          <C> 
    April 4, 1998                                                           
    Basic EPS                       $  579           1,077        $   .54
    Effect of dilutive options          --              21                
    Diluted EPS                     $  579           1,098        $   .53
                                                                          
    March 29, 1997                                                       
    Basic EPS                       $  (42)          1,103        $  (.04)
    Effect of dilutive options          --              18               
    Diluted EPS                     $  (42)          1,121        $  (.04)
</TABLE>

5.The Company adopted Statement of Financial Accounting Standards (SFAS) No.
  130, "Reporting Comprehensive Income" as of January 4, 1998.  Since the
  Company has no components of comprehensive income for the periods
  presented, there is no effect of the adoption reflected in the financial
  statements.





                                5
<PAGE>

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 1998 used $1,673,000
   in cash compared to $5,814,000 in 1997.  The decrease in cash
   used is mainly attributed to changes in accrued expense and
   payables balances.  The increase in these balances is largely
   due to the timing of paymemts.
   
   The Company estimates that its short-term line of credit (of
   which $1,000,000 was outstanding at April 4, 1998) 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.

   In June 1997, the Financial Accounting Standards Board (FASB)
   issued SFAS No. 131, "Disclosures about Segments of an Enterprise
   and Related Information."  In February 1998, the FASB issued
   SFAS No. 132, "Employers' Disclosure about Pensions and Other
   Postretirement Benefits."  The Company has not yet  adopted these
   pronouncements, but does not expect that they will have a material
   impact on the Company's financial position or results of operations.

   Operations - Comparison of Quarter Ended April 4, 1998 to
   Quarter Ended March 29, 1997 (See page 3)

   Consolidated net sales increased $1,901,000 (9.1%).  The
   increase in the construction materials segment of $2,219,000
   (21.7%) is attributed to mild weather and the continuing high
   level of construction activity along the Front Range in
   southern Colorado.  A decrease in the heating and air-conditioning
   segment sales of $318,000 (3.0%) was due to depressed sales
   in the area serviced by Phoenix Manufacturing, Inc. which has
   experienced unfavorable weather patterns.
   
   Consolidated cost of sales (exclusive of depreciation and
   depletion) as a percentage of sales decreased from 78.7% to
   75.8%.  The decrease was due to improved margins in Williams
   Furnace Co.'s fan coil line combined with improved sales in
   the construction materials segment.

   Selling and administrative expenses decreased $111,000 (3.1%)
   and as a percentage of sales from 17.3% to 15.4%. The
   decrease in expenses was realized in numerous categories in
   the construction materials segment and at Williams Furnace
   Co.  The percentage decline is due to the increase in net
   sales and the fixed nature of many of the expenses.

   Historically, the Company has experienced operating losses
   during the first quarter.  This trend is expected to continue
   as sales of construction materials are generally higher in
   the second and third quarters while sales of heating and air-
   conditioning products, though not showing strong seasonality,
   experience product mix changes that yield higher gross
   profits in the fourth quarter.  The break from this trend in
   the first quarters of 1998 and 1997 was mainly due to the
   strong performance of the construction materials segment
   which has benefited from the continuing strong economy and
   was aided by mild weather.  Additionally, Williams' furnace
   sales were boosted by the damp, cool weather in the western
   states in 1998.
   
   
   
   
   
   
   
   
   
   
   
   
   
                                6

<PAGE>

   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 4, 1998.




                            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:      April 23, 1998       By:   /S/ Joseph J. Sum
                                      Joseph J. Sum, Vice President
                                      and Chief Financial Officer








                                7