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 March 29, 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 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 25, 1997    1,104,221

                                
         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
              MARCH 29, 1997 and DECEMBER 28, 1996
                           (Unaudited)
                (000's omitted except share data)
                                
<TABLE>
<CAPTION>                                
                                            MARCH 29,     DECEMBER 28,
                                               1997           1996
<S>                                      <C>             <C> 
          ASSETS
Current assets:                                           
 Cash and cash equivalents                $     --      $    379
 Receivables, net                           17,641        14,584
 Inventories:                                             
  Finished goods                             9,775         8,696
  Work in process                            1,829         1,800
  Raw materials and supplies                 5,270         4,688
 Prepaid expenses                            2,776         2,687
                                          --------      --------
   Total current assets                     37,291        32,834
                                          --------      --------
                                                                
Property, plant and equipment, net          18,608        18,818
                                          --------      --------
Other assets:                                              
 Investment in mining partnership              600           600
 Other                                       1,521         1,641
                                          --------      --------
                                          $ 58,020      $ 53,893
                                          ========      ========
          LIABILITIES                                     
Current liabilities:                                      
 Bank loan payable                        $  6,500      $    400
 Current portion of long-term debt           1,500         1,500
 Accounts payable and accrued expenses      12,137        13,863
 Income taxes                                  245           450
                                          --------      --------
   Total current liabilities                20,382        16,213
                                          --------      --------
                                                          
Long-term debt                               6,500         6,500
                                          --------      --------
Deferred income taxes                        1,830         1,830
                                          --------      --------
                                                          
          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                           28,131        28,173
Treasury shares, 222,367, at cost           (2,970)       (2,970)
                                          --------      --------
                                            29,308        29,350
                                          --------      --------
                                          $ 58,020      $ 53,893
                                          ========      ========
</TABLE>
                                
                                
                                
                     See accompanying notes
                                2
<PAGE>                                
                                
                CONTINENTAL MATERIALS CORPORATION
   CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
  FOR THE THREE MONTHS ENDED MARCH 29, 1997 AND MARCH 30, 1996
                           (Unaudited)
            (000's omitted except per share amounts)

<TABLE>
<CAPTION>
                                            MARCH 29,    MARCH 30,
                                               1997         1996
<S>                                         <C>          <C>     
Net sales                                   $  20,905    $  17,852
                                                                 
Costs and expenses:                                              
 Cost of sales (exclusive of depreciation,                       
  depletion and amortization)                  16,450       13,903
 Depreciation, depletion and amortization         879          661
 Selling and administrative                     3,621        3,168
                                            ---------    ---------
                                               20,950       17,732
                                            ---------    ---------
                                                                 
Operating (loss) income                           (45)         120
                                                         
Interest                                         (180)        (148)
Equity loss from mining partnership               (28)      (1,007)
Other income, net                                 185          105
                                            ---------    ---------
                                                         
Loss before income taxes                          (68)        (930)
                                                           
Credit for income taxes                           (26)        (353)
                                            ---------    ---------
                                                                  
 Net loss                                         (42)        (577)
                                                         
Retained earnings, beginning of period         28,173       25,818
                                            ---------    ---------
                                                         
Retained earnings, end of period            $  28,131    $  25,241
                                            =========    =========
                                                         
Net loss per share                          $    (.04)     $  (.52)
                                            =========    =========
Average shares outstanding                      1,104        1,110
                                            =========    =========
</TABLE>









                     See accompanying notes
                                3
<PAGE>
                                
               CONSOLIDATED MATERIALS CORPORATION
              CONSOLIDATED STATEMENTS OF CASH FLOWS
  FOR THE THREE MONTHS ENDED MARCH 29, 1997 AND MARCH 30, 1996
                           (Unaudited)
                         (000's omitted)


<TABLE>
<CAPTION>
                                               MARCH 29,   MARCH 30,
                                                 1997         1996
                                                           
<S>                                            <C>         <C>
Net cash used by operating activities          $ (5,814)   $ (3,471)
                                                                  
Investing activities:                                             
 Capital expenditures                              (645)       (205)
 Proceeds from sale of property and equipment         8          29
 Investment in mining partnership                   (28)       (257)
                                               --------    --------
Net cash used in investing activities              (665)       (433)
                                               --------    --------
Financing activities:                                              
 Borrowings under revolving credit facility       6,100       3,700
 Payment to acquire treasury stock                   --        (286)
                                               --------    --------
Net cash provided by financing activities         6,100       3,414
                                                                   
Net decrease in cash and cash equivalents          (379)       (490)
Cash and cash equivalents:                                         
 Beginning of period                                379       1,074
                                               --------    --------
                                                                  
 End of period                                 $     --    $    584
                                               ========    ========            
                                                                    
                                                                    
Supplemental disclosures of cash flow items:                      
Cash paid during the three months for:                            
 Interest                                      $    199    $    139
 Income taxes                                       180           1

</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 MARCH 29, 1997
                           (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  (except  for  the   1996
  adjustment  discussed in Note 2 below, none of the  adjustments
  were  other than normal recurring adjustments) necessary for  a
  fair statement of the results for the interim periods.

2.The  1996  equity  loss  from mining partnership  includes  the
  Company's  30%  share of the partnership's operating  loss  for
  the  period of $379,000 plus a write down in the carrying value
  of  the  investment of $628,000.  During the first  quarter  of
  1997  the  Partners, including the Company, signed a Letter  of
  Intent  to  sell  their  interest in ORMP.   The  agreement  is
  contingent  upon, among other matters, the buyer's satisfactory
  completion of due diligence and financing arrangements.

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

4.During  April 1997, the class action suits filed to oppose  the
  now  withdrawn offer of the Gidwitz group to take  the  Company
  private  were dismissed without prejudice.  No compensation  of
  any  form  was paid by the Company to the plaintiffs  or  their
  attorneys.

5.Operating  results for the first three months of 1997  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 1996 Annual Report.)



















                                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 1997 used $5,814,000
   in  cash compared to $3,471,000 in 1996.  The greater  use  of
   cash  is  attributable  to  higher  receivable  balances   and
   inventory levels due to increased sales volume.
   
   The  Company estimates that its short-term line of credit  (of
   which  $6,500,000 was outstanding at March 29, 1997)  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 March  29,  1997  to
   Quarter Ended March 30, 1996 (See page 3)

   Consolidated  net  sales  increased $3,053,000  (17.1%).   The
   increase  in the construction materials segment of  $2,550,000
   (33.3%)   is  attributed  to  a  continuing  high   level   of
   construction  activity in Colorado Springs, Colorado  and  the
   addition  of Transit Mix of Pueblo which was acquired  in  the
   last  quarter of 1996.  The increase in the heating  and  air-
   conditioning segment sales of $503,000 (5.0%) was realized  by
   Phoenix  Manufacturing Co. and is mainly attributed to several
   large motor shipments.
   
   Consolidated  cost  of sales (exclusive  of  depreciation  and
   depletion)  as a percentage of sales increased to  78.7%  from
   77.9%.   The increase is due to the motor shipments  mentioned
   above  which are sold at a lower margin, a change  in  product
   mix  at Phoenix and the increase in volume in the construction
   materials  segment  which has a higher  cost  of  sales  as  a
   percentage of sales.

   Depreciation,  depletion and amortization  increased  $218,000
   to   $879,000   due  to  the  Transit  Mix  of  Pueblo   asset
   acquisition in October, 1996.
   
   Selling   and   administrative  expenses  increased   $453,000
   (14.3%)  while declining as a percentage of sales  from  17.7%
   to  17.3%.  The dollar increase is mainly attributable to  the
   addition  of  Transit  Mix  of Pueblo  and  the  higher  sales
   volume,  while  the percentage decline is  due  to  the  fixed
   nature of many of the expenses.
   
   The  1996  equity  loss from mining partnership  includes  the
   Company's  30% share of the partnership's operating  loss  for
   the  period  of  $379,000 plus a write down  in  the  carrying
   value  of  the  investment  of $628,000.   The  1997  loss  of
   $28,000  reflects the Company's 30% share of  ORMP's  carrying
   costs  as  mining  was suspended during the first  quarter  of
   1996.    During  the  first  quarter  of  1997  the  Partners,
   including  the  Company, signed a Letter  of  Intent  to  sell
   their  interest in ORMP.  A definitive agreement is contingent
   upon,   among   other   matters,  the   buyer's   satisfactory
   completion of due diligence and financing arrangements.

   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  quarter  of  1996 was mainly  due  to  the  strong
   performance  of the construction materials segment  which  was
   aided by mild weather.
   
   
   
                                6

<PAGE>

PART II -   Other Information

Item 6.     Exhibits and Reports on Form 8-K

            (a)  Exhibits:

            Exhibit 11:  Computation of per share earnings

            Exhibit 27:  Financial data schedule

            (b)  Registrant filed no reports on Form 8-K during
                 the quarter ended March 29, 1997.




                            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 30, 1997          By:/S/ Joseph J. Sum
                                 Joseph J. Sum, Vice President
                                 and Chief Financial Officer















                                7