<PAGE>

                          SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C.  20549

                                      FORM 10-Q
                                           
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the quarter ended March 29, 1997

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

Commission file number  1-7753

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

        PENNSYLVANIA                                           25-1001433
        ------------                                           ----------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                             Identification No.)

10011 PINES BLVD., SUITE 201, PEMBROKE PINES, FL                 33024
------------------------------------------------                 -----
   (Address of principal executive offices)                   (zip code)


                                     954-436-8909
                                     ------------
                 (Registrant's telephone number, including area code)


    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 and (2) has been subject to such filing
requirements for the past 90 days.

                                 Yes  X  .   No    .
                                    -----      ----- 
    Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

CLASS                                         OUTSTANDING AT APRIL 30, 1997
-----                                         -----------------------------
Common Stock, $.20 par value                        2,377,663 shares*

*Includes 29,533 shares issuable upon surrender of the
 outstanding $.10 par common stock.

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                         PART I - FINANCIAL INFORMATION


                           DECORATOR INDUSTRIES, INC.
                                BALANCE SHEET

                                                MARCH 29, 1997   Dec. 28, 1996
                                                --------------   -------------
                 ASSETS                           (UNAUDITED)
                 ------
CURRENT ASSETS:
  Cash and Cash Equivalents                          $ 4,642,815    $ 4,714,356
  Short-term Investments                               2,584,946      2,539,613
  Accounts Receivable, less allowance for
      doubtful accounts ($241,746 and $232,302)        3,892,110      2,972,572
  Inventories                                          3,309,346      3,083,004
  Other Current Assets                                   478,639        333,269
                                                     -----------    -----------
TOTAL CURRENT ASSETS                                  14,907,856     13,642,814
                                                     -----------    -----------
PROPERTY AND EQUIPMENT:
  Land, Buildings & Improvements                       2,387,622      2,355,013
  Machinery, Equipment, Furniture & Fixtures           3,394,679      3,042,968
                                                     -----------    -----------
TOTAL PROPERTY & EQUIPMENT                             5,782,301      5,397,981
  Less:  Accumulated Depreciation and Amortization     2,347,469      2,249,848
                                                     -----------    -----------
NET PROPERTY & EQUIPMENT                               3,434,832      3,148,133
                                                     -----------    -----------
GOODWILL, less accumulated
     amortization of $888,922 and $874,225             2,648,449      1,402,818
OTHER ASSETS                                             183,905        200,592
                                                     -----------    -----------
TOTAL ASSETS                                         $21,175,042    $18,394,357
                                                     -----------    -----------
                                                     -----------    -----------

     LIABILITIES AND STOCKHOLDERS' EQUITY
     ------------------------------------
CURRENT LIABILITIES:
  Accounts Payable                                   $ 2,952,199    $ 2,624,552
  Current Maturities of Long-term Debt                    41,692         41,685
  Accrued Expenses:
      Income Taxes                                       442,352         63,397
      Compensation                                       675,320      1,443,921
      Other                                            2,766,026        465,423
                                                     -----------    -----------
TOTAL CURRENT LIABILITIES                              6,877,589      4,638,978
                                                     -----------    -----------
LONG-TERM DEBT                                           539,192        549,433
DEFERRED INCOME TAXES                                    195,000        195,000
                                                     -----------    -----------
TOTAL LIABILITIES                                      7,611,781      5,383,411
                                                     -----------    -----------
STOCKHOLDERS' EQUITY:
  Common Stock $.20 par value: Authorized shares, 
    5,000,000; Issued shares, 2,744,829 and 2,725,462    547,791        545,094
  Paid-in Capital                                      1,559,467      1,546,152
  Retained Earnings                                   13,014,928     12,478,625
                                                     -----------    -----------
                                                      15,122,186     14,569,871
  Less: Treasury Stock, at cost: 369,087 shares        1,558,925      1,558,925
                                                     -----------    -----------
TOTAL STOCKHOLDERS' EQUITY                            13,563,261     13,010,946
                                                     -----------    -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY           $21,175,042    $18,394,357
                                                     -----------    -----------
                                                     -----------    -----------

The accompanying notes are an integral part of the financial statements.

                                        1
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                              DECORATOR INDUSTRIES, INC.
                                STATEMENT OF EARNINGS
                                     (UNAUDITED)

                                             FOR THIRTEEN WEEKS ENDED:
                                   --------------------------------------------
                                       MARCH 29, 1997         MARCH 30, 1996 
                                       --------------         --------------

NET SALES                           $9,386,543   100.00%   $9,439,498   100.00%
COST OF PRODUCTS SOLD                6,922,154    73.75%    7,102,934    75.25%
                                    ----------             ----------
GROSS PROFIT                         2,464,389    26.25%    2,336,564    24.75%
SELLING AND ADMINISTRATIVE 
  EXPENSES                           1,429,942    15.23%    1,390,875    14.73%
                                    ----------             ----------
OPERATIONING INCOME                  1,034,447    11.02%      945,689    10.02%

OTHER INCOME (EXPENSE):                
    Interest and Dividend Income        92,162     0.98%       57,787     0.61%
    Interest Expense                   (11,003)   -0.12%      (11,750)   -0.12%
                                    ----------             ----------
EARNINGS BEFORE INCOME TAXES         1,115,606    11.89%      991,726    10.51%
PROVISION FOR INCOME TAXES             413,000     4.40%      369,000     3.91%
                                    ----------             ----------
NET INCOME                            $702,606     7.49%     $622,726     6.60%
                                    ----------             ----------
                                    ----------             ----------


PRIMARY EARNINGS PER SHARE               $0.30                  $0.27 *
                                         -----                  -----
                                         -----                  -----
FULLY DILUTED EARNINGS PER SHARE         $0.28                  $0.25 *
                                         -----                  -----
                                         -----                  -----
                   
Average Number of Shares Outstanding:                 
    Primary                          2,373,213              2,307,885 *
    Fully Diluted                    2,556,069              2,482,231 *


*Restated to reflect the four-for-three stock split effective June 17, 1996.


The accompanying notes are an integral part of the financial statements.


                                        2
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                      DECORATOR INDUSTRIES, INC.
                 STATEMENT OF CASH FLOWS (UNAUDITED)
                                                     FOR 13 WEEKS ENDED:
                                                ------------------------------
                                                MARCH 29, 1997   MARCH 30, 1996
                                                --------------   --------------
CASH FLOWS FROM OPERATING ACTIVITES:             
  Net Income                                        $702,606        $622,726 
  Adjustments to Reconcile Net Income to Net Cash  
  Provided by Operating Activities:              
    Depreciation and Amortization                    112,576          99,276 
    Provision for Losses on Accounts Receivable        5,000          12,500 
    (Gain) Loss on Disposal of Assets                                  1,951 
  Increase (Decrease) from Changes In:           
    Accounts Receivable                             (492,373)       (888,772)
    Inventory                                        264,065          81,872 
    Short-term Investments                           (45,333)     (2,394,707)
    Prepaid Expenses                                (145,370)        (25,172)
    Other Assets                                      (3,313)       (268,647)
    Accounts Payable                                 327,647         574,356 
    Accrued Expenses                                (265,358)        (16,741)
                                                  ----------      ----------
NET CASH PROVIDED BY (USED FOR) 
OPERATING ACTIVITIES                                  460,14      (2,201,358)
                                                  ----------      ----------
CASH FLOWS FROM INVESTING ACTIVITIES:            
  Capital Expenditures                              (111,664)        (77,620)
  Proceeds from Property Dispositions                    500             860 
  Note Receivable                                     20,000          20,000 
  Acquisition                                       (280,000)
                                                  ----------      ----------
NET CASH USED FOR INVESTING ACTIVITIES              (371,164)        (56,760)
              
CASH FLOWS FROM FINANCING ACTIVITIES:            
  Long-term Debt Payments                            (10,234)         (8,703)
  Dividend Payments                                 (166,302)       (120,280)
  Proceeds from Exercise of Stock Options             16,012          42,000 
  Purchase of Common Stock for Treasury                             (748,837)
                                                  ----------      ----------
NET CASH USED FOR FINANCING ACTIVITIES              (160,524)       (835,820)
NET DECREASE IN CASH AND CASH EQUIVALENTS            (71,541)     (3,093,938)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR     4,714,356       5,269,772 
                                                  ----------      ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD        $4,642,815      $2,175,834 
                                                  ----------      ----------
                                                  ----------      ----------
              
SUPPLEMENTAL DISCLOSURES OF CASH 
FLOW INFORMATION: 
Cash Paid for:               
  Interest                                           $11,003          $8,787
  Income Taxes                                       $34,045         $56,472
Cash Flows from Acquisition:           
  Purchase Price                                  $2,455,783          
  Less: Deferred Portion of Purchase Price        (2,175,783)         
    Cash Used for Acquisition                       $280,000

The accompanying notes are an integral part of the financial statements.


                                        3 
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                              DECORATOR INDUSTRIES, INC.
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                THIRTEEN WEEKS ENDED MARCH 29, 1997 AND MARCH 30, 1996
                                     (UNAUDITED)



NOTE 1.  In the opinion of management, the accompanying unaudited consolidated
         financial statements contain all adjustments necessary to present
         fairly the Company's financial position as of March 29, 1997, the
         changes therein for the thirteen week period then ended and the
         results of operations forthe thirteen week periods ended March 29,
         1997 and March 30, 1996.

NOTE 2.  The consolidated financial statements included in the Form 10-Q
         arepresented in accordance with the requirements of the form and do
         not include all of the disclosures required by generally accepted
         accounting principles.  For additional information, reference is made
         to the Company's annual report on Form 10-K for the year ended
         December 28, 1996. The results of operations for the thirteen week
         periods ended March 29, 1997 and March 30, 1996 are not necessarily
         indicative of operating results for the full year.

NOTE 3.  INVENTORIES

         Inventories at March 29, 1997 and December 28, 1996 consisted of the
         following:

                                    MARCH 29, 1997   DECEMBER 28, 1996
                                    --------------   -----------------
         Raw material and
         Supplies                     $3,121,611        $2,854,066

         In process and
         Finished Goods                  187,735           228,938
                                         -------           -------
                                      $3,309,346        $3,083,004
                                      ----------        ----------
                                      ----------        ----------

NOTE 4.  EARNINGS PER SHARE

         The excess of shares assumed to be issued under the stock option plans
         over shares that could be purchased with the proceeds based on the
         higher average or period ending market prices, was sufficient to cause
         fully diluted earnings per share to be different from primary earnings
         per share as shown in the consolidated statement of income.

NOTE 5.  ACQUISITIONS

    The Company acquired, effective March 15, 1997, the business and certain
assets of Specialty Window Coverings Corp., an Elkhart, Indiana based
manufacturer of pleated shades for the recreational vehicle market. The purchase
price was $2,455,783 in cash plus conditional payments, based on earnings, of up
to $2 million over the succeeding two years. The Company 


                                        4
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                              DECORATOR INDUSTRIES, INC.
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                THIRTEEN WEEKS ENDED MARCH 29, 1997 AND MARCH 30, 1996
                                     (UNAUDITED)


    
         assumed no liabilities. Specialty will continue to operate from its
         existing facilities, which are being expanded from 20,000 to 35,000
         square feet and which are leased from the former owners of Specialty.
         Specialty had net sales of approximately $5 million in 1996. The
         Company recognized goodwill of approximately $1.3 million in
         connection with the acquisition.

         On March 4, 1997, the Company further expanded its product line to
         include furniture and cushions for the recreational vehicle market by
         having purchased the assets of Action Design Interiors, also based in
         Elkhart, Indiana.







                                        5
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS



FINANCIAL CONDITION

The Company's financial condition, as measured by the following ratios,
continues to be strong at the end of the First Quarter.

                                     MARCH 29, 1997      DECEMBER 28, 1996
                                     --------------      -----------------
Current Ratio                            2:70 *               2:94
Quick Ratio                              2:00 *               2:28
LT Debt to Total Capital                 3.62%                4.03%
Working Capital                       $8,030,267           $9,003,836

             *Adjusted for the elimination of the acquisition liability.


Cash and Short-Term Investments totaled $7,227,761 at March 29, 1997.
Approximately $2,150,000 of this cash balance has subsequently been used to pay
the acquisition liability included in Other Liabilities on the quarter-end
Balance Sheet. The remaining cash balances and borrowing capacity keep the
company well-positioned to take advantage of internal growth or acquisition
opportunities that might arise.


RESULTS OF OPERATIONS:

The following tables show the percentage relationship to net sales of certain
items in the Company's Statement of Earnings and net sales dollars by market:

                                                 FIRST          FIRST
                                                QUARTER        QUARTER   
                                                 1997           1996
                                                 ----           ----
  EARNINGS RATIOS
Net Sales                                       100.0%         100.0%
Cost of products sold                            73.7           75.2
Selling and administrative                       15.2           14.7
Interest and investment income                   (1.0)           (.6)
Interest expense                                   .1             .1
Income taxes                                      4.4            3.9
Net income                                        7.5            6.6


  NET SALES BY MARKET
Manufactured housing                           $4,573         $5,246
Recreational vehicles                           2,668          2,164
Hospitality                                     2,146          2,029
                                               ------         ------
Net sales - total                              $9,387         $9,439
                                               ------         ------
                                               ------         ------


                                        6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (CONTINUED)



Thirteen-Week Period Ended March 29, 1997, (First Quarter 1997) compared to
Thirteen-Week Period Ended March 30, 1996, (First Quarter 1996)
-----------------------------------------------------------------------------

Net sales for the First Quarter were $9,386,543, compared to $9,439,498 for the
same period the previous year, a .5% decrease. The reduction in sales to the
Manufactured Housing Industry were offset by increases to the Recreational
Vehicle and Hospitality markets.

Cost of products sold decreased to 73.7% in the First Quarter compared to 75.2%
a year ago. The improvement is the result of reduced material costs.

Net income in the First Quarter was $702,606 or 30 cents per share (primary),
compared with $622,726 or 27 cents per share (primary), in the same period a
year ago. The results reflect a 13% and 11% increase respectfully.





                                        7

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                             PART II - OTHER INFORMATION


    Item 6.   Exhibits and Reports on Form 8-K

    (a)  EXHIBITS
         
         27A - Financial data schedule, filed herewith.



    (b)  No reports on Form 8-K were filed by the Company
         during the fiscal quarter ended March 29, 1997.



                                         SIGNATURES
         Pursuant to the requirements of the Securities 
         Exchange Act of 1934, the registrant has caused 
         this report to be signed on its behalf by the 
         undersigned thereunto duly authorized.

                                  DECORATOR INDUSTRIES, INC.
                                    (Registrant)



                                 By: /S/ WILLIAM BASSETT   
                                     ------------------------------
                                     William Bassett, President


                                 By: /S/ MICHAEL K.SOLOMON    
                                     ------------------------------
Date: May 9, 1997                    Michael K. Solomon, Treasurer