SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

                                    FORM 10-Q

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

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


For the quarter ended March 31, 1997                 Commission File No. 0-16452
                      --------------                                     -------

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


          Delaware                                          43-0899374
          --------                                          ----------
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                          Identification No.)

  Green Boulevard, Mexico, Missouri                            65265
  ---------------------------------                            -----
(Address of principal executive offices)                     (Zip Code)

Registrant's telephone number, including area code:  (573) 473-3626

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

Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of the latest  practicable  date: As of May 14, 1997,  8,026,158
shares of Common Stock, $1 par value, were outstanding.







                                  Page 1 of 20


<PAGE>


A. P. GREEN INDUSTRIES, INC.

PART I.    FINANCIAL INFORMATION

Item 1.    FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

                                                        March 31,   December 31,
                                                          1997          1996
                                                        ---------   ------------
(Dollars in thousands, except per share data)

ASSETS

  Current Assets
    Cash and cash equivalents                           $  3,323     $  9,477
    Receivables (net of allowances -
      1997, $1,782;  1996, $1,701)                        42,947       42,084
    Reimbursement due on paid asbestos claims                678        3,898
    Inventories                                           56,312       53,674
    Deferred income tax asset                              2,850        3,374
    Other                                                  6,941        7,030
                                                         -------      -------
      Total current assets                               113,051      119,537

  Property, plant and equipment, net                     106,844      107,394
  Projected insurance recovery on asbestos claims        118,343      110,374
  Pension assets                                           9,061        9,044
  Intangible assets, net                                   4,078        4,132
  Other assets                                             4,589        4,648
                                                         -------      -------
Total assets                                            $355,966     $355,129
                                                         =======      =======


LIABILITIES AND STOCKHOLDERS' EQUITY
  Current Liabilities
    Accounts payable                                    $ 21,158     $ 20,408
    Accrued expenses
      Payrolls                                             5,599        6,267
      Taxes other than on income                           1,591        1,860
      Insurance reserves                                   3,472        3,574
      Other                                                6,369        6,528
    Current maturities of long-term debt                   4,145        4,168
    Income taxes                                           1,126        1,191
                                                         -------      -------
      Total current liabilities                           43,460       43,996

  Deferred income taxes                                    9,459       10,228
  Long-term non-pension benefits                          16,832       16,583
  Long-term pensions                                      12,726       12,449
  Long-term debt                                          34,736       40,109
  Projected asbestos claims                              118,343      111,966
                                                         -------      -------
      Total liabilities                                  235,556      235,331
                                                         -------      -------
  Minority Interests                                       1,810        1,414

  Stockholders' Equity
    Preferred stock - $1 par value;
      authorized:  2,000,000 shares;
      issued and outstanding:  none                           --           --
    Common stock - $1 par value;
      authorized: 10,000,000 shares;
      issued:  8,978,792 in 1997
      and 8,975,442 in 1996                                8,979        8,975
    Additional paid-in capital                            68,335       68,309
    Retained earnings                                     61,648       61,151
    Less: Deferred foreign currency translation           (3,186)      (2,875)
          Treasury stock of 953,934 shares in 1997
             and 1996, at cost                            (9,498)      (9,498)
          Note receivable-ESOT                            (6,941)      (6,941)
          Minimum pension liability adjustment,
             net of tax                                     (737)        (737)
                                                         -------      -------
      Total stockholders' equity                         118,600      118,384
                                                         -------      -------
Total liabilities and stockholders' equity              $355,966     $355,129
                                                         =======      =======

See accompanying notes to consolidated financial statements.


                                       2
<PAGE>


A. P. GREEN INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)




                                                           Three months ended
                                                                March 31,
                                                        ------------------------
(Dollars in thousands, except per share data)               1997         1996
                                                        ------------------------

Net sales                                               $   64,816   $   64,234

Cost of sales                                               54,014       52,879
                                                         ---------    ---------
     Gross profit                                           10,802       11,355

Expenses and other income

    Selling & administrative expenses                        9,222        8,869

    Interest expense                                           834          786

    Interest income                                           (247)        (322)

    Minority interest in income (loss) of partnership            4          (33)

    Other income, net                                          (66)        (142)
                                                          ---------    ---------
       Earnings before income taxes                          1,055        2,197

Income tax expense                                             358          786

Equity in net income of affiliates                             (15)        (180)

Minority interest in loss of consolidated subsidiaries         (99)        (140)
                                                         ---------    ---------
Net earnings                                            $      811   $    1,731
                                                         =========    =========
Net earnings per common share                           $     0.10   $     0.22
                                                         =========    =========
Weighted average number of common shares                 8,023,220    8,077,442
                                                         =========    =========
Dividends per common share                              $     0.04   $    0.035
                                                         =========    =========

See accompanying notes to consolidated financial statements.



















                                       3
<PAGE>


A. P. GREEN INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


                                                    Three months ended March 31,
                                                    ----------------------------
(Dollars in thousands)                                     1997         1996
                                                    ----------------------------
Cash flows from operating activities

  Net earnings                                           $   811      $ 1,731

  Adjustments for items not requiring (providing) cash
    Depreciation, depletion and amortization               2,999        2,592
    Stock compensation to directors                           29           28
    Provision for losses on accounts receivable              195          148
    Loss (gain) on sale of assets                            (58)          36
    Equity in earnings of affiliates,
      net of dividends received                              (15)        (180)
    Minority interest in losses of consolidated
      subsidiaries and partnership                           (95)        (173)

  Decrease (increase) in assets
    Trade receivables                                     (1,058)        (500)
    Asbestos claim and fee reimbursements received         5,236        4,913
    Inventories                                           (2,639)      (2,418)
    Receivable and prepaid taxes                              45          355
    Other current assets                                      (6)        (601)

  Increase (decrease) in liabilities
    Accounts payable and accrued expenses                   (447)      (3,306)
    Asbestos claims paid                                  (3,607)      (4,371)
    Pensions                                                 277          118
    Income taxes                                             (65)         316
    Deferred income taxes                                   (246)         146
    Long-term non-pension benefits                           249          342
                                                          ------       ------
  Net cash provided by (used in) operating activities      1,605         (824)
                                                          ------       ------
Cash flows from investing activities

  Capital expenditures                                    (1,589)      (3,264)
  Increase in other long-term assets                         (24)        (272)
  Decrease (increase) in pension assets                      (17)          99
  Proceeds from sales of assets                              106           26
                                                          ------       ------
  Net cash used in investing activities                   (1,524)      (3,411)
                                                          ------       ------
Cash flows from financing activities

  Repayments of debt                                      (6,100)         (63)
  Proceeds from borrowings                                    --           75
  Dividends paid                                            (321)        (283)
  Capital contributions from minority partner                490           --
  Tax benefit on dividends paid to ESOT                        7            7
                                                          ------       ------
  Net cash used in financing activities                   (5,924)        (264)
                                                          ------       ------
Effect of exchange rate changes                             (311)        (308)
                                                          ------       ------
Net decrease in cash and cash equivalents                 (6,154)      (4,807)

Cash and cash equivalents at beginning of year             9,477        9,284
                                                          ------       ------
Cash and cash equivalents at end of period               $ 3,323      $ 4,477
                                                          ======       ======

See accompanying notes to consolidated financial statements.


                                       4
<PAGE>


A. P. GREEN INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


1.       MANAGEMENT'S COMMENTS REGARDING ADJUSTMENTS AND RESULTS OF
         ----------------------------------------------------------
         OPERATIONS
         ----------

         In the opinion of management,  the accompanying  consolidated financial
         statements  include all  adjustments  of a normal and recurring  nature
         necessary for a fair presentation of the financial position and results
         of operations for the periods  presented.  These  financial  statements
         should be read in conjunction  with the Company's Annual Report on Form
         10-K for the year ended  December 31, 1996. The results for the quarter
         ended  March 31,  1997 are not  necessarily  indicative  of the results
         which may  occur for the full  year.  All per share  amounts  have been
         restated to reflect the two-for-one stock split effective September 20,
         1996.  Certain prior year amounts have been  reclassified to conform to
         the 1997 presentation.

2.       RESERVES FOR PLANT CLOSINGS
         ---------------------------

         The Company  has  reserves  for  estimated  exit costs and  termination
         benefits in connection  with the shutdown of certain  facilities in the
         U.S. and Canada. Three of the plants acquired in the acquisition of the
         refractories   business  of  General   Refractories   Company  and  its
         affiliated  companies  ("General")  were  closed  during  1994,  a $3.6
         million  reserve for which was  established  at the time of acquisition
         and included on the opening balance sheet. During 1995 this reserve was
         increased by approximately  $330,000,  primarily to revise estimates of
         employee   termination  benefits  resulting  from  the  sale  of  these
         facilities taking longer than anticipated.  A $380,000 reserve was also
         established  during 1995 for the closing of the Weston,  Ontario plant.
         Substantially all employees at these facilities  (approximately  210 in
         total)  have  been  terminated  and   approximately   $3.2  million  of
         termination  benefits and plant closing costs have been charged against
         the reserves to date.  The U.S.  facilities  are held for sale at their
         estimated net realizable value.


                                       -5-

<PAGE>



3.       INVENTORIES
         -----------

                                             March 31, 1997  December 31, 1996
                                             --------------  -----------------

         Finished goods & work-in-process
           Valued at LIFO:
             FIFO cost                          $ 33,979          $ 31,278
             Less LIFO reserve                   (14,472)          (14,907)
                                                 -------           -------

                  LIFO cost                       19,507            16,371
         Valued at FIFO                           13,223            13,225
                                                 -------           -------

         TOTAL                                    32,730            29,596
                                                 -------           -------

         Raw materials and supplies
           Valued at LIFO:
             FIFO cost                            17,116            17,702
             Less LIFO reserve                    (6,275)           (6,129)
                                                 -------           -------

               LIFO cost                          10,841            11,573
           Valued at FIFO                         12,741            12,505
                                                 -------           -------

             TOTAL                                23,582            24,078
                                                 -------           -------

                                                $ 56,312          $ 53,674
                                                 =======           =======

4.       LITIGATION
         ----------

         Asbestos-related claims - Personal Injury
         -----------------------------------------

         A. P. Green is among  numerous  defendants  in  lawsuits  pending as of
         March 31,  1997 that seek to recover  compensatory  and, in many cases,
         punitive damages for personal injury allegedly  resulting from exposure
         to asbestos-containing products.

         A. P.  Green is a member  of the  Center  for  Claims  Resolution  (the
         Center),  an  organization  of  twenty  companies  (Members)  who  were
         formerly distributors or manufacturers of asbestos-containing products.
         The Center administers, evaluates, settles, pays and defends all of the
         asbestos-related  personal injury lawsuits involving its Members. Under
         the  terms  of the  Center  Agreement,  each  Member's  portion  of the
         liability  payments  and  defense  costs are based  upon,  among  other
         things, the numbers and types of claims brought against it.



                                       -6-

<PAGE>



         Claims  activity  for the Company for each of the years ended  December
         31, 1996, 1995 and 1994, based upon information provided by the Center,
         was as follows:
         -----------------------------------------------------------------------
                                                   1996       1995       1994
         -----------------------------------------------------------------------

         Claims pending at January 1              48,367     50,920     52,122
         Claims filed                             29,702     12,560     14,836
         Cases settled, dismissed or
            otherwise resolved                   (19,184)   (15,113)   (16,038)
                                                  ------     ------     ------ 

            Claims pending at December 31         58,885     48,367     50,920
                                                  ======     ======     ======

         Average  settlement  amount
            per claim(1)                        $  1,582   $  1,778    $ 1,816
         =======================================================================
         (1) Substantially  all  settlements  are  covered  by  the  Company's
             insurance program.

         On January 15, 1993,  the Members were named as  defendants  in a class
         action  lawsuit  brought  on  behalf  of  all  persons  who  have  been
         occupationally exposed to  asbestos-containing  products of the Members
         and who had not yet  asserted  claims  for such  exposure  (the  Class)
         pursuant  to Federal  Rule of Civil  Procedure  23(b)(3) in the Federal
         District Court for the Eastern  District of  Pennsylvania.  At the same
         time, a settlement (the  Settlement)  between the Members and the Class
         was  filed  with the  court.  Under the  terms of the  Settlement,  the
         Members have agreed to pay  compensation to any member of the Class who
         has, according to objective medical criteria,  physical impairment as a
         result of such exposure.  Different levels of compensation will be paid
         depending  on the type and degree of physical  impairment.  No punitive
         damages will be paid. The Settlement provides,  among other things, for
         a cap on the number of claims to be  processed  each year  through 2004
         and a range of settlement values for each disease category.  Settlement
         values  are based on  historical  average  payments  by the  Center for
         similar cases. Each Member will be responsible for its percentage share
         of each claim  payment  (no joint and several  liability),  such shares
         having been  previously  established.  A five-week  hearing was held to
         determine  the fairness of the  Settlement.  At the end of the hearing,
         the court ruled that the Settlement was fair and enjoined Class members
         from filing lawsuits in the tort system against the Members. The Center
         has been processing and settling claims filed by Class members pursuant
         to the Settlement  since 1994. The ruling by the Eastern District Court
         of Pennsylvania  was appealed by certain  objectors.  The Third Circuit
         Court of Appeals reversed the lower court, ruling that the Class should
         be decertified. The Class members and settling plaintiffs applied for a
         writ of certiorari  to the U. S. Supreme Court which was granted.  Oral
         arguments  were  heard  in  February  1997,  but no  decision  has been
         rendered to date.



                                       -7-

<PAGE>



         In a third-party action filed simultaneously with the class action (and
         in parallel Alternate Dispute Resolution proceedings), the Members have
         asked for a declaratory judgment against their respective insurers that
         such insurers  cannot use the  Settlement as a defense to their payment
         under  applicable  policies of insurance.  The  Settlement is expressly
         contingent upon such  declaratory  relief.  In addition,  some Members,
         including A. P. Green,  have asked for a declaratory  judgment  against
         their insurers with whom they have not reached coverage resolutions. No
         decision has been  rendered at this date with respect to these  issues.
         However,  in December 1996 A. P. Green and the E. J.  Bartells  Company
         (Bartells),  a former  subsidiary,  reached a comprehensive  settlement
         with all but one of their insurance  carriers.  Under the terms of that
         settlement  agreement,  the  carriers  have  agreed to pay  (subject to
         applicable policy limits), on behalf of the insureds, their liabilities
         arising  out of  asbestos  personal  injury  claims.  A. P.  Green will
         maintain its coverage  litigation  against the non-settling  carrier in
         the event that agreement cannot be reached with it.

         Under the assumption  that it receives the necessary  court  approvals,
         the Settlement has provided the Company with a basis for estimating its
         potential  liability and related  insurance  recovery  associated  with
         asbestos  cases.  The  Company has  reviewed  its  insurance  policies,
         historical  settlement  amounts,  the number of  pending  cases and the
         projected  number of claims to be filed  pursuant to the Settlement and
         the Company's share of amounts to be paid  thereunder.  The Company has
         also reviewed its contractual  liability for the payment of deductibles
         under   certain   insurance    policies   insuring   Bartells   against
         asbestos-related  personal  injury  claims,  such policies  having been
         issued when  Bartells  was owned by A. P.  Green.  The Company has also
         reviewed  the  terms of the  settlement  agreement  with its  insurance
         carriers.  Based upon such  reviews,  the  Company  has  projected  its
         liability  for such cases and claims  through 2004 to be  approximately
         $118.3  million and $112.0  million at March 31, 1997 and  December 31,
         1996, respectively,  with offsetting projected insurance reimbursements
         of approximately $118.3 million and $110.4 million, respectively.

         While management  understands the inherent uncertainty in litigation of
         this type and the possibility  that past costs may not be indicative of
         future costs,  management  does not believe that these claims and cases
         will have any  additional  material  adverse  effect  on the  Company's
         consolidated  financial  position or results of operations.  Management
         anticipates the Company's  payments for these claims will occur over at
         least seven years and can be made from normal operating cash sources.

         In addition to asbestos-related personal injury claims asserted against
         A. P.  Green,  a number of similar  claims have been  asserted  against
         Bigelow-Liptak Corporation (now known as A. P. Green Services, Inc.), a
         subsidiary  of the Company.  These  claims have been and are  currently
         being handled by such subsidiary's insurance carriers. Except for



                                       -8-

<PAGE>



         deductible amounts or retentions provided under insurance policies,  no
         claim for reimbursement of defense or indemnity  payments has been made
         against the Company or such subsidiary by any such carriers.

         Asbestos-Related Claims-Property Damage
         ---------------------------------------

         A. P. Green is among  numerous  defendants  in a property  damage class
         action suit pending in South Carolina.  A. P. Green previously has been
         dismissed  from a number of property  damage cases and believes that it
         should be dismissed  from the South Carolina case based on the end uses
         of its products. A similar suit pending in the State of Oregon involves
         a former wholly owned  subsidiary of the Company and is being  defended
         by the Company's insurance carrier. Based upon the Company's history in
         these  asbestos-related  property  damage claims,  management  does not
         believe  that the  ultimate  resolution  of these  matters  will have a
         material  adverse  effect  on  the  Company's   consolidated  financial
         position or results of operations.

         There was no assumption by the Company of  asbestos-related  liability,
         either  personal  injury or property  damage,  in  connection  with the
         August 1994 General acquisition.

         Environmental
         -------------

         The  EPA or  private  parties  have  named  the  Company  or one of its
         subsidiaries as a potentially  responsible party in connection with two
         superfund sites in the United States. The Company is a de minimis party
         with  respect to one of the sites and expects to arrive at a settlement
         agreement  and consent  decree with  respect to it for an amount of not
         more than $10,000. With respect to the second, involving a wholly owned
         subsidiary of the Company,  there does not appear to be any evidence of
         delivery  to the  site of  hazardous  material  by the  subsidiary.  An
         estimate has been made of the costs to be incurred in these matters and
         the Company has recorded a reserve respecting those costs.

         Other
         -----

         From time to time, A. P. Green is subject to claims and other  lawsuits
         that arise in the ordinary  course of business,  some of which may seek
         damages in substantial  amounts,  including  punitive or  extraordinary
         damages.  Reserves  for these  claims and  lawsuits are recorded to the
         extent  that  losses  are deemed  probable  and are  estimable.  In the
         opinion  of  management,  the  disposition  of all  current  claims and
         lawsuits will not have a material  adverse  effect on the  consolidated
         financial position or results of operations of A. P. Green.



                                       -9-

<PAGE>



A. P. GREEN INDUSTRIES, INC.

PART I.  FINANCIAL INFORMATION

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

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

         Total sales  increased 0.9% to $64.8 million for the three months ended
         March 31, 1997 from $64.2 million for the comparable  1996  three-month
         period.  Gross profit declined 4.9% to $10.8 million from $11.4 million
         for the  comparable  periods.  The impact  from the  December  31, 1996
         acquisition  of  Eastern  Ridge  Lime in  Ripplemead,  Virginia  was to
         increase sales by $2.1 million and gross profit by $424,000.

         Refractory Products and Services
         --------------------------------

         Refractory  products and services  sales declined 1.6% to $53.5 million
         for the three-month  period ended March 31, 1997 from $54.4 million for
         the three-month  period ended March 31, 1996.  United States refractory
         sales  declined  4.4% to  $45.5  million  from  $47.6  million  for the
         comparable three-month periods. The majority of this decline was due to
         lower sales of silica  products from the Lehi,  Utah plant,  which were
         high in 1996 due to capital  projects  at  several  glass and coke oven
         customers.  Declines in brick,  specialties  and ceramic  fiber volumes
         were partially  offset by increases in precast shapes and INTOGREEN Co.
         and Lanxide  ThermoComposites,  Inc.  (LTI)  products  for a net volume
         decline of 2.5%.  Prices for INTOGREEN and LTI products and specialties
         prices  increased,  while prices on all other U.S.  refractory  product
         lines  declined for an average price decline of 0.5% for the comparable
         quarters.  U.S.  export sales  declined 28.4% to $4.4 million from $6.2
         million, primarily due to reduced sales to South America and the Middle
         East.  Reduced export sales from the U.S. to Mexico,  the Caribbean and
         Europe were offset with increased  sales by the Company's  subsidiaries
         in those regions.

         Sales of the Canadian  subsidiary declined 2.0% to $5.4 million for the
         three months  ended March 31, 1997 from $5.5 million for the comparable
         1996 period.  Decreases in brick and specialties volumes were partially
         offset by  increases  in ceramic  fiber,  crucible  and  precast  shape
         volumes,  resulting  in an  overall  volume  decline  of  4.1%.  Prices
         increased  across all  product  lines with the  exception  of  precast
         shapes resulting in an overall price increase of 5.2%.

         The first quarter of 1996 included  costs related to the final shutdown
         of the Weston,  Ontario  plant,  which was sold in December  1995,  and
         relocation of the related inventory and equipment. Elimination of those
         costs  resulted in a 7.0%  improvement  in Canadian gross profit in the
         first quarter of 1997. As a result of the gross profit improvement, the

                                      -10-

<PAGE>



         Canadian  pre-tax loss  declined to $74,000 from $181,000 for the first
         quarters of 1997 and 1996, respectively.

         Sales in the United  Kingdom  increased  5.5% to $2.2  million  for the
         three months ended March 31, 1997 from $2.1 million for the  comparable
         1996  quarter.  A decline in gross  profit,  primarily due to increased
         material  costs,  more than offset the sales  increase,  resulting in a
         pre-tax  loss of  $31,000  in the first  quarter  of 1997  compared  to
         pre-tax earnings of $74,000 in the comparable 1996 period.

         Sales at A. P. Green de Mexico for the first quarter of 1997  increased
         53.0% to $2.4 million from $1.6 million for the comparable 1996 period.
         Increased   material  and  freight   costs  reduced  the  gross  profit
         percentage  from 31.0% to 22.4%,  resulting  in a reduction  in pre-tax
         earnings to $218,000 from $227,000.

         Sales at PT AP Green  Indonesia were  $118,000,  with a pre-tax loss of
         $238,000 due to start-up costs and  relatively  high fixed costs at the
         low initial  volume level.  This operation is expected to be profitable
         by the end of 1997. The Indonesian operation incurred a pre-tax loss of
         $11,000 during the first quarter of 1996.

         Refractory  cost of sales as a percentage  of sales  increased to 83.9%
         from  83.1%  for the  three  months  ended  March  31,  1997 and  1996,
         respectively. This increase was primarily due to unusually high natural
         gas prices during the first  quarter of 1997 and reduced  production at
         the Mexico,  Missouri  plant as new mixing and batching  equipment  was
         installed in January.  Partially  offsetting these increased costs were
         lower  equipment  repair and  maintenance  and group  health  insurance
         costs.

         Refractory  operating  profits declined 37.0% to $1.9 million from $3.1
         million in 1997 and 1996, respectively. In addition to the reduction in
         gross profit,  increased research  expenditures,  primarily at LTI, and
         increased selling and administrative costs at INTOGREEN,  LTI and PT AP
         Green  Indonesia  contributed  to the  reduction in  operating  profit.
         Results from these subsidiaries  should improve as they progress beyond
         the start-up phase of operations.

         Industrial Lime
         ---------------

         Industrial  lime sales  increased  10.4% to $11.4 million for the first
         quarter of 1997,  including  $2.1 million from the newly acquired plant
         in  Ripplemead,  Virginia,  from $9.9 million for the first  quarter of
         1996. Volumes at the New Braunfels, Texas plant decreased an average of
         3.0%, with declines in road  stabilization  and building lime partially
         offset with increased  volume of industrial  lime.  Pricing was flat at
         New Braunfels for the  comparable  quarters,  with slight  increases in
         industrial  and road  stabilization  prices  offset by lower prices for
         building lime and lime by-products. At the Kimballton,  Virginia plant,
         declines in quicklime and hydrate volumes was partially offset

                                      -11-

<PAGE>



         by an  improvement  in Cal-Dol  volume for an overall  decline of 6.8%.
         Average  selling prices  declined  slightly across all product lines at
         Kimballton for the first quarter of 1997 compared to the 1996 period.

         Industrial  lime gross profit was $2.2 million for both  periods,  with
         the gross  profit  percentage  declining to 19.1% of sales in 1997 from
         21.8% of sales in 1996. The decline in gross profit  percentage was due
         to increased  purchased  material  costs at both the Kimballton and New
         Braunfels  plants  and  increased  power and  processing  fuel costs at
         Kimballton,  partially  offset by reduced fuel costs at New  Braunfels.
         Also  contributing  to the decline in gross profit  percentage were the
         relatively high operating costs and  depreciation  related to the newly
         acquired Ripplemead plant.  Significant  improvements have been made at
         this facility, which generated a small net profit in the first quarter,
         and the impact of these improvements,  coupled with increased synergies
         with the  Kimballton  plant,  should  result in improved  gross  profit
         percentages in future periods.  Operating  profit was also flat at $1.8
         million for the comparable periods.

         Expenses and Other Income
         -------------------------

         Selling and administrative  expenses increased 4.0% to $9.2 million for
         the  three-month  period ended March 31, 1997 from $8.9 million for the
         comparable  1996  period.  The  increase  was  primarily  due  to  LTI,
         INTOGREEN and PT AP Green Indonesia as noted above, partially offset by
         reduced management incentive expenses.

         Interest  expense  increased  6.1% to $834,000 in 1997 from $786,000 in
         1996 due to interest  associated with borrowings  against the Company's
         line of credit.  Daily average bank line borrowings were  approximately
         $4.2 million  during the first quarter of 1997,  primarily due to funds
         borrowed  in  December   1996   related  to  the  Eastern   Ridge  Lime
         acquisition,  while there were no bank line borrowings during the first
         quarter  of 1996.  Interest  income  for the first  quarter of 1997 was
         $247,000  compared  to  $322,000  for the first  quarter  of 1996.  The
         reduction was due primarily to reduced funds available for investing.

         Other  income  decreased  53.3% to $66,000 for the three  months  ended
         March 31, 1997 from $142,000 for the comparable 1996 period,  primarily
         due to currency  conversion losses on U.S. dollar denominated  accounts
         at the  Canadian  subsidiary  during  1997  compared to a small gain in
         1996, partially offset by increased royalty income.

         The Company and its Canadian and U.K.  subsidiaries  typically transact
         business in their own  currencies  and  accordingly  are not subject to
         significant  transaction gains and losses. A. P. Green de Mexico and PT
         AP Green Indonesia transact a significant  portion of their business in
         U.S. dollars and, as such, use the dollar as their functional currency.
         This



                                      -12-

<PAGE>



         results in  currency  conversion  gains and losses on Mexican  peso and
         Indonesian rupiah transactions,  A. P. Green's portion of which was not
         significant to the consolidated results.

         Equity in Net Income of Affiliates
         ----------------------------------

         The  Company's  share of income from its two Colombian  affiliates  was
         $15,000 in the first quarter of 1997 compared to $180,000 for the first
         quarter of 1996.  The reduction was due to a recession in the Colombian
         construction  industry,  political uncertainty and a general decline in
         economic conditions in Colombia.  Current projections  indicate reduced
         income levels will continue in the near future.

         Accounting Standards Not Yet Implemented
         ----------------------------------------

         The Company is required to implement Statement of Financial  Accounting
         Standards  No.  128,  "Earnings  per  Share",  for the quarter and year
         ending  December 31, 1997. The standard  requires  presentation of both
         basic and diluted  earnings  per share on the face of the  consolidated
         statement of earnings, using the treasury stock method to calculate the
         net impact of dilutive  securities.  In addition,  a reconciliation  of
         both the numerator and denominator of the two  calculations is required
         in the footnotes to the financial statements. Due to the relatively low
         number of exercisable stock options outstanding,  implementation of the
         standard would not have changed earnings per share as reported herein.

                                      -13-

<PAGE>



                                INDUSTRY SEGMENTS
                                 (In thousands)

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

Refractory products and services           $  53,497          $  54,380
Industrial lime                               11,429              9,892
Intersegment eliminations                       (110)               (38)
                                            --------           --------

                                           $  64,816          $  64,234
                                            ========           ========
GROSS PROFIT

Refractory products and services           $   8,623          $   9,203
Industrial lime                                2,179              2,152
                                            --------           --------

                                           $  10,802          $  11,355
                                            ========           ========
GROSS PROFIT PERCENTAGE

Refractory products and services                16.1%              16.9%
Industrial lime                                 19.1%              21.8%

                                                16.7%              17.7%
                                            ========           ========
OPERATING PROFIT

Refractory products and services           $   1,946          $   3,090
Industrial lime                                1,823              1,835
                                            --------           --------

                                               3,769              4,925
                                            --------           --------
OTHER CHARGES TO INCOME

General corporate expenses, net                2,127              2,264
Interest expense                                 834                786
Interest income                                 (247)              (322)
                                            --------           --------

  Total other charges                          2,714              2,728
                                            --------           --------

EARNINGS BEFORE INCOME TAXES               $   1,055          $   2,197
                                            ========           ========

IDENTIFIABLE ASSETS (AT PERIOD END)

Refractory products and services           $ 296,729          $ 311,004
Industrial lime                               59,021             47,523
Corporate                                        216              7,775
                                            --------           --------

                                           $ 355,966          $ 366,302
                                            ========           ========

                                      -14-

<PAGE>



                                           Three Months Ended March 31,
                                           ----------------------------
                                              1997               1996
                                           ----------------------------
DEPRECIATION, DEPLETION AND AMORTIZATION

Refractory products and services           $   1,728          $   1,637
Industrial lime                                1,074                692
Corporate                                        197                263
                                            --------           --------

                                           $   2,999          $   2,592
                                            ========           ========

CAPITAL EXPENDITURES

Refractory products and services           $   1,099          $   2,637
Industrial lime                                  347                481
Corporate                                        143                146
                                            --------           --------

                                           $   1,589          $   3,264
                                            ========           ========



                               GEOGRAPHIC SEGMENTS
                                 (In thousands)

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

United States                              $  56,939          $  57,489
Canada                                         5,375              5,487
United Kingdom                                 2,210              2,094
Mexico                                         2,404              1,571
Far East                                         118                 --
Intersegment transfers (primarily U.S.)       (2,230)            (2,407)
                                            --------           --------

                                           $  64,816          $  64,234
                                            ========           ========
EARNINGS (LOSS) BEFORE INCOME TAXES

United States                              $   1,180          $   2,088
Canada                                           (74)              (181)
United Kingdom                                   (31)                74
Mexico                                           218                227
Far East                                        (238)               (11)
                                            --------           --------
                                           $   1,055          $   2,197
                                            ========           ========


                                      -15-

<PAGE>



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

IDENTIFIABLE ASSETS (AT PERIOD END)

United States                              $ 313,587          $ 328,946
Canada                                        16,961             17,283
United Kingdom                                 4,694              4,278
Mexico                                         6,949              5,043
Far East                                       7,346              2,976
Corporate                                      6,429              7,776
                                            --------           --------

                                           $ 355,966          $ 366,302
                                            ========           ========





                              PRICE/VOLUME SUMMARY
                            1997 AS COMPARED TO 1996
                           PERCENT INCREASE (DECREASE)

                                                             Three
                                                             Months
                                                             Ended
                                                             -----
U.S. REFRACTORY PRODUCTS SALES

  Volume                                                     (2.5)%

  Price                                                      (0.5)

INDUSTRIAL LIME SALES
   (excluding impact of Eastern Ridge acquisition)

  Volume                                                     (5.2)

  Price                                                      (0.1)


                                      -16-

<PAGE>



FINANCIAL CONDITION
-------------------

The Company continues to maintain a strong balance sheet.

                               Summary Information
                             (Dollars in thousands)

                                      March 31,
                               ----------------------    December 31,
                                 1997          1996          1996
                               --------      --------      --------

Working capital                $ 69,591      $ 79,426      $ 75,541

Current ratio                     2.6:1         3.0:1         2.7:1

Total assets                   $355,966      $366,302      $355,129

Current maturities of
 long-term debt                   4,145         2,742         4,168

Long-term debt                   34,736        34,360        40,109

Stockholders' equity           $118,600      $115,174      $118,384

Debt to total
 capitalization(1)                 24.7%         24.4%         27.2%

         (1)  Calculated as total Debt  (long-term  debt  including  current
              maturities) divided by total  stockholders'  equity plus total
              Debt.

         Working  capital  declined $6.0 million from December 31, 1996 to March
         31,  1997 as cash  was  used  to  repay  borrowings  against  the  U.S.
         long-term  line of  credit.  The ratio of  current  assets  to  current
         liabilities decreased to 2.6 to 1 from 2.7 to 1 during the same period.
         As compared to March 31, 1996  working  capital was down $9.8  million,
         primarily due to a $4.1 million increase in accounts payable and a $2.5
         million reduction in reimbursement due on paid asbestos claims. Both of
         these changes,  as well as the $3.2 million  reduction in reimbursement
         due on paid asbestos claims since December 31, 1996, relate to asbestos
         claim settlements with and reimbursements  from the Company's insurance
         carriers and the Center.

         Also  contributing  to the reduction in working capital since March 31,
         1996  were a $1.6  million  reduction  in  accounts  receivable  due to
         improved collections and a $1.7 million planned reduction in refractory
         finished  goods  inventories.   In  addition,   current  maturities  of
         long-term   debt    increased   $1.4   million,    primarily   due   to
         reclassification from long-term

                                      -17-

<PAGE>



         debt of the final payment on an industrial  development revenue bond at
         the Bessemer, Alabama plant which matures in December 1997.

         Projected  insurance recovery on asbestos claims increased $8.0 million
         while  projected  asbestos  claims  increased  $6.4 million,  both as a
         result of revised  estimates  based upon  information  provided  by the
         Center,  net of payments  received from insurance  carriers  during the
         quarter. The net projected asbestos liability included in the Company's
         consolidated  statement of financial  position has been reduced to zero
         as of  March  31,  1997 as a  result  of  final  settlements  with  the
         Company's insurance  carriers.  Future payments of asbestos claims will
         be made directly to the Center by insurance carriers.

         Long-term  debt  decreased $5.3 million from December 31, 1996 to March
         31, 1997 due to $6.0 million in repayments  against the U.S.  long-term
         line of credit.  These  repayments were partially  offset by a $700,000
         ten-year capital lease on a warehouse in Houston, Texas, which bears an
         interest rate of 10.9% and expires December 1, 2006.

         Capital expenditures for the first quarter of 1997 totaled $1.6 million
         compared to $3.3 million during the first quarter of 1996, with capital
         expenditures for the  refractories  business  decreasing  approximately
         $1.5  million.  This  reduction was primarily due to completion of both
         the new plant in Indonesia and the expansion of the Smithville, Ontario
         plant during 1996.

         Subsequent Event
         ----------------

         In May 1997, the Company's $30.0 million U.S.  long-term line of credit
         was  extended  to May 2, 1999.  At the same time,  certain  restrictive
         covenants  associated with the Company's U.S.  long-term line of credit
         and the unsecured notes payable were amended  effective January 1, 1997
         to terms more favorable to the Company.  Approximately  $2.7 million of
         this  line  of  credit  was  being  utilized  at  March  31,  1997  for
         outstanding  letters of credit and $3.0 million in borrowings  remained
         outstanding,  leaving  an  available  balance  of  approximately  $24.3
         million.

                                      -18-

<PAGE>



A. P. GREEN INDUSTRIES, INC.

PART II.  OTHER INFORMATION



Item 6.           EXHIBITS AND REPORTS ON FORM 8-K
                  --------------------------------

         (a)      Exhibits:

                  Exhibit No.

                  27  Financial Data  Schedule  as  of and for the Three  Months
                      Ended March 31, 1997

         (b)      Reports on Form 8-K: On January  13,  1997 the  Company  filed
                  Form  8-K  to  report,   under  Item  2,  the  acquisition  of
                  substantially  all of the  assets  and  assumption  of certain
                  liabilities  of the  operations  of Eastern  Ridge Lime,  L.P.
                  ("Eastern  Ridge").  Pursuant to Item  7(a)(4) of Form 8-K, on
                  March 17, 1997 the Company filed Form 8-K/A to include,  under
                  Item 7,  the  following  historical  and pro  forma  financial
                  statements:

                  (a) Historical Financial Statements of Eastern Ridge

                  Balance sheets,  statements of operations,  statements of cash
                  flows and statements of partnership  equity  (deficit),  notes
                  thereto  and  independent  auditors'  report as of and for the
                  years ended December 31, 1995 and 1994.

                  Unaudited balance sheet as of September 30, 1996 and unaudited
                  statements of operations  and statements of cash flows for the
                  nine months ended September 30, 1996 and 1995.

                  (b) Pro Forma Financial Information

                  Pro forma  combined  statement of  financial  position and pro
                  forma  combined  statement  of  earnings  as of  and  for  the
                  nine-month  period  ended  September  30,  1996 and pro  forma
                  combined statement of earnings for the year ended December 31,
                  1995, unaudited and with notes thereto.




                                      -19-

<PAGE>


                                    SIGNATURE
                                    ---------

Pursuant  to the  requirements  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.

                                     A. P. Green Industries, Inc.
                                              (Registrant)



                                     By:/s/ Gary L. Roberts
                                        --------------------------
                                            Gary L. Roberts

                                     Vice President, Chief Financial
                                     Officer and Treasurer


Date:  May 14, 1997
       ------------


























                                      -20-