<PAGE>


                                  FORM 10-Q
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                                       
                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934
                                       
                                       
                                       
                       For the Period Ended September 30, 1997
                           Commission File Number: 0-21737
                                       
                              Zimmerman Sign Company
            ------------------------------------------------------
            (Exact name of Registrant as specified in its charter)
                                       
                                       
                                       
                                       
         TEXAS                                         75-0864498
------------------------                  ------------------------------------
(State of Incorporation)                  (I.R.S. Employer Identification No.)


   9846 HIGHWAY 31 EAST, TYLER, TEXAS                                 75705
----------------------------------------                            ----------
(Address of principal executive offices)                            (Zip Code)



Registrant's telephone number, including area code: (903) 535-7400

                                NOT APPLICABLE
-------------------------------------------------------------------------------
Former name, former address and fiscal 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  /   /

               1,854,692 SHARES OF COMMON STOCK, $0.01 PAR VALUE
-------------------------------------------------------------------------------
                Common Stock Outstanding as of October 31, 1997

<PAGE>

                            ZIMMERMAN SIGN COMPANY
                                       
                                     INDEX
                                       

PART I - FINANCIAL INFORMATION                                        PAGE NO.
------------------------------                                        --------

Item 1.  Financial Statements

              Balance Sheets as of September 30, 1997 (unaudited)
                and December 31, 1996  . . . . . . . . . . . . . . .      1 

              Statements of Operations (unaudited) for the three 
                and nine months ended September 30, 1997 and 
                1996 . . . . . . . . . . . . . . . . . . . . . . . .      2

              Statements of Cash Flows (unaudited) for the nine 
                months ended September 30, 1997 and 1996 . . . . . .      3
         
              Notes to Financial Statements. . . . . . . . . . . . .      4

Item 2.  Management's Discussion and Analysis of Results of 
           Operations and Financial Condition. . . . . . . . . . . .      5



PART II - OTHER INFORMATION
---------------------------

Item 1   Legal Proceedings . . . . . . . . . . . . . . . . . . . . .      7

Item 2   Changes in Securities . . . . . . . . . . . . . . . . . . .      7

Item 3   Default Upon Senior Securities. . . . . . . . . . . . . . .      7

Item 4   Submission of Matters to a Vote of Security 
           Holders . . . . . . . . . . . . . . . . . . . . . . . . .      7
         
Item 5   Other Information . . . . . . . . . . . . . . . . . . . . .      7

Item 6   Exhibits and Reports on Form 8-K. . . . . . . . . . . . . .      7

         Signatures. . . . . . . . . . . . . . . . . . . . . . . . .      7

<PAGE>
                                       
                            ZIMMERMAN SIGN COMPANY
                                Balance Sheets
                   September 30, 1997 and December 31, 1996
                                       
                                               1997             1996   
                                           -----------      -----------
               Assets                      (Unaudited)
               ------
Current assets:

  Cash                                     $    34,166      $   132,483 
  Accounts receivable, net of allowance 
    for doubtful accounts of $120,581 in 
    1997 and $100,000 in 1996                9,272,752       10,140,903 
  Inventories                               14,736,117       13,607,758 
  Prepaids and other current assets            482,079          482,825 
  Deferred tax assets                          620,774             --   
                                           -----------      -----------
         Total current assets               25,145,888       24,363,969 
Property, plant and equipment, net           2,940,546        3,152,903 
Other assets                                   531,341          637,069 
                                           -----------      -----------
                                           $28,617,775      $28,153,941
                                           ===========      ===========

 Liabilities and Stockholders' Deficit
 -------------------------------------
Current liabilities:

  Current installments of long-term 
    debt                                   $ 1,581,000      $ 1,170,000 
  Accounts payable                           6,409,303        5,124,465 
  Accrued expenses                           1,672,156        1,408,615 
  Dividend payable                           1,000,000        1,000,000 
  Customer deposits                            927,477          758,637 
                                           -----------      -----------
         Total current liabilities          11,589,936        9,461,717 
                                           -----------      -----------

Long-term debt, excluding 
  current installments                      25,722,000       28,555,000 
                                           -----------      -----------

Stockholders' deficit:

  Preferred stock, $.01 par value. 
    Authorized 2,000,000 shares; 
    none issued
  Common stock, $.01 par value. Authorized 
    15,000,000 shares; 1,854,692 shares 
    issued and outstanding                      18,547           18,547 
  Accumulated deficit                       (8,712,708)      (9,881,323)
                                           -----------      -----------
         Total stockholders' deficit        (8,694,161)      (9,862,776)
                                           -----------      -----------
                                           $28,617,775      $28,153,941
                                           ===========      ===========

See accompanying notes to financial statements


                                       1
<PAGE>

                                ZIMMERMAN SIGN COMPANY
                               Statements of Operations
               Three and Nine Months Ended September 30, 1997 and 1996
                                     (Unaudited)

<TABLE>
                                            Three Months Ended          Nine Months Ended    
                                               September 30                September 30             
                                      --------------------------   ---------------------------
                                           1997          1996           1997         1996      
                                      ------------   -----------   ------------   ------------ 
<S>                                   <C>            <C>           <C>            <C>
Net sales                             $ 11,086,233   $ 9,652,710   $ 32,441,677   $ 29,180,059

Cost of goods sold                       8,804,218     7,360,001     25,435,827     22,717,618
                                      ------------   -----------   ------------   ------------ 
  Gross profit                           2,282,015     2,292,709      7,005,851      6,462,441

Selling, general and administrative 
  expenses                               1,360,163     1,120,526      4,202,991      3,272,099

Management fees                             --           150,000         --            450,000

Interest expense, net                      615,935       199,539      1,807,142        545,978
                                      ------------   -----------   ------------   ------------ 
Income before federal income taxes         305,917       822,644        995,717      2,194,364

Federal income taxes                        74,391       279,699        354,138        746,083
                                      ------------   -----------   ------------   ------------ 
  Net income                          $    231,526   $   542,945   $    641,579   $  1,448,281
                                      ============   ===========   ============   ============

Net income per share                  $       0.12   $      0.29   $       0.35   $       0.78
                                      ============   ===========   ============   ============

Weighted average number of shares
  outstanding                            1,854,692     1,854,692      1,854,692      1,854,692
                                      ============   ===========   ============   ============
</TABLE>

See accompanying notes to financial statements


                                       2

<PAGE>

                                ZIMMERMAN SIGN COMPANY
                               Statements of Cash Flows
                    Nine Months Ended September 30, 1997 and 1996
                                     (Unaudited)
                                           
                                                        1997         1996   
                                                    -----------   -----------

Cash flows from operating activities:

  Net income                                        $   641,579   $ 1,448,281 

  Adjustments to reconcile net income to 
    net cash provided by operating activities:

    Depreciation and amortization                       535,915       364,642 
    Provision for losses on accounts receivable          20,581        18,126
    Deferred tax benefit                                (93,738)           --
    Changes in operating assets and liabilities:
      Accounts receivable                               847,570       438,361
      Inventories                                    (1,128,359)   (2,317,888)
      Prepaids and other current assets                 (31,951)      725,920
      Other assets                                       (3,000)       45,504
      Customer deposits                                 168,840       271,468 
      Accounts payable and accrued expenses           1,548,379      (865,901)
                                                    -----------   -----------
        Net cash provided by operating activities     2,505,816       128,513 
                                                    -----------   -----------
Cash flows used in investing activities:

  Purchases of property, plant and 
    equipment, net                                     (182,133)     (548,796)
                                                    -----------   -----------
Cash flows from financing activities:

  Payments of revolving line of credit               (1,600,000)      575,000 
  Principal payments on long-term debt                 (822,000)     (200,063)
                                                    -----------   -----------
          Net cash provided by (used in) 
            financing activities                     (2,422,000)      374,937 
                                                    -----------   -----------
Net decreases in cash                                   (98,317)      (45,346)

Cash at beginning of period                             132,483       107,756 
                                                    -----------   -----------
Cash at end of period                               $    34,166   $    62,410
                                                    ===========   ===========

See accompanying notes to financial statements

                                       3
<PAGE>

                                ZIMMERMAN SIGN COMPANY
                            NOTES TO FINANCIAL STATEMENTS

1.   Basis of Presentation

     The accompanying financial statements have been prepared by Zimmerman Sign
     Company (the Company), without audit.  In the opinion of management, all
     adjustments (which include only normal recurring adjustments) necessary to
     present fairly the financial position, results of operations and changes in
     cash flows at September 30, 1997 and for all periods presented have been
     made.  The prior year quarter and nine months results have been restated to
     reflect certain adjustments that previously were not made on an interim
     period basis, but were made only in the annual financial statements prior
     to the company becoming a public reporting entity.

     Certain information and footnote disclosures normally included in financial
     statements prepared in accordance with generally accepted accounting
     principles have been condensed or omitted.  These financial statements
     should be read in conjunction with the financial statements and notes
     thereto included in the Company's 1996 Annual Report to Stockholders.  The
     results of operations for the periods ended September 30, 1997 are not
     necessarily indicative of the operating results for the full year.

2.   In conjunction with the spin-off of the Company from its parent,
     Independence Holding Company (IHC), on December 31, 1996, deferred tax
     assets formerly recorded by IHC on its financial statements are available
     to the Company and were recorded as an increase to retained earnings on
     January 1, 1997.


                                       4

<PAGE>

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


THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE ATTACHED
UNAUDITED FINANCIAL STATEMENTS AND NOTES THERETO, AND WITH ZIMMERMAN SIGN
COMPANY'S (THE COMPANY) AUDITED FINANCIAL STATEMENTS AND NOTES THERETO FOR THE
YEAR ENDED DECEMBER 31, 1996.

The Company's net sales for the three month period ended September 30, 1997
increased $1,434,000 or 14.9% to $11,086,000 from $9,653,000 for the same period
last year. Net sales for the nine months ended September 30, 1997 increased
$3,262,000 or 11.2% to $32,442,000 compared to $29,180,000 for the same period
in 1996 (as adjusted, see Note 1 to the Financial Statements).  The net sales
increase for the nine month period is primarily due to increased sales to
petroleum and automotive customers.

The Company's gross profit for the three months ended September 30, 1997
decreased to 20.6% from 23.8% for the same period in 1996.  For the nine months
ended September 30, 1997, the gross profit percentage decreased to 21.6% from
22.2% in 1996.  The decreases for both periods are primarily due to higher
factory overhead expenses.

Selling, general and administrative expenses (including management fees for
1996) were $1,360,000 or 12.3% as a percentage of sales for the quarter ended
September 30, 1997 compared to  $1,271,000 or 13.2% as a percentage of sales for
the same period in the prior year.   For the nine months ended September 30,
1997, selling, general and administrative expenses increased $481,000 to
$4,203,000 or 13.0% as a percentage of sales as compared to $3,722,000 or 12.8%
as a percentage of sales for the nine months ended September 30, 1996.  The
increase for the nine month period is primarily the result of amortization of
certain costs associated with the Company's 1996 recapitalization, ongoing costs
of being a public company, including the obtaining of services previously
provided by its former parent, Independence Holding Company (IHC), and
incurrence of higher health insurance and other personnel related costs during
the first nine months of 1997.

The Company's management fee arrangement terminated at December 31, 1996 when
the Company was spun-off from IHC.  Services previously provided to the Company
by the former parent are now performed by the Company.  The costs associated
with these services are reflected in selling, general and administrative
expenses in the 1997 quarter and year to date. 

Net interest expense increased to $616,000 for the quarter ended September 30,
1997 from $200,000 for the same period in the prior year.   Interest expense for
the nine months ended September 30, 1997 increased to $1,807,000 from $546,000
for the nine months ended September 30, 1996.  This was primarily the result of
higher debt incurred in association with the Company's restructuring and 
spin-off from IHC.

Income before federal income taxes was $306,000 for the quarter ended September
30, 1997 compared to $823,000 for the same period in the prior year, a decrease
of $517,000.  Income before federal income taxes for the nine months ended
September 30, 1997 decreased $1,198,000 to $996,000 from $2,194,000 for the same
period in 1996.  This decrease primarily resulted from expenses related to the
Company's restructuring and spin-off from IHC.


                                       5

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES
                                           
Operating working capital (defined as accounts receivable plus inventories, less
accounts payable, including accrued expenses and customer deposits) decreased
$1,457,000 to $15,000,000 at September 30, 1997, from $16,457,000 at December
31, 1996.  The decrease in operating working capital resulted from decreased
accounts receivable and increased accounts payable being partially offset by
increased inventories.  Funds of $2,506,000 were provided by operating
activities for the nine months ended September 30, 1997 compared to $129,000 for
the nine months ended September 30, 1996.  Increases in accounts payable and
accrued expenses and customer deposits as well as a decrease in net receivables
were the primary sources of funds, which were partially offset by increases in
inventory.

Investing activities used $182,000 for the first nine months of 1997 as a result
of property and equipment purchases.  Financing activities used $2,422,000 as a
result of decreased net borrowings under the Company's line of credit and
repayments of bank term loans.

The Company's future capital expenditures will relate principally to the
acquisition of new machinery and equipment designed to increase productivity and
factory efficiency.  The Company believes its cash generated from operations and
funds available under the existing line of credit are sufficient for its planned
requirements during 1997.

SEASONALITY

The Company's sales exhibit limited seasonality, with sales in the first quarter
generally being the lowest of the four calendar quarters.  First quarter sales
tend to be relatively lower because of weather constraints which may restrict
customers' construction activities and may reduce their sign purchases. 

NEW ACCOUNTING STANDARDS

In February 1997, the Financial Accounting Standards Board issued Statement No.
128, 'Earnings Per Share', which specifies the computation, presentation and
disclosure requirements for earnings per share for entities with publicly held
common stock for both interim and annual periods ending after December 15, 1997.
Management of the Company does not expect the impact from adopting the
provisions of Statement No. 128 in fiscal year 1997 to be material.

FORWARD-LOOKING INFORMATION

This report and other reports and statements filed by the Company from time to
time with the Securities and Exchange Commission (collectively, 'SEC Filings')
contain or may contain certain forward-looking statements and information that
are based upon beliefs of, and information currently available to the Company's
management.  When used in SEC Filings, the words 'anticipate', 'believe',
'estimate', 'future', 'intend', 'plan', and similar expressions with prospective
connotations as they relate to the Company and its business identify 
forward-looking statements.  All forward-looking statements reflect the 
current views of the Company with respect to future events and are subject to 
various risks, uncertainties and assumptions relating to the Company and its 
operating environment which may cause the actual results to vary 
significantly from those anticipated.  Specific factors that may cause the 
Company's actual results to differ from those anticipated in forward-looking 
statements are discussed in the Company's most recently filed Form 10-K.


                                       6

<PAGE>

                                       PART II
                                  OTHER INFORMATION

Item 1.   Legal Proceedings:
          Not applicable.

Item 2.   Changes in Securities:
          Not applicable.

Item 3.   Default Upon Senior Securities:
          Not applicable

Item 4.   Submission of Matters to a Vote of Security Holders:
          Not applicable

Item 5.   Other Information:
          Not applicable

Item 6.   Exhibits and Reports on Form 8-K:

               (a)  Exhibits 

                    Exhibit no.    Description
                    -------------  --------------
                        27.1       Financial Data Schedule

               (b)   No reports on Form 8-K were filed during the quarter
                     ended September 30, 1997.


SIGNATURES

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, on November 12, 1997.


                            ZIMMERMAN SIGN COMPANY
                                  REGISTRANT      




                            /s/ Jeffrey P. Johnson
           --------------------------------------------------------
                           VICE PRESIDENT OF FINANCE


             (AUTHORIZED OFFICER AND PRINCIPAL FINANCIAL OFFICER)  

                                       7