UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                   (MARK ONE)
             ( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 29, 1998

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

        FOR THE TRANSITION PERIOD FROM______________ TO ________________

                       COMMISSION FILE NUMBER : 000-23457


                        ENTEX INFORMATION SERVICES, INC.

             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


                      DELAWARE                      93 -133715291
          (STATE OR OTHER JURISDICTION             (I.R.S. EMPLOYER
                 OF INCORPORATION)              IDENTIFICATION NUMBER)

                6 INTERNATIONAL DRIVE, RYE BROOK, N.Y. 10573-1058
                                                           (914) 935-3600

     (ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
                          PRINCIPAL EXECUTIVE OFFICES)

         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  AND EXCHANGE ACT
OF 1934 DURING THE  PRECEDING  TWELVE  MONTHS,  AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST NINETY DAYS:

                                YES ( ) NO ( X )

         THE NUMBER OF OUTSTANDING SHARES OF THE REGISTRANT'S  COMMON STOCK, PAR
VALUE $.0001 PER SHARE, WAS 32,404,610 ON MARCH 29, 1998.

    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 13, 1998
    -------------------------------------------------------------------------



<PAGE>




               ENTEX INFORMATION SERVICES, INC.

                             INDEX

                                                                    PAGE NUMBERS
PART I.   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

          CONSOLIDATED BALANCE SHEETS AS OF
          MARCH 29, 1998 AND JUNE 29, 1997                               2

          CONSOLIDATED STATEMENTS OF OPERATIONS
          FOR THE THREE AND NINE MONTHS ENDED MARCH 29, 1998
          AND MARCH 30, 1997                                             3
          
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
          THE NINE MONTHS ENDED MARCH 29, 1998
          AND MARCH 30, 1997                                             4

          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                     5 

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS                            6 - 11



PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS                                              12

ITEM 2.   CHANGES IN SECURITIES                                          12

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES                                12

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS            12

ITEM 5.   OTHER INFORMATION                                              12

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K                               12


          SIGNATURES                                                     13


                                       1
<PAGE>

                        ENTEX INFORMATION SERVICES, INC.
                         PART I - FINANCIAL INFORMATION
                           CONSOLIDATED BALANCE SHEETS
                    (DOLLARS IN THOUSANDS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
                                                                              Unaudited
                                                                               March 29,      June 29,
                                                                                1998            1997
                                                                              ---------       ---------
<S>                                                                           <C>             <C>
Assets
Current assets:
   Cash ...................................................................   $   9,231       $  15,838
   Trade receivables (net of allowance for doubtful accounts
      of $4,771 and $4,746, respectively) .................................     346,841         334,196
   Vendor receivables (net of allowance of $1,933 and $2,000, respectively)      43,020          37,789
   Inventories ............................................................     168,084         183,957
   Other current assets ...................................................       8,262           9,228
                                                                              ---------       ---------
          Total current assets ............................................     575,438         581,008

Property, plant and equipment, net ........................................      53,670          55,049
Goodwill, net .............................................................      42,976          45,887
Other assets, net .........................................................       1,305           1,646
                                                                              ---------       ---------

   Total assets ...........................................................   $ 673,389       $ 683,590
                                                                              =========       =========

Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
   Accounts payable .......................................................   $ 293,708       $ 269,962
   Accrued liabilities ....................................................      69,569          53,598
   Notes payable and current installments of long-term debt ...............     274,786         348,276
                                                                              ---------       ---------
          Total current liabilities .......................................     638,063         671,836

Long-term debt ............................................................      53,688          48,215
Other long-term liabilities ...............................................         950           1,271
                                                                              ---------       ---------
          Total long-term liabilities .....................................      54,638          49,486

   Total liabilities ......................................................     692,701         721,322
                                                                              ---------       ---------

Stockholders' equity (deficit):
Preferred stock, 2 million shares authorized;
    no shares  issued or outstanding ......................................        --              --
Common stock, $.0001 par value; 100 million shares
    authorized, 32,404,610 and 32,357,840 shares issued and
    outstanding, respectively .............................................           3               3
Additional paid-in capital ................................................      19,426          19,003
Retained earnings (deficit) ...............................................     (38,688)        (56,707)
Treasury stock, shares at cost ............................................          (2)             (2)
Cumulative translation adjustments ........................................         (51)            (29)
                                                                              ---------       ---------  
   Total stockholders' equity (deficit) ...................................     (19,312)        (37,732)
                                                                              ---------       ---------  
                                                                              $ 673,389       $ 683,590                       
                                                                              =========       =========  

</TABLE>

             See accompanying notes to consolidated financial statements


                                       2
<PAGE>


                        ENTEX INFORMATION SERVICES, INC.
                     Consolidated Statements of Operations
                  (Dollars in thousands except per share data)

<TABLE>
<CAPTION>

                                                  Unaudited                             Unaudited              
                                             Three Months Ended                     Nine Months Ended
                                       -------------------------------       -------------------------------
                                         March 29,          March 30,          March 29,          March 30,
                                           1998               1997               1998               1997
                                       ------------       ------------       ------------       ------------   
<S>                                   <C>                <C>                <C>                <C>
Net revenues:
   Product revenues                    $   479,267        $    506,370       $  1,523,963       $  1,584,941
   Service revenues                        114,567              92,824            331,090            249,268
                                       ------------       ------------       ------------       ------------
          Total net revenues               593,834             599,194          1,855,053          1,834,209

Cost of revenues:
   Cost of products sold                   428,968             456,088          1,366,067          1,439,985
   Cost of services provided                87,299              71,161            254,124            188,710
                                       ------------       ------------       ------------       ------------
          Cost of revenues                 516,267             527,249          1,620,191          1,628,695


Product gross margin                        50,299              50,282            157,896            144,956
Services gross margin                       27,268              21,663             76,966             60,558
                                        -----------       ------------       ------------       ------------
          Total gross margin                77,567              71,945            234,862            205,514

Selling, general and
          Administrative expenses           63,995              61,811            189,133            187,265
                                       ------------       ------------       ------------       ------------

          Income from operations            13,572              10,134             45,729             18,249

Interest expense, net                        8,702               9,418             27,698             27,308
                                       ------------       ------------       ------------       ------------

          Income (loss) before
               Income taxes                  4,870                 716             18,031             (9,059)

Provision for income taxes                       4                   9                 12                 24
                                       ------------       ------------       ------------       ------------

          Net income (loss)            $     4,866        $        707       $     18,019       $     (9,083)
                                       ============       ============       ============       ============

Common Share Data:
Basic earnings (loss) per share        $       .15        $        .02       $        .56       $       (.28)
                                       ============       ============       ============       ============

Diluted earnings (loss) per share      $       .14        $        .02       $        .53       $       (.28)
                                       ============       ============       ============       ============

Basic weighted average number of  
shares of common stock outstanding      32,362,643          32,312,020         32,341,754         32,312,020

Common equivalent shares from stock
options and warrants using the 
treasury stock method                    1,352,131             560,354          1,326,430             --     
                                       ------------       ------------       ------------       ------------

Diluted weighted average number of  
shares of common stock outstanding      33,714,774          32,872,374         33,668,184         32,312,020
                                       ============       ============       ============       ============




</TABLE>

          See accompanying notes to consolidated financial statements


                                       3
<PAGE>




                        ENTEX INFORMATION SERVICES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                     Unaudited
                                                                                 Nine Months Ended
                                                                             March 29,       March 30,
                                                                               1998            1997
                                                                             --------        --------
<S>                                                                        <C>             <C>
Net cash provided by (used in) operating activities                         $  75,124       $ (28,137)

Cash flows from investing activities:
    Capital expenditures                                                      (12,249)        (18,629)
    Cash paid for acquisitions                                                     --          (6,478)
    Other                                                                          --          (1,179)
                                                                             --------        --------
             Net cash used in investing activities                            (12,249)        (26,286) 

Cash flows from financing activities:
    Proceeds from borrowings                                                   80,658          75,000
    Change in cash overdraft                                                    7,927          (9,861)
    Proceeds from sale of common stock, net                                       291            (120)
    Repayments on borrowings                                                 (158,358)        (13,469)
                                                                             --------        --------
           Net cash (used in) provided by financing activities                (69,482)         51,550

Decrease in cash                                                               (6,607)         (2,873)

Cash at beginning of period                                                    15,838          12,603
                                                                             --------        --------
Cash at end of period                                                       $   9,231       $   9,730
                                                                             ========        ========

Supplemental disclosure of cash flow information:

   Interest paid                                                            $  27,387       $  25,529
                                                                             ========        ========
   
   Tax refund                                                               $    (372)      $ (12,188)
                                                                             ========        ========    

</TABLE>

           See accompanying notes to consolidated financial statements






                                       4
<PAGE>




                        ENTEX INFORMATION SERVICES, INC.
                   Notes to Consolidated Financial Statements

1.   DESCRIPTION  OF THE  BUSINESS

     ENTEX is a leading  provider of personal  computer ("PC") solutions to meet
     the  distributed   information  technology  systems  and  end-user  support
     requirements  of Fortune 1000  companies and other large  enterprises.  The
     Company's  total  PC  management   capabilities   include  acquisition  and
     procurement  services  and  network,  professional  and  other  outsourcing
     service support for the PC- based network environment.

2.   CONSOLIDATED FINANCIAL STATEMENTS

     The  consolidated  financial  statements  are  unaudited  and  reflect  all
     adjustments (consisting only of normal recurring adjustments) which are, in
     the  opinion  of  management,  necessary  for a  fair  presentation  of the
     financial  position  and  operating  results for the interim  periods.  The
     results of  operations  for the three and nine months  ended March 29, 1998
     are not  necessarily  indicative  of the results for the entire fiscal year
     ended June 28, 1998. These unaudited financial statements should be read in
     conjunction  with  the  financial  statements  included  in  the  Company's
     registration statement on Form 10 for the fiscal year ended June 29, 1997.

3.   INVENTORIES

     Inventories consist of the following:
                                                      Unaudited
                                                       March 29,        June 29,
                                                         1998             1997
                                                      ---------        ---------
     Finished goods held for resale                    $158,543         $175,300
     Spare parts                                          9,541            8,657
                                                      ---------        ---------
                                                       $168,084         $183,957
                                                      =========        =========
4.   COMMON STOCK SPLIT

     As of November 25, 1997, the Board of Directors approved an increase in the
     number of authorized  common  shares from  10,000,000  to  100,000,000.  In
     addition,  the Board of Directors authorized a stock split in the form of a
     four-for-one  stock  dividend to holders of record as of November 25, 1997,
     whereby each such share will be equal to five shares of Common  Stock.  All
     references in the consolidated  financial  statements  referring to shares,
     share  prices,  per share  amounts  and  stock  plans  have  been  adjusted
     retroactively for the four-for-one stock split.

5.   NEW ACCOUNTING PRONOUNCEMENTS

     In February 1997, the Financial Accounting Standards Board issued Statement
     No. 128, Earnings Per Share. The new standard simplifies the computation of
     earnings per share (EPS), and requires the presentation of two new amounts,
     basic and diluted earnings per share. During 1998, the Company adopted SFAS
     128 and restated its computation of EPS for the prior period.

     In  addition,  in June  1997,  the FASB  issued  SFAS No.  130,  "Reporting
     Comprehensive  Income".  This statement is effective for periods  beginning
     after  December  15,  1997 with early  adoption  permitted.  The Company is
     evaluating the effect this  statement will have on its financial  reporting
     and  disclosures.  

     In June 1997, the Financial Accounting Standards Board issued Statement No.
     131,  "Disclosures About Segments of an Enterprise and Related Information"
     ("SFAS 131").  SFAS 131,  which is effective for fiscal  periods  beginning
     after  December 15, 1997,  revises  information  regarding the reporting of
     certain  operating  segments.  It also  establishes  standards  for related
     disclosures  about  products  and  services,  geographic  areas  and  major
     customers.  The Company is evaluating  the effect this  statement will have
     on its disclosures of segment and related information.


                                       5
<PAGE>




                        ENTEX INFORMATION SERVICES, INC.
 Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations
                             (Dollars in thousands)

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

The information  contained in this Report on Form 10-Q includes  forward looking
statements.  Since  this  information  is based on  current  expectations  which
involve risks and  uncertainties,  actual results could differ  materially  from
those  expressed  in the forward  looking  statements.  Reference is made to the
Company's  registration statement on Form 10 for a further discussion of certain
risk factors.


OVERVIEW

ENTEX is a leading  provider of personal  computer ("PC")  solutions to meet the
distributed  information technology systems and end-user support requirements of
Fortune 1000  companies  and other large  enterprises.  The  Company's  total PC
management capabilities include acquisition and procurement services and network
and professional and other outsourcing  service support for the PC-based network
environment.

During fiscal 1996 and 1997, the Company completed several  acquisitions to meet
customer demand for expanded service offerings including (i) Random Access, Inc.
("Random Access"),  a provider of information  technology  solutions through the
sale of  microcomputers  and technical  services to corporate and  institutional
clients in the western United States, and (ii) FCP Technologies, Inc. ("FCP"), a
systems  integrator  based in  Maryland,  specializing  in network  integration,
migration  and  consulting  services.  Each  acquisition  was accounted for as a
purchase  and the  results  of  each  have  been  included  in the  consolidated
financial statements since the date of each acquisition.

The Company has two principal  sources of revenue:  product revenues and service
revenues.  Product  revenues  include  acquisition  and  procurement of personal
computer  and network  products,  software  and  peripherals.  Service  revenues
include network services,  professional  services,  outsourcing services, PC and
network  operation  support  services,  on-site and centrally  located help desk
services,  as well as asset  management  services.  While product  revenues have
historically accounted for more than 80 % of net revenues, service revenues have
grown in  absolute  dollar  terms and as a  percentage  of net  revenues in each
fiscal year since the Company's inception.






                                       6
<PAGE>





                        ENTEX INFORMATION SERVICES, INC.
 Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations
                             (Dollars in thousands)

The following table sets forth the percentage of total net revenues  represented
by the  items  in  the  Company's  statements  of  operations  for  the  periods
indicated:
<TABLE>
<CAPTION>
                                                     Three Months Ended             Nine Months Ended
                                                  March 29,       March 30,      March 29,     March 30,
                                                    1998            1997           1998           1997
<S>                                            <C>               <C>           <C>           <C>
STATEMENT OF OPERATIONS DATA

Net revenues:
     Product revenues                               80.7%           84.5%          82.2%          86.4%
     Service revenues                               19.3            15.5           17.8           13.6
                                                 -------         -------        -------        -------
          Total net revenues                       100.0           100.0          100.0          100.0

Cost of revenues                                    86.9            88.0           87.3           88.8
                                                 -------         -------        -------        -------
Gross margin (1)                                    13.1            12.0           12.7           11.2

Selling, general and administrative
expenses                                            10.8            10.3           10.2           10.2
                                                 -------         -------        -------        -------
Income from operations                               2.3             1.7            2.5            1.0

Interest expense, net                                1.5             1.6            1.5            1.5
                                                 -------         -------        -------        -------
Income (loss) before income taxes                     .8              .1            1.0            (.5)

Provision for income taxes                            --              --             --             --
                                                 -------         -------        -------        -------
Net income (loss)                                     .8%             .1%           1.0%           (.5)%
                                                 =======         =======        =======        =======

</TABLE>
(1) Product gross margin as a percentage  of product  revenues and service gross
margin as a percentage of service revenues for each period was as follows:
<TABLE>
<CAPTION>
                                                     Three Months Ended             Nine Months Ended
                                                  Mar. 29,         Mar. 30,       Mar. 29,      Mar. 30,
                                                    1998            1997           1998           1997
                                                    ----            ----           ----           ----
<S>                                               <C>             <C>            <C>            <C>
Product gross margin                                10.5%            9.9%          10.4%           9.1%
Service gross margin                                23.8%           23.3%          23.2%          24.3%


</TABLE>


                                       7
<PAGE>




                        ENTEX INFORMATION SERVICES, INC.
 Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations
                             (Dollars in thousands)

Three Months Ended March 29, 1998 Compared to Three Months Ended March 30, 1997

The  Company's  net income  improved in the three months ended March 29, 1998 to
$4.9 million compared to $707 thousand in the three months ended March 30, 1997.
The  improvement  was a result of an  increase  in service  gross  margins and a
higher percentage of services in the revenue base.

     Product revenues: Product revenues were $479.3 million for the three months
ended March 29, 1998 as compared to $506.4  million for the three  months  ended
March  30,  1997,  a  decrease  of $27.1  million  or 5.4%.  While  the  Company
experienced  overall unit growth in sales of desktops,  laptops and server units
during the quarter ended March 29, 1998, the revenue decline  reflects the price
reductions  in  average  sales  price  driven by lower  manufacturer  prices and
intense competition.

     Service revenues: Service revenues were $114.6 million for the three months
ended March 29, 1998 as compared  to $92.8  million for the three  months  ended
March 30, 1997,  an increase of $21.8  million or 23.4%.  Service  revenues as a
percentage of total net revenues  increased to 19.3% for the quarter ended March
29,  1998 as  compared  to 15.5% in the  quarter  ended  March 30,  1997.  These
increases reflect increase in demand from existing customers and the addition of
new large  accounts.  The Company is focused on continuing  to increase  service
revenues.*

     Gross margins:  Total gross margins increased to 13.1% for the three months
ended March 29, 1998 as compared to 12.0% for the three  months  ended March 30,
1997.  Product  gross margin as a percentage  of product  revenues  increased to
10.5% or $50.3  million for the three months ended March 29, 1998 as compared to
9.9% or $50.3 million for the three months ended March 30, 1997. These increases
reflect  the  Company's  efforts to improve  product  margins  through  improved
controls over price protection arrangements and vendor allowances as well as the
Company's  participation in certain manufacturers' programs designed to increase
sales of specific products.  Future product margins may be adversely  influenced
by manufacturers'  pricing strategies and increased  competition.* Service gross
margins  increased $5.6 million or 25.9% to $27.3 million  reflecting  growth in
service revenue.

     Selling,  general  and  administrative   expenses:   Selling,  general  and
administrative  expenses were $64.0 million for the three months ended March 29,
1998 as compared  to $61.8  million for the  quarter  ended March 30,  1997,  an
increase of $2.2 million or 3.5% reflecting the improvement in infrastructure to
support the business expansion.

     Income from  operations:  Income from  operations was $13.6 million for the
three  months  ended March 29, 1998 as compared to $10.1  million in the quarter
ended  March 30,  1997,  an  increase  of $3.5  million or 33.9%.  The  increase
reflects significant improvements in product gross margins, shift in revenue mix
towards higher margin services.

     Interest  expense,  net: Net interest expense decreased to $8.7 million for
the three  months ended March 29, 1998 as compared to $9.4 million for the three
months ended March 30, 1997, a decrease of $707  thousand or 7.6%.  The decrease
was driven  principally by paydown of loans under the IBMCC financing  agreement
(see "Liquidity and Capital Resources" section).

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

*This statement is forward-looking reflecting current expectations. There can be
no assurances  that the  Company's  actual  performance  will meet the Company's
current expectations.  The reader is cautioned that other sections and sentences
not so identified  may also contain  forward-looking  information.  Reference is
made to the Company's registration statement on Form 10 for a further discussion
of these risks.



                                       8
<PAGE>




                        ENTEX INFORMATION SERVICES, INC.
Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations
                             (Dollars in thousands)

     Provisions  for income  taxes:  The Company  utilized  net  operating  loss
carryforwards  to offset  federal income tax  requirements  for the three months
ended March 29, 1998.  Although the Company  recognized net income for the three
months ended March 29, 1998,  based on the history of negative pretax  earnings,
the Company has  determined  that it would be prudent to maintain the  valuation
reserve against the deferred tax asset until it can sustain several  quarters of
profitable operations. While the Company considered the improved operations over
the course of fiscal year 1997, and fiscal 1998 interim periods, the Company did
not believe that it had  sufficient  reason to conclude  that it was more likely
than not that the  deferred  tax  asset  would be  realized.  The  Company  will
reevaluate the foregoing premise in connection with future periods.

     Net income:  As a result of the factors mentioned above, net income for the
three months ended March 29, 1998 was $4.9 million as compared to $707  thousand
for the three months ended March 30, 1997.

Nine Months Ended March 29, 1998 Compared to Nine Months Ended March 30, 1997

The  Company's  net income  improved in the nine months  ended March 29, 1998 to
$18.0  million  compared to a net loss of $9.1  million in the nine months ended
March 30, 1997.  The  improvement  was a result of an increase in product  gross
margins  attributable  to enhanced  controls  over vendor  programs and a higher
percentage of services in the revenue base.

     Product revenues:  Product revenues were $1.524 billion for the nine months
ended March 29, 1998 as  compared  to $1.585  billion for the nine months  ended
March  30,  1997,  a  decrease  of $61.0  million  or 3.8%.  While  the  Company
experienced  overall unit growth in sales of desktops,  laptops and server units
during the nine months ended March 29, 1998,  the revenue  decline  reflects the
price reductions in average sales price driven by lower manufacturer  prices and
intense competition.

     Service revenues:  Service revenues were $331.1 million for the nine months
ended March 29, 1998 as  compared  to $249.3  million for the nine months  ended
March 30, 1997,  an increase of $81.8  million or 32.8%.  Service  revenues as a
percentage  of total net  revenues  increased to 17.8% for the nine months ended
March 29, 1998 as compared  to 13.6% in the nine  months  ended March 30,  1997.
These  increases  reflect  increase in demand from  existing  customers  and the
addition of new large accounts. The Company is focused on continuing to increase
service revenue.*

     Gross margins:  Total gross margins  increased to 12.7% for the nine months
ended March 29,  1998 as  compared to 11.2% for the nine months  ended March 30,
1997.  Product  gross margin as a percentage  of product  revenues  increased to
10.4% or $157.9  million for the nine months ended March 29, 1998 as compared to
9.1% or $145.0 million for the nine months ended March 30, 1997. These increases
reflect  the  Company's  efforts to improve  product  margins  through  improved
controls  over  price  protection  arrangements  and vendor  allowances  and the
Company's  participation in certain manufacturers' programs designed to increase
sales of specific products.  Future product margins may be adversely  influenced
by manufacturers' pricing strategies and increased  competition.* Service margin
percentage  declined  slightly from 24.3% to 23.2%  reflecting the investment in
national accounts.

     Selling,  general  and  administrative   expenses:   Selling,  general  and
administrative  expenses  were  essentially  flat,  $189.1  million for the nine
months  ended March 29,  1998 as compared to $187.3  million for the nine months
ended  March  30,  1997.  Selling,  general  and  administrative  expenses  as a
percentage of total revenues remained flat at 10.2%.

--------------------------------------------------------------------------------
*This statement is forward-looking reflecting current expectations. There can be
no assurances  that the  Company's  actual  performance  will meet the Company's
current expectations.  The reader is cautioned that other sections and sentences
not so identified  may also contain  forward-looking  information.  Reference is
made to the Company's registration statement on Form 10 for a further discussion
of these risks.




                                       9
<PAGE>




                        ENTEX INFORMATION SERVICES, INC.
   Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations
                             (Dollars in thousands)

     Income from  operations:  Income from  operations was $45.7 million for the
nine months ended March 29, 1998 as compared to $18.2 million in the nine months
ended March 30, 1997, an increase of $27.5 million. The increase reflects growth
in the higher margin service  business and  significant  improvements in product
gross margins, while containing selling,  general and administrative expenses to
support the business expansion.

     Interest expense,  net: Net interest expense increased to $27.7 million for
the nine months  ended March 29, 1998 as compared to $27.3  million for the nine
months ended March 30, 1997, an increase of $400 thousand or 1.4%.  The increase
was driven by higher working capital needs.

     Provisions  for income  taxes:  The Company  utilized  net  operating  loss
carryforwards  to offset  federal  income tax  requirements  for the nine months
ended March 29, 1998.  Although the Company  recognized  net income for the nine
months ended March 29, 1998,  based on the history of negative pretax  earnings,
the Company has  determined  that it would be prudent to maintain the  valuation
reserve against the deferred tax asset until it can sustain several  quarters of
profitable operations. While the Company considered the improved operations over
the course of fiscal year 1997 and fiscal 1998 interim periods,  the Company did
not believe that it had  sufficient  reason to conclude  that it was more likely
than not that the  deferred  tax  asset  would be  realized.  The  Company  will
reevaluate the foregoing premise in connection with future periods.

     Net income:  As a result of the factors mentioned above, net income for the
nine months ended March 29, 1998 was $18.0  million as compared to a net loss of
$9.1 million for the nine months ended March 30, 1997.

Liquidity and Capital Resources

The Company has  historically  financed its  operations  with  borrowings  under
various  credit lines.  Cash provided by operating  activities was $75.1 million
for the nine months ended March 29, 1998.

The cash  provided by  operations  during the nine  months  ended March 29, 1998
resulted  primarily  from net income of $18.0  million,  depreciation  and other
non-cash  charges to income of $14.0 million and from changes in working capital
needs.

Cash used in investing activities was $12.2 million during the nine months ended
March 29, 1998 and was used primarily for capital expenditures.

Cash used in financing activities was $69.5 million during the nine months ended
March 29, 1998. 

As of March 29, 1998,  the Company's  primary  source of liquidity  consisted of
various financings  provided under the Fourth Amended and Restated Agreement for
Wholesale  Financing,  as amended ("IBMCC Financing  Agreement") with IBM Credit
Corporation  ("IBMCC") and an inventory  financing  facility with FINOVA Capital
Corporation  ("FINOVA").  The IBMCC Financing  Agreement provides for borrowings
under a working capital line of credit of up to $525 million (the "IBMCC Working
Capital Line of Credit").  At March 29, 1998, the amount  outstanding  under the
IBMCC Working  Capital Line of Credit was $392.4 million of which $286.5 million
was  interest  bearing.  The  amount  of  available  borrowings  under the IBMCC
Financing   Agreement   may  be  increased   for  higher   seasonal   purchasing
requirements,  and may be reduced or  terminated  by IBMCC upon 60 days  written
notice.  Amounts outstanding under the IBMCC Working Capital Line of Credit bear
interest at the prime rate plus .50% (9.0% at March 29, 1998).  Borrowings under
the IBMCC  Financing  Agreement are secured by the Company's  assets,  including
certain accounts receivable, certain inventories and other assets. The agreement
is subject to annual renewal and expires September 15, 1998.




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                        ENTEX INFORMATION SERVICES, INC.
   Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations
                             (Dollars in thousands)

In connection with the Company's acquisition of Random Access in September 1995,
the IBMCC  Financing  Agreement  was  amended to provide  for a term loan in the
original principal amount of $20 million (the "IBMCC Long-Term Loan"). The IBMCC
Financing  Agreement  was  further  amended  in  December  1996 and July 1997 to
provide a short term loan in the original  principal  amount of $55 million (the
"Short  Term  Loan")  and a special  working  capital  advance  in the  original
principal  amount of $20 million (the "Special  Working  Capital  Advance").  On
November 28, 1997,  the  Short-Term  Loan was repaid in full.  In addition,  $10
million of the $20 million  Special  Working Capital Advance has been paid down.
Amounts  outstanding  under the IBMCC  Long-Term  Loan and the  Special  Working
Capital  Advance bear  interest at the prime rate plus 2.50% (11.0% at March 29,
1998). At March 29, 1998,  $17.3 million of principal was outstanding  under the
Long-Term Loan and $10.0 million of principal was outstanding  under the Special
Working Capital Advance.

As of March 29, 1998, the Company had $110 million available for borrowing under
its inventory  line of credit with FINOVA.  The line of credit is secured by the
Company's  inventory financed by FINOVA. At March 29, 1998, the principal amount
outstanding  under  this  line of credit  was $62  million.  Under  terms of the
agreement with FINOVA, the Company paid no interest on this borrowing.

The IBMCC Financing Agreement provides that if Dort A. Cameron III ceases to own
and/or control at least 35% of the issued and  outstanding  capital stock of the
Company,  the Company will be deemed to be in default under the IBMCC  Financing
Agreement.  In addition,  the IBMCC  Financing  Agreement  contains  restrictive
covenants  with respect to maintenance  of minimum  tangible net worth,  current
ratio, fixed asset additions,  fixed charges and certain additional indebtedness
and prohibits the Company from paying cash dividends on Common Stock.

     The Company is aware of the issues  associated with the programming code in
existing  computer systems as the millennium (year 2000)  approaches.  The "year
2000"  problem is complex  since  virtually  every  computer  operation  will be
affected  in some way by the  rollover  of the two digit  year  value to 00. The
issue is  whether  computer  systems  will  properly  recognize  date  sensitive
information  when  the  year  changes  to  2000.  Systems  that do not  properly
recognize such  information  could generate  erroneous data or cause a system to
fail. The Company is utilizing both internal and external resources to identify,
correct or reprogram,  and test the systems for the year 2000 compliance.  It is
anticipated  that all  reprogramming  efforts  will be complete by December  31,
1999, allowing adequate time for testing.* In this connection,  the Company will
be implementing the R/3 TM Enterprise  Resource Planning solution from SAP at an
estimated  cost of $30 million  over the next 12 months.  Given the  information
known at this time  about the  Company's  systems,  coupled  with the  Company's
ongoing efforts to upgrade or replace  business  critical  systems,  the Company
does not believe that any additional  costs will have a material  adverse effect
on the Company's business,  operating results and financial condition.  However,
the Company is still analyzing its remaining computer systems and, to the extent
they are not fully year 2000 compliant, there can be no assurance that the costs
necessary to update software or potential systems interruptions would not have a
material  adverse  effect  on the  Company's  business,  operating  results  and
financial condition.

The  Company  believes  its  current  cash  balances  and its  available  credit
facilities  will be  sufficient to meet its  anticipated  cash needs for capital
expenditures for the next 12 months.* The Company intends to continue to finance
a significant portion of its working capital needs through credit facilities.
The Company  believes that it may seek to raise  additional funds through public
or private  equity or debt financing or from other sources to support the future
growth of the business. However, there can be no assurance that the Company will
be able to raise such additional funding.
--------------------------------------------------------------------------------
*This statement is forward-looking reflecting current expectations. There can be
no assurances  that the  Company's  actual  performance  will meet the Company's
current expectations.  The reader is cautioned that other sections and sentences
not so identified  may also contain  forward-looking  information.  Reference is
made to the Company's registration statement on Form 10 for a further discussion
of these risks. 


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                        ENTEX INFORMATION SERVICES, INC.


                           PART II - OTHER INFORMATION

          ITEM 1. Legal Proceedings

                                    - NONE

          ITEM 2. Changes in Securities

                                    - NONE                        

          ITEM 3. Default Upon Senior Securities

                                    - NONE

          ITEM 4. Submission of Matters to a Vote of Security Holders

                                    - NONE

          ITEM 5. Other Information

                                    - NONE

          ITEM 6. Exhibits and Reports on Form 8-K

          Exhibits (see Schedules which appear in final document)

               10.11 1996 Non-Employee  Director Stock Plan (Amended and
                     restated as of March 31, 1998)
               
               27.1  Financial Data Schedule.


                 (a) Reports on Form 8-K

                                    - NONE







                                       12
<PAGE>




                                   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 hereunto duly authorized.


         May 13, 1998


                                          ENTEX Information Services, Inc.
                                             /s/ Kenneth A. Ghazey
                                             ----------------------
                                             Kenneth A. Ghazey
                                             Executive Vice President
                                             and Chief Financial Officer


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