Securities and Exchange Commission
                              Washington, DC 20549

                                    Form 10-Q

          (X) Quarterly Report Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1934

                  For the Quarterly Period Ended June 30, 1997
                                       or

          ( ) Transition Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                  For the Transition Period From _____To _____

                        Commission File Number: 000-21621


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


            Texas                                           75-2666013
-------------------------------                       ---------------------
(State or other jurisdiction of                       (IRS Employer ID No.)
 incorporation or organization)


    University Centre I
  1300 S. University Drive
        Suite 200
    Fort Worth, Texas                                         76107
  -------------------------                                 ---------
   (Address of principal                                    (Zip Code)
     executive offices)

                                 (817-332-2758)
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (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  for each of the issuer's  classes or
common stock, as of the latest practicable date.

Common Stock, par value $.01 per share                 6,809,500 shares
--------------------------------------         ---------------------------------
           (Class)                             (Outstanding as of July 31, 1997)
<PAGE>

                                   KEVCO, INC.
                               INDEX TO FORM 10-Q

PART  I - FINANCIAL INFORMATION

ITEM  1 - Financial Statements

Consolidated Balance Sheets as of June 30, 1997 (unaudited)
   and December 31, 1996.............................................  3

Consolidated Statements of Income for the three-month and six-month
   periods ended June 30, 1997 and 1996 (unaudited)..................  4

Consolidated Statements of Cash Flows for the six-month
   periods ended June 30, 1997 and 1996 (unaudited)..................  5

Notes to Consolidated Financial Statements...........................  6

ITEM 2 - Management's Discussion and Analysis of Financial 
         Condition and Results of Operations......................... 10 

PART II - OTHER INFORMATION

ITEM 6 - Exhibits and Reports on Form 8-K............................ 15

Signatures........................................................... 19

Exhibit index........................................................ 20

Exhibits............................................................. 21


                                       2
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                                  Kevco, Inc.
                          Consolidated Balance Sheets
                                 (in thousands)
                                  (unaudited)
                                                       June 30,   December 31,
                                                        1997         1996
                                                        ----         ----
                                     ASSETS
Current assets
  Cash and cash equivalents                           $     80      $ 2,078
  Trade accounts receivable, less allowance for
        doubtful accounts of $119 and $100 in
        1997 and 1996, respectively                     24,413        9,458
  Inventories                                           34,434       23,722
  Prepaid expenses and other current assets                813          533
                                                      --------      -------
       Total current assets                             59,740       35,791
Property and equipment, net                             17,802       10,208
Intangible assets, net                                  33,836        9,495
Other assets                                               644          322
                                                      --------      -------
       Total assets                                   $112,022      $55,816
                                                      ========      =======

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Trade accounts payable                              $ 19,661      $ 6,666
  Accrued liabilities                                    3,739        3,107
  Income taxes payable                                      57          762
  Current portion of long-term debt                      1,389          367
                                                      --------      -------
       Total current liabilities                        24,846       10,902
Long-term debt, less current portion                    46,880        9,464
Deferred income taxes                                      629          629
Deferred compensation obligation                           652          383
                                                      --------      -------
       Total liabilities                                73,007       21,378
                                                      -------       -------
Stockholders' equity:
  Common stock, $.01 par value; 100,000 shares
    authorized; 6,809 shares issued and outstanding         68           68
  Additional paid-in capital                            32,854       32,854
  Retained earnings                                      6,093        1,516
                                                      --------      -------
       Total stockholders' equity                       39,015       34,438
                                                      --------      -------
       Total liabilities and stockholders' equity     $112,022      $55,816
                                                      ========      =======

          See accompanying notes to consolidated financial statements.

                                       3
<PAGE>
                                  Kevco, Inc.
                       Consolidated Statements of Income
                     (in thousands, except per share data)
                                  (unaudited)
<TABLE>
<CAPTION>
                                               Three Months Ended     Six Months Ended
                                                     June 30,              June 30,
                                               ------------------     ----------------
                                                 1997       1996       1997      1996
                                                 ----       ----       ----      ----
<S>                                            <C>        <C>       <C>        <C>     
Net sales                                      $101,305   $71,364   $173,404   $135,598
Cost of sales                                    87,434    60,506    149,410    115,247
                                               --------   -------   --------   --------
     Gross profit                                13,871    10,858     23,994     20,351
Commission income                                 1,628     1,526      2,907      2,700
                                               --------   -------   --------   --------
                                                 15,499    12,384     26,901     23,051
Selling, general and administrative expenses     10,097     7,858     17,778     14,968
                                               --------   -------   --------   --------
     Operating income                             5,402     4,526      9,123      8,083
Interest expense                                    968       511      1,496      1,058
                                               --------   -------   --------   --------
     Income before income taxes                   4,434     4,015      7,627      7,025
Income taxes                                      1,773        15      3,050         25
                                               --------   -------   --------   --------
     Net income                                $  2,661   $ 4,000   $  4,577   $  7,000
                                               ========   =======   ========   ========

Earnings per share                             $   0.39             $   0.66
                                               ========             ========
Weighted average shares outstanding               6,910                6,927
                                               ========             ========
Pro forma information (Note 5)
  Historical income before income taxes                   $ 4,015              $  7,025
  Income tax expense adjustments                            1,566                 2,740
                                                          -------              --------
  Pro forma net income                                    $ 2,449              $  4,285
                                                          =======              ========
  Pro forma earnings per share                            $  0.51              $   0.90
                                                          =======              ========
  Weighted average shares outstanding                       4,778                 4,778
                                                          =======              ========
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       4
<PAGE>
                                  Kevco, Inc.
                     Consolidated Statements of Cash Flows
                                 (in thousands)
                                  (unaudited)

                                                            Six Months Ended
                                                                 June 30,
                                                          ---------------------
                                                            1997          1996
                                                            ----          ----
Cash flows from operating activities:
  Net income                                             $  4,577      $  7,000
  Adjustments to reconcile net income to net
   cash provided by operating activities:
      Depreciation and amortization                         1,386           903
      Gain on sale of assets                                   --            (3)
      Deferred compensation obligation                         76            11
      Changes in assets and liabilities                    (3,221)          456
                                                         --------      --------
      Net cash provided by operating activities             2,818         8,367
Cash flows from investing activities:
   Purchase of Consolidated                               (13,421)           --
   Purchase of Bowen                                      (19,077)           --
   Purchase of equipment                                     (747)         (884)
   Proceeds from sale of assets                               813             3
   (Increase) decrease in other assets                       (394)           54
                                                         --------      --------
      Net cash used by investing activities               (32,826)         (827)
Cash flows from financing activities:
  Payments on line of credit, net                          (1,771)           --
  Proceeds from long-term debt                             30,000        25,900
  Distributions paid                                           --        (5,456)
  Payments of long-term debt                                 (219)      (29,336)
  Capital contributions                                        --            86
  Collections on loan to stockholder                           --           375
      Net cash provided (used) by
                                                         --------      --------
        financing activities                               28,010        (8,431)
                                                         --------      --------
Net decrease in cash and cash equivalents                  (1,998)         (891)
Beginning cash and cash equivalents                         2,078           977
                                                         --------      --------
Ending cash and cash equivalents                         $     80      $     86
                                                         ========      ========

          See accompanying notes to consolidated financial statements.

                                       5
<PAGE>
                                   KEVCO, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

1.   ACCOUNTING POLICIES AND BASIS OF PRESENTATION

The Annual Report on Form 10-K for the year ended  December 31, 1996, for Kevco,
Inc. includes a summary of significant accounting policies and should be read in
conjunction  with this Form 10-Q.  Prior to the  effective  date of the  initial
public offering (see Note 3), Kevco, Inc.  restructured and created an operating
company subsidiary with a subsidiary.  As a result, the financial statements are
referred to as consolidated financial statements.  The accompanying consolidated
financial  statements  of Kevco,  Inc. and its  wholly-owned  subsidiaries  (the
"Company")  have been  prepared  pursuant  to the rules and  regulations  of the
Securities and Exchange Commission ("SEC"). Accordingly, they do not include all
of the  information  and  footnotes  required by generally  accepted  accounting
principles   ("GAAP")  for  complete  financial   statements.   All  significant
intercompany transactions and accounts have been eliminated.

In the opinion of management,  the consolidated financial statements contain all
adjustments,   consisting  only  of  normal  recurring  adjustments,  considered
necessary  for a fair  statement  of the balance  sheets as of June 30, 1997 and
December 31, 1996,  the statements of income for the  three-month  and six-month
periods  ended June 30, 1997 and 1996 and the  statements  of cash flows for the
six-month  periods ended June 30, 1997 and 1996.  The results of operations  for
the  three-month  and six-month  periods ended June 30, 1997 are not necessarily
indicative  of the  results of  operations  for the entire  fiscal  year  ending
December 31, 1997.

On August 29, 1996, the Company effected a 0.47-for-1 reverse stock split of its
common stock and retired its treasury  shares.  All share and per share  amounts
included  in the  accompanying  financial  statements  and  footnotes  have been
restated to reflect the reverse stock split.


2.   ACQUISITIONS

On February 27, 1997, the Company acquired  substantially all of the assets, and
assumed  certain   liabilities,   of  Consolidated   Forest   Products,   L.L.C.
("Consolidated")  (the  "Consolidated   Acquisition")  for  approximately  $14.0
million. The acquisition was accounted for as a purchase and,  accordingly,  the
operating results of Consolidated have been included in the operating results of
the Company since February 27, 1997. The acquisition  cost in excess of the fair
value of net assets of  Consolidated  of  approximately  $9.6  million  has been
accounted for as goodwill and will be amortized  over its estimated  useful life
of 40 years.

On February 28, 1997,  the Company  purchased  all of the capital stock of Bowen
Supply,  Inc.  ("Bowen")  (the  "Bowen  Acquisition")  for  approximately  $19.5
million. The acquisition was accounted for as a purchase and,  accordingly,  the
operating  results of Bowen have been included in the  operating  results of the
Company  since  February 28, 1997.  The  acquisition  cost in excess of the fair
value of net assets of Bowen of  approximately  $14.9 million has been accounted
for as  goodwill  and will be  amortized  over its  estimated  useful life of 40
years.

                                        6
<PAGE>
                                   KEVCO, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


The following pro forma financial information combines the historical results of
the Company as if the Consolidated  Acquisition,  the Bowen  Acquisition and the
initial  public  offering  had  occurred  as of the  beginning  of  each  period
presented:

                                              Six months ended June 30,
                                              -------------------------
                                              1997               1996
                                              ----               ----
                                               (dollars in thousands)

      Net sales                              $195,700           $202,486
      Net income                             $  4,960           $  6,475
      Earnings per share                     $   0.72           $   0.94

3.   INITIAL PUBLIC OFFERING

In November 1996, the Company  completed an initial public offering of 2,415,000
shares of the  Company's  common stock  (including an  over-allotment  option of
315,000  shares  exercised  in  December  1996) for $12.00  per  share,  netting
proceeds  to  the  Company   after   underwriting   discounts  and  expenses  of
approximately  $26.0 million.  Proceeds to the Company were used to repay all of
the outstanding balance of the Company's $20.0 million revolving credit facility
of $9.0 million and a permanent  reduction of all of the outstanding  balance of
the Company's term loan of $13.9  million.  Proceeds were also used to make an S
corporation  distribution of approximately $3.7 million representing  previously
taxed but undistributed earnings through June 30, 1996 (see Note 7 and 8).

4.   INVENTORIES

Inventories are comprised of the following (in thousands):

                                          June 30,  December 31,
                                            1997        1996
                                          --------  ------------
          Raw materials                   $ 8,573     $ 4,385
          Work-in process                     832         332
          Finished goods                    2,145       1,324
          Goods held for resale            22,884      17,681
                                          -------     -------
                                          $34,434     $23,722
                                          =======     =======

                                       7
<PAGE>
                                   KEVCO, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


4.   INVENTORIES (continued)

During the second quarter of 1997, the Company  adopted the FIFO method to value
inventories  for  which  the  LIFO  method  had  previously  been  utilized  for
determining  cost. The FIFO method will better measure the current value of such
inventories,  provide a more appropriate matching of revenues and expenses,  and
conform  all  inventories  of  the  Company  to  the  same  accounting   method.
Additionally,  the  change  will  enhance  the  comparability  of the  Company's
financial  statements  by changing  to the  predominant  method  utilized in its
industry.

The Company applied this change retroactively,  which resulted in an increase in
retained  earnings  of  $789,000  and  $787,000  at  January  1,  1997 and 1996,
respectively.  There was no material  impact on net income or earnings per share
for the three and six months ended June 30, 1997 and 1996.

5.   PRO FORMA INFORMATION

Pro forma net income for 1996  represents the results of operations  adjusted to
reflect a provision for income taxes on  historical  income before income taxes,
which  gives  effect to the  change in the  Company's  income  tax status to a C
corporation  concurrently  with the consummation of the Company's initial public
offering. The difference between the pro forma income tax rates utilized and the
federal statutory rate of 34% relates primarily to state income taxes.

Pro forma  earnings  per share for 1996 has been  computed by dividing pro forma
net income by the weighted average number of shares of common stock  outstanding
during the period.

In accordance with a regulation of the Securities and Exchange  Commission,  pro
forma earnings per share data for 1996 have been presented to reflect the effect
of the  assumed  issuance  of that  number of shares of common  stock that would
generate sufficient cash to pay an S corporation distribution in an amount equal
to previously taxed but undistributed earnings.

Historical  earnings  per  share  for 1996 is not  presented  because  it is not
indicative of the ongoing entity.

6.   INCOME TAXES

Prior to November 6, 1996,  the Company's  stockholders  had elected to be taxed
under the provisions of Subchapter S of the Internal  Revenue Code. As a result,
there was no  provision  for federal  income taxes in the  historical  financial
statements  for the  three-month  and six-month  periods ended June 30, 1996, as
such taxes were the  responsibility  of the individual  stockholders.  Effective
November 6, 1996, the Company converted to a C corporation and became subject to
federal income taxes on an ongoing basis.


                                       8
<PAGE>
                                   KEVCO, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


7.   STOCKHOLDERS' EQUITY

In conjunction  with its initial public offering,  the Company  terminated its S
corporation  status  and  distributed  to its  stockholders  approximately  $3.7
million,  representing  previously taxed but undistributed  earnings at June 30,
1996.  On  December  31,  1996,  the  Company  repaid  notes in the  approximate
aggregate  amount of $5.2  million  that were  issued  immediately  prior to the
consummation  of  the  offering,  which  notes  were  the  final  S  corporation
distribution  and represented  earnings from July 1, 1996 to the consummation of
the offering.

8.   CREDIT AGREEMENT

In February  1997,  the Company and its lender  amended the credit  agreement in
order to fund the Consolidated  Acquisition and the Bowen  Acquisition (see Note
2).  The term debt was  increased  to $30.0  million  and the  revolving  credit
facility was increased to $35.0  million,  each maturing in 2001.  The Company's
term debt and revolver are collateralized by inventory,  accounts receivable and
property and equipment and the common stock of the Company's  subsidiaries  (see
Note  1).  The  related  credit  agreement  contains  certain  restrictions  and
conditions that include cash flow and various financial ratio requirements,  and
limitations  on  incurrence  on debt or  liens,  acquisitions  of  property  and
equipment,  distributions  to  shareholders  and certain  events  constituting a
Change of Control (as defined in such agreement).

9.   RECENT ACCOUNTING PRONOUNCEMENT

In February 1997, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards No. 128,  Earnings Per Share ("SFAS 128"). SFAS
128 simplifies the standards for computing earnings per share ("EPS") previously
found in APB Opinion No. 15,  Earnings Per Share  ("Opinion 15"), and makes them
comparable to international EPS standards. SFAS 128 replaces the presentation of
primary EPS with a presentation of basic EPS. Basic EPS excludes dilution and is
computed  by  dividing   income   available  to  common   stockholders   by  the
weighted-average number of common shares outstanding for the period. Diluted EPS
reflects  the  potential  dilution  that  could  occur  if  securities  or other
contracts to issue common stock were exercised or converted into common stock or
resulted in the issuance of common stock that then shared in the earnings of the
entity.  Diluted  EPS is computed  similarly  to fully  diluted EPS  pursuant to
Opinion 15. SFAS 128 also requires dual presentation of basic and diluted EPS on
the face of the income  statement for entities with complex  capital  structures
and a  reconciliation  of  the  numerator  and  denominator  of  the  basic  EPS
computation  to the numerator and  denominator  of the diluted EPS  computation.
SFAS 128 is effective for financial  statements  issued for periods ending after
December  15,  1997,  including  interim  periods;  earlier  application  is not
permitted. SFAS 128 requires restatement of all prior-period EPS data presented.
The Company is  currently  evaluating  SFAS 128.  However,  management  does not
believe  that it will  have a  material  impact  on the  consolidated  financial
statements of the Company.

                                        9
<PAGE>
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

GENERAL

         The following  discussion  includes the  operations of Kevco,  Inc. for
each of the periods  discussed.  This  discussion and analysis should be read in
conjunction  with the  Company's  Annual  Report on Form 10-K for the year ended
December 31, 1996.

         The  Company  recognizes  revenues  from  product  sales at the time of
shipment (or the time of product  receipt,  in the case of direct shipments from
suppliers to customers).  In some cases the Company sells on a commission basis.
Commissions are recognized when earned and represent  amounts earned in selling,
warehousing  and  delivering  products  for  certain  manufacturers  of building
products  with  which  the  Company  has  distribution  agreements.   Commission
arrangements do not require inventory investments or receivable  financing,  and
therefore  are  significantly  less  expensive to the Company  than  traditional
sales. To the extent the volume of items warehoused and shipped under commission
arrangements  increases  faster or slower  than the  volume of items  related to
traditional  sales,  changes  in net sales may not be  representative  of actual
increases or decreases in shipment volume.

ACQUISITIONS

         On  February  27,  1997,   the  Company   acquired   Consolidated   for
approximately  $13.0  million  in cash and  promissory  notes  in the  aggregate
original  principal  amount of approximately  $1.0 million,  with such aggregate
original   principal   amount   subject  to  potential   post-closing   downward
adjustments.  The acquisition  cost in excess of the fair value of net assets of
Consolidated resulted in goodwill of approximately $9.6 million.

         On February  28, 1997,  the Company  acquired  Bowen for  approximately
$18.0 million in cash and promissory notes in the aggregate  original  principal
amount of approximately  $1.5 million,  with such aggregate  original  principal
amount subject to potential  post-closing downward adjustments.  The acquisition
cost in excess of the fair value of net assets of Bowen  resulted in goodwill of
approximately $14.9 million.

RESULTS OF OPERATIONS

         The  following  table sets forth,  for the periods  indicated,  certain
Consolidated  Statements  of Income data as a percentage  of the  Company's  net
sales.
                                   Three Months Ended       Six Months Ended
                                       June 30,                  June 30,
                                   ------------------       ----------------
                                     1997    1996           1997    1996
                                     ----    ----           ----    ----
Net sales                           100.0%  100.0%          100.0%  100.0%
Cost of sales                        86.3    84.8            86.2    85.0
                                    -----   -----           -----   ----- 
   Gross profit                      13.7    15.2            13.8    15.0
Commission income                     1.6     2.1             1.7     2.0
                                    -----   -----           -----   ----- 
                                     15.3    17.3            15.5    17.0
Selling, general and
 administrative expenses             10.0    11.0            10.3    11.0
                                    -----   -----           -----   ----- 
  Operating income                    5.3     6.3             5.2     6.0
Interest expense                     (0.9)   (0.7)           (0.8)   (0.8)
                                    -----   -----           -----   ----- 
  Income before income taxes          4.4%    5.6%            4.4%    5.2%
                                    =====   =====           =====   ===== 
                                       10
<PAGE>

COMPARISON OF THREE MONTHS ENDED JUNE 30, 1997 AND 1996

         Net sales  increased by $29.9 million,  or 41.9%, to $101.3 million for
the three month period ended June 30, 1997 from $71.4 million for the comparable
1996 period.  The net sales increase  primarily  resulted from the effect of the
Consolidated    Acquisition   and   Bowen   Acquisition    (collectively,    the
"Acquisitions")  consummated in February 1997. However,  net sales,  without the
effect of the  Acquisitions,  decreased from $71.4 million to $68.0  million,  a
decrease of 4.8%,  which is  comparable  to the reported  manufacturing  housing
shipment decline of 3.2% from January through May 1997, as compared to the prior
period. Sales to the manufactured housing industry represented approximately 90%
for the three months ended June 30, 1997.

         Gross profit increased by $3.0 million,  or 27.5%, to $13.9 million for
the three month period ended June 30, 1997 from $10.9 million for the comparable
1996 period due primarily to the Acquisitions. Gross profit, as a percent of net
sales,  decreased  to 13.7% for the three month  period ended June 30, 1997 from
15.2% for the comparable 1996 period.  Management  believes that the decrease in
gross profit,  as a percent of net sales,  is related  primarily to consistently
high lumber prices compared to relatively stable gross profit dollars associated
with the Company's wood products divisions, which divisions represent 40% of net
sales.

         Commission  income increased by $0.1 million,  or 6.7%, to $1.6 million
for the three  month  period  ended  June 30,  1997 from  $1.5  million  for the
comparable 1996 period. The increase was primarily attributable to the Company's
expansion in commission-based distribution arrangements.

         Selling, general and administrative expenses increased by $2.2 million,
or 27.8%,  to $10.1  million for the three month period ended June 30, 1997 from
$7.9 million for the comparable  1996 period.  The increase was primarily due to
increased  sales volume.  Selling,  general and  administrative  expenses,  as a
percent of net sales,  decreased to 10.0% for 1997 from 11.0% for the comparable
1996 period. The decrease reflects the Company's continued efforts in increasing
efficiency.

         Net income increased by $0.3 million, or 12.5%, to $2.7 million for the
three  months  ended June 30,  1997 from $2.4  million for the  comparable  1996
period on a pro forma basis giving effect to the Company's  conversion from an S
corporation  to a C  corporation.  The  increase  in  net  income  is  primarily
attributable to the increase in net sales due to the Acquisitions.

COMPARISON OF SIX MONTHS ENDED JUNE 30, 1997 AND 1996

         Net sales  increased by $37.8 million,  or 27.9%, to $173.4 million for
the six month period ended June 30, 1997 from $135.6  million for the comparable
1996 period.  The net sales increase  primarily  resulted from the effect of the
Consolidated    Acquisition   and   Bowen   Acquisition    (collectively,    the
"Acquisitions") in February 1997. However,  net sales, without the effect of the
Acquisitions,  decreased  from $135.6 million to $128.9  million,  a decrease of
4.9%, which is comparable to the reported manufacturing housing shipment decline
of 3.2% from January through May 1997, as compared to the prior period. Sales to
the manufactured  housing  industry  represented  approximately  90% for the six
months ended June 30, 1997.

                                       11
<PAGE>

         Gross profit increased by $3.7 million,  or 18.2%, to $24.0 million for
the six month period ended June 30, 1997 from $20.3  million for the  comparable
1996 period due primarily to the Acquisitions. Gross profit, as a percent of net
sales,  decreased  to 13.8% for the six month  period  ended June 30,  1997 from
15.0% for the comparable 1996 period.  Management  believes that the decrease in
gross profit,  as a percent of net sales,  is related  primarily to consistently
high lumber prices compared to relatively stable gross profit dollars associated
with the Company's wood products divisions, which divisions represent 37% of net
sales.

         Commission  income increased by $0.2 million,  or 7.4%, to $2.9 million
for the six  month  period  ended  June  30,  1997  from  $2.7  million  for the
comparable 1996 period. The increase was primarily attributable to the Company's
expansion in commission-based distribution arrangements.

         Selling, general and administrative expenses increased by $2.8 million,
or 19.3%,  to $17.8  million for the six month  period  ended June 30, 1997 from
$15.0 million for the comparable 1996 period.  The increase was primarily due to
increased  sales volume.  Selling,  general and  administrative  expenses,  as a
percent of net sales,  decreased to 10.3% for 1997 from 11.0% for the comparable
1996 period. The decrease reflects the Company's continued efforts in increasing
efficiency.

         Net income increased by $0.3 million,  or 7.0%, to $4.6 million for the
six months ended June 30, 1997 from $4.3 million for the comparable  1996 period
on a pro  forma  basis  giving  effect  to the  Company's  conversion  from an S
corporation  to a C  corporation.  The  increase  in  net  income  is  primarily
attributable to the increase in net sales due to the Acquisitions.

LIQUIDITY AND CAPITAL RESOURCES

         Historically,  the Company's growth has been financed through cash flow
from operations,  borrowings under its bank credit  facilities and the expansion
of trade credit. Net cash provided by operating  activities was $2.8 million for
the six months ended June 30, 1997. The Company's capital expenditures were $0.7
million for the six months ended June 30, 1997.

         In connection  with the acquisition of Service Supply at June 30, 1995,
the Company arranged for a term loan and a revolving credit facility with a bank
in the  aggregate  amount  of $35.0  million;  the term  loan  comprising  $15.0
million.  In November 1996, the Company  completed an initial public offering of
2,415,000 shares of the Company's stock (including an  over-allotment  option of
315,000  shares  exercised  in  December  1996) for $12.00  per  share,  netting
proceeds  to  the  Company   after   underwriting   discounts  and  expenses  of
approximately  $26.0  million.  A  portion  of the net  proceeds  of the  public
offering  was used to repay  all of the  outstanding  balance  of the  revolving
credit facility and to permanently  repay all of the  outstanding  balance under
the term loan. In February  1997,  the Company and its lender amended the credit
agreement  in order to fund the  Acquisitions.  The term debt was  increased  to
$30.0 million and the revolving  credit facility was increased to $35.0 million,
each maturing in 2001. The term debt will be payable $0 in 1997; $2.0 million in
1998;  $8.0 million in 1999;  $10.0 million in 2000;  and $10.0 million in 2001.
Interest is paid on the term loan at a blend of the bank's  prime rate and LIBOR
based  on  pricing  options  selected  by the  Company  plus a  margin  based on
operating  statistics of the Company (7.05% at June 30, 1997).  Borrowings under
the  revolving  credit  facility are due 2001,  and require  quarterly  interest
payments  currently based on a blend of the bank's prime rate and LIBOR based on
pricing  options  selected by the Company plus a margin  determined by operating
statistics  of the Company  (7.45% at June 30,  1997).  The  borrower  under the

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<PAGE>

credit  facility  is  one of  the  Company's  operating  subsidiaries,  and  the
obligations thereunder are guaranteed by the Company. The term debt and revolver
are  secured  by  substantially  all  of  the  assets  of the  Company  and  its
subsidiaries  as well as the  capital  stock of such  subsidiaries.  The related
credit agreement contains certain  restrictions and conditions that include cash
flow and various financial ratio requirements,  and limitations on incurrence on
debt or liens,  acquisitions  of  property  and  equipment  ,  distributions  to
shareholders and certain events  constituting a Change of Control (as defined in
such agreement).

         As  an  S   corporation,   the  Company  made   distributions   to  its
shareholders, including amounts equal to at least their federal and state income
tax  liabilities  attributable  to the Company's  earnings.  Distributions  were
generally made on a quarterly  basis as needed to satisfy such tax  liabilities.
Concurrent with the consummation of the offering,  the Company  converted to a C
corporation  and is now subject to federal and certain state taxes.  The Company
does not anticipate paying cash dividends on its common stock in the foreseeable
future and  intends to retain its  earnings  to support  operations  and finance
expansion.

         In conjunction with its initial public offering, the Company terminated
its S corporation status and distributed to its stockholders  approximately $3.7
million,  representing  previously taxed but undistributed  earnings at June 30,
1996.  On  December  31,  1996,  the  Company  repaid  notes in the  approximate
aggregate  amount of $5.2  million  that were  issued  immediately  prior to the
consummation  of  the  offering,  which  notes  were  the  final  S  corporation
distribution  and represented  earnings from July 1, 1996 to the consummation of
the offering.

ASSET MANAGEMENT

         The  Company  actively  manages  its  assets  and  liabilities  through
compensating  its corporate  and facility  managers for  receivable  collection,
inventory  control  and  profits  in  relation  to these and  other  net  assets
employed.

         For the  six  months  ended  June  30,  1997,  days  sales  in  average
receivables  was  approximately  22 days,  days sales in average  inventory  was
approximately  39 days and days sales in average  payables was  approximately 23
days.

FORWARD-LOOKING STATEMENTS

         Certain  statements  contained  in this  quarterly  report that are not
historical  facts  are   forward-looking   statements  that  involve  risks  and
uncertainties,  including,  but not  limited  to,  the  impact  of  competitors'
pricing,   product  quality  and  related  features;  the  cyclical  nature  and
seasonality of the manufactured  housing and recreational  vehicle markets;  the
dependence of the Company on its  principal  customers  and key  suppliers;  and
other  risks  detailed  in the  Company's  Securities  and  Exchange  Commission
filings, including those set forth in the Company's Annual Report on Form 10-K.

                                       13
<PAGE>
                          PART II -- OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)      EXHIBITS

Exhibit
Number                                 Description
------                                 -----------

2.1  Merger  Agreement,  dated June 6, 1995 by and among Kevco, Inc. and Service
     Supply Systems, Inc., joined by a wholly-owned subsidiary of Kevco, Inc.(1)

2.2  Form of Plan and Agreement of Merger (between Kevco,  Texas, Inc. and Kevco
     Delaware, Inc.)(1)

2.3  Form of Bill of Sale and General  Assignment from Kevco Delaware,  Inc., as
     Assignor, to Sunbelt Wood Components, Inc. as Assignee.(1)

2.4  Form of Assumption Agreement between Kevco Delaware,  Inc. and Sunbelt Wood
     Components, Inc.(1)

2.5  Asset Purchase Agreement by and among Consolidated  Forest Products,  Inc.,
     Consolidated Forest Products, L.L.C. and the members of Consolidated Forest
     Products, L.L.C.(2)

2.6  Stock  Purchase  Agreement  by and  among  Kevco  Delaware,  Inc.  and  the
     shareholders of Bowen Supply, Inc. (2)

3.1  Articles of Incorporation of Kevco, Inc., as amended.(1)

3.2  Bylaws of Kevco, Inc.(1)

4.1  Form of  certificate  evidencing  ownership  of the Common  Stock of Kevco,
     Inc.(1)

10.1 Amendment  No. 2 to 1995 Stock Option Plan (Amended and Restated 1995 Stock
     Option Plan of Kevco, Inc.) and Supplementary Letter.(1)

10.2 1996 Stock  Option  Plan of Kevco,  Inc.,  as  amended,  and  Supplementary
     Letter.(1)

10.3 Form of Amended and Restated Employment Agreement (between Gerald E. Kimmel
     and Kevco, Inc.),  joined therein by Kevco Delaware,  Inc. and Sunbelt Wood
     Components, Inc.(1)

10.4 Employment  Agreement  between C. Lee Denham and Kevco, Inc. dated June 30,
     1995.(1)

10.5 Lease  between K & E Land & Leasing  and  Kevco,  Inc.  dated  December  1,
     1977.(1)

                                       14
<PAGE>


Exhibit
Number                                  Description
------                                  -----------

10.6  Amendment  No. 1 to Lease, by and  between K & E Land & Leasing and Kevco,
      Inc. dated March , 1982.(1)

10.7  Amendment  No. 2 to Lease, by and  between K & E Land & Leasing and Kevco,
      Inc. dated May 30, 1983.(1)

10.8  Amendment  No. 3 to Lease, by and  between K & E Land & Leasing and Kevco,
      Inc. dated February 1, 1993.(1)

10.9  Lease dated April 1, 1980 between  City of Newton, Kansas and K & E Land &
      Leasing.(1)

10.10 Sublease and Lease  Guarantee  Agreement dated April 1, 1980 between K & E
      Land & Leasing and Kevco, Inc.(1)

10.11 Amendment No. 1 to Sublease and Lease Guaranty Agreement by and between 
      K & E Land & Leasing and Kevco, Inc. dated May 30, 1983.(1)

10.12 Lease  Agreement dated October 12, 1987 between 1741 Conant  Partnership &
      Kevco, Inc.(1)

10.13 Equipment  Lease Agreement  dated  January  1,  1991  between K & E Land &
      Leasing and Kevco, Inc.(1)

10.14 Amendment No. 1 to Equipment Lease  Agreement between K & E Land & Leasing
      and Kevco, Inc. dated February 12, 1993.(1)

10.15 Amendment No. 2 to Equipment Lease Agreement  between K & E Land & Leasing
      and Kevco, Inc. dated October 26, 1993.(1)

10.16 Amendment No. 3 to Equipment Lease Agreement  between K & E Land & Leasing
      and Kevco, Inc. dated May 23, 1994.(1)

10.17 Deferred Compensation Agreement between Kevco, Inc. and Clyde A. Reed, Jr.
      dated May 24, 1977.(1)

10.18 Amendment No. 1 to Deferred Compensation Agreement dated May , 1980.(1)

10.19 Amendment  No.  2  to Deferred  Compensation  Agreement  dated  March  10,
      1992.(1)

10.20 Amended and Restated Health and Accident Pan of Kevco, Inc.(1)

10.21 Investment and Tax Advice Plan of Kevco, Inc.(1)

10.22 Credit  Agreement among Kevco Inc.,  certain Lenders and NationsBank of
      Texas, N.A., as Administrative Lender dated June 30, 1995.(1)

                                       15
<PAGE>


Exhibit
Number                     Description
------                     -----------

10.23 First Amendment to Credit  Agreement, dated as of September 1, 1995, among
      Kevco,  Inc.,  the  banks  listed  on  the  signature  pages  thereof, and
      NationsBank of Texas, N.A.(1)

10.24 Second  Amendment to Credit Agreement dated as of November 29, 1995, among
      Kevco,  Inc.,  the  banks  listed  on  the  signature  pages  thereof, and
      NationsBank of Texas, N.A.(1)

10.25 Revolving  Credit Note of Kevco,  Inc. to NationsBank of Texas, N.A. dated
      September 1, 1995, in the amount of $14,285,714.28.(1)

10.26 Term  Loan  Note of  Kevco,  Inc.  to  NationsBank of  Texas,  N.A.  dated
      September 1, 1995 in amount of $10,714,285.72.(1)

10.27 Revolving  Credit Note of Kevco,  Inc. to The  Sumitomo Bank,  Ltd.  dated
      February 2, 1996 in the amount of $5,714,285.72.(1)

10.28 Term Loan Note of Kevco, Inc. to The Sumitomo Bank, Ltd. dated February 2,
      1996 in the amount of $4,285,714.28.(1)

10.29 Paine Webber  Standardized  401(K)  Profit-Sharing Adoption Agreement (No.
      005) (To be used with Basic  Plan  Document  No. 03 Only) for  Kevco  Inc.
      dated May 24, 1996 and Paine Webber Defined Contribution Plan.(1)

10.30 Promissory  Note of Gerald E. Kimmel to Kevco, Inc. dated October 26, 1993
      in the amount of $5,000,000.(1)

10.31 Amendment  No. 4 to Lease  dated  December  1, 1977 by and  between  K & E
      Leasing and Kevco, Inc. dated October 26, 1993.(1)

10.32 Assignment  and  Acceptance dated February 2, 1996 between The Daiwa Bank,
      Limited and The Sumitomo Bank, Ltd., Chicago, Branch.(1)

10.33 Form of Tax Indemnification and Distribution Agreement.(1)

10.34 Form of  Promissory  Note  made by  Kevco  Texas,  Inc  in the  amount  of
      $3,733,000 (the Prior S Corporation Earnings Note).(1)

10.35 Form  of  Promissory  Note  made  by  Kevco  Texas,  Inc.  (the  Future  S
      Corporation Earnings Note).(1)

10.36 Form of  Assignment  of $5,000,000 Note made by Kevco,  Inc.  (n/k/a Kevco
      Texas, Inc.).(1)

10.37 Form of Adoption  Agreement by Kevco, Inc. and Kevco Texas, Inc. (re; 1995
      Stock Option Plan and 1996 Stock Option Plan).(1)

                                       16
<PAGE>

Exhibit
Number                     Description
------                     -----------

10.38 Amendment  No. 1 dated  September  21, 1988,  to Lease  Agreement  by 1741
      Conant Partnership as lessor an Kevco, Inc.(n/k/a Kevco Texas, Inc.).(1)

10.39 Letter  Agreement  dated June 22, 1982, between  Kevco,  Inc.(n/k/a  Kevco
      Texas, Inc.) and K & E Land & Leasing. (re: lease rentals).(1)

10.40 Letter  Agreement  dated  October  1,1996 by  Kevco,  Inc.,  K & E  Land &
      Leasing, and 1741 Conant Partnership (re: lease rental).(1)

10.41 Form of Parent Pledge Agreement.(1)

10.42 Consent and Waiver, dated as October 21, 1996, by and among NationsBank of
      Texas, N.A., The Sumitomo Bank, Ltd. and Kevco Texas, Inc.(1)

10.43 Amended and Restated Credit  Agreement,  dated as of February 27, 1997, by
      and among Kevco Delaware,  Inc., certain lenders and NationsBank of Texas,
      N.A.(4)

11.1 Computation of Earnings Per Common Share.(5)

18.1 Letter on change in accounting principle.(5)

27.1 Financial Data Schedule.(5)

----------

(1)  Previously filed as an exhibit to the Company's  Registration  Statement of
     Form S-1 (No. 333-11173) and incorporated herein by reference.

(2)  Previously filed as an exhibit to the Company's  Current Report on Form 8-K
     dated February 27, 1997, and incorporated herein by reference.

(3)  Previously  filed as an exhibit to the Company's Annual Report on Form 10-K
     for the year ended December 31, 1996.

(4)  Previously  filed as an exhibit to the Company's  Quarterly  Report on Form
     10-Q for the quarter ended March 31, 1997.

(5)  Filed herewith.

(b)  REPORTS ON FORM 8-K

     On March 13,  1997,  the Company  filed a Current  Report on Form 8-K dated
     February  17, 1997,  reporting  the  acquisitions  of  Consolidated  Forest
     Products,  L.L.C.  and Bowen Supply,  Inc. A Form 8-K/A dated  February 17,
     1997,  was filed on May 8, 1997 to include the financial  statements of the
     acquired  businesses  and the pro forma  financial  data for the year ended
     December 31, 1996 related to those acquisitions.


                                       17
<PAGE>


                                   SIGNATURES

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

                                   KEVCO, INC.

Date:    July 31, 1997                    By: /s/ Jerry E. Kimmel
                                             --------------------------------
                                             Jerry E. Kimmel
                                             Chairman of the Board, President
                                             and Chief Executive Officer


Date:    July 31, 1997                    By: /s/ Ellis L. McKinley, Jr.
                                             --------------------------------
                                             Ellis L. McKinley, Jr.
                                             Vice President, Chief Financial
                                             Officer, Treasurer and Director
                                             (Principal Financial Officer)


                                       18
<PAGE>

                                   KEVCO, INC.

                                  Exhibit Index


  Exhibit No.                       Description
  -----------                       -----------

     11.1             Computation of earnings per common share.
     18.1             Letter on change in accounting principle.
     27.1             Financial Data Schedule.





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