SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

         For the quarterly period ended June 30, 1999

                                       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 No. 0-7152

                           DEVCON INTERNATIONAL CORP.
             (Exact Name of Registrant as Specified in its Charter)

         FLORIDA                                                 59-0671992
(State or Other Jurisdiction of                               (I.R.S.Employer
 Incorporation or Organization)                              Identification No.)

1350 E. NEWPORT CENTER DRIVE, SUITE 201, DEERFIELD BEACH, FL             33442
          (Address of Principal Executive Offices)                    (Zip Code)

                                 (954) 429-1500
              (Registrant's Telephone Number, Including Area Code)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

                          COMMON STOCK, $.10 PAR VALUE
                                (Title of Class)

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 ______

As of August 10, 1999 the number of shares outstanding of the Registrant's
Common Stock was 4,498,935.


<PAGE>

                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                                      INDEX

                                                                     PAGE NUMBER
                                                                     -----------
Part I.           Financial Information:

                  Condensed Consolidated Balance Sheets
                  June 30, 1999 and December 31, 1998...................   3-4

                  Condensed Consolidated Statements of Operations
                  Three and Six Months Ended June 30, 1999 and 1998.....     5

                  Condensed Consolidated Statements of Cash Flows
                  Six Months Ended June 30, 1999 and 1998...............   6-7

                  Notes to Condensed Consolidated Financial Statements..   8-9

                  Management's Discussion and Analysis of
                  Financial Conditions and Results of
                  Operations............................................ 10-16

Part II.          Other Information..................................... 17-19

                                        2

<PAGE>

PART I.    FINANCIAL INFORMATION
------------------------------------------------------------

                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                      Condensed Consolidated Balance Sheets
                       June 30, 1999 and December 31, 1998

                                              June 30,        December 31,
                                                1999              1998
                                            -----------       ------------
                                            (Unaudited)

ASSETS

Current assets:
   Cash                                     $ 1,644,983       $   899,605
   Cash equivalents                           1,539,479         1,359,253
   Receivables, net                          12,403,854        12,611,437
   Costs in excess of billings
      and estimated earnings                    326,123           710,557
   Inventories                                4,386,179         4,468,718
   Assets held for sale                       2,711,517         2,868,922
   Other                                        873,393           398,592
                                            -----------       -----------
         Total current assets                23,885,528        23,317,084

Property, plant and equipment
   Land                                       2,168,685         2,167,318
   Buildings                                  3,548,821         3,560,545
   Leasehold interests                        6,710,008         6,632,206
   Equipment                                 58,198,154        58,340,451
   Furniture and fixtures                       747,606           642,314
   Construction in process                    3,197,138           406,344
                                            -----------       -----------
                                             74,570,412        71,749,178

Less accumulated depreciation               (29,841,377)      (28,715,682)
                                            -----------       -----------
                                             44,729,035        43,033,496

Investments in unconsolidated
   joint ventures and affiliates                236,370           237,370
Receivables, net                             10,312,738        13,173,472
Intangible assets, net of
   accumulated amortization                   1,036,475         1,165,692
Other assets                                  1,461,141         1,503,005
                                            -----------       -----------
         Total assets                       $81,661,287       $82,430,119
                                            ===========       ===========

See accompanying notes to condensed consolidated financial statements.

                                        3

<PAGE>

                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                      Condensed Consolidated Balance Sheets
                       June 30, 1999 and December 31, 1998

                                                     June 30,       December 31,
                                                       1999             1998
                                                   -----------      -----------
                                                   (Unaudited)

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable, trade and other               $ 5,483,260      $ 6,917,119
   Accrued expenses and other liabilities            2,201,868        3,186,375
   Notes payable to banks                              700,000           88,108
   Current installments of long-term debt            6,772,044        5,539,151
   Billings in excess of costs and
     estimated earnings                                477,304          315,007
   Income taxes                                        322,737          361,071
                                                   -----------      -----------
          Total current liabilities                 15,957,213       16,406,831

Long-term debt, excluding current
   installments and notes payable to banks          18,092,303       18,153,451
Minority interest in consolidated
   subsidiaries                                      1,286,460        1,762,809
Deferred income taxes                                  399,056          399,056
Other liabilities                                    2,358,738        2,067,413
                                                   -----------      -----------
          Total liabilities                         38,093,770       38,789,560
                                                   -----------      -----------
Stockholders' equity:
   Common stock                                        449,894          449,894
   Treasury stock                                      (78,132)            -
   Additional paid-in capital                       12,064,133       12,064,133
   Accumulated other comprehensive income-
    cumulative translation adjustment               (1,444,745)        (859,376)
   Retained earnings                                32,576,367       31,985,908
                                                   -----------      -----------
          Total stockholders' equity                43,567,517       43,640,559
                                                   -----------      -----------
Total liabilities and stockholders' equity         $81,661,287      $82,430,119
                                                   ===========      ===========

See accompanying notes to condensed consolidated financial statements.

                                        4

<PAGE>

                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Operations
                Three and Six Months Ended June 30, 1999 and 1998
                                   (Unaudited)

<TABLE>
<CAPTION>
                                              Three                Three                 Six                  Six
                                              Months               Months               Months               Months
                                              Ended                Ended                Ended                Ended
                                             June 30,             June 30,             June 30,             June 30,
                                               1999                 1998                1999                  1998
                                           -----------          -----------          -----------          -----------
<S>                                        <C>                  <C>                  <C>                  <C>
Concrete and related
   products revenue                        $14,965,896          $13,271,683          $28,921,738          $25,759,433
Contracting revenue                          3,458,907            3,400,954            7,738,320            5,150,529
Other revenue                                     -                    -                    -                 371,386
                                           -----------          -----------          -----------          -----------
       Total revenue                        18,424,803           16,672,637           36,660,058           31,281,348

Cost of concrete and
   related products revenue                (11,825,083)         (10,622,531)         (23,129,253)         (20,469,456)
Cost of contracting revenue                 (2,809,097)          (2,503,822)          (6,520,585)          (4,602,744)
Cost of other revenue                             -                  (1,825)                -                (247,562)
                                           -----------          -----------          -----------          -----------
       Gross profit                          3,790,623            3,544,459            7,010,220            5,961,586

Selling, general and
   administrative expenses                  (3,004,033)          (2,902,166)          (6,323,749)          (5,440,523)
Credit for litigation                             -                    -                 419,000                 -
                                           -----------          -----------          -----------          -----------
       Operating income                        786,590             642,293            1,105,471              521,063

Other income (deductions)
   Joint venture
       equipment loss                          (30,000)                -                 (30,000)                -
   Gain (loss) on sale of
       property and equipment                   38,104              (20,573)              108,512              45,997
   Interest expense                           (581,794)            (578,819)           (1,254,165)         (1,099,093)
   Interest and other income                   175,895              668,598               371,059             817,245
   Minority interest                           177,534               (9,575)              476,349              (9,575)
                                           -----------          -----------          ------------         -----------
                                              (220,261)              59,631              (328,245)           (245,426)

       Income before
          income taxes                         566,329              701,924               777,226             275,637

Income tax expense                            (102,967)            (250,374)             (186,767)           (170,179)
                                           -----------          -----------          ------------         -----------
       Net income                          $   463,362          $   451,550          $    590,459         $   105,458
                                           ===========          ===========          ============         ===========
Basic earnings per share                   $      0.10          $      0.10          $       0.13         $      0.02
                                           ===========          ===========          ============         ===========
Diluted earnings per share                 $      0.10          $      0.10          $       0.13         $      0.02
                                           ===========          ===========          ============         ===========
Weighted average number of
   shares outstanding-basic                  4,495,213            4,498,935             4,497,074           4,498,935
                                           ===========          ===========          ============         ===========
Weighted average number of
   shares-diluted                            4,579,947            4,524,722             4,540,517           4,533,768
                                           ===========          ===========          ============         ===========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                        5

<PAGE>

                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                        Six Months June 30, 1999 and 1998
                                   (Unaudited)

                                                       1999             1998
                                                   ------------     ------------
Cash flows from operating activities:
   Net income (loss)                               $    590,459     $   105,458
   Adjustments to reconcile net income
       (loss) to net cash provided
       by operating activities:
   Depreciation and amortization                      3,129,467       2,918,395
   Provision for doubtful accounts and notes            195,779        (217,162)
   Gain on sale of equipment                           (108,512)        (45,997)
   Credit for litigation                               (419,000)           -
   Joint venture equity loss                             30,000            -
   Minority interest (income) loss                     (476,349)          9,575

Changes in operating assets and liabilities:
   (Increase) decrease in receivables, net              (92,290)        293,718
   Decrease (increase) in costs in excess
       of billings and estimated earnings               384,433        (858,388)
   Decrease in inventories                               65,703         254,178
   Increase in other current assets                    (474,800)       (102,793)
   Increase in other assets                             (30,576)         (2,932)
   Decrease in accounts payable, trade
       and other                                     (1,813,989)     (1,059,290)
   Increase in billings in
       excess of costs and estimated earnings           162,297         371,392
   (Decrease) increase in income taxes
       payable                                          (38,334)         44,135
   Increase (decrease)in other liabilities              291,326        (316,171)
                                                   ------------     -----------
       Net cash provided by operating activities      1,395,614       1,394,118
                                                   ------------     -----------

Cash flows from investing activities:
   Purchase of property, plant and
       equipment                                     (5,512,946)     (4,313,764)
   Proceeds from disposition of property,
       plant and equipment                              500,426       3,473,105
   Payments received on notes                         2,882,005       1,165,236
   Investment in affiliates                             (29,000)       (112,020)
   Advances from affiliates                                -              5,561
   Issuance of notes                                    (16,000)       (479,135)
   Purchase of treasury stock                           (78,132)              -
                                                   ------------     -----------
       Net cash used in investing activities       $ (2,253,647)    $  (261,017)
                                                   ------------     -----------

See accompanying notes to condensed consolidated financial statements.

                                        6

<PAGE>

                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                     Six Months Ended June 30, 1999 and 1998
                                   (Unaudited)

                                                      1999              1998
                                                  ------------      ------------
Cash flows from financing activities:
   Proceeds from debt                             $ 5,134,086       $ 5,029,879
   Principal payments on debt                      (3,962,341)       (7,008,558)
   Net borrowings from bank credit
       line/overdrafts                                611,892           306,795
                                                  -----------       -----------
       Net cash provided by (used in)
          financing activities                      1,783,637        (1,671,884)
                                                  -----------       -----------
       Net increase (decrease)in cash
          and cash equivalents                        925,604          (538,783)

       Cash and cash equivalents,
          beginning of period                       2,258,858         1,001,368
                                                  -----------       -----------
       Cash and cash equivalents,
          end of period                           $ 3,184,462       $   462,585
                                                  ===========       ===========
Supplemental disclosures of
   cash flow information

       Cash paid for:

          Interest                                $ 1,286,376       $ 1,163,717
                                                  ===========       ===========
          Income taxes                            $    83,333       $   124,140
                                                  ===========       ===========

See accompanying notes to condensed consolidated financial statements.

                                        7

<PAGE>

                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BASIS OF PRESENTATION

The condensed consolidated financial statements include the accounts of the
Company and its majority-owned subsidiaries.

The accounting policies followed by the Company are set forth in Note (l) to the
Company's financial statements included in its Annual Report on Form 10-K for
the fiscal year ended December 31, 1998.

In the opinion of management, the accompanying unaudited condensed consolidated
financial statements contain all adjustments necessary to present fairly the
Company's financial position as of June 30, 1999 and the results of its
operations and cash flows for the three and six months ended June 30, 1999 and
1998.

The results of operations for the six months ended June 30, 1999 are not
necessarily indicative of the results to be expected for the full year.

EARNINGS PER SHARE

Basic earnings per share are computed by dividing income available to common
shareholders by the weighted-average number of common shares outstanding during
the period. Diluted earnings per share are computed by dividing income available
to common shareholders by the weighted-average number of common shares
outstanding during the period increased to include the number of additional
common shares that would have been outstanding if the dilutive potential common
shares had been issued. The dilutive effect of outstanding options is reflected
in diluted earnings per share by application of the treasury stock method. For
loss periods, weighted average common share equivalents are excluded from the
calculation as their effect would be antidilutive.

Options to purchase 486,300 and 171,300 shares of common stock, at prices
ranging from $1.50 to $3.00 per share, were outstanding for the quarters ended
June 30, 1999 and 1998, respectively. Options to purchase 350,475 and 342,475
shares of common stock, at prices ranging from $2.94 to $14.00 per share, were
outstanding for the quarters ended June 30, 1999 and 1998, respectively, but
were not included in the computation of diluted earnings per share because the
options' exercise prices were greater than the average market prices of the
common shares. For additional disclosures regarding the outstanding employee
stock options, see the 1998 Form 10-K.

COMPREHENSIVE INCOME

Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income." SFAS No. 130 requires that all items recognized under
accounting standards as components of comprehensive income be reported in annual
financial statements that is displayed with the same prominence as other annual
financial statements. The Company's total comprehensive income, comprised of
translation adjustments, for the six month period ended June 30, 1999 and 1998
were as follows:

                                        8

<PAGE>

                                                          1999            1998
                                                       --------         --------
Net income                                             $590,459         $451,550
Other comprehensive loss                               (585,369)            -
                                                       --------         --------
       Total comprehensive income                      $  5,090         $451,550
                                                       ========         ========

SEGMENT REPORTING

The following sets forth the revenue and income before income taxes for each of
the Company's business segments for the six months ended June 30, 1999 and 1998.

                                                     1999              1998
                                                  ----------        ----------

Revenue (including intersegment)
   Concrete and related products                  $29,487,186       $25,845,850
   Contracting                                      7,937,220         5,150,529
   Other                                                 -              371,386
   Elimination of intersegment revenue               (764,348)          (86,417)
                                                  -----------       -----------
       Total revenue                              $36,660,058       $31,281,348
                                                  ===========       ===========
Operating income (loss):
   Concrete and related products                  $   603,000       $ 1,098,000
   Contracting                                        478,000          (353,000)
   Other                                                 -              118,000
   Credit for litigation                              419,000              -
   Unallocated corporate overhead                    (394,529)         (341,937)
                                                  -----------       -----------
       Total operating income                       1,105,471           521,063
                                                  -----------       -----------
Other deductions                                     (328,245)         (245,426)
                                                  -----------       -----------
Income before income taxes                        $   777,226       $   275,637
                                                  ===========       ===========

                                        9

<PAGE>

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

INTRODUCTION

All dollar amounts of $1.0 million or more are rounded to the nearest one tenth
of a million; all other dollar amounts are rounded to the nearest one thousand
and all percentages are stated to the nearest one tenth of one percent.

This Form 10-Q contains certain "forward-looking statements" within the meaning
of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), which represent the Company's expectations and beliefs. These statements
by their nature involve substantial risks and uncertainties, certain of which
are beyond the Company's control, and actual results may differ materially
depending on a variety of important factors, including the financial condition
of the Company's customers, changes in domestic and foreign economic and
political conditions, demand for the Company's services and products, risk and
uncertainties related to large foreign construction projects and changes in the
Company's competitive environment.

The Company cautions that the factors described above could cause actual results
or outcomes to differ materially from those expressed in any forward-looking
statements of the Company made by or on behalf of the Company. Any
forward-looking statement speaks only as of the date on which such statement is
made, and the Company undertakes no obligation to update any forward-looking
statement or statements to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time, and it is not possible for
management to predict all of such factors or the effect that any such factor may
have on the Company's business.

COMPARISON OF THREE MONTHS ENDED JUNE 30, 1999 VS. THREE MONTHS ENDED JUNE 30
1998

REVENUE

The Company's revenue during the second quarter of 1999 was $18.4 million as
compared to $16.7 million during the same period in 1998. This 10.5 percent
increase was primarily due to an increase in concrete and related products
revenue and to a lesser extent to an increase in contracting revenue.

The Company's concrete and related products division revenue increased 12.8
percent to $15.0 million during the second quarter of 1999 as compared to $13.3
million for the same period in 1998, primarily as a result of an increase in
demand for this division's products on certain Caribbean islands, offset to a
lesser extent by decreased demand on other islands. The Company cannot currently
determine whether demand for this division's products will increase, decrease or
remain the same throughout 1999.

Revenue from the Company's land development contracting division increased by
1.7 percent to $3.5 million during the second quarter of 1999 as compared to
$3.4 million for the same period in 1998. The Company's backlog of unfilled
portions of land development contracts at June 30, 1999 was $10.5 million,
involving 10 projects. The backlog of one project in the Bahamas amounts to $8.5
million. A Company subsidiary and two of the Company's directors are minority
partners of the entity developing this project. The project has not yet received
its total financing thus the timing and amount of the contract could vary. The
Company expects that part of the backlog outstanding at June 30, 1999 will be
completed

                                       10

<PAGE>

by the end of 1999. The Company cannot currently determine whether the contract
revenue will increase, decrease or remain the same throughout 1999.

COST OF CONCRETE AND RELATED PRODUCTS

Cost of concrete and related products as a percentage of concrete and related
products revenue decreased to 79.0 percent during the second quarter of 1999
from 80.0 percent for the same period in 1998. This decrease was primarily
attributable to higher sales volumes on some islands and to changes in the mix
of products sold in the second quarter of 1999 compared to 1998.

COST OF CONTRACTING

Cost of contracting as a percentage of land development contracting revenue
increased to 81.2 percent during the second quarter of 1999 from 73.6 percent
during the same period in 1998. This increase is primarily attributable to the
varying profitability levels of individual contracts and the stage of completion
of such contracts.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE

Selling, general and administrative expense ("SG&A expense") increased by 3.5
percent to $3.0 million for the second quarter of 1999 from $2.9 million for the
same period in 1998. As a percentage of revenue, SG&A expense decreased to 16.3
percent during the second quarter compared to 17.4 percent for the same period
last year. This decrease is primarily attributable to an increase in sales
combined with a smaller increase in SG&A expense.

DIVISIONAL OPERATING INCOME

The Company had an operating income of $787,000 for the second quarter of 1999,
as compared to $642,000 for the same period in 1998. The Company's concrete and
related products division operating income was $677,000 during the second
quarter of 1999 compared to $279,000 during the same period in 1998. This
increase is primarily attributable to increased gross profit of $492,000 offset
to a lesser extent by an increase in SG&A expense. The increased gross profit is
mainly due to improved volumes in Antigua and St. Martin, offset partially by
increased production costs in Puerto Rico.

The Company's land development contracting division had an operating income of
$300,000 during the second quarter of 1999 compared to $544,000 during the same
period in 1998. This decrease was primarily attributable to the varying
profitability levels of individual contracts and the stage of completion of such
contracts.

OTHER INCOME

Minority interest income amounted to $178,000 due to losses in a consolidated
joint venture. Interest income decreased in the second quarter of 1999 compared
to the same period in 1998, primarily due to the Company recognizing less
interest income on the notes receivable due from the Government of Antigua and
Barbuda.

NET INCOME (LOSS)

The Company had a net income of $463,000 during the second quarter of 1999 as
compared to $452,000 during the same period in 1998.

                                       11

<PAGE>

COMPARISON OF SIX MONTHS ENDED JUNE 30, 1999 VS. SIX MONTHS ENDED JUNE 30, 1998

REVENUE

The Company's revenue during the first six months of 1999 was $36.7 million as
compared to $31.3 million during the same period in 1998. This 17.2 percent
increase was due to increases in contracting revenue and in concrete and related
products revenue.

The Company's concrete and related products division revenue increased 12.3
percent to $28.9 million during the first six months of 1999 as compared to
$25.8 million for the same period in 1998, primarily as a result of an increase
in demand for this division's products on St. Martin, Antigua and Tortola,
offset to a lesser extent by decreased demand on other islands. The Company
cannot currently determine whether demand for this division's products will
increase, decrease or remain the same throughout 1999.

Revenue from the Company's land development contracting division increased by
50.2 percent to $7.7 million during the first six months of 1999 as compared to
$5.2 million for the same period in 1998. This increase is primarily due to the
Company continuing various contracts that were started during the prior quarters
and to revenue on a contract in the Bahamas. The Company's backlog of unfilled
portions of land development contracts at June 30, 1999 was $10.5 million,
involving 10 projects. The backlog of the project in the Bahamas amounts to $8.5
million. A Company subsidiary and two of the Company's directors are minority
partners of the entity developing this project. The project has not yet received
its total financing thus the timing and amount of the contract could vary. The
Company expects that part of the backlog outstanding at June 30, 1999 will be
completed by the end of 1999. The Company cannot currently determine whether the
contract revenue will increase, decrease or remain the same throughout 1999.

COST OF CONCRETE AND RELATED PRODUCTS

Cost of concrete and related products as a percentage of concrete and related
products revenue increased to 80.0 percent during the first six months of 1999
from 79.5 percent for the same period in 1998. This increase was primarily
attributable to higher production cost on some islands and to changes in the mix
of products sold in the second quarter of 1999 compared to 1998.

COST OF CONTRACTING

Cost of contracting as a percentage of land development contracting revenue
decreased to 84.3 percent during the first six months of 1999 from 89.4 percent
during the same period in 1998. This decrease is primarily attributable to the
varying profitability levels of individual contracts and the stage of completion
of such contracts, and to the expense taken on a large contract in 1998.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE

Selling, general and administrative expense ("SG&A expense") increased by 16.2
percent to $6.3 million for the first six months of 1999 from $5.4 million for
the same period in 1998. As a percentage of revenue, SG&A expense decreased to
17.2 percent during the second quarter compared to 17.4 percent for the same
period last year. This decrease is primarily attributable to an increase in
sales, offset to a lesser extent by an increase in SG&A expense, primarily bad
debt expense.

                                       12

<PAGE>

CREDIT FOR LITIGATION

In the first quarter of 1999 the Company recognized a credit for litigation of
$419,000. This was a result of an order from a Florida circuit court requiring
another party to pay the Company prejudgment interest. See also Item 1, Legal
Proceedings.

DIVISIONAL OPERATING INCOME

The Company had an operating income of $1.1 million for the first six months of
1999, as compared to $521,000 for the same period in 1998. The Company's
concrete and related products division operating income was $603,000 during the
first six months of 1999 compared to $1.1 million during the same period in
1998. This decrease is primarily attributable to a one time worker's
compensation expense reduction in 1998 and increased cost in 1999 for doubtful
accounts for the concrete and related products division, offset to a lesser
extent by an increase in gross profit in 1999.

The Company's land development contracting division had an operating income of
$478,000 during the first six months of 1999 compared to a loss of $353,000
during the same period in 1998. This improvement was primarily attributable to
the increased revenue and the type of contracts the Company has been able to
obtain, combined with a reduction in SG&A expenses. There was also an expense
taken on a large contract in 1998.

OTHER INCOME

Minority interest income increased due to losses in a consolidated joint
venture. Net interest expense increased to $883,000 in 1999 from $282,000 in
1998, primarily due to the Company recognizing less interest income on the
receivable due from the Government of Antigua and Barbuda.

NET INCOME

The Company had a net income of $590,000 during the first six months of 1999 as
compared to $105,000 during the same period in 1998.

LIQUIDITY AND CAPITAL RESOURCES

The Company generally funds its working capital needs from operations and bank
borrowings. In the land development contracting business, the Company must
expend considerable funds for equipment, labor and supplies to meet the needs of
particular projects. The Company's capital needs are greatest at the start of
any new contract, since the Company generally must complete 45 to 60 days of
work before receiving the first progress payment. In addition, as a project
continues, a portion of the progress billing is usually withheld as retainage
until all work is complete, further increasing the need for capital. On occasion
the Company has provided long-term financing to certain customers who have
utilized its land development contracting services. The Company has also
provided financing for other business ventures from time to time. With respect
to the Company's concrete and related products division, accounts receivable are
typically outstanding for a minimum of 60 days and in some cases much longer.
The nature of the Company's business requires a continuing investment in plant
and equipment, along with the related maintenance and upkeep costs of such
equipment.

                                       13

<PAGE>

The Company has funded many of these expenditures out of its current working
capital. However, notwithstanding the foregoing and after factoring in the
Company's obligations as set forth below, management believes that the Company's
cash flow from operations, existing working capital and funds available from
lines of credit will be adequate to meet the Company's anticipated needs for
operations during the next twelve months.

As of June 30, 1999, the Company's liquidity and capital resources included cash
and cash equivalents of $3.2 million and working capital of $7.9 million.
Included in working capital is approximately $2.7 million of assets held for
sale. Although management's intention is to sell these assets within the next 12
months, there can be no assurance that all assets will be sold. As of June 30,
1999, total outstanding liabilities were $38.1 million. As of June 30, 1999, the
Company had available lines of credit totaling $800,000. In April 1999 the
Company received $1.1 million in payment on a note receivable from the sale of a
leasehold in St. Maarten in 1997.

Cash flows provided by operating activities for the six months ended June 30,
1999 was $1.4 million, approximately the same as in 1998. The primary use of
cash for operating activities during the three months ended June 30, 1999 was a
decrease in accounts payable and accruals of $1.8 million.

Net cash used in investing activities was $2.3 million in the first six months
of 1999. Purchases of property, plant, and equipment were $5.5 million. The
purchases were partially financed through equipment financing. Proceeds from
sale of property, plant and equipment were $500,000 and repayment of debt was
$4.0 million. Receipts on notes receivables were $2.9 million.

The Company entered into a credit agreement with a Caribbean bank in November
1996 for a total credit of $7.0 million. One part of the credit agreement is a
term loan for $6.0 million repayable in monthly installments through November
2002. The Company had $3.3 million of the borrowings outstanding on this loan at
June 30, 1999. The second part is a revolving line of credit of $1.0 million.
The credit line has been re-approved and extended until February 2000. The
Company had $700,000 outstanding under this line of credit at June 30, 1999. The
interest rate on indebtedness outstanding under both loans is at a rate variable
with the prime rate. The credit agreement is collateralized by various parcels
of real property and other assets located in the United States Virgin Islands
and certain other areas. Although the Company had previously been in violation
of certain loan covenants, it no longer is. One of the financial covenants was
renegotiated during the quarter and an amendment to the loan agreement was
executed in early August.

The Company has a $500,000 unsecured overdraft facility from a commercial bank
in the Caribbean. The facility is due on demand and bears interest at 14.0
percent per annum. At June 30, 1999, the Company had no borrowings outstanding
under this line.

The Company has borrowed approximately $5.0 million from the Company President.
The note is unsecured and bears interest at a rate variable with the prime
interest rate. Three hundred fifty thousand is due on demand and $4.7 million is
due on July 1, 2000. The President has the option of making the note due on
demand should a "Change of Control" occur. A Change of Control has occurred if a
person or group acquires 15.0 percent or more of the common stock or announces a
tender offer, the consummation of which would result in ownership by a person or
group of 15.0 percent or more of the common stock. The Company has borrowed $1.8
million from one of its directors and his family. The notes are secured by

                                       14

<PAGE>

equipment and bear interest of 10.0 percent. The notes have equal monthly
payments over 5 years.

The Company purchases equipment from time to time as needed for its ongoing
business operations. The Company is currently replacing or upgrading some
equipment (principally concrete trucks and quarry equipment) used by the
concrete and related products division. This should result in a net cash
expenditure, after financing part of the equipment purchases, of approximately
$2.5 million during 1999. The Company has identified some equipment and real
property not needed for its ongoing operations and it plans to sell those
assets. The net carrying cost of these assets is $2.7 million. Any proceeds from
these sales would be used to reduce debt and provide working capital. The
Company believes it has available or can obtain sufficient financing for its
contemplated equipment replacements and additions. Historically, the Company has
used a number of lenders to finance a portion of its machinery and equipment
purchases on an individual asset basis. At June 30, 1999, amounts outstanding to
these lenders totaled $14.8 million. These loans are typically repaid over a
three to five-year term in monthly principal and interest installments.

A significant portion of the Company's outstanding debt bears interest at
variable rates. The Company could be negatively impacted by a substantial
increase in interest rates.

Receivables at June 30, 1999 include $9.6 million, net, of promissory notes and
bonds due from the Government of Antigua, $2.0 million of which is classified as
a current receivable. The gross balance of the notes and bonds is $34.8 million.
The notes called for both quarterly and monthly principal and interest payments
until maturity in 1997. The notes were not satisfied at maturity but the
Antiguan government has advised the Company that payments from agreed upon
sources will continue until the obligation is satisfied. The agreed upon sources
are lease proceeds from a rental of a United States military base, fuel tax
revenues and proceeds from a real estate venture. Cash receipts during 1998 from
agreed upon sources was $2.3 million.

YEAR 2000 ISSUE

The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. If not addressed, such
computer systems, software products and embedded technology may be unable to
properly interpret dates beyond the year 1999, which could cause system failures
or miscalculations and lead to disruptions in the Company's activities and
operations.

The Company has identified three major areas determined to be critical for
successful Year 2000 compliance:

         o        Information systems such as PCs, networks, batch-plant
                  computers

         o        Third party relationships, including customers, suppliers, and
                  government agencies

         o        Equipment which may contain microprocessors with embedded
                  technology

The Company has taken an inventory of all computers and software and the Company
has started planning the changes needed for these systems to become Year 2000
compliant. The Company is currently implementing a new information system for
its financial reporting, and the Company is evaluating proposals from various
vendors

                                       15

<PAGE>

in respect to distribution systems for the island subsidiaries. The Company
believes that all conversion efforts will be completed before the end of 1999.

The Company is in the process of contacting suppliers and customers regarding
their Year 2000 compliance status. The Company's contact includes questioning
them about imbedded micro-processors.

The Company has initiated a Year 2000 contingency plan development process to
mitigate potential disruptions in its activities and operations that may be
created by failures of critical business partners, equipment and internal
systems. These contingency plans are expected to be developed by the third
quarter of 1999. However, the Company can provide no assurance that it will
correctly anticipate the level, impact or duration of non-compliance by critical
business partners, equipment or internal systems, or that contingency plans will
be sufficient to mitigate the impact of non-compliance.

The Company estimates to spend around $350,000 on the Year 2000 project. This
consists of PCs, software and other related costs.

The Company cannot assure that its systems or the computer systems of other
companies with whom the Company conducts business will be Year 2000 compliant
prior to December 31, 1999. Management has determined that making the required
system changes will have no material impact on the Company's consolidated
financial position, results of operations or cash flows.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued SFAS No. 133, ACCOUNTING FOR DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES. SFAS 133 requires companies to record
derivatives on the balance sheet as assets and liabilities, measured at fair
value. Gains and losses resulting from changes in the values of those
derivatives would be accounted for depending on the use of the derivative and
whether it qualifies for hedge accounting. SFAS 133 is effective for fiscal
years beginning after June 15, 1999, with earlier adoption encouraged.
Management does not anticipate a significant impact of the adoption of SFAS 133
on the Company's consolidated financial position, results of operations or cash
flows.

REPURCHASE OF COMPANY SHARES

On May 14, 1999 the Company announced its plan to purchase Company shares in the
open market for up to $500,000. The timing of share repurchases, the actual
number of shares purchased and the price to be paid will depend upon the
availability of shares, the prevailing market prices and other considerations
which may in the opinion of the Board of Directors or management affect the
advisability of purchasing Devcon shares. In June the Company purchased 25,000
shares for a cost of $3.125 each. The Company has not made any further
purchases.

                                       16

<PAGE>

II.  OTHER INFORMATION

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

ITEM 1.                   LEGAL PROCEEDINGS

                          On April 8, 1999, a final judgment was entered in
                          favor of the Company and against the Greater Orlando
                          Aviation Authority ("GOAA") in the amount of $542,688.
                          However, because the judgment amount was less then
                          seventy-five (75%) of an offer of judgment ($790,000)
                          previously made by GOAA in July 1998, the Company was
                          subject to pay GOAA's attorneys' fees from the date
                          the offer of judgment was made. The Company accrued
                          for GOAA's estimated legal expenses in 1998. On May 7,
                          1999, the Florida circuit court awarded prejudgment
                          interest on the judgment amount of $542,688 at 10% per
                          annum from August 8, 1995 until paid. Through June 30,
                          1999, this prejudgment interest amounts to
                          approximately $203,000, for a total award of
                          approximately $750,000, or 95% of the offer of
                          judgment. Consequently, subject to GOAA's possible
                          appeal, there is not currently an obligation to pay
                          GOAA's legal fees, and the accrual for such expenses
                          was reversed in the first quarter of 1999.
                          Furthermore, the Company has filed an appeal on the
                          underlying merits of the case to seek reimbursement of
                          additional costs and profit in connection with the
                          construction project, which was performed between 1992
                          and 1995.

                          In 1992, Fore Golf, Inc. sued the Company in the Ninth
                          Judicial Circuit, Orange County, Florida, Case No.
                          CI-92-5289. The Company was sued by Fore Golf, Inc.
                          for work which this subcontractor allegedly performed
                          in 1990 and 1991 during construction of two golf
                          courses at Disney World in Orlando, Florida, the
                          alleged unpaid contract balance in connection with
                          this project, and inefficiency costs. In June 1997,
                          the court issued an order establishing liability and
                          damages against the Company. The Court entered a final
                          judgment in favor of the plaintiff for damages and
                          prejudgment interest. Subsequently, the trial court
                          also awarded the plaintiff attorneys' fees. The
                          Company accrued a total of $4.5 million, included in
                          other liabilities, in 1997 to reflect the total
                          estimated costs to be incurred should it not be
                          successful in our post trial and appeal efforts. The
                          Company has posted a bond for the damages, prejudgment
                          interest and plaintiff's attorneys' fees. This bond is
                          personally guaranteed by the Company's President. The
                          Company settled its lawsuit with Fore Golf, Inc. and
                          its creditors in March 1999. The settlement calls for
                          a cash payment of approximately $300,000 and payments
                          of $460,000 over a period of 4 years. The Company has
                          not yet settled with the lawyers of Fore Golf
                          regarding the judgment on attorney' fees. The trial
                          court fee award has been contested by Fore Golf's
                          attorneys.

                          The Company is from time to time involved in routine
                          litigation arising in the ordinary course of its
                          business, primarily related to its contracting
                          activities.

                                       17

<PAGE>

                          The Company is subject to certain Federal, state and
                          local environmental laws and regulations. Management
                          believes that the Company is in compliance with all
                          such laws and regulations. Compliance with
                          environmental protection laws has not had a material
                          adverse impact on the Company's consolidated financial
                          condition, results of operations or cash flows in the
                          past and is not expected to have a material adverse
                          impact in the foreseeable future.

ITEM 2.                   CHANGES IN SECURITIES AND USE OF PROCEEDS

                          None

ITEM 3.                   DEFAULTS UPON SENIOR SECURITIES

                          None

ITEM 4.                   SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS

                          The Company held its Annual Shareholders Meeting on
                          June 10, 1999. The issues submitted to a vote of the
                          security holders and the results of the voting are as
                          follows:

                          1)    Election of five directors

                                                             FOR        WITHHELD
                                                             ---        --------
                                Richard L. Hornsby        3,373,880      175,600
                                Robert L. Kester          3,339,380      210,100
                                W. Douglas Pitts          3,373,880      175,600
                                Donald L. Smith, Jr.      3,373,880      175,600
                                Robert A. Steele          3,339,380      210,100

                                The Board consists of five directors. All
                                nominees were elected to serve for a one year
                                period.

                          2)    Proposal to approve and ratify the Company's
                                1999 Stock Option Plan:

<TABLE>
<CAPTION>
                                  FOR                 AGAINST              WITHHELD              NON-VOTE
                                  ---                 -------              --------              --------
                                <S>                   <C>                   <C>                  <C>
                                2,182,324             576,537               66,895               723,724
</TABLE>

                          3)    Proposal to ratify the appointment of KPMG LLP
                                as the Company's auditor for 1999.

<TABLE>
<CAPTION>
                                  FOR                 AGAINST              WITHHELD
                                  ---                 -------              --------
                                <S>                       <C>               <C>
                                3,544,885                 900               3,695
</TABLE>

ITEM 5.                   OTHER INFORMATION

                          None

                                       18

<PAGE>

ITEM 6.                   EXHIBITS AND REPORTS ON FORM 8-K

                          (a)   Exhibits:

                                27    Financial Data Schedule

                          (b)   Reports on Form 8-K:

                                No reports on Form 8-K were filed by the Company
                                during the first three months of fiscal 1999.

                                       19

<PAGE>

                                   SIGNATURES

Pursuant to the requirement 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.

Date:    August 10, 1999                               By: /s/ JAN A. NORELID
                                                           ---------------------
                                                               Jan A. Norelid
                                                               Vice President

                                       20

<PAGE>

                                  EXHIBIT INDEX

EXHIBIT                                             DESCRIPTION
-------                                             -----------
27                                                  Financial Data Schedule