<PAGE>

================================================================================

                      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 March 31, 2002

                                       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 May 3, 2002 the number of shares outstanding of the Registrant's Common
Stock was 3,598,185.

================================================================================
<PAGE>

                          DEVCON INTERNATIONAL CORP.
                               AND SUBSIDIARIES


                                     INDEX

<TABLE>
<CAPTION>
                                                                                                     Page Number
                                                                                                     -----------
<S>                                                                                                  <C>
Part I.           Financial Information:


                  Condensed Consolidated Balance Sheets
                  March 31, 2002 and December 31, 2001 (Unaudited)..................................        3-4


                  Condensed Consolidated Statements of Operations
                  Three months Ended March 31, 2002 and 2001
                  (unaudited).......................................................................          5


                  Condensed Consolidated Statements of Cash Flows
                  Three months Ended March 31, 2002 and 2001
                  (unaudited).......................................................................        6-7


                  Notes to Condensed Consolidated Financial Statements
                  (unaudited).......................................................................       8-10


                  Management's Discussion and Analysis of
                  Financial Condition and Results of
                  Operations........................................................................      11-16

                  Quantitative and Qualitative Disclosures About Market Risk........................         16


Part II.          Other Information.................................................................         17
</TABLE>

                                       2
<PAGE>

PART I.    Financial Information
--------------------------------------------------------

Item 1.  FINANCIAL STATEMENTS

                          DEVCON INTERNATIONAL CORP.
                               AND SUBSIDIARIES

                     Condensed Consolidated Balance Sheets
                     March 31, 2002 and December 31, 2001
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                        March 31,                December 31,
                                                                          2002                      2001
                                                                      -------------            ---------------
<S>                                                                   <C>                      <C>
ASSETS
------

Current assets:
   Cash and cash equivalents                                           $   8,261,111               $   7,994,327
   Receivables, net                                                       11,382,379                  12,162,049
   Costs and estimated earnings
      in excess of billings                                                1,255,395                     229,056
   Inventories                                                             3,513,280                   3,736,759
   Prepaid expenses and other assets                                         532,587                     645,665
                                                                       -------------               -------------

         Total current assets                                             24,944,752                  24,767,856

Property, plant and equipment, net:
   Land                                                                    1,462,068                   1,462,068
   Buildings                                                               1,135,954                   1,135,954
   Leasehold improvements                                                  3,154,802                   3,159,536
   Equipment                                                              49,204,346                  49,567,905
   Furniture and fixtures                                                    723,868                     684,849
   Construction in process                                                 3,051,312                   2,793,580
                                                                       -------------               -------------
                                                                          58,732,350                  58,803,892

Less accumulated depreciation                                            (28,330,380)                (27,578,652)
                                                                       -------------               -------------
         Total property, plant & equipment, net                           30,401,970                  31,225,240

Investments in unconsolidated
   joint ventures and affiliates                                             316,932                     315,858
Receivables, net                                                          10,770,226                  10,596,702
Other assets                                                               1,068,552                   1,046,091
                                                                       -------------               -------------

Total assets                                                           $  67,502,432               $  67,951,747
                                                                       =============               =============
</TABLE>

     See accompanying notes to condensed consolidated financial statements

                                       3
<PAGE>

                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                      Condensed Consolidated Balance Sheets
                      March 31, 2002 and December 31, 2001
                                   (Unaudited)

                                   (Continued)

<TABLE>
<CAPTION>
                                                                          March 31           December 31,
                                                                            2002                  2001
                                                                         -----------         ------------
<S>                                                                      <C>                 <C>
Liabilities and Stockholders' Equity
------------------------------------

Current liabilities:
    Accounts payable, trade and other                                    $ 3,504,389          $ 4,093,229
    Accrued expenses and other liabilities                                 2,405,876            2,214,575
    Current installments of long-term debt                                   973,521            1,143,097
    Billings in excess of costs and estimated earnings                       393,825              414,837
    Income taxes                                                           1,016,851              699,118
                                                                         -----------          -----------
         Total current liabilities                                         8,294,462            8,564,856

Long-term debt, excluding current installments                             2,448,178            2,454,809
Deferred income taxes                                                        122,207              205,344
Deferred gain on sale of businesses                                                -            1,142,537
Other liabilities                                                          1,938,326            1,738,930
                                                                         -----------          -----------

         Total liabilities                                                12,803,173           14,106,476

Stockholders' equity:
    Common stock                                                             373,628              374,128
    Additional paid-in capital                                            10,105,620           10,133,527
    Accumulated other comprehensive loss -
       cumulative translation adjustment                                  (2,584,381)          (2,516,382)
    Retained earnings                                                     47,806,856           46,941,249
    Treasury stock at cost                                                (1,002,464)          (1,087,251)
                                                                         -----------          -----------

         Total stockholders' equity                                       54,699,259           53,845,271
                                                                         -----------          -----------

Commitments and contingencies

         Total liabilities and stockholders' equity                      $67,502,432          $67,951,747
                                                                         ===========          ===========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>

                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Operations
                   Three Months Ended March 31, 2002 and 2001
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                        2002                  2001
                                                                    ------------         ------------
<S>                                                                 <C>                  <C>
Materials revenue                                                   $  8,957,566         $ 11,167,816
Construction revenue                                                   4,428,657            2,048,673
                                                                    ------------         ------------
Total revenue                                                         13,386,223           13,216,489

Cost of materials                                                     (7,840,538)          (9,238,430)
Cost of construction                                                  (3,522,801)          (2,071,671)
                                                                    ------------         ------------
         Gross profit                                                  2,022,884            1,906,388

Operating expenses:
      Selling, general and administrative expenses                    (2,864,673)          (2,250,973)
                                                                    ------------         ------------

         Operating loss                                                 (841,789)            (344,585)

Other income (deductions):
      Joint venture equity gain                                            1,074                    -
      Gain on sale of equipment and property                              85,448               37,542
      Gain on sale of business                                         1,048,395                    -
      Interest expense                                                   (75,848)            (110,171)
      Interest and other income                                        1,015,642              483,080
      Minority interest                                                        -               37,156
                                                                    ------------         ------------
                                                                       2,074,711              447,607
                                                                    ------------         ------------

         Income before income taxes                                    1,232,922              103,022

Income tax expense                                                      (295,535)             (54,063)
                                                                    ------------         ------------

      Net income                                                    $    937,387         $     48,959
                                                                    ============         ============


Earnings per share from continuing operations
Basic                                                               $       0.26         $       0.01
                                                                    ============         ============
Diluted                                                             $       0.24         $       0.01
                                                                    ============         ============

Weighted average number of shares outstanding
Basic                                                                  3,588,336             3,671,855
                                                                    ============         =============
Diluted                                                                3,895,711             4,007,059
                                                                    ============         =============
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       5
<PAGE>

                          DEVCON INTERNATIONAL CORP.
                               AND SUBSIDIARIES

                Condensed Consolidated Statements of Cash Flows
                  Three Months Ended March 31, 2002 and 2001
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                          2002                        2001
                                                                      ------------               -------------
<S>                                                                   <C>                        <C>
Cash flows from operating activities:
   Net income                                                         $    937,387               $      48,959
   Adjustments to reconcile net income
   to net cash provided by operating activities:
       Depreciation and amortization                                     1,200,876                   1,217,065
       Deferred income tax benefit                                         (54,747)                          -
       Provision for doubtful accounts and notes                            72,127                      61,898
       Impairment of long-lived assets                                       7,423                           -
       Gain on sale of equipment and property                              (85,448)                    (37,542)
       Gain on sale of businesses                                       (1,048,395)                          -
       Joint venture equity gain                                            (1,074)                          -
       Minority interest income                                                  -                     (37,156)

   Changes in operating assets and liabilities:
       Decrease in receivables                                             258,263                   1,492,352
       (Increase) decrease in costs and estimated
          earnings in excess of billings                                (1,026,339)                    736,673
       Decrease in inventories                                             237,549                       9,297
       Decrease in other current assets                                     84,678                      84,768
       Increase in other assets                                            (22,461)                    (22,538)
       Decrease in accounts payable,
          accruals and other liabilities                                  (319,322)                 (2,425,380)
       Decrease in billings in excess
          of costs and estimated earnings                                  (21,012)                   (432,990)
       Increase (decrease) in income taxes payable                         317,733                    (175,489)
       Increase (decrease) in deferred gain
          and other liabilities                                             97,832                    (120,518)
                                                                      ------------               -------------
Net cash provided by operating activities                             $    635,070               $     399,399
                                                                      ------------               -------------

Cash flows from investing activities:
   Purchases of property, plant and equipment                             (609,881)                 (1,646,762)
   Proceeds from sale of property and equipment                              6,149                     400,209
   Payments received on notes                                              591,553                     665,901
   Investment in unconsolidated joint ventures                                   -                      (2,666)
   Issuance of notes                                                      (164,500)                   (500,000)
                                                                      ------------               -------------
Net cash used in investing activities                                 $   (176,679)              $  (1,083,318)
                                                                      ------------               -------------
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       6
<PAGE>

                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                   Three Months Ended March 31, 2002 and 2001
                                   (Unaudited)
                                   (Continued)

<TABLE>
<CAPTION>
                                                                            2002                         2001
                                                                        -------------               -------------
<S>                                                                     <C>                         <C>
Cash flows from financing activities:
   Issuance of stock                                                    $     17,100                $     17,100
   Proceeds from debt                                                         -                           12,551
   Principal payments on debt                                               (176,207)                   (362,035)
   Purchase of treasury stock                                                (32,500)                    (13,750)
                                                                        ------------                -------------

Net cash used in financing activities                                   $   (191,607)               $   (346,134)
                                                                        ------------                -------------

Net increase (decrease) in cash and cash equivalents                         266,784                  (1,030,053)

Cash and cash equivalents, beginning of period                             7,994,327                   8,166,954
                                                                        ------------                ------------

Cash and cash equivalents, end of period                                $  8,261,111                $  7,136,901
                                                                        ============                ============

Supplemental disclosures of cash flow information


       Cash paid for:

          Interest                                                      $     80,994                $    112,694
                                                                        ============                ============

          Income taxes                                                  $     18,168                $    227,286
                                                                        ============                ============


Supplemental disclosures of noncash investing activities:

       Receipt of notes in settlement
          of receivables                                                $    724,439                $    350,000
                                                                        ============                ============

       Translation loss adjustment                                      $    (67,999)               $   (402,177)
                                                                        ============                ============
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       7
<PAGE>

                          DEVCON INTERNATIONAL CORP.
                               AND SUBSIDIARIES
                                  (Unaudited)

             Notes to Condensed Consolidated Financial Statements

The condensed consolidated financial statements include the accounts of Devcon
International Corp. and its majority-owned subsidiaries (the "Company").

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, 2001 (the "2001 Form 10-K").

In the opinion of management, the accompanying unaudited condensed consolidated
financial statements contain all adjustments (which consist only of normal
recurring adjustments) necessary to present fairly the Company's financial
position as of March 31, 2002 and the results of its operations and cash flows
for the three months ended March 31, 2002 and 2001.The results of operations for
the three months ended March 31, 2002 are unaudited and are not necessarily
indicative of the results to be expected for the full year.

The unaudited condensed consolidated financial statements included herein should
be read in conjunction with the financial statements and related footnotes
included in the Company's 2001 Form 10-K.

Earnings Per Share
------------------

Basic earnings per share is computed by dividing income available to common
shareholders by the weighted-average number of common shares outstanding during
the period. Diluted earnings per share is 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 anti-dilutive.

<TABLE>
<CAPTION>
                                                March 31, 2002                           March 31, 2001
                                     Option price            Options          Option price            Options
                                    From        To         outstanding        From       To         outstanding
<S>                                 <C>       <C>          <C>                <C>      <C>          <C>
Dilutive options                    $1.50     $ 5.50          555,100         $1.50    $ 6.75         751,700
Not included options                $6.25     $14.00          246,795         $7.00    $14.00          62,295
</TABLE>

Certain options 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 2001 Form 10-K.

                                       8
<PAGE>

             Notes to Condensed Consolidated Financial Statements
                                  (Continued)

Comprehensive Income (Loss)
---------------------------

The Company's total comprehensive income (loss), comprised of net income and
foreign currency translation adjustments, for the three months ended March 31,
2002 and 2001 was as follows:

                                                      2002             2001
                                                  -------------    ------------

Net income                                        $     937,387    $     48,959
Other comprehensive loss                                (67,999)       (402,177)
                                                  -------------    ------------
       Total comprehensive income (loss)          $     869,388    $   (353,218)
                                                  =============    ============

Segment Reporting
-----------------

The following sets forth the revenue and income before income taxes for each of
the Company's business segments for the three months ended March 31, 2002 and
2001:

                                                       2002            2001
                                                  -------------    ------------
Revenue (including inter-segment)
    Materials revenue                             $   9,320,852    $ 11,230,200
    Construction revenue                              4,437,908       2,077,220
    Elimination of inter-segment revenue               (372,537)        (90,931)
                                                  -------------    ------------

          Total revenue                           $  13,386,223    $ 13,216,489
                                                  =============    ============

Operating (loss) income
     Materials                                    $    (837,000)   $    401,000
     Construction                                       324,000        (418,000)
     Unallocated corporate overhead                    (328,789)       (327,585)
                                                  --------------   ------------

        Total operating loss                           (841,789)       (344,585)

Other income, net                                     2,074,711         447,607
                                                  -------------   -------------

Income before income taxes                        $   1,232,922   $     103,022
                                                  =============   =============

New Accounting Standards
------------------------

In June 2001, the Financial  Accounting  Standards Board ("FASB")  approved the
issuance of Statements of Financial Accounting Standards ("SFAS") No. 141,
"Business Combinations"; SFAS No. 142, "Goodwill and Other Intangible Assets";
and SFAS No. 143, "Accounting for Asset Retirement Obligations."

                                       9
<PAGE>

             Notes to Condensed Consolidated Financial Statements
                                  (Continued)

SFAS No. 141 supersedes Accounting Principles Board ("APB") Opinion No. 16,
"Business Combinations." The most significant changes made by SFAS No. 141 are
requiring the purchase method of accounting for all business combinations
initiated after June 30, 2001, establishing specific criteria for the
recognition of intangible assets separately from goodwill, and requiring that
unallocated negative goodwill be written off immediately as an extraordinary
gain. The adoption of SFAS No. 141 did not have a material impact on the
condensed consolidated financial statements.

SFAS No. 142 supersedes APB 17, "Intangible Assets," and primarily addresses
accounting for goodwill and intangible assets subsequent to their acquisition
(i.e., the post-acquisition accounting). The provisions of SFAS No. 142 are
effective for fiscal years beginning after December 15, 2001. The most
significant changes made by SFAS No. 142 are that goodwill and intangible assets
with indefinite lives will no longer be amortized, goodwill will be tested for
impairment at least annually at the reporting unit level, intangible assets
deemed to have an indefinite life will be tested for impairment at least
annually, and the amortization period of intangible assets with finite lives
will no longer be limited to forty years. The adoption of SFAS No. 142 did not
have a material impact on the condensed consolidated financial statements.

SFAS No. 143 requires that entities record as a liability obligations associated
with the retirement of a tangible long-lived asset when such obligations are
incurred, and capitalize the cost by increasing the carrying amount of the
related long-lived asset. SFAS No. 143 will be effective for fiscal years
beginning after June 15, 2002. The Company does not expect a material impact
from the adoption of SFAS No. 143 on the condensed consolidated financial
statements.

In August 2001, the FASB approved the issuance of SFAS No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets." SFAS No. 144 supersedes SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of," and certain parts of APB Opinion No. 30, "Reporting
the Results of Operations - Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions" SFAS No. 144 establishes an accounting model based on SFAS No. 121
for long-lived assets to be disposed of by sale, previously accounted for under
APB Opinion No. 30. This Statement is effective for fiscal years beginning after
December 15, 2001. The adoption of this statement did not materially affect the
financial position or results of operations.

Environmental Matters
---------------------

We are involved, on a continuing basis, in monitoring our compliance with
environmental laws and in making capital and operating improvements necessary to
comply with existing and anticipated environmental requirements. While it is
impossible to predict with certainty, management currently does not foresee such
expenses in the future as having a material effect on our business, results of
operations, or financial condition.

                                       10
<PAGE>

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

The following discussion should be read in conjunction with the accompanying
condensed consolidated financial statements, as well as the financial statements
and related notes included in the Company's 2001 Form 10-K.

INTRODUCTION

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
involve risks and uncertainties that are beyond the Company's control, and
actual results may differ materially depending on many factors, including,
without limitation, the financial condition of our customers, changes in
domestic and foreign economic and political conditions, demand for our services,
changes in our competitive environment, changes in infrastructure requirements,
changes in available financing and/or cash flow, fixed price contract risks,
bidding errors, unanticipated increase in costs, penalty clauses, United States
currency fluctuations versus other currencies, foreign nations' exchange
controls, restrictions on withdrawal of foreign investments and terrorist acts
that directly or indirectly could affect our business.

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.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company has identified significant accounting policies that, as a result of
the judgments, uncertainties, uniqueness and complexities of the underlying
accounting standards and operations involved, could result in material changes
to its financial condition or results of operations under different conditions
or using different assumptions. The Company believes its most significant
accounting policies are related to the following areas: estimations of cost to
complete construction contracts, allowance for credit losses, loss reserves for
inventories, accruals for deferred compensation agreements, Antiguan tax
assessment evaluation, tax on un-repatriated earnings, valuation of the Antigua
and Barbuda Government notes and the valuation allowance of deferred taxes.
Details regarding the Company's use of these policies and the related estimates
are described fully in the Company's 2001 Form 10-K. During the first quarter

                                       11
<PAGE>

of 2002, there have been no material changes to the Company's significant
accounting policies that impacted the Company's financial condition or results
of operations.

COMPARISON OF THREE MONTHS ENDED MARCH 31, 2002 WITH THREE MONTHS ENDED
MARCH 31, 2001

REVENUE

The Company's revenue during the first quarter of 2002 was $13.4 million as
compared to $13.2 million during the same period in 2001. This 1.3 percent
increase was primarily due to an increase of $2.4 million in construction
revenue, partially offset by a decrease in materials revenue of $2.2 million.

The Company's materials division revenue decreased 19.8 percent to $9.0 million
during the first quarter of 2002 as compared to $11.2 million for the same
period in 2001, due primarily to a decrease of $1.1 million in cement sales as a
result of the termination of its cement distribution agreement with Union
Maritima Internacional, S.A. ("UMAR") on March 1, 2001, coupled with a decrease
in concrete sales of 15.5 percent, in block sales of 12.1 percent and in
aggregate sales of 9.9 percent. Due to market conditions, which we believe are
the result of a slowdown in the islands' economies, where the Company operates,
due to reduced tourism in the islands in the aftermath of the events of
September 11, 2001, we are seeing a decrease in volume across all islands,
except for Antigua.

Revenue from the Company's construction division increased 116.2 percent to $4.4
million during the first quarter of 2002 as compared to $2.0 million for the
same period in 2001. This increase is mainly due to continued work on two
contracts in the Bahamas, one of which is further described below, and a
contract in Antigua. The Company's backlog of unfilled portions of land
development contracts at March 31, 2002 was $7.6 million, involving 7 contracts.
The backlog of two contracts for the project in the Bahamas amounted to $6.0
million. Subsequent to March 31, 2002 the Company has entered into an additional
contract for $1.0 million for the same project. A Company subsidiary, the
President, and a director of the Company are minority partners of the entity
developing this project. The Company expects that most of this contract will be
completed during 2002. The project received financing in January 2002. We are
actively bidding and negotiating additional projects. If no significant new
construction contracts are finalized in the near future, the construction
division will experience a reduction in revenue in 2002 compared to 2001.

COST OF MATERIALS

Cost of materials as a percentage of materials revenue increased to 87.5 percent
during the first quarter of 2002 from 82.7 percent for the same period in 2001.
This increase was the result of a decrease in revenue, which resulted in fixed
costs of sales weighing heavier on the margins for the division.

                                       12
<PAGE>

COST OF CONSTRUCTION

Cost of construction as a percentage of construction revenue decreased to 79.5
percent during the first quarter of 2002 from 101.1 percent during the same
period in 2001. This decrease is primarily attributable to increased volumes and
improved margins on some contracts in the Bahamas and Antigua, and also to the
varying profitability levels of individual contracts and the stage of completion
of such contracts.

OPERATING EXPENSES

Selling, general and administrative expense ("SG&A expense") increased by 27.3
percent to $2.9 million for the first quarter of 2002 from $2.3 million for the
same period in 2001. The increase in SG&A expense was primarily due to severance
expense, losses on foreign exchange, increases in professional fees and other
expenses. As a percentage of revenue, SG&A expense increased to 21.4 percent
during the first quarter as compared to 17.0 percent for the same period last
year. Some of these expenses were uncharacteristic and are not expected to recur
in the next quarter.

OPERATING LOSS

The Company had an operating loss of $842,000 for the first quarter of 2002
compared to $345,000 for the same period in 2001. The Company's materials
division operating loss was $837,000 during the first quarter of 2002 compared
to income of $401,000 during the same period in 2001. This increase in operating
loss is primarily attributable to decreased volumes on all islands, except
Antigua, and to increased SG&A expenses.

The Company's construction division had operating income of $324,000 during the
first quarter of 2002 compared to an operating loss of $418,000 during the same
period in 2001. This increase was attributable to increased volumes in the
Bahamas and Antigua and to varying profitability levels of individual contracts,
and the stage of completion of such contracts.

OTHER INCOME (DEDUCTIONS)

At the time of sale of the operations in Dominica, the Company entered into a
profit and loss participation agreement until March 31, 2002. During this time
the gain on the sale of the operations were deferred. At the end of said period,
the Company recognized a gain on sale of business of $1.0 million. Gain on sale
of equipment and property was $85,000 compared to $38,000 for the same quarter
last year. Interest and other income increased in the first quarter of 2002 to
$1.0 million compared to $483,000 for the same period in 2001, primarily due to
an increase in the interest recognized on the note receivable from the
Government of Antigua, and, to a lesser extent, to interest income from financed
construction projects. Interest expense decreased to $76,000 from $110,000 for
the same quarter in 2001, primarily due to decreased interest rates.

                                       13
<PAGE>

INCOME TAXES

The company operates in various tax jurisdictions with various tax rates, and
depending on where profits or losses are recognized during the period, the
effective tax rate will vary. In certain jurisdictions certain income is not
taxable, and in certain jurisdictions, the Company enjoys certain tax
exemptions. The effective tax rate for the first quarter of 2002 was 24.0
percent as compared to 52.5 percent for the same period in 2001.

NET INCOME

The Company had net income of $937,000 during the first quarter of 2002 as
compared to $49,000 during the same period in 2001.

LIQUIDITY AND CAPITAL RESOURCES

The Company generally funds its working capital needs from operations and bank
borrowings. In the land development construction 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. 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. During the first quarter
of 2002, the Company provided long-term financing in the amount of $724,000 to
certain customers who utilized its land development construction services. The
Company has also provided financing for other business ventures from time to
time. With respect to the Company's materials 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.

The Company has, since the beginning of 2000, funded most of these expenditures
out of its current working capital. Management believes the cash flow from
operations, existing working capital, and funds available from lines of credit
will be adequate to meet the company's needs during the next 12 months.
Historically, the Company has used a number of lenders to finance a portion of
our machinery and equipment purchases. At December 31, 2001 there were no
amounts outstanding to these lenders. Management believes it has significant
collateral and financial stability to be able to obtain significant financing,
should it be required.

As of March 31, 2002, the Company's liquidity and capital resources included
cash and cash equivalents of $8.3 million and working capital of $16.7 million.
As of March 31, 2002, total outstanding liabilities were $12.8 million. As of
March 31, 2002, the Company had available lines of credit totaling $1.2 million.

Cash flows provided by operating activities for the three months ended March 31,
2002 were $635,000 compared with $399,000 for the same period in 2001. The
primary use of cash for operating activities during the three months ended March
31, 2002 was an increase in costs and estimated earnings in excess of billings
of $1.0 million and a decrease in payables, accruals and

                                       14
<PAGE>

other liabilities of $319,000, offset to a lesser extent by an increase in
income taxes payable, a decrease in receivables and in inventory.

Net cash used in investing activities was $177,000 in the first three months of
2002. Purchases of property, plant and equipment were $610,000. The Company
issued new notes receivable for $165,000 and receipts on notes receivable were
$592,000. Net cash used in financing activities was $192,000 for the first three
months of 2002, consisting primarily of principal payments of debt.

The Company's accounts receivable has an average of 64 days of sales outstanding
as of March 31, 2002. This is an improvement from 78 days at the end of December
2001. The Company's materials segment has remained the same at 61 days at the
end of this quarter as compared to 60 days at the end of last year. The
construction segment has improved substantially to 69 days as compared to 113
days at the end of last year. The improvement was due to large cash receipts
from the venture in the Bahamas in the beginning of this quarter. The Company
does not consider notes receivable in this calculation.

The Company entered into a new unsecured credit line of $1.0 million in May 2001
with a bank in Florida. The bank can demand repayment of the loan and
cancellation of the overdraft facility, if certain financial or other covenants
are in default. There was no outstanding balance as of March 31, 2002. The
interest rate on indebtedness outstanding under the credit line is at a rate
variable with Libor.

The Company has borrowed approximately $2.7 million from the Company President.
The note is unsecured and bears interest at the prime rate. Nine hundred twenty
thousand is due on demand, and $1.8 million is due on July 1, 2003. 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 entered into an agreement with the Company President in June 2000,
whereby Mr. Smith shall receive a retirement benefit. The accrued liability as
of March 31, 2002 was $821,000, and the Company estimates to accrue an
additional $491,000 through March 2003. The Company estimates that the total
accrual will then be sufficient to cover its obligations under the
aforementioned agreement.

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
materials division. This should result in net cash expenditures, after financing
part of the equipment purchases, of approximately $3 million during 2002.
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 March 31,
2002, no amount was outstanding to these lenders. The Company believes it has
available or can obtain sufficient financing for its contemplated equipment
replacements and additions.

                                       15
<PAGE>

Receivables at March 31, 2002 include a net balance of $7.2 million, consisting
of promissory notes due from the Government of Antigua and Barbuda,
substantially all of which is classified as a long-term receivable. The gross
balance of the notes is $31.1 million. The notes were restructured on April 28,
2000 and call for both quarterly and monthly principal and interest payments
until maturity in 2015. The notes are paid from agreed upon sources, which
consist of lease proceeds from the rental of a United States military base, fuel
tax revenue, proceeds from a real estate venture and other sources. Receipts
recorded for the three months ended March 31, 2002 were $1.0 million.

REPURCHASE OF COMPANY SHARES

The Company repurchased 5,000 shares during the first quarter of 2002 at an
average price of $6.50 for the year. The original plan of February 2000 to
repurchase shares for up to $3.0 million, as amended in 2001 providing for the
repurchase an additional 50,000 shares, has been completed. At this point there
are no immediate plans to continue the repurchase program. However, management
and the Board may decide from time to time in the future to purchase shares
being offered to the Company at market price.

RELATED PARTY TRANSACTIONS

The Company has certain transactions with some of the Directors or employees.
Details regarding the Company's transaction with related parties are described
fully in the Company's 2001 Form 10-K. During the first quarter of 2002, there
have been no material changes to the Company's related party transactions.



Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to financial market risks due primarily to changes in
interest rates, which it manages primarily by managing the maturities of its
financial instruments. The Company does not use derivatives to alter the
interest characteristics of its financial instruments. Management does not
believe a change in interest rate will materially affect the Company's financial
position or results of operations.

The Company has significant operations overseas. Generally, all significant
activities of the overseas affiliates are recorded in their functional currency,
which is generally the currency of the country of domicile of the affiliate. The
foreign functional currencies that the Company deals with are Netherlands
Antilles Guilders, Eastern Caribbean Units, French Francs and Euros. The first
two are pegged to the U.S. dollar and have remained fixed for many years.
Management does not believe a change in the French Franc or Euro exchange rate
will materially affect the Company's financial position or result of operations.
The French operations are less than 10% of the Company's total operations.

                                       16
<PAGE>

PART II.  OTHER INFORMATION
_____________________________________________

Item 1.   Legal Proceedings
          -----------------

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

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

          None

Item 5.   Other Information
          -----------------

          None

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

          (a)  Exhibits:

               None

          (b)  Reports on Form 8-K:

               None

                                       17
<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: May 13, 2002                             S/ JAN A. NORELID
                                               -----------------
                                                Jan A. Norelid
                                               Vice President - Finance

                                       18