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 September 30, 2003

                                       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______

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act):
            YES______                                  NO     X

As of November 4, 2003 the number of shares outstanding of the Registrant's
Common Stock was 3,316,373.


<PAGE>



                                        2
Intentionally left blank


<PAGE>
                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES


                                      INDEX

                                                                     Page Number

PART I.           Financial Information:


   ITEM 1.  Condensed Consolidated Balance Sheets
            September 30, 2003 and December 31, 2002 (unaudited).............4-5


            Condensed Consolidated Statements of Operations
            Three and Nine Months Ended September 30, 2003 and 2002
            (unaudited).......................................................7


            Condensed Consolidated Statements of Cash Flows
            Nine Months Ended September 30, 2003 and 2002
            (unaudited).....................................................8-9


            Notes to Condensed Consolidated Financial Statements
            (unaudited)................................................... 10-16


   ITEM 2.  Management's Discussion and Analysis of
            Financial Condition and Results of
            Operations.................................................... 17-28

   ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk.......29

   ITEM 4.  Controls and Procedures..........................................29

PART II.    Other Information................................................30



                                       3


<PAGE>

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

ITEM 1.  Financial Statements

                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                      Condensed Consolidated Balance Sheets
                    September 30, 2003 and December 31, 2002
                                   (Unaudited)
<TABLE>
<S>                                                                          <C>                         <C>

                                                                        September 30,                December 31,
                                                                             2003                        2002
ASSETS                                                                  -----------                  -----------

Current assets:
   Cash and cash equivalents                                            $  9,098,264                $  8,977,293
   Accounts and notes receivables, net                                    13,275,523                  12,261,687
   Costs and estimated earnings
      in excess of billings                                                1,210,815                   1,990,353
   Inventories                                                             4,310,271                   4,416,278
   Prepaid expenses and other current assets                                 887,171                     667,174
                                                                         -----------                  -----------
         Total current assets                                             28,782,044                  28,312,785

Property, plant and equipment, net:
   Land                                                                    1,432,068                   1,462,068
   Buildings                                                                 597,366                   1,111,954
   Leasehold improvements                                                  3,287,649                   3,494,392
   Equipment                                                              49,457,125                  53,109,586
   Furniture and fixtures                                                    794,349                     712,124
   Construction in process                                                   891,861                     744,448
                                                                         -----------                  -----------
                                                                          56,460,418                  60,634,572

Less accumulated depreciation                                            (32,086,205)                (30,606,467)
                                                                         -----------                  -----------
         Total property, plant & equipment, net                           24,374,213                  30,028,105


Investments in and advances to
   unconsolidated joint ventures and affiliates                              349,242                     373,251
Notes receivables, excluding current installments                         10,325,789                   8,460,887
Other assets                                                               2,025,373                   1,262,333
                                                                         -----------                  -----------
         Total assets                                                    $65,856,661                 $68,437,361
                                                                         ===========                  ===========

</TABLE>
See accompanying notes to unaudited condensed consolidated financial statments.
                                       4
<PAGE>


                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                      Condensed Consolidated Balance Sheets
                    September 30, 2003 and December 31, 2002
                                   (Unaudited)

                                   (Continued)
<TABLE>
<S>                                                                         <C>                         <C>


                                                                       September 30,                December 31,
                                                                          2003                          2002
LIABILITIES AND STOCKHOLDERS' EQUITY                                    -----------                  -----------

Current liabilities:
    Accounts payable, trade and other                                   $  4,392,213                $  4,131,087
    Accrued expenses and other liabilities                                 4,030,334                   3,197,545
    Line of credit                                                           -                            11,000
    Current installments of long-term debt                                   338,298                     378,500
    Billings in excess of costs and estimated earnings                       671,899                       1,958
    Income taxes payable                                                   1,273,831                     933,734
                                                                         -----------                  -----------
         Total current liabilities                                        10,706,575                   8,653,824

Long-term debt, excluding current installments                             2,383,301                   2,334,974
Deferred income taxes                                                         48,746                      65,356
Other long-term liabilities                                                3,811,850                   2,357,952
                                                                         -----------                  -----------
         Total liabilities                                                16,950,472                  13,412,106


Stockholders' equity:
    Common stock: $0.10 par value. Authorized
    15,000,000 shares, issued 3,403,173 in 2003
    and 3,591,269 in 2002, outstanding 3,316,373
    in 2003 and 3,469,169 shares in 2002                                     340,317                     359,126
    Additional paid-in capital                                             9,248,938                   9,704,937
    Retained earnings                                                     41,124,770                  47,417,954
    Accumulated other comprehensive loss -
       cumulative translation adjustment                                  (1,217,971)                 (1,611,983)
    Treasury stock, at cost, 86,800 and 122,100
       shares in 2003 and 2002, respectively                                (589,865)                   (844,779)
                                                                         -----------                  -----------
         Total stockholders' equity                                       48,906,189                  55,025,255
                                                                         -----------                  -----------
Commitments and contingencies

         Total liabilities and stockholders' equity                      $65,856,661                 $68,437,361
                                                                         ===========                  ==========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
                                       5
<PAGE>
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                                        6



<PAGE>
                         DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Operations
             Three and Nine Months Ended September 30, 2003 and 2002
                                   (Unaudited)
<TABLE>
<S>                                                                     <C>    <C>        <C>               <C>    <C>      <C>

                                                                           Three Months Ended                Nine Months Ended
                                                                       Sept. 30,        Sept. 30,        Sept. 30,        Sept. 30,
                                                                          2003            2002             2003             2002
                                                                     -----------       ----------       -----------     ------------
Materials revenue                                                  $  9,971,339      $ 9,764,107       $28,669,545      $28,216,471
                                                                     -----------       ----------       -----------     ------------
Construction revenue                                                  4,087,422        3,504,267        11,841,562       11,936,369
      Total revenue                                                  14,058,761       13,268,374        40,511,107       40,152,840

Cost of materials                                                    (8,517,849)      (7,705,817)      (24,646,116)     (23,102,319)
Cost of construction                                                 (3,353,981)      (3,558,364)      (11,309,178)     (10,692,223)
                                                                     -----------       ----------       -----------     ------------
      Gross profit                                                    2,186,931        2,004,193         4,555,813        6,358,298

Operating expenses:
      Selling, general and administrative expenses                   (2,543,412)      (2,958,927)       (9,726,497)      (8,598,455)
      Impairment of assets                                               -                 -             (2,859,235)           -
                                                                     -----------       ----------       -----------     ------------
         Operating loss                                                (356,481)        (954,734)       (8,029,919)      (2,240,157)

Other income (deductions):
      Joint venture equity gain                                         112,737            1,037           106,991            7,371
      Gain on sale of equipment and property                            193,958           35,720           425,996          144,190
      Gain on sale of business                                             -                -                 -           1,040,973
      Interest expense                                                  (29,906)         (75,093)         (111,325)        (227,097)
      Interest income                                                   760,380        1,051,188         2,315,221        3,044,142
                                                                      1,037,169        1,012,852         2,736,883        4,009,597

         Income (loss) before income taxes                              680,688           58,118        (5,293,036)       1,769,422

Income tax expense                                                      (49,726)         (55,176)          (28,142)        (416,660)
                                                                     -----------       ----------       -----------     ------------
      Net income (loss)                                              $  630,962     $      2,942       $(5,321,178)     $ 1,352,762
                                                                     ===========       ==========       ===========     ============

Earnings (loss) per share
Basic                                                                $     0.19      $       -          $    (1.58)      $     0.38
                                                                     ===========       ==========       ===========     ============
Diluted                                                              $     0.18      $       -          $    (1.58)      $     0.35
                                                                     ===========       ==========       ===========     ============
Weighted average number of shares outstanding
Basic                                                                 3,312,065        3,592,048         3,365,317        3,589,520
                                                                     ===========       ==========       ===========     ============
Diluted                                                               3,591,736        3,883,834         3,365,317        3,890,056
                                                                     ===========       ==========       ===========     ============

</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
                                       7
<PAGE>



                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                  Nine Months Ended September 30, 2003 and 2002
                                   (Unaudited)
<TABLE>
<S>                                                                          <C>                         <C>

                                                                        September 30,                September 30,
                                                                             2003                        2002
                                                                          ----------                  ----------
Cash flows from operating activities:
Net (loss) income                                                        $(5,321,178)                $ 1,352,762
   Adjustments to reconcile net (loss) income
       to net cash provided by operating activities:
   Depreciation and amortization                                           4,165,994                   3,676,963
   Deferred income taxes benefit                                            (296,409)                   (272,237)
   Provision for doubtful accounts and notes                                  49,527                     185,899
   Impairment of long-lived assets                                         2,859,235                     -
   Gain on sale of equipment and property                                   (425,996)                   (144,190)
   Gain on sale of business                                                   -                       (1,040,973)
   Joint venture equity loss (gain)                                           33,009                      (7,371)
Changes in operating assets and liabilities:
   (Increase) decrease in accounts
       and notes receivables                                              (4,169,600)                  2,108,358
   Decrease (increase) in costs and estimated
       earnings in excess of billings                                        779,538                  (2,333,550)
   Decrease (increase) in inventories                                        185,922                    (540,897)
   Increase in prepaid expenses and
       other current assets                                                 (188,789)                   (205,165)
   Increase in other assets                                                 (514,449)                    (17,472)
   Increase in accounts payable,
       accruals and other liabilities                                        581,660                      35,359
   Increase (decrease) in billings in excess
       of costs and estimated earnings                                       669,941                    (412,743)
   Increase in income taxes payable                                          340,097                     318,269
   Increase in other long-term liabilities                                 1,453,898                     426,992
                                                                          ----------                  ----------
Net cash provided by operating activities                                $   202,400                 $ 3,130,004

Cash flows from investing activities:
   Purchases of property, plant and equipment                            $(2,014,846)                $(2,276,766)
   Proceeds from sale of property and equipment                              356,469                     217,596
   Payments received on notes                                              3,660,733                   1,443,549
   Investment in unconsolidated joint ventures                                (9,000)                    -
   Issuance of notes                                                        (830,689)                   (256,840)
                                                                          ----------                  ----------
Net cash provided by (used in) investing activities                      $ 1,162,667                 $  (872,461)
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
                                       8

<PAGE>


                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                  Nine Months Ended September 30, 2003 and 2002
                                   (Unaudited)
                                   (Continued)
<TABLE>
<S>                                                                              <C>                          <C>
                                                                        September 30,               September 30,
                                                                             2003                        2002
                                                                         -----------                ------------
Cash flows from financing activities:
   Proceeds from issuance of stock                                      $    227,533                $     44,400
   Purchase of treasury stock                                             (1,419,433)                   (379,686)
   Principal payments on debt                                                (29,923)                   (853,930)
   Net (repayments) borrowings on credit lines                               (11,000)                    538,000
                                                                         -----------                ------------
Net cash used in financing activities                                   $ (1,232,823)               $   (651,216)

Effect of exchange rate changes on cash                                 $    (11,273)               $     30,670
                                                                         -----------                ------------
Net increase in cash and cash equivalents                               $    120,971                $  1,636,997

Cash and cash equivalents, beginning of period                             8,977,293                   7,994,327
                                                                         -----------                ------------
Cash and cash equivalents, end of period                                $  9,098,264                $  9,631,324
                                                                         ===========                ============
Supplemental disclosures of cash flow information


   Cash paid for:

       Interest                                                         $    111,177                $    232,243
                                                                         ===========                ============
       Income taxes                                                     $     71,163                $    352,967
                                                                         ===========                ============

Supplemental disclosures of non-cash investing and financing activities:

   Receipt of notes in settlement of receivables                        $  4,134,262                $  1,689,905
                                                                         ===========                ============
   Increase of deferred income                                          $     -                     $    154,389
                                                                         ===========                ============
   Retirement of treasury stock                                         $  1,674,347                $    384,323
                                                                         ===========                ============
   Translation gain adjustment                                          $    394,012                $    542,914
                                                                         ===========                ============
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
                                       9
<PAGE>

                   DEVCON INTERNATIONAL CORP. AND SUBSIDIARIES
         Notes to Unaudited Condensed Consolidated Financial Statements

The unaudited 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, 2002 (the "2002 Form 10-K").
The unaudited condensed financial statements for the three and nine months ended
September 30, 2003 and 2002 included herein have been prepared in accordance
with the instructions for Form 10-Q under the Securities Exchange Act of 1934,
as amended, and Article 10 of Regulation S-X under the Securities Act of 1933,
as amended. Certain information and footnote disclosures normally included in
financial statements prepared in conformity with accounting principles generally
accepted in the United States of America have been condensed or omitted pursuant
to such rules and regulations relating to interim financial statements.

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 September 30, 2003 and the results of its
operations for the three and nine months ended September 30, 2003 and 2002 and
cash flows for the nine months ended September 30, 2003 and 2002. The results of
operations for the three and nine months ended September 30, 2003 and 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 2002 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, by application of the treasury stock method. In 2003,
the dilutive potential common shares were not included in the computation of
diluted earnings per share for the nine month period, because the inclusion of
the options would be antidilutive. Certain options were not included in the
computations of diluted earnings per share because the options' exercise prices
were greater than the average market prices of the common shares.
<TABLE>
<S>                                  <C>         <C>          <C>                <C>        <C>          <C>

                                         September 30, 2003                            September 30, 2002
                                     Option price          Options               Option price          Options
                                    From        To       outstanding            From        To       outstanding
                                    -----      -----     ----------             ----        ---      -----------
Anti-dilutive options                1.50        6.81      709,300               -           -           -
Dilutive options                     -            -            -                1.50        5.85       574,400
Not included options                 7.00        9.38       32,295              6.25        9.63       234,795

                                       10

</TABLE>

<PAGE>


         Notes to Unaudited Condensed Consolidated Financial Statements
                                   (Continued)
<TABLE>
<S>                                                         <C>    <C>    <C>             <C>    <C>    <C>
                                                            Three Months Ended             Nine Months Ended
Weighted average number                                   Sept. 30,       Sept. 30,      Sept. 30,      Sept. 30,
   of shares outstanding                                   2003             2002           2003           2002
                                                         ---------       ---------      ---------      ---------
Basic                                                    3,312,065       3,592,048      3,365,317      3,589,520
Effect of dilutive securities: Options                     279,671         291,786         -             300,536
                                                         ---------       ---------      ---------      ---------
Diluted                                                  3,591,736       3,883,834      3,365,317      3,890,056
                                                         =========       =========      =========      =========
</TABLE>

For additional disclosures regarding the employee stock options, see the 2002
Form 10-K.

STOCK-BASED COMPENSATION

The Company accounts for its stock option plans under the recognition and
measurement principles of APB Opinion No. 25, "Accounting for Stock Issued to
Employees and Related Interpretations." No stock-based compensation cost is
reflected in net income (loss) for these plans, as all options granted under
these plans had an exercise price equal to or higher than the market value of
the underlying common stock on the date of grant. The following table
illustrates the effect on net income (loss) and income (loss) per share as if
the Company had applied the fair value recognition provisions of FASB Statement
No. 123, "Accounting for Stock Based Compensation" to stock-based compensation:
<TABLE>
<S>                                                           <C>    <C>    <C>               <C>    <C>    <C>
                                                                Three Months Ended          Nine Months Ended
                                                          Sept. 30,        Sept. 30,       Sept. 30,       Sept. 30,
                                                             2003            2002             2003           2002
                                                          ---------       ---------       ---------       ---------
Net income (loss), as reported                             $630,962          $2,942     $(5,321,178)     $1,352,762
Deduct: total stock-based employee
      Compensation expense determined
      under fair value based method
      for all awards, net of taxes                          (21,930)        (26,364)       (114,391)        (84,548)
                                                          ---------       ---------       ---------        ---------
Net income (loss), as adjusted                             $609,032       $ (23,422)    $(5,435,569)      $1,268,214

Earning (loss) per share:
      Basic, as reported                                   $  0.19         $   -           $ (1.58)       $  0.38
      Diluted, as reported                                    0.18             -             (1.58)          0.35

      Basic, as adjusted                                      0.18          (0.01)           (1.62)          0.35
      Diluted, as adjusted                                    0.17          (0.01)           (1.62)          0.33
</TABLE>

The fair value of each stock option is estimated on the date of grant using the
Black-Scholes option-pricing model.

                                       11

<PAGE>

         Notes to Unaudited Condensed Consolidated Financial Statements
                                   (Continued)

COMPREHENSIVE INCOME (LOSS)

The Company's total comprehensive income (loss) comprised of net income (loss)
and foreign currency translation adjustments, for the three and nine months
ended September 30, 2003 and 2002 was as follows:
<TABLE>
<S>                                                         <C>    <C>    <C>               <C>    <C>    <C>
                                                            Three Months Ended             Nine Months Ended
                                                         Sept. 30,      Sept. 30,        Sept. 30,        Sept. 30,
                                                           2003           2002             2003              2002
                                                         --------       ---------       ----------        ---------
Net income (loss)                                      $  630,962      $     2,942     $(5,321,178)      $1,352,762
Other comprehensive income
  - foreign currency transaction adjustments              (35,775)        (103,220)        394,012          542,914
                                                         --------       -----------     -----------        ---------
       Total comprehensive income (loss)               $  595,187       $ (100,278)    $(4,927,166)      $1,895,676
                                                         ========       ===========     ===========       ==========
SEGMENT REPORTING

The following sets forth the revenue and income (loss) before income taxes for
each of the Company's business segments for the three and nine months ended
September 30, 2003 and 2002:
                                                      Three Months Ended                 Nine Months Ended
                                                     Sept. 30,          Sept. 30,       Sept. 30,         Sept. 30,
                                                       2003               2002             2003             2002
Revenue (including inter-segment)                    ---------         ----------     -----------       -----------
   Materials                                       $ 9,787,933        $9,843,523      $28,306,578       $28,660,436
   Construction                                      4,400,910         3,519,849       12,721,901        11,978,142
   Elimination of inter-segment                       (130,082)          (94,998)        (517,372)         (485,738)
                                                    ----------        ----------      -----------       -----------
          Total revenue                            $14,058,761       $13,268,374      $40,511,107       $40,152,840
                                                    ==========        ==========       ==========        ==========
Operating (loss) income
   Materials                                       $  (120,000)      $  (196,000)     $(5,064,000)      $(1,233,000)
   Construction                                        253,000          (542,000)      (1,129,000)         (291,000)
   Unallocated corporate overhead                     (489,481)         (216,734)      (1,836,919)         (716,157)
                                                    ----------         ----------     -----------       -----------
        Total operating loss                          (356,481)         (954,734)      (8,029,919)       (2,240,157)

Other income, net                                    1,037,169         1,012,852        2,736,883         4,009,579
                                                     ---------         ----------     -----------       -----------
Income (loss) before income taxes                 $    680,688      $     58,118     $ (5,293,036)      $ 1,769,422
                                                    ==========        ==========       ==========        ==========
</TABLE>

RETIREMENT AND SEVERANCE EXPENSE

Included in selling, general and administrative expenses is retirement and
severance expense totaling $350,000 and $1.5 million for the three and nine
months ended September 30, 2003, respectively, and $201,000 and $597,000 for the
three and nine months ended September 30, 2002, respectively.

                                       12
<PAGE>
         Notes to Unaudited Condensed Consolidated Financial Statements
                                   (Continued)

IMPAIRMENT OF LONG-LIVED ASSETS AND ACCELERATED DEPRECIATION

The Company has two batch plants on Antigua and, during the second quarter,
consolidated its operations to the main facility. Accordingly, the installation
cost of the plant that was moved has been fully depreciated and the original
plant at the main facility that will be functioning as a spare plant had its
book value depreciated through accelerated depreciation to its estimated fair
value. The depreciation expense recorded in the second quarter was approximately
$275,000.

In the first quarter 2003, the Company recorded an impairment expense of $2.9
million. This consisted of the following items:

         St. Martin crusher & concrete operations                  $2,119,000
         Sint Maarten block plant                                     232,000
         Aguadilla crusher plant                                      438,000
         Other assets                                                  70,000
                                                                   ----------
         Total                                                     $2,859,000
                                                                   ==========
The St. Martin/Sint Maarten operations were determined to be impaired due to
continuing losses. The Company could not project sufficient future earnings to
cover the long-lived assets. An impairment charge of $2,119,000 was recorded to
write down the St. Martin crusher and concrete plant to their estimated fair
value, using an estimated probable sales price as determinant of the value.
Management is reviewing its alternatives and has not yet made a decision about
future operational changes. The Sint Maarten concrete and aggregate sales
operations have an estimated fair value in excess of recorded long-lived assets,
and therefore no impairment was recorded for this part of the business. The Sint
Maarten block plant was impaired and an operational decision has been made to
close the plant and dismantle it. The Company is currently importing part of its
need for blocks from Devcon plants on other islands.

The plant in Aguadilla, Puerto Rico, is leased to a third party, whose
extraction permit was cancelled in February this year. On April 10, the lessee
asked for a moratorium on payments, at the same time as he gave notice of the
extraction permit being cancelled. As a result of these actions, management's
expectation of future cash flows and the fact that the only source of revenue
for the plant has come from the lessee, the Company recorded an impairment
charge of $438,000 to write down the plant to its estimated fair value. On
September 1, 2003 the third party received its extraction permit and has started
aggregates processing operations.

NEW ACCOUNTING STANDARDS

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations" ("SFAS 143"). SFAS 143 requires the Company to record the fair
value of an asset retirement obligation as a liability in the period in which it
incurs a legal obligation associated with the retirement of tangible long-lived
assets that result from the acquisition, construction, development, and/or
normal use of the assets. The Company also records a corresponding asset that is
depreciated over the life of the asset. Subsequent to the initial measurement of
the asset retirement obligation, the obligation will be adjusted at the end of
each period to reflect the passage of time and changes in the estimated future
cash flows underlying the obligation. The

                                       13
<PAGE>

         Notes to Unaudited Condensed Consolidated Financial Statements
                                   (Continued)

Company was required to adopt SFAS 143 on January 1, 2003. The adoption of SFAS
143 in the first quarter 2003 did not have a material effect on the Company's
financial position and results of operations.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No.
4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections"
("SFAS 145"). SFAS 145 amends existing guidance on reporting gains and losses on
the extinguishments of debt to prohibit the classification of the gain or loss
as extraordinary, as the use of such extinguishments have become part of the
risk management strategy of many companies. SFAS 145 also amends SFAS No. 13 to
require sale-leaseback accounting for certain lease modifications that have
economic effects similar to sale-leaseback transactions. The provisions of SFAS
145 related to the rescission of Statement No. 4 are applied in fiscal years
beginning after May 15, 2002. Earlier application of these provisions is
encouraged. The provisions of SFAS 145 related to Statement No. 13 were
effective for transactions occurring after May 15, 2002, with early application
encouraged. The adoption of SFAS 145 in the first quarter 2003 did not have a
material effect on the Company's financial position and results of operations.

In July 2002, the FASB issued Statement of Financial Accounting Standards No.
146, "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS
146"). SFAS 146 is effective for the Company for disposal activities initiated
after December 31, 2002. The adoption of SFAS 146 in the first quarter of 2003
did not have a material impact on the Company's financial position and results
of operations.

In December 2002, the FASB issued SFAS No. 148 "Accounting for Stock-Based
Compensation - Transition and Disclosure, an amendment of FASB Statement No.
123" ("SFAS 148"). SFAS 148 amends SFAS No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123") to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, SFAS 148 amends the disclosure requirements
of SFAS 123 to require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. The
provisions of SFAS 148 are effective for fiscal years ending after December 15,
2002 and the interim disclosure provisions are effective for interim periods
beginning after December 15, 2002. The Company currently plans to continue to
apply the intrinsic-value based method to account for stock options and has
adopted the disclosure requirements of SFAS 148 in the notes to these unaudited
condensed consolidated financial statements. The application of the disclosure
portion of this standard will have no impact on the Company's consolidated
financial position or results of operations. The Financial Accounting Standards
Board recently indicated that it will require stock-based employee compensation
to be recorded as a charge to earnings pursuant to a standard it is are
currently deliberating, which it believes will become effective on January 1,
2004. The Company will continue to monitor the progress on the issuance of this
standard as well as evaluate the Company's position with respect to current
guidance.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity" ("SFAS No.
150"). SFAS No. 150 establishes standards for how an issuer classifies and
measures certain financial instruments with

                                       14
<PAGE>

         Notes to Unaudited Condensed Consolidated Financial Statements
                                   (Continued)

characteristics of both liabilities and equity. It requires that an issuer
classify a freestanding financial instrument that is within its scope as a
liability, (or an asset in some circumstances). SFAS 150 is effective for
financial instruments entered into or modified after May 31, 2003, and
otherwise is effective at the beginning of the first interim period beginning
after June 15, 2003. The adoption of SFAS No. 150 did not have an impact on the
Company's consolidated financial statements.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness to Others, an interpretation of FASB Statements No. 5, 57 and 107
and a rescission of FASB Interpretation No. 34" ("FIN 45"). This Interpretation
elaborates on the disclosures to be made by a guarantor in its interim and
annual financial statements about its obligations under guarantees issued. FIN
45 also clarifies that a guarantor is required to recognize, at inception of a
guarantee, a liability for the fair value of the obligation undertaken. The
initial recognition and measurement provisions of FIN 45 are applicable to
guarantees issued or modified after December 31, 2002. The disclosure
requirements are effective for financial statements of interim and annual
periods ending after December 31, 2002. The adoption of FIN 45 did not have a
material impact on the Company's consolidated financial position and results of
operations.

 In January 2003, the FASB issued FASB Interpretation No. 46 "Consolidation of
Variable Interest Entities, an Interpretation of APB No. 50," ("FIN 46"). FIN 46
requires certain variable interest entities to be consolidated by the primary
beneficiary of the entity if the equity investors in the entity do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46, as amended, is
effective for all new variable interest entities created or acquired after
January 31, 2003. For variable interest entities created or acquired prior to
February 1, 2003, the provisions of FIN 46 must be applied for the first interim
or annual period beginning after December 15, 2003. The adoption of FIN 46 is
not expected to have an impact on the Company's consolidated financial position
and results of operations

During November 2002, the Emerging Issues Task Force ("EITF") reached a
consensus on EITF Issue 00-21, Multiple-Deliverable Revenue Arrangements, which
addresses how to account for arrangements that may involve the delivery or
performance of multiple products, services, and/or rights to use assets. The
final consensus will be applicable to agreements entered into in fiscal periods
beginning after June 15, 2003, with early adoption permitted. The Company does
not expect that the adoption will have an impact on the Company's financial
position and results of operations.

ENVIRONMENTAL MATTERS

The Company is involved, on a continuing basis, in monitoring its 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 the Company's
business, results of operations, or financial condition.

                                       15
<PAGE>

         Notes to Unaudited Condensed Consolidated Financial Statements
                                   (Continued)
ANTIGUA TAX ASSESSMENT

During the fourth quarter of 2001, the Company's three subsidiaries in Antigua
were assessed $6.1 million in income and withholding taxes for the years 1995
through 1999. The Company is appealing the assessments in the appropriate
venues. The Company believes that if any tax is accrued in the future, it will
not have an immediate cash flow effect on the Company, but will result in an
offset between tax owed and the approximately $29.0 million receivable from the
Government of Antigua. It is too early to predict the final outcome of the
appeals process or to estimate the ultimate amount of loss, if any, to the
Company. Based on the advice from local Antiguan tax consultants and local
Antiguan counsel, management believes the Company's defenses to be meritorious
and does not believe that the ultimate outcome will have a material adverse
effect on the consolidated financial position or results of operations of the
Company.

CONTINGENT LIABILITIES

Details regarding the Company's other contingent liabilities are described fully
in the Company's 2002 Form 10-K. During 2003, there have been no material
changes to the Company's contingent liabilities.

                                       16

<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
unaudited condensed consolidated financial statements, as well as the financial
statements and related notes included in the Company's 2002 Form 10-K. 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.

FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 (the Reform Act) provides a
safe harbor for forward-looking statements made by or on behalf of the Company.
The Company and its representatives may, from time to time, make written or
verbal forward-looking statements, including statements contained in the
Company's filings with the Securities and Exchange Commission and in its reports
to stockholders. Generally, the inclusion of the words "believe," "expect,"
"intend," "estimate," "anticipate," "will," and similar expressions identify
statements that constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 and that are intended to come within the safe harbor
protection provided by those sections. All statements addressing operating
performance, events, or developments that we expect or anticipate will occur in
the future, including statements relating to sales growth, earnings or earnings
per share growth, and market share, as well as statements expressing optimism or
pessimism about future operating results, are forward-looking statements within
the meaning of the Reform Act.

The forward-looking statements are and will be based upon our management's
then-current views and assumptions regarding future events and operating
performance, and are applicable only as of the dates of such statements. We
undertake no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events, or otherwise.

By their nature, all forward-looking statements involve risks and uncertainties.
Actual results, including our revenues from both our Construction and Materials
divisions, expenses, gross margins, cash flows, financial condition, and net
income, as well as factors such as our competitive position, inventory levels,
backlog, the demand for our products and services, customer base and the
liquidity and needs of our customers, may differ materially from those
contemplated by the forward-looking statements or those currently being
experienced by the Company for a number of reasons, including but not limited
to:

o    The strength of the construction economies on various islands in the
     Caribbean, primarily in the United States Virgin Islands, Sint Maarten, St.
     Martin, Antigua and Puerto Rico. Our business is subject to economic
     conditions in our markets, including recession, inflation, deflation,
     general weakness in construction and housing markets, and changes in
     infrastructure requirements.

o    Our ability to maintain mutually beneficial relationships with key
     customers. We have a number of significant customers. The loss of
     significant customers, the financial condition of our customers or an
     adverse change to the financial condition of

                                       17
<PAGE>

     our significant customers could have a material adverse effect on our
     business or the collectibility of our receivables.

o    Unforeseen inventory adjustments or significant changes in purchasing
     patterns by our customers and the resultant impact on manufacturing volumes
     and inventory levels.

o    Changes in estimation of fair values of long-lived assets and their
     retirement obligations due to changes in the used equipment market could
     have a material effect on the consolidated financial statements.

o    Adverse changes in currency exchange rates or raw material commodity
     prices, both in absolute terms and relative to competitors' risk profiles.
     We have businesses in various foreign countries in the Caribbean. As a
     result, we are exposed to movements in the exchange rates of various
     currencies against the United States dollar. We believe our most
     significant foreign currency exposure is the Euro.

o    Increased competition: The Materials division operates in markets that are
     highly competitive on the basis of price and quality. We compete with local
     suppliers of ready-mix, and local and foreign suppliers of aggregates and
     concrete block. Competition from certain of these manufacturers has
     intensified in recent years and is expected to continue. The Construction
     division has local and foreign competitors in its markets. Customer and
     competitive pressures sometimes have an adverse effect on our pricing.

o    Our foreign operations may be affected by factors such as tariffs,
     nationalization, exchange controls, interest rate fluctuations, civil
     unrest, governmental changes, limitations on foreign investment in local
     business and other political, economic and regulatory conditions, risks or
     difficulties.

o    The effects of litigation, environmental remediation matters, and product
     liability exposures, as well as other risks and uncertainties detailed from
     time to time in our filings with the Securities and Exchange Commission.

o    Our ability to generate sufficient cash flows to support capital expansion,
     business acquisition plans, our share repurchase program and general
     operating activities, and our ability to obtain necessary financing at
     favorable interest rates.

o    Changes in laws and regulations, including changes in accounting standards,
     taxation requirements, including tax rate changes, new tax laws and revised
     tax law interpretations, and environmental laws, in both domestic and
     foreign jurisdictions, and restrictions on repatriation of foreign
     investments.

o    The impact of unforeseen events, including war or terrorist activities, on
     economic conditions and consumer confidence.

o    Interest rate fluctuations and other capital market conditions.

                                       18
<PAGE>
o    Changes in discount rates used for retirement arrangements with Company
     executives and changes in mortality tables can substantially affect the
     recorded net present value of future liabilities.

o    Construction contracts with a fixed price sometimes suffer penalties that
     cannot be recovered by additional billing, which penalties may be due to
     circumstances in completing construction work, errors in bidding contracts,
     or changed conditions.

o    Adverse weather conditions, specifically heavy rains or hurricanes, which
     could reduce demand for our products.

o    Our ability to sell water desalination plants and create a new business for
     us, as well as our ability to recover any investments that we decide to
     make in the water desalination business and other business opportunities.

The foregoing list is not exhaustive. There can be no assurance that we have
correctly identified and appropriately assessed all factors affecting our
business or that the publicly available and other information with respect to
these matters is complete and correct. Additional risks and uncertainties not
presently known to us or that we currently believe to be immaterial also may
adversely impact us. Should any risks and uncertainties develop into actual
events, these developments could have material adverse effects on our business,
financial condition, and results of operations. For these reasons, you are
cautioned not to place undue reliance on our forward-looking statements.

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, estimation of fair value of long-lived assets and their retirement
obligations, 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 2002 Form 10-K. During 2003, there have
been no material changes to the Company's significant accounting policies that
impacted the Company's financial condition or results of operations.


                                       19
<PAGE>


COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2003 WITH THREE MONTHS ENDED
SEPTEMBER 30, 2002

REVENUE

The Company's revenue during the third quarter of 2003 was $14.1 million as
compared to $13.3 million during the same period in 2002. This 6.0 percent
increase was primarily due to an increase of $583,000 in construction revenue,
and a smaller increase in materials revenue of $207,000.

The Company's materials division revenue increased 2.1 percent to $10.0 million
during the third quarter of 2003 as compared to $9.8 million for the same period
in 2002, due to an increase in sales of concrete, partially offset by a
reduction in sales of aggregates. We are encouraged to see increased revenue on
St. Maarten/St. Martin of 18.5% compared to the same quarter last year. The
increase is mainly due to sales of concrete and cement however, the sale of
aggregates is still decreasing slightly. The Company recently received new
contracts and customers for its aggregates on St. Martin and expects to increase
aggregates volumes during the next six months. Revenue in Puerto Rico and St.
Croix was 28.1 and 17.3 percent, respectively, lower than the same quarter last
year due to declining demand for aggregates. St. Thomas slightly improved its
volumes this quarter as compared to the same quarter last year; however this
quarter's revenue was lower than the second quarter of this year.

Revenue from the Company's construction division increased 16.6 percent to $4.1
million during the third quarter of 2003 as compared to $3.5 million for the
same period in 2002. This increase is mainly due to contracts in Antigua and
Aruba, offset to a lesser degree by lower revenue in the Bahamas. The Company's
backlog of unfilled portions of land development contracts at September 30, 2003
was $4.8 million, involving eleven contracts. The backlog of a contract for a
project in the Bahamas amounted to $707,000. A Company subsidiary and our
President are minority partners of the entity developing this project. The
Company expects that most of these contracts will be completed during 2003. The
Company is actively bidding and negotiating additional projects in other areas
of the Caribbean. The Company cannot currently determine whether demand for this
division's services will increase, decrease or remain the same throughout 2003.

COST OF MATERIALS

Cost of materials as a percentage of materials revenue increased to 85.4 percent
during the third quarter of 2003 from 78.9 percent during the same period in
2002. This was the result of decreased margins in the US Virgin Islands and
Puerto Rico due to a change in the mix of products sold and increased costs. In
addition, decreased sales in St. Croix and Puerto Rico led to lower margins as a
result of high fixed costs in operations. This was offset to a lesser extent by
improved margin in St. Martin resulting from increased volumes.


                                       20
<PAGE>


COST OF CONSTRUCTION

Cost of construction as a percentage of construction revenue decreased to 82.1
percent during the third quarter of 2003 from 101.5 percent during the same
period in 2002. This decrease is primarily attributable to improved margins on
certain contracts in the Aruba and Antigua, compared to contracts in the U.S.
Virgin Islands in the previous year, to improved margins on two contracts in the
Bahamas and to reduction of costs incurred for marine equipment. The estimated
cost to complete, the varying profitability levels of individual contracts and
the stage of completion of such contracts can affect the cost of construction
and margins either positively or negatively.

OPERATING EXPENSES

Selling, general and administrative expense ("SG&A expense") decreased by 13.9
percent to $2.5 million for the third quarter of 2003. The decrease in SG&A
expense was primarily due to exchange rate differences resulting in income for
the current year as compared to expense for the same period last year and
reduced labor and certain labor-related costs, offset to a lesser extent by
increased severance and retirement expense. There were also minor increases and
decreases of other expense items. As a percentage of revenue, SG&A expense
decreased to 18.1 percent during the third quarter as compared to 22.3 percent
for the same period last year, as a result of the foregoing factors, as well as
increased revenue.

OPERATING LOSS

The Company had an operating loss of $356,000 for the third quarter of 2003
compared to $955,000 for the same period in 2002. The Company's materials
division operating loss was $120,000 during the third quarter of 2003 compared
to $196,000 during the same period in 2002. This increase in operating loss is
primarily attributable to decreased gross margins on St. Thomas, Puerto Rico and
St. Croix and retirement expense on Antigua, offset to a lesser extent by
improved profitability on Sint Maarten/St. Martin.

The Company's construction division had operating income of $253,000 during the
third quarter of 2003 compared to an operating loss of $542,000 during the same
period in 2002. This improvement in profitability was primarily attributable to
improved profitability on new contracts in Aruba and Antigua and reduced
expenses for marine equipment. The varying profitability levels of individual
contracts and the stage of completion of such contracts can affect the cost of
construction and margins either positively or negatively.

OTHER INCOME (DEDUCTIONS)

Gain on sale of equipment and property was $194,000 compared to $36,000 for the
same period in 2002. Joint venture equity gain was $113,000 in the quarter, due
to the sale of property in a real estate venture in Florida. Interest income
decreased in the third quarter of 2003 to $760,000 compared to $1.1 million for
the same period in 2002, primarily due to a decrease in the interest recognized
on the note receivable from the Government of Antigua and Barbuda
("Government"). The Government did not comply with its payment obligations
during the

                                       21
<PAGE>

second and third quarter this year, and therefore interest recognized on the
notes was significantly lower than last year. The Company expects receipts of
some of the amounts due around the end of the year, when the annual rental
payment from the United States military base is received by the Government.
However, the Company is not assured that the Government will comply with its
payment obligations in the fourth quarter; consequently, the Company is unsure
if the interest to be recognized on the notes in the fourth quarter will
continue at this lower level.

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. The effective tax rate for the three months ended
September 30, 2003 was 7.3 percent as compared to 94.9 percent for the same
period in 2002. In certain jurisdictions, certain income is not taxable, and in
certain jurisdictions, the Company enjoys certain tax exemptions. The tax
expense in the third quarter 2003 is mainly due to taxes accrued in Antigua. The
Company also incurred some withholding taxes on management fees charged by the
corporate office.

NET INCOME (LOSS)

The Company had net income of $631,000 during the third quarter of 2003 as
compared $3,000 during the same period in 2002.

COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2003 WITH NINE MONTHS ENDED
SEPTEMBER 30, 2002

REVENUE

The Company's revenue during the first nine months of 2003 was $40.5 million as
compared to $40.2 million during the same period in 2002. This 0.9 percent
increase was primarily due to an increase in materials revenue of $453,000,
partially offset by a decrease of $95,000 in construction revenue.

The Company's materials division revenue increased 1.6 percent to $28.7 million
during the first nine months of 2003 as compared to $28.2 million for the same
period in 2002. This increase was due primarily to an increase in revenue of
concrete, cement and block, offset to a lesser extent by a decrease in aggregate
sales of 9.4 percent. St Martin/Sint Maarten, and to a lesser extent St Thomas
and Antigua, experienced an increase in materials sales of 18.4%, 6.5% and 4.9%,
respectively, compared to the same period in 2002, while St Croix, due to a
downturn of the construction economy on the island, experienced a 31.1 percent
decrease in material sales.

Revenue from the Company's construction division decreased 0.8 percent to $11.8
million during the first nine months of 2003; as compared to $11.9 million for
the same period in 2002. This decrease is mainly due to reduction of work in the
Bahamas and on St. Croix, while St Thomas, Antigua and Aruba had increased
revenue. The Company's backlog of unfilled portions of land development
contracts at September 30, 2003 was $4.8 million, involving eleven contracts.
The backlog of a contract for a project in the Bahamas amounted to $707,000. A
Company subsidiary

                                       22
<PAGE>

and our President are minority partners of the entity developing this project.
The Company expects that most of these contracts will be completed during 2003.
The Company is actively bidding and negotiating additional projects in other
areas of the Caribbean. The Company cannot currently determine whether demand
for this division's services will increase, decrease or remain the same
throughout 2003.

COST OF MATERIALS

Cost of materials as a percentage of materials revenue increased to 86.0 percent
during the first nine months of 2003 from 81.9 percent for the same period in
2002. This increase was primarily the result of a decrease in revenue on St.
Croix and Puerto Rico. Accordingly, fixed costs of sales had a heavier impact on
the margins for those islands. In addition changes in sales mix and higher
production costs in St. Thomas, partially offset by improved sales and margins
on Sint Maarten/St. Martin and Antigua, were responsible for the increase

COST OF CONSTRUCTION

Cost of construction as a percentage of construction revenue increased to 95.5
percent during the first nine months of 2003 from 89.6 percent during the same
period in 2002. This increase is primarily attributable to changes in the
estimates of cost to complete and additional costs incurred for the construction
of the golf course on Exuma, Bahamas that were previously not contemplated and
for which no revenue has yet been recognized, and to losses incurred as a result
of idle marine equipment. The estimated cost to complete, the varying
profitability levels of individual contracts and the stage of completion of such
contracts can affect the cost of construction and margins either positively or
negatively.

OPERATING EXPENSES

Selling, general and administrative expense increased by 13.1 percent to $9.7
million for the first nine months of 2003 compared to $8.6 million for the same
period in 2002. The increase in SG&A expense was primarily due to increase of
severance and retirement expense, accelerated depreciation on assets in St.
Thomas and Antigua, and professional fees. As a percentage of revenue, SG&A
expense increased to 24.0 percent during the first nine months as compared to
21.4 percent for the same period last year.

The Company recorded impairment expense of $2.9 million in the first quarter of
2003, as further described in the notes to the unaudited condensed financial
statements.

OPERATING LOSS

The Company had an operating loss of $8.0 million for the first nine months of
2003 compared to a loss of $2.2 million for the same period in 2002. The
Company's materials division operating loss was $5.1 million during the first
nine months of 2003, compared to a loss of $1.2 million during the same period
in 2002. This increase in operating loss is primarily attributable to impairment
of assets in St. Martin and other islands of $2.9 million, accelerated
depreciation of

                                       23
<PAGE>

$562,000 on assets in St. Thomas and Antigua, operating losses on Sint
Maarten/St. Martin, St. Croix and Puerto Rico, accrual of retirement and
severance expense, and consulting fees.

The Company's construction division had an operating loss of $1.1 million during
the first nine months of 2003 compared to $291,000 during the same period in
2002. This increase in operating loss is primarily attributable to losses
incurred in 2003 on a contract in the Bahamas and losses incurred as a result of
idle marine equipment.

OTHER INCOME (DEDUCTIONS)

At the time of the sale of its 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 March 31, 2002, the
Company recognized a gain on sale of business of $1.0 million. Gain on sale of
equipment and property was $426,000 compared to $144,000 for the same period
last year. Interest income decreased in the first nine months of 2003 to $2.3
million compared to $3.0 million for the same period in 2002, primarily due to a
decrease in the interest recognized on the note receivable from the Government
of Antigua and Barbuda. The Government did not comply with its payment
obligations during the second and third quarter this year, and therefore
interest recognized on the notes was lower than the same period last year. The
Company expects receipts of some of the amounts due around the end of the year,
when the annual rental payment from the United States military base is received
by the Government. However, the Company is not assured that the Government will
comply with its payment obligations in the fourth quarter; consequently, the
Company is unsure if the interest to be recognized on the notes in the fourth
quarter will continue at this lower level. Interest expense decreased to
$111,000 from $227,000 for the same period in 2002, primarily due to decreased
outstanding debt.

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 nine months ended September 30, 2003
was negative 0.5 percent as compared to 23.5 percent for the same period in
2002, primarily due to establishment of a valuation allowance on net operating
losses created during the current year.

NET INCOME (LOSS)

The Company had a net loss of $5.3 million for the first nine months of 2003 as
compared to net income of $1.4 million for the same period in 2002.


                                       24
<PAGE>
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 third quarter
of 2003, the Company provided long-term financing in the amount of $688,000 to
certain customers who utilized its land development construction services and
purchased materials, equipment or property. The outstanding balances of the
previously financed construction services, materials and equipment totaled $6.9
million as of September 30, 2003, all of which is due to be paid within the next
three years. 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. These purchases of equipment totaled $2.0 million during the first
nine months this year and should result in cash expenditures of approximately
$3.0 million during the full year. 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 its machinery and equipment purchases; however,
since 2001 there are no outstanding amounts owed to these lenders. Management
believes it has significant collateral and financial stability to be able to
obtain significant financing, should it be required, though no assurance can be
made.

As of September 30, 2003, the Company's liquidity and capital resources included
cash and cash equivalents of $9.1 million and working capital of $18.1 million.
As of September 30, 2003, total outstanding liabilities were $17.0 million. As
of September 30, 2003, the Company had available lines of credit totaling $1.4
million.

Cash flows provided by operating activities for the nine months ended September
30, 2003 were $202,000 compared to $3.1 million for the same period in 2002. The
primary use of cash for the first nine months in 2003 was an increase in
accounts and notes receivables of $4.2 million, offset to a lesser extent by an
increase in other long-term liabilities of $1.5 million, an increase in billings
in excess of costs and estimated earnings of $670,000 and an increase in
accounts payable, accruals and other liabilities of $582,000.

Net cash provided by investing activities was $1.2 million in the first nine
months of 2003. Purchases of property, plant and equipment were $2.0 million.
The Company issued new notes receivable for $830,000 and receipts on notes
receivable were $3.7 million. Net cash used in financing activities was $1.2
million for the first nine months of 2003, consisting primarily of the purchase
of treasury stock.
                                       25
<PAGE>

The Company's accounts receivable averaged 61 days of sales outstanding as of
September 30, 2003. This is an increase compared to 53 days at the end of
December 2002. The Company's materials segment improved to 50 days as compared
to 51 days at the end of last quarter, mainly due to faster collections in St.
Martin. The construction segment has deteriorated to 88 days as compared to 61
days at the end of last year. The slowdown in collections was primarily due to
receivables for work in the Bahamas as well as start up of new contracts in
Aruba and Antigua, which adversely affected collections. The Company does not
consider notes receivable in this calculation.

The Company has an unsecured credit line of $1.0 million with a bank in Florida.
The credit line expires in June 2004 and the bank can also demand repayment of
the loan and cancellation of the overdraft facility, if certain financial or
other covenants are in default. The Company is in compliance with the covenants
as of September 30, 2003. There was no outstanding balance as of September 30,
2003. The interest rate on indebtedness outstanding under the credit line is at
a rate variable with LIBOR.

In May 2003, the Company entered into a joint venture with a utility equipment
company to own and/or operate reverse osmosis fresh water, waste water treatment
and power systems. The joint venture will be 80 percent owned by Devcon. As
projects are approved by the Company, Devcon will fund the venture with up to
$2.4 million in cash and loans plus a guarantee of up to an additional $2.4
million in project financing. As of September 30, 2003 there have been no
projects funded.

The Company has borrowed approximately $2.1 million from the Company President.
The note is unsecured and bears interest at the prime rate. Three hundred
thousand is due on demand, and $1.8 million is due on July 1, 2004. 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. Of the amount borrowed, $1.7 million is
collateral for a loan guarantee that the President has extended to the Company
on behalf of a project in the Bahamas, in which the President and the Company
have a minority ownership.

The Company has entered into retirement agreements with certain existing and
retired executives of the Company. The net present value of future liabilities
for these arrangements as of September 30, 2003 was $2.9 million, of which $1.6
million is for the Company's President. The company has used a discount rate of
8% and standard mortality tables.

In September 2001, the Company decided to stop its operations on Aguadilla,
Puerto Rico. The plant in Aguadilla, Puerto Rico, is leased to a third party,
whose extraction permit was cancelled in February this year. On April 10, 2003,
the lessee asked for a moratorium on payments, at the same time as he gave
notice of the extraction permit being cancelled. As a result of these actions
and the fact that the only source of revenue for the plant has come from the
lessee, the Company recorded an impairment charge of $438,000 to write down the
plant to its estimated fair value.

                                       26
<PAGE>

On September 1, 2003 the third party received its extraction permit and has
started aggregates processing operations.

As part of the 1995, subsequently renegotiated in 1999, acquisition of Societe
des Carrieres de Grand Case ("SCGC"), a French company operating a ready-mix
concrete plant and quarry in St. Martin, the Company agreed to pay the quarry
owners, who were also the owners of SCGC, a royalty payment of $550,000 per year
through July 2004 and rent of $50,000 per year through July 2005. The agreements
may be renewed, at the Company's option, for a successive five-year period and
would require annual payments of $550,000 and $50,000 per year, respectively. At
the end of the 15-year royalty period, the Company has the option to purchase
this 50-hectare property for $4.4 million.

Receivables at September 30, 2003 include a net balance of $6.2 million,
consisting of promissory notes due from the Government of Antigua and Barbuda,
of which $5.2 million is classified as a long-term receivable. The gross balance
of the notes is $29.0 million. The notes were restructured on April 28, 2000 and
call for both quarterly and monthly principal and interest payments until
maturity in 2015. During the second and third quarter this year, the Government
did not make all the payments due under the notes; therefore, the interest
recognized on the notes was lower than expected. The Company expects receipts of
some of the amounts due around the end of the year, when the annual rental
payment from the United States military base is received by the Government. 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 nine months
ended September 30, 2003 were $2.6 million, of which $754,000 was recorded as
reduction of principal.

During the second quarter of 2002, the Company issued a construction contract
performance guaranty together with one of the Company's customers for $5.1
million. The Company issued a letter of credit for $500,000 as collateral for
the transaction and has not had any expenses in connection with this
transaction. The construction project was substantially complete as of October
1, 2003, however the construction contract provides for a guarantee of materials
and workmanship for a period of one year subsequent to the issuance of a
certificate of occupancy. If the owner of the project does not declare a default
during this one year period the letter of credit will be voided and the Company
will have no further liability. The Company received an up front fee of
$154,000, and has recorded a receivable for an additional $52,000. At the same
time, a long-term liability of the total amount has been recorded, which may be
recognized to income, once it is determined that no liability exists for the
project, less any amounts paid by us in connection with the performance
guarantee.

REPURCHASE OF COMPANY SHARES

On August 9, 2002 the Board of Directors approved a plan for the Company to
purchase Company shares in the open market for up to $3.0 million. 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 or management
affect the advisability of purchasing Devcon shares. Under this program, the
Company has repurchased 339,887 shares through September 30, 2003 at an average
rate of

                                       27
<PAGE>
$6.71. The Company did not repurchase any shares during third quarter of 2003.
The Company retired 244,696 shares during the nine months of 2003. As of
September 30, 2003 the Company had 86,800 shares of treasury stock as compared
to 122,100 as of December 31, 2002.

RELATED PARTY TRANSACTIONS

The Company has certain transactions with some of the Directors or employees.
Details regarding the Company's transactions with related parties are described
fully in the Company's 2002 Form 10-K.

In April of 2003, the Company purchased 12,000 shares of Company stock from Mr.
R Steele, a director at the time, at the prevailing market rate.

As of January 1, 2003, the Company entered into a payment deferral agreement
with a resort project in the Bahamas, in which the President and a Company
subsidiary are minority partners. The loan agreement calls for 50 percent
deferral of payments due for construction contract obligations incurred after
November 1, 2002, up to a maximum of $2.5 million. Several notes, which are
guaranteed partly by certain owners of the project, evidence the loan and the
President of the Company has issued a personal guarantee for the total amount
due under this loan agreement to the Company as of September 30, 2003.

The Company has a $28.5 million construction contract with an entity in the
Bahamas. The President and a subsidiary of the Company are minority shareholders
in the entity, owning 11.3 percent and 1.2 percent, respectively. Mr. Smith, the
President, is also a member of the entity's managing committee. Management
believes the contract has been entered into at arm's length and at terms and
conditions that the Company would offer its other customers. Prices established
for the work are dependent on market conditions and unique conditions to the
environment of the Bahamas. In connection with this contract, the Company
recorded revenue of $8.4 million during 2002, and $3.3 million this year through
September 30, 2003. The backlog on the contract as of September 30, 2003 was
$707,000. As of September 30, 2003 the Company had trade and notes receivables
from the venture of approximately $3.8 million and the cost and estimated
earnings in excess of billings was $330,000. Mr. Smith has guaranteed the
payment of the receivables from the entity, up to a maximum of $2.5 million.

There have been no other material changes to the Company's related party
transactions.

                                       28

<PAGE>


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 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 Euro exchange rate will materially affect the Company's
financial position or result of operations. The French operations are
approximately 10% of the Company's total operations.

Item 4.       CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to provide reasonable
assurance that information required to be disclosed in the reports we file with
the SEC is recorded, processed, summarized and reported within the time periods
specified in the rules of the SEC. As of the end of the period covered by this
Quarterly Report, on Form 10-Q, we carried out an evaluation, under the
supervision and participation of our management, including our Chief Executive
Officer and Chief Financial Officer, of the design and operation of these
disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based
upon that evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures are effective, at the
reasonable assurance level, to ensure that information required to be disclosed
by us in reports that we file under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in SEC rules and
forms. There have been no changes in our internal controls over financial
reporting during the quarter ended September 30, 2003, that have materially
affected, or are reasonably likely to materially affect, our internal controls
over financial reporting.


                                       29
<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:
              Exhibit 31.1 Certification Pursuant to Rule 13a-14(a)& 15d-14(a),
                           as Adopted Pursuant to Section 302 of the Sarbanes-
                           Oxley Act of 2002
              Exhibit 31.2 Certification Pursuant  to Rule 13a-14(a)& 15d-14(a),
                           as Adopted Pursuant to Section 302 of the Sarbanes-
                           Oxley Act of 2002
              Exhibit 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as
                           Adopted Pursuant to Section 906 of the Sarbanes-
                           Oxley Act of 2002
              Exhibit 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as
                           Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                           Act of 2002

              (b) Reports on Form 8-K:


              The Company filed form 8-K on August 12, 2003 giving information
              about earnings and an upcoming conference call with analysts.


                                       30
<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:     November 11, 2003                     /S/ JAN A. NORELID
                                                    ---------------
                                                    Jan A. Norelid
                                                    Chief Financial Officer and
                                                    Vice President, Finance


                                       31
<PAGE>






                                  EXHIBIT INDEX



Exhibit No.       Exhibit Description

31.1     Certification Pursuant to Rule 13a-14(a) & 15d-14(a), as Adopted
         Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2     Certification Pursuant to Rule 13a-14(a) & 15d-14(a), as Adopted
         Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
         to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
         to Section 906 of the Sarbanes-Oxley Act of 2002.

                                       32

<PAGE>


                                  EXHIBIT 31.1
                                  CERTIFICATION
I, Donald L. Smith, Jr., certify that:

1.       I have reviewed this quarterly report on Form 10-Q of Devcon
         International Corp.

2.       Based on my knowledge, this report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this report.

3.       Based on my knowledge, the financial statements, and other financial
         information included in this report, fairly present in all material
         respects the financial condition, results of operations and cash flows
         of the registrant as of, and for, the periods presented in this report;

4.       The registrant's other certifying officer(s) and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
         registrant and have:

         (a)      Designed such disclosure controls and procedures, or caused
                  such disclosure controls and procedures to be designed under
                  our supervision, to ensure that material information relating
                  to the registrant, including its consolidated subsidiaries, is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared.

         (b)      Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures and presented in this report our
                  conclusions about the effectiveness of the disclosure controls
                  and procedures, as of the end of the period covered by this
                  report based on such evaluation; and

         (c)      Disclosed in this report any change in the registrant's
                  internal control over financial reporting that occurred during
                  the registrant's most recent fiscal quarter (the registrant's
                  fourth fiscal quarter in the case of an annual report) that
                  has materially affected, or is reasonably likely to materially
                  affect, the registrant's internal control over financial
                  reporting; and

5.       The registrant's other certifying officer(s) and I have disclosed,
         based on our most recent evaluation of internal control over financial
         reporting, to the registrant's auditors and the audit committee of the
         registrant's board of directors (or persons performing the equivalent
         functions):

         (a)      All significant deficiencies and material weaknesses in the
                  design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial information; and

         (b)      Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal control over financial reporting.


Date:    November 11, 2003              /s/ Donald L. Smith, Jr.
                                            --------------------
                                            Donald L. Smith, Jr.
                                            President and Chairman of the Board

                                       33

<PAGE>


                                  EXHIBIT 31.2
                                  CERTIFICATION
I, Jan A. Norelid, certify that:

1.       I have reviewed this quarterly report on Form 10-Q of Devcon
         International Corp.

2.       Based on my knowledge, this report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this report.

3.       Based on my knowledge, the financial statements, and other financial
         information included in this report, fairly present in all material
         respects the financial condition, results of operations and cash flows
         of the registrant as of, and for, the periods presented in this report;

4.       The registrant's other certifying officer(s) and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
         registrant and have:

         (a)      Designed such disclosure controls and procedures, or caused
                  such disclosure controls and procedures to be designed under
                  our supervision, to ensure that material information relating
                  to the registrant, including its consolidated subsidiaries, is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared.

         (b)      Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures and presented in this report our
                  conclusions about the effectiveness of the disclosure controls
                  and procedures, as of the end of the period covered by this
                  report based on such evaluation; and

         (c)      Disclosed in this report any change in the registrant's
                  internal control over financial reporting that occurred during
                  the registrant's most recent fiscal quarter (the registrant's
                  fourth fiscal quarter in the case of an annual report) that
                  has materially affected, or is reasonably likely to materially
                  affect, the registrant's internal control over financial
                  reporting; and

5.       The registrant's other certifying officer(s) and I have disclosed,
         based on our most recent evaluation of internal control over financial
         reporting, to the registrant's auditors and the audit committee of the
         registrant's board of directors (or persons performing the equivalent
         functions):

         (a)      All significant deficiencies and material weaknesses in the
                  design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial information; and

         (b)      Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal control over financial reporting.


         Date:    November 11, 2003                  /s/ Jan A. Norelid
                                                         ---------------
                                                         Jan A. Norelid
                                                         Chief Financial Officer

                                       34
<PAGE>


                                  EXHIBIT 32.1

                            CERTIFICATION PURSUANT TO
                                                         U.S.C. SECTION 1350,
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of Devcon International Corp. (the
"Company") on Form 10-Q for the period ending September 30, 2003 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Donald L. Smith, Jr., Chief Executive Officer of the Company, certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

         (1)      The report fully complies with the requirements of section
                  13(a) or 15(d) of the Securities Exchange Act of 1934; and

         (2)      The information contained in the report fairly presents, in
                  all material respects, the financial condition and result of
                  operations of the Company.



Date:    November 11, 2003                          /s/ Donald L. Smith, Jr.
                                                        --------------------
                                                        Donald L. Smith, Jr.
                                                        Chief Executive Officer





Note: This certification is being furnished, not filed, as exhibit 32.1

                                       35
<PAGE>
                                  EXHIBIT 32.2

                            CERTIFICATION PURSUANT TO
                              U.S.C. SECTION 1350,
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of Devcon International Corp. (the
"Company") on Form 10-Q for the period ending September 30, 2003 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I, Jan
A. Norelid, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

         (1)      The report fully complies with the requirements of section
                  13(a) or 15(d) of the Securities Exchange Act of 1934; and

         (2)      The information contained in the report fairly presents, in
                  all material respects, the financial condition and result of
                  operations of the Company.



Date:    November 11, 2003                          /s/ Jan A. Norelid
                                                        --------------
                                                        Jan A. Norelid
                                                        Chief Financial Officer



Note: This certification is being furnished, not filed, as exhibit 32.2

                                     36
<PAGE>