SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

         For the quarterly period ended March 31, 1999

                                       OR

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

         For the transition period from _________ to _________.

                           Commission File No. 0-7152

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

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

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

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

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

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

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days:

         YES   [X]                 NO [ ]

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


<PAGE>

                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                                      INDEX

                                                                     PAGE NUMBER
                                                                     -----------

Part I.    Financial Information:

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


           Condensed Consolidated Statements of Operations
           Three Months Ended March 31, 1999 and 1998.............        5


           Condensed Consolidated Statements of Cash Flows
           Three Months Ended March 31, 1999 and 1998.............      6-7


           Notes to Condensed Consolidated Financial Statements...      8-9

           Management's Discussion and Analysis of
           Financial Conditions and Results of
           Operations.............................................    10-15

Part II.   Other Information......................................    16-17


                                       2
<PAGE>

PART I.    FINANCIAL INFORMATION

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

                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                      Condensed Consolidated Balance Sheets
                      March 31, 1999 and December 31, 1998

                                                      MARCH 31,     DECEMBER 31,
                                                        1999            1998    
                                                  -------------     ------------
                                                    (Unaudited)

ASSETS

Current assets:
   Cash                                            $   947,044      $   899,605
   Cash equivalents                                  1,114,479        1,359,253
   Receivables, net                                 13,496,372       12,611,437
   Costs in excess of billings
      and estimated earnings                           864,767          710,557
   Inventories                                       4,178,680        4,468,718
   Assets held for sale                              2,821,699        2,868,922
   Other                                               325,136          398,592
                                                   -----------      -----------

         Total current assets                       23,748,177       23,317,084

Property, plant and equipment
   Land                                              2,159,727        2,167,318
   Buildings                                         3,559,987        3,560,545
   Leasehold interests                               6,947,456        6,632,206
   Equipment                                        57,736,122       58,340,451
   Furniture and fixtures                              712,723          642,314
   Construction in process                           2,695,409          406,344
                                                   -----------      -----------
                                                    73,811,424       71,749,178

Less accumulated depreciation                      (29,588,653)     (28,715,682)
                                                   -----------      -----------
                                                    44,222,771       43,033,496

Investments in unconsolidated
   joint ventures and affiliates                       237,370          237,370
Receivables, net                                    10,963,982       13,173,472
Intangible assets, net of
   accumulated amortization                          1,089,932        1,165,692
Other assets                                         1,501,838        1,503,005
                                                   -----------      -----------

         Total assets                              $81,764,070      $82,430,119
                                                   ===========      ===========

See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>

                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                      Condensed Consolidated Balance Sheets
                      March 31, 1999 and December 31, 1998

                                                     MARCH 31,      DECEMBER 31,
                                                      1999              1998    
                                                  -----------       ------------
                                                   (Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable, trade and other              $ 6,582,812       $ 6,917,119
   Accrued expenses and other liabilities           1,777,477         3,186,375
   Notes payable to banks                             182,288            88,108
   Current installments of long-term debt           6,611,078         5,539,151
   Billings in excess of costs and
     estimated earnings                               418,982           315,007
   Income taxes                                       337,737           361,071
                                                  -----------       -----------

          Total current liabilities                15,910,374        16,406,831

Long-term debt, excluding current
   installments and notes payable to banks         18,238,372        18,153,451
Minority interest in consolidated
   subsidiaries                                     1,463,994         1,762,809
Deferred income taxes                                 399,056           399,056
Other liabilities                                   2,376,138         2,067,413
                                                  -----------       -----------

          Total liabilities                        38,387,934        38,789,560

Stockholders' equity:
   Common stock                                       449,894           449,894
   Additional paid-in capital                      12,064,133        12,064,133
   Accumulated other comprehensive income-
    cumulative translation adjustment              (1,250,897)         (859,376)
   Retained earnings                               32,113,006        31,985,908
                                                  -----------       -----------

          Total stockholders' equity               43,376,136        43,640,559
                                                  -----------       -----------

Total liabilities and stockholders' equity        $81,764,070       $82,430,119
                                                  ===========       ===========

See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>

                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Operations
                   Three Months Ended March 31, 1999 and 1998
                                   (Unaudited)

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

Concrete and related products revenue            $13,955,842       $12,487,751
Contracting revenue                                4,279,413         1,749,575
Other revenue                                           -              371,386
                                                 -----------       -----------
       Total revenue                              18,235,255        14,608,712

Cost of concrete and related
   products revenue                               11,304,170         9,846,924
Cost of contracting revenue                        3,711,488         2,098,923
Cost of other revenue                                   -              245,737
                                                 -----------       -----------
       Gross profit                                3,219,597         2,417,128

Selling, general and
   administrative expenses                         3,319,715         2,538,358
Credit for litigation                               (419,000)             -   
                                                 -----------       -----------

       Operating income (loss)                       318,882          (121,230)

Other income (deductions)
   Interest expense                                 (672,371)         (520,274)
   Gain on sale of equipment                          70,408            66,569
   Interest and other income                         195,164           148,649
   Minority interest                                 298,815              -   
                                                 -----------       -----------
                                                    (107,984)         (305,056)
                                                 -----------       -----------

       Income (loss) before income taxes             210,898          (426,286)

Income tax (expense) benefit                         (83,800)           80,194
                                                 -----------       -----------

       Net income (loss)                         $   127,098       $  (346,092)
                                                 ===========       ===========

Basic earnings (loss) per share                  $    .03          $   (.08)  
                                                 ===========       ===========

Diluted earnings (loss) per share                $    .03          $   (.08)  
                                                 ===========       ===========
Weighted average number of
   shares outstanding-basic                        4,498,935         4,498,935
                                                 ===========       ===========

Weighted average number of
   shares-diluted                                  4,501,088         4,498,935
                                                 ===========       ===========

See accompanying notes to condensed consolidated financial statements.

                                       5
<PAGE>

                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                      Three Months March 31, 1999 and 1998
                                   (Unaudited)

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

Cash flows from operating activities:
   Net income (loss)                                $   127,098   $  (346,092)

Adjustments to reconcile net income
      (loss) to net cash provided by operating
      activities:
   Depreciation and amortization                      1,489,500     1,393,845
   Provision for doubtful accounts
       and notes                                        173,770      (235,181)
   Gain on sale of equipment                            (70,408)      (66,569)
   Credit for litigation                               (419,000)         -
   Minority interest income                            (298,815)         -

Changes in operating assets and liabilities:
   Decrease in receivables, net                         192,535     1,209,578
   Increase in costs in excess of billings
    and estimated earnings                             (154,210)   (1,283,381)
   Decrease (increase)in inventories                    290,038      (109,819)
   Decrease in other current assets                      73,458       447,956
   (Increase) decrease in other assets                  (17,548)       29,021
   Decrease in accounts payable, trade
       and other                                     (1,422,794)     (951,144)
   Increase (decrease)in billings in
       excess of costs and estimated earnings           103,975       (66,579)
   (Decrease) increase in income taxes
       payable                                          (23,334)       44,135
   Increase (decrease)in other liabilities              308,725      (202,995)
                                                    -----------   -----------
       Net cash provided by (used in)
          operating activities                          352,990      (137,225)
                                                    -----------   -----------
Cash flows from investing activities:
   Purchase of property, plant and
       equipment                                     (3,263,936)   (1,129,479)
   Proceeds from disposition of property,
       plant and equipment                              359,870     3,316,956
   Payments received on notes                         1,118,713       721,817
   Investment in affiliates                                -         (101,020)
   Issuance of notes                                    (16,000)         -   
                                                    -----------   -----------
       Net cash (used in) provided by
        investing activities                        $(1,801,353)  $ 2,808,274
                                                    -----------   -----------

                                       6
<PAGE>


                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                   Three Months Ended March 31, 1999 and 1998
                                   (Unaudited)

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

Cash flows from financing activities:
   Proceeds from debt                          $ 2,812,330     $ 1,511,534
   Principal payments on debt                   (1,655,482)     (5,412,931)
   Net borrowings from bank credit
       line/overdrafts                              94,180         951,980
                                               -----------     -----------
       Net cash provided by (used in)
          financing activities                   1,251,028      (2,949,417)
                                              ------------     -----------
       Net decrease in cash
          and cash equivalents                    (197,335)       (278,368)

       Cash and cash equivalents,
          beginning of period                    2,258,858         876,368
                                              ------------     -----------
       Cash and cash equivalents,
          end of period                       $  2,061,523     $   598,000
                                              ============     ===========
Supplemental disclosures of
   cash flow information

       Cash paid for:

          Interest                            $    659,769     $   593,875
                                              ============     ===========

          Income taxes                        $     33,333     $   120,334
                                              ============     ===========

See accompanying notes to condensed consolidated financial statements.

                                       7
<PAGE>

                           DEVCON INTERNATIONAL CORP.
                                AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BASIS OF PRESENTATION

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

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

In the opinion of management, the accompanying unaudited condensed consolidated
financial statements contain all adjustments necessary to present fairly the
Company's financial position as of March 31, 1999 and the results of its
operations and cash flows for the three months ended March 31, 1999 and 1998.

The results of operations for the three months ended March 31, 1999 are not
necessarily indicative of the results to be expected for the full year.

EARNINGS PER SHARE

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

Options to purchase 178,300 and 208,300 shares of common stock, at prices
ranging from $2.17 to $3.75 per share, were outstanding for the quarters ended
March 31, 1999 and 1998, respectively. For the three months ended March 31,
1998, the options were not included in the computation of diluted earnings per
share because the inclusion of the options would be antidilutive. Options to
purchase 361,475 and 294,975 shares of common stock, at prices ranging from
$2.94 to $14.00 per share, were outstanding for the quarters ended March 31,
1999 and 1998, respectively, but were not included in the computation of diluted
earnings per share because the options' exercise prices were greater than the
average market prices of the common shares. For additional disclosures regarding
the outstanding employee stock options, see the 1998 Form 10-K.

COMPREHENSIVE INCOME

Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income." SFAS No. 130 requires that all items recognized under
accounting standards as components of comprehensive income be reported in annual
financial statements that is displayed with the same prominence as other annual
financial statements. The Company's total comprehensive income, comprised of
translation adjustments, for the three month period ended March 31, 1999 and
1998 were as follows:

                                       8
<PAGE>

                                             1999            1998 
                                           ---------      ---------
Net income (loss)                          $ 127,098      $(346,092)
Other comprehensive income                  (391,521)            - 
                                           ---------      ---------

       Total comprehensive loss            $(264,423)     $(346,092)
                                           =========      ========= 

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 months ended March 31,
1999 and 1998.

                                                1999              1998   
                                           -----------        ------------
Revenue (including intersegment)
   Concrete and related products           $14,355,124        $12,530,393
   Contracting                               4,279,413          1,749,575
   Other                                          -               371,386
   Elimination of intersegment revenue        (399,282)           (42,642)
                                           -----------        -----------

       Total revenue                       $18,235,255        $14,608,712
                                           ===========        ===========

Operating income (loss):
   Concrete and related products           $   (74,000)       $   819,000
   Contracting                                 178,000           (897,000)
   Other                                          -               120,000
   Unallocated corporate overhead              214,882           (163,230)
                                           -----------        -----------

       Total operating income (loss)           318,882           (121,230)
                                           -----------        -----------

Other deductions                              (107,984)          (305,056)
                                           ===========        ===========

Income (loss) before income taxes          $   210,898        $  (426,286)
                                           ===========        ===========

                                       9
<PAGE>

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

INTRODUCTION

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

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

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

COMPARISON OF THREE MONTHS ENDED MARCH 31, 1999 VS. THREE MONTHS ENDED MARCH 31,
1998

REVENUE

The Company's revenue during the first quarter of 1999 was $18.2 million as
compared to $14.6 million during the same period in 1998. This 24.8 percent
increase was primarily due to an increase in contracting revenue and to a lesser
extent to an increase in concrete and related products revenue.

The Company's concrete and related products division revenue increased 11.8
percent to $14.0 million during the first quarter of 1999 as compared to $12.5
million for the same period in 1998, primarily as a result of an increase in
demand for this division's products on certain Caribbean islands, offset to a
lesser extent by decreased demand on other islands. The Company cannot currently
determine whether demand for this division's products will increase, decrease or
remain the same throughout 1999.

Revenue from the Company's land development contracting division increased by
144.6 percent to $4.3 million during the first quarter of 1999 as compared to
$1.7 million for the same period in 1998. This increase is primarily due to the
Company continuing various contracts that were started during the prior quarters
and to revenue on a contract in the Bahamas. The Company's backlog of unfilled
portions of land development contracts at March 31, 1999 was $12.9 million,
involving 9 projects. The backlog of the project in the Bahamas amounts to $10.0
million. A Company subsidiary and two of the Company's directors are minority
partners of the entity developing this project. The project has not yet received

                                       10
<PAGE>

its total financing thus the timing and amount of the contract could vary. The
Company expects that part of the backlog outstanding at March 31, 1999 will be
completed by the end of 1999. The Company cannot currently determine whether the
contract revenue will increase, decrease or remain the same throughout 1999.

COST OF CONCRETE AND RELATED PRODUCTS

Cost of concrete and related products as a percentage of concrete and related
products revenue increased to 81.0 percent during the first quarter of 1999 from
78.9 percent for the same period in 1998. This increase was primarily
attributable to higher production cost on some islands and to changes in the mix
of products sold in the first quarter of 1999 compared to 1998.

COST OF CONTRACTING

Cost of contracting as a percentage of land development contracting revenue
decreased to 86.7 percent during the first quarter of 1999 from 120.0 percent
during the same period in 1998. This decrease is primarily attributable to the
varying profitability levels of individual contracts and the stage of completion
of such contracts, and to the expense taken on a large contract in 1998.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE

Selling, general and administrative expense ("SG&A expense") increased by 30.8
percent to $3.3 million for the first quarter of 1999 from $2.5 million for the
same period in 1998. As a percentage of revenue, SG&A expense increased to 18.2
percent during the first quarter compared to 17.4 percent for the same period
last year. This increase is primarily attributable to increase of expense for
bad debt. The expense for the allowance for doubtful accounts and notes was
approximately $174,000 during the quarter compared to a credit to expense of
$235,000 in the same quarter of 1998.

CREDIT FOR LITIGATION

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

DIVISIONAL OPERATING INCOME 

The Company had an operating income of $319,000 for the first quarter of 1999,
as compared to an operating loss of $121,000 for the same period in 1998. The
Company's concrete and related products division operating loss was $74,000
during the first quarter of 1999 compared to a profit of $819,000 during the
same period in 1998. This decrease is primarily attributable to increased bad
debt expense in 1999 and a one time worker's compensation expense reduction in
1998 for the concrete and related products division.

The Company's land development contracting division had an operating income of
$178,000 during the first quarter of 1999 compared to a loss of $897,000 during
the same period in 1998. This improvement was primarily attributable to the
increased revenue and the type of contracts the Company has been able to obtain,
combined with a reduction in SG&A expenses, primarily legal expense. There was
also an expense taken on a large contract in 1998.

                                       11
<PAGE>

OTHER INCOME

Minority interest income increased due to losses in a consolidated joint
venture. Net interest expense increased to $477,000 in 1999 from $372,000 in
1998.

NET INCOME (LOSS)

The Company had a net income of $127,000 during the first quarter of 1999 as
compared to a loss of $346,000 during the same period in 1998.

LIQUIDITY AND CAPITAL RESOURCES

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

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

As of March 31, 1999, the Company's liquidity and capital resources included
cash and cash equivalents of $2.1 million and working capital of $7.8 million.
Included in working capital is approximately $2.8 million of assets held for
sale. Although management's intention is to sell these assets within the next 12
months, there can be no assurance that all assets will be sold. As of March 31,
1999, total outstanding liabilities were $38.4 million. As of March 31, 1999,
the Company had available lines of credit totaling $1.2 million. In April 1999
the Company received $1.1 million in payment on a note receivable from the sale
of a leasehold in St. Maarten in 1997.

Cash flows provided by operating activities for the three months ended March 31,
1999 was $353,000 compared with $137,000 used in operating activities for the
same period in 1998. The primary uses of cash for operating activities during
the three months ended March 31, 1999 were a decrease in accounts payable and
accruals of $1.4 million.

Net cash used in investing activities was $1.8 million in the first three months
of 1999. Purchases of property, plant, and equipment were $3.3 million. The
purchases were partially financed through equipment financing. Proceeds from
sale of property, plant and equipment were $360,000 and repayment of debt was
$1.7 million.

                                       12
<PAGE>

The Company turned its first quarter ending accounts receivable approximately
7.4 times, compared to 7.3 and 5.3 times for the fiscal years 1998 and 1997,
respectively. The small increase in 1999 of the accounts receivable turnover
ratio compared to 1998 is a result of increased sales in the first quarter of
1999, and the improvement compared to 1997 is primarily due to increased
contracting activity.

The Company entered into a credit agreement with a Caribbean bank in November
1996 for a total credit of $7.0 million. One part of the credit agreement is a
term loan for $6.0 million repayable in monthly installments through November
2002. The Company had $3.7 million of the borrowings outstanding on this loan at
March 31, 1999. The second part is a revolving line of credit of $1.0 million.
The credit line has been re-approved and extended until May 1999. The Company
had $150,000 outstanding under this line of credit at March 31, 1999. The
interest rate on indebtedness outstanding under both loans is at a rate variable
with the prime rate. The credit agreement is collateralized by various parcels
of real property and other assets located in the United States Virgin Islands
and certain other areas. The Company was in violation of certain loan covenants
as of March 31, 1999. The bank has agreed not to accelerate the repayment of the
loan as long as the Company is current in its loan payments. The Company
anticipates to be current in its loan payments during the term of the loan.

The Company has a $500,000 unsecured overdraft facility from a commercial bank
in the Caribbean. The facility is due on demand and bears interest at 14.0
percent per annum. At March 31, 1999, the Company had borrowings of $32,000
outstanding under this line.

The Company has borrowed approximately $5.4 million from the Company President.
The note is unsecured and bears interest at a rate variable with the prime
interest rate. Three hundred twenty-one thousand is due on demand and $5.1
million is due on April 1, 2000. The President has the option of making the note
due on demand should a "Change of Control" occur. A Change of Control has
occurred if a person or group acquires 15.0 percent or more of the common stock
or announces a tender offer, the consummation of which would result in ownership
by a person or group of 15.0 percent or more of the common stock.

The Company purchases equipment from time to time as needed for its ongoing
business operations. The Company is currently replacing or upgrading some
equipment (principally concrete trucks and quarry equipment) used by the
concrete and related products division. This should result in a net cash
expenditure, after financing part of the equipment purchases, of approximately
$3.0 million during 1999. The Company has identified some equipment and real
property not needed for its ongoing operations and it plans to sell those
assets. The net carrying cost of these assets is $2.8 million. Any proceeds from
these sales would be used to reduce debt and provide working capital. The
Company believes it has available or can obtain sufficient financing for its
contemplated equipment replacements and additions. Historically, the Company has
used a number of lenders to finance a portion of its machinery and equipment
purchases on an individual asset basis. At March 31, 1999, amounts outstanding
to these lenders totaled $14.4 million. These loans are typically repaid over a
three to five-year term in monthly principal and interest installments.

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

Receivables at March 31, 1999 include $10.2 million, net, of promissory notes
and bonds due from the Government of Antigua, $2.0 million of which is
classified as 

                                       13
<PAGE>

a current receivable. The gross balance of the notes and bonds is $34.7 million.
The notes called for both quarterly and monthly principal and interest payments
until maturity in 1997. The notes were not satisfied at maturity but the
Antiguan government has advised the Company that payments from agreed upon
sources will continue until the obligation is satisfied. The agreed upon sources
are lease proceeds from a rental of a United States military base, fuel tax
revenues and proceeds from a real estate venture. Cash receipts during 1998 from
agreed upon sources was $2.3 million.

YEAR 2000 ISSUE

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

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

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

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

    o   Equipment which may contain microprocessors with embedded technology

The Company has taken an inventory of all computers and software and the Company
has started planning the changes needed for these systems to become Year 2000
compliant. The Company is currently implementing a new information system for
its financial reporting, and the Company is evaluating proposals from various
vendors in respect to distribution systems for the island subsidiaries. The
Company believes that all conversion efforts will be completed before the end of
1999.

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

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

The Company estimates to spend around $300,000 on the Year 2000 project. This
consists of PCs, software and other related costs.

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

                                       14
<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS

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

                                       15
<PAGE>

II.  OTHER INFORMATION

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

ITEM 1.   LEGAL PROCEEDINGS

          On April 8, 1999, a final judgment was entered in favor of the Company
          and against the Greater Orlando Aviation Authority ("GOAA") in the
          amount of $542,688. However, because the judgment amount was less then
          seventy-five (75%) of an offer of judgment ($790,000) previously made
          by GOAA in July 1998, the Company was subject to pay GOAA's attorneys'
          fees from the date the offer of judgment was made. The Company accrued
          for GOAA's estimated legal expenses in 1998. On May 7, 1999, the
          Florida circuit court awarded prejudgment interest on the judgment
          amount of $542,688 at 10% per annum from August 8, 1995 until paid.
          Through March 31, 1999, this prejudgment interest amounts to
          approximately $203,000, for a total award of approximately $750,000,
          or 95% of the offer of judgment. Consequently, subject to GOAA's
          possible appeal, there is not currently an obligation to pay GOAA's
          legal fees, and the accrual for such expenses was reversed in the
          first quarter of 1999. Furthermore, the Company has filed an appeal on
          the underlying merits of the case to seek reimbursement of additional
          costs and profit in connection with the construction project, which
          was performed between 1992 and 1995.

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

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

                                       16
<PAGE>

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

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

                          None

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

          The Company was in violation of certain loan covenants as of March 31,
          1999. The bank has agreed not to accelerate the repayment of the loan
          as long as the Company is current in its loan payments. The Company
          anticipates to be current in its loan payments during the term of the
          loan.

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:

                 27    Financial Data Schedule

          (b)    Reports on Form 8-K:

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

                                       17
<PAGE>

                                   SIGNATURES

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

Date:    May 14, 1999                     By: /s/ JAN A. NORELID     
                                             ------------------------
                                              Jan A. Norelid
                                              Vice President

                                       18

<PAGE>


                                  EXHIBIT INDEX

EXHIBIT             DESCRIPTION
-------             -----------

27                  Financial Data Schedule


                                       19